Finance Minister Nirmala Sitharaman on February 01, 2024, stuck to the path of fiscal consolidation in her Interim Budget speech. She said that the fiscal deficit in 2023-24 is expected to be 5.8 per cent, lower than the earlier estimates of 5.9 per cent. For 2024-25, it has been pegged at 5.1 per cent.
“We continue on the path of fiscal consolidation to reduce the fiscal deficit to 4.5 per cent in 2025-26,” she said. Sitharaman said that the Centre will borrow Rs 14.13 trillion in the year starting April 1 as compared to Rs 15.43 trillion in the current year. The net borrowings have been pegged at Rs 11.75 trillion for the next financial year.
She added that the Centre will spend a record Rs 11.11 trillion on infrastructure creation in 2024-25 to ensure that the country remains one of the world’s fastest-growing major economies. This allocation for capital expenditure for the year starting April 1 is 11.1 per cent higher than the allocation in the current year.
The capital expenditure as a percentage of the Gross Domestic Product (GDP) will rise to 3.4 per cent next year as compared to 3.3 per cent in the current year, Sitharaman added.
On the taxes front, Sitharaman said that there will be no changes in tax rates for direct and indirect taxes, including import duties.
Highlighting that the direct tax collection has tripled since 2014, FM Sitharaman said that the number of tax filers had increased 2.4 times during the period. Moreover, the processing time of tax returns has been reduced from 93 days in FY14 to 10 days currently. “Refunds have been made faster,” she said.
On the indirect taxes front, Sitharaman said that the average monthly Goods and Services Tax (GST) collection has doubled to Rs 1.66 trillion. For 2024-25, the Centre has projected the tax receipts to be Rs 26.02 trillion.
Source: Business Standard