With the Narendra Modi-led NDA government sworn in, India is awaiting the announcement of the full Budget for FY25. While there is no official announcement on the date of the presentation of the Union Budget, media reports suggested that Finance Minister Nirmala Sitharaman will table the Budget in the third week of July, with the commencement of the Monsoon Session of the Parliament. The Monsoon Session is set to begin on July 22, per sources. The session is likely to continue until August 9.
Meanwhile, the finance minister will hold a pre-Budget consultation with industry stakeholders on June 20. This will be the first Union Budget under Modi 3.0 and Nirmala Sitharaman is all set to make history with this as she is on track to become the first finance minister to deliver seven consecutive Budget presentations, comprising six complete budgets and one interim, surpassing Morarji Desai’s record in this regard.
In her interim budget speech on February 1, Finance Minister Nirmala Sitharaman allocated Rs 86,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, maintaining the same level as the revised estimate for 2023-24. She emphasized that the MGNREGA allocation is based on ground-level demand.
Sitharaman also highlighted concerns raised by the Comptroller and Auditor General (CAG) regarding the operation of MGNREGA in some states. She noted that there are claims that require verification to ensure that the beneficiaries are legitimate. "Are those receiving wages truly existing individuals on the ground? ...and other questions critical to the very letter and spirit of the program," she stated.
As part of the preparations for the Union Budget, Finance Minister Nirmala Sitharaman chaired the second pre-budget consultation with leading experts from the financial and capital markets sector today. The discussions covered a range of topics, including the Non-Banking Financial Companies (NBFC) sector, GST rules, and improvements to the capital market.
Raman Aggarwal, co-chairman of the Finance Industry Development Council (FIDC), highlighted during the meeting that the NBFCs' credit-to-GDP ratio was 12.6 percent as of March 2023. He suggested that there is a need to focus on funding for NBFCs, proposing that the government could allocate funds to SIDBI (Small Industries Development Bank of India) or NABARD (National Bank for Agriculture and Rural Development) to refinance NBFCs.
Aggarwal pointed out that the NBFC sector had grown significantly, reaching 18.7 percent of banking sector assets as of March 2023, up from 13 percent a decade ago.
During the pre-Budget consultation with Finance Minister Nirmala Sitharaman on Thursday, India Inc. emphasized several key priorities for the upcoming Union Budget. These included reducing the tax burden on the common man, sustaining capital expenditure, and implementing measures to curb food inflation. Additionally, industry leaders and associations urged the government to prioritize infrastructure development to uphold economic growth. They also underscored the importance of supporting the MSME (Micro, Small, and Medium Enterprises) sector, crucial for both the Indian economy and employment generation.
During the interim budget presentation in February, Finance Minister Nirmala Sitharaman announced a record-breaking infrastructure outlay of Rs 11.11 lakh crore. This allocation surpassed the previous high of Rs 10 lakh crore set in fiscal 2023-24 and constituted 3.4 percent of the GDP. The government aims to accelerate the development of access-controlled highways, enhance port efficiency, improve railway safety and speed, and promote cleaner, less congested cities with this substantial investment.
IVCA made suggestions to mainstream AIF investments and encourage and enable large domestic capital pools of insurance and pension funds to participate in the AIF industry to finance Infrastructure, credit and start-ups, scale-ups & growth companies IVCA also urged the government to operationalise the 2022 budget announcement of blended finance as well through a Fund of Funds approach managed by competent managers for directing capital to strategies which are in alignment with govt priorities.
Following the pre-Budget discussion on the country’s financial sector and capital markets, chaired by Finance Minister Nirmala Sitharaman, Nilesh Shah, MD, Kotak Mahindra AMC, said, “We thanked the Honourable Finance Minister and the Finance Ministry team for the great work done by them which has made the Indian economy fastest growing major economy and our equity market one of the best performing market. I shared with the Honourable Finance Minister that under the aegis of our regulator SEBI, mutual funds have spread financial awareness. We have enlisted more than 4 crore Indians to participate in the journey of Viksit Bharat and secure their financial freedom. We need to reach out to far more Indians now to secure their financial freedom. We requested Honourable FM to launch a Jan Nivesh campaign to create financial inclusion for crores of Indians who are stuck in Ponzi schemes and speculations. Let Indians become financially independent by participating in the journey of Viksit Bharat.”
From institutional landholders to people receiving monthly pensions of Rs 10,000 to professionals like lawyers, doctors, engineers and more are excluded from the PM-KISAN scheme.
The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is a central government initiative launched to provide direct income support of Rs. 6,000 annually to small and marginal farmers. The support is disbursed in three equal instalments directly into the bank accounts of eligible farmers. The scheme aims to ensure financial assistance to farmers between crop cycles and promote sustainable agricultural practices across India. Read more.
The finance minister highlighted these major announcements made in the Interim Budget:
Finance Minister Nirmala Sitharaman, in her interim budget speech on February 1, provided Rs 86,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme, retaining it at the same level as provided for in the revised estimate for 2023-24. She said that the MGNREGA allocation is done on the basis of demand coming from the ground.
She also pointed out that the CAG has already commented on the way MGNREGA is operating in some States, where claims are reaching a stage where they need to be verified. “Are they [those getting wages] really people existing on the ground?...and other questions critical to the very letter and spirit of the program”
Finance Minister Nirmala Sitharaman, during the interim budget presentation earlier in February, had said that the government has set a fresh record for infrastructure outlay by earmarking Rs 11.11 lakh crore, topping the existing high of Rs 10 lakh crore allocated during fiscal 2023-24. This amounted to 3.4 per cent of the GDP. With this, the country sets its eyes on goals of faster access-controlled highways, super-efficient ports, safer and speedier trains, with cleaner, and decongested cities.
A government which is going through a transition period or is in the last year in office before the general elections held every 5 years, cannot present a full Union Budget. In such a case, the finance minister of the incumbent government presents an interim budget during the joint sitting of Rajya Sabha and Lok Sabha in Parliament.
An interim budget contains a detailed documentation of all the expenses to be incurred and every rupee to be earned through taxes in the next few months until the elections.
Finance Minister Nirmala Sitharaman had tabled the interim budget in the Parliament on February 1, 2024.
When VP Singh was the finance minister in 1986, he included innovative measures to support economic inclusiveness, in the Union Budget. The creation of a Small Industries Development Bank, subsidies on bank loans for cobblers and rickshaw pullers, and an accident insurance programme for municipal sweepers were among the main ideas.
TT Krishnamachari succeeded CD Deshmukh as finance minister and was known for his diligent work and focus on taxation. He introduced wealth tax and expenditure tax in 1957. In 1964-65, Krishnamachari launched India‘s first voluntary disclosure scheme for concealed income. Additionally, Jawaharlal Nehru, India’s first prime minister, briefly served as the Union Finance Minister in 1958-59 and was the first prime minister to present the national budget.
Inclusion of ATF & Natural Gas is not on the agenda of the GST Council meeting and there was no discussion with regard to ATF & Natural Gas as yet, sources told CNBC TV18.
The 53rd GST Council meet is scheduled for June 22, 2024, in New Delhi. “The 53rd meeting of the GST Council will be held on 22nd June, 2024 at New Delhi,” the official handle of GST Council on X, stated.
What’s on the agenda of 53rd GST Council meet? Read here to know more
The Budget presented has had an interesting evolution over the years, moving from a traditional briefcase to a bahi khata, and now to a digital tablet. Finance Minister Nirmala Sitharaman, in 2019, introduced a traditional twist to the budget presentation by replacing the traditional briefcase with a red-colored bahi khata. This change marked her first Budget presentation. And later for the presentation of Union Budget 2021-22, the finance minister used a tablet.
In the budget of 1950-53, the then government had formally announced the initiation of the Planning Commission. Headed by the Prime Minister, this primary body was entrusted with the responsibility of directing a well-defined program for the country’s development.
TT Krishnamachari, following CD Deshmukh as finance minister, in 1957, introduced two new taxes: a wealth tax and an expenditure tax, urging taxpayers to demonstrate patriotism in paying these levies. During his tenure in 1964-65, Krishnamachari pioneered India‘s first voluntary disclosure of concealed income schemes.
Until 1955, the Union Budget was exclusively printed in English. However, starting with the Budget of 1955-56, because of an initiative led by the then Finance Minister CD Deshmukh, it began to be presented in both English and Hindi.
Despite high security, the Union Budget was leaked in 1950. During that time, John Mathai was the finance minister. The incident led to the printing of the Budget shifting from Rashtrapati Bhawan to Minto Road. And later, after 1980, the budget printing process shifted to the North Block basement.
Until 1999, the Union Budget was presented at 5 pm on the final day of February and this practice was inherited from British India. During the colonial era, the Budget was presented in Britain at 11 am (local time), which corresponded to 5 pm in India.
Yashwant Sinha, later in 1999, proposed that the Union Budget should be presented at 11 am. He was the finance minister in the Atal Bihari Vajpayee-led NDA government. This was done so that there was sufficient time for a more thorough analysis of the numbers, leading to more informed debates and discussions.
The rationale behind this change was to allow sufficient time for a more thorough analysis of the numbers, leading to more informed debates and discussions.
The Union Budget was always presented at the end of the month of February. However in 2017, Arun Jaitely declared that the Union Budget will not be presented on the final working day of February, as was the practice during the colonial period, but on February 1. He ended the 92-year old practice. The tradition had originated in the 1860s when officials of the East India Company introduced it in India. Arun Jaitley had mentioned that as the Budget was presented at the end of February, the government used to get very little time to prepare for the new policies and changes that would take effect from April 1.
Union Minister for Finance & Corporate Affairs Nirmala Sitharaman on Thursday chaired the second pre-budget consultation with experts of the financial and capital markets sector in connection with the upcoming Union Budget 2024-25.
“Union Minister for Finance & Corporate Affairs Smt. Nirala Sitharaman chairs the second Pre-Budget Consultation with leading experts of the financial and capital markets sector in connection with the forthcoming General Budget 2024-25 in New Delhi, today,” the Ministry of Finance said in a post on X.
Ever wondered why the Budget document is always wrapped in red colour? The iconic red color associated with budget briefcases has its roots in British politics. In 1860, British Chancellor Gladstone introduced a red leather-covered briefcase with the Queen's monogram, known as the Gladstone Box. It was chosen for its prominence on the arms of the House of Saxe-Coburg-Gotha.
Two reasons are attributed to the choice of red. One is Prince Albert's preference, aligning with the colour on the arms of his house. Another story suggests Queen Elizabeth I's representative presented a red briefcase filled with black puddings to the Spanish ambassador in the late 16th century, initiating the red colour tradition.
Apart from historical ties, red is believed to attract attention, making it a suitable choice for such a significant announcement. Besides, the red colour may also be said to signify Indian tradition since the red colour, commonly used for covering religious texts, adds a cultural touch to the budget announcement.
The first Budget presentation by the Modi 3.0 Cabinet will be the 7th Budget presented by Finance Minister Nirmala Sitharaman in a row. With this, she would surpass Morarji Desai’s record of presenting 6 consecutive Budgets.
The Budget presentation has evolved in an intriguing way, moving from a traditional briefcase to a bahi khata, and now to a digital tablet. The budget was given a traditional twist in 2019 when Finance Minister Nirmala Sitharaman swapped the outdated briefcase with a red-colored bahi khata. Subsequently, for the Union Budget 2021-22, Sitharaman presented the budget digitally using a tablet.
The Cabinet approved the development of a mega Rs 76,200 crore all-weather greenfield deep-draft port at Vadhavan in Maharashtra. The Cabinet also gave its nod to viability gap funding, for Rs 7,453 crore offshore wind energy projects, including one in Gujarat, and a Rs 2,870-crore project for the expansion of Varanasi airport. It also approved viability gap funding, for Rs 7,453-crore offshore wind energy projects, including one in Gujarat.
The Cabinet approved increases of around 1.4-12.7% in the minimum support prices (MSP) of 14 crops for the 2024-25 kharif season (July-June), but raised the support price for paddy, the key summer crop, by a relatively modest 5.35% to Rs 2,300/quintal. The MSP for paddy was fixed at Rs 2,183/quintal for the last kharif season, which was up 7% on year.
Rice stocks at the central pool as on June 1 was 31.98 MT. Effectively, FCI holds 50.08 million tonne (MT) — including 18.12 MT of grain receivable from millers, four times above the buffer of 13.54 MT for July 1.
The MSP for moong for 2024-25 season will be Rs 8,682/quintal, up 1.4%. Tur/Arhar MSP will be up 7.9% on year at Rs 7,550/quintal.The support price for groundnut and soybean, key oilseeds grown in kharif season have been increased by 6.4% and 6.3% on year to 6,783/quintal and Rs 4,892/quintal, respectively.
The Budget for 2024-25 should focus on fiscal rectitude while providing for social welfare, capital expenditure, and job creation through schemes and contain inflation, economists told Finance Minister Nirmala Sitharaman during her first pre-Budget consultation. FM Sitharaman met over a dozen economists including National Co-Convener of Swadeshi Jagaran Manch Ashwani Mahajan, Institute for Studies in Industrial Development (ISID) Director Nagesh Kumar, Crisil chief economist Dharmakirti Joshi, Goldman Sachs India chief economist Santanu Senguptaand former chief statistician TCA Anant.
The Union Budget for FY25 or Financial Year 2024-2025 will be presented by Finance Minister Nirmala Sitharaman. This will be the seventh consecutive Budget presented by her and with this she will surpass Morarji Desai’s record of presenting six Budgets in a row. The last Budget that Sitharaman presented was the Interim Budget in February 2024. This was the Vote On Account ahead of the elections in April and May.