Finance Minister Nirmala Sitharaman resisted populism during the election year by limiting the fiscal deficit to 5.8 percent this fiscal and peg it to 5.1 percent in the next fiscal supported by buoyancy in tax collection.
“We continue on the path of fiscal consolidation, as announced in my Budget Speech for 2021-22, to reduce the fiscal deficit below 4.5 percent by 2025-26. The fiscal deficit in 2024-25 is estimated to be 5.1 percent of GDP. , adhering to that path,” Sitharaman said in her Budget speech.
The gross and net market borrowings through dated securities during 2024-25 are estimated at 14.13 and 11.75 lakh crores respectively. Both will be less than that in 2023-24. Now that the private investments are happening at scale, the lower borrowings from the Central Government will facilitate greater availability of credit for the private sector, she said.
Contrary to the fears of brokers, the FM raised the capital expenditure for the next fiscal by 11.1% to Rs 11.1 lakh crore.
RE tax receipts
Revised Estimate of the total receipts excluding loans is Rs 27.56 lakh crore, of which the tax receipts are Rs 23.24 lakh crore. The Revised Estimate of the total expenditure is Rs 44.90 lakh crore.
The revenues at Rs 30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth and formalization in the economy.
The Revised Estimate of the fiscal deficit is 5.8% of GDP, improving the Budget Estimate, despite moderation in the nominal growth estimates.
“Coming to 2024-25, the total receipts excluding loans and the total expenditure are estimated at Rs 30.80 lakh crore and Rs 47.66 lakh crore respectively. The tax receipts are estimated.
at Rs 26.02 lakh crore. 83. The scheme of fifty-year interest-free loan for capital expenditure to states will continue this year with a total outlay of Rs 1.3 lakh crore,” Sitharaman said in his Budget speech.
Tax status quo
Despite being an election year, the finance minister refrained from touching the direct taxes, and stayed on the fiscal consolidation path.
“Regarding tax proposals, in accordance with the convention, I do not propose to make any changes in relation to taxation and propose to retain the same tax rates for direct and indirect taxes.
taxes including import duties. However, some tax benefits to start-ups and investments made by sovereign wealth or pension funds as well as tax exemption on certain income of some IFSC units expire on 1.03.2024. To provide continuity in taxation, I propose to extend the date to 31.03.2025,” said Sitharaman.
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