What is Interim Budget

The Interim Budget 2024-25 has been presented in Parliament, with the aim of making India a ‘Developed India’ by 2047 with balanced, integrated and equitable growth in diverse sectors. An Interim Budget, given in the last year of the government’s term or the transition phase between two governments or before dissolving the Parliament for fresh elections, covers ongoing government expenses and public utilities until a new full budget is prepared by a new government. This Union Budget is known as the Annual Finance Statement as per clause (1) of Article 112 of the Indian Constitution for the financial year and, therefore, a significant indicator of public finance.

 

This paper seeks to compare and contrast the Interim Budget and the Vote on Account in relation to their constitutional regulation, use, and ramifications on the governance of the country. An Interim Budget under Article 112 is provided before election for meeting the government expenses and takes policy changes also like tax structure alteration for a specific period till the new budget is approved. On the other hand, Vote on Account passed under Article 116 is provided for meeting necessary and essential expenditures for a maximum of two months without affecting the tax structure and allows the smooth running of government. The Union Budget itself is a financial statement of the revenue and expenditure prepared by the Department of Economic Affairs, Ministry of Finance, consists of a revenue receipts like taxes and non-tax revenues and current expenditures and Capital Budget which combines capital receipts and payments. Being a cash basis document, budget estimates here are sourced from different departments and ministries. It is presented in Parliament by the Union Finance Minister in two parts: While Part A covers policy measures in relation to macroeconomic environment, government initiatives, priorities and expenditure sector wise, Part B deals with the Finance Bill and tax proposals.

Major Highlights of the Interim Budget 2024-25

It is a temporary budget unveiled before the general elections and is marked by several significant priorities for leading economic growth and development.

**Capital Expenditure**

This year’s budget signifies a massive 11% increase, allowing the government to implement measures, such as increased expenditures on capital goods or investment on skilled human capital, that is the probable and possible path to economic transformation. 1% of the total plan outlay In an incremental fashion, the capital expenditure has been provided at ₹ 11,11,111 crore which is 3% of the total plan outlay of ₹ 36, 37,692 crore. undefined This increase is in line with the government’s efforts to approve and support more infrastructure and developmental capital. This increase shows the government’s approval of more infrastructure and developmental capital funds.

**Economic Growth Projections**

Looking to the fiscal years 2023-24, the GDP has been anticipated to be at the rate of 7%. 3 % in accordance with the new predictions presented by the Reserve Bank of India. Earlier this month the International Monetary Fund (IMF) has changed its assessment of the India’s growth to 6. 3% and the country is expected to be the third largest economy by 2027Source of data: Also table no: Ø C Current/Static analysis of the countries in question: Ø D Current/Static comparative analysis of the countries in question:

**Revenue and Expenditure Estimates**

Taking into account the projections for the year 2024-25, the total receipt is estimated at ₹ 30. Lakh crore without borrowing, the total expenditure and has been estimated at ₹47. undefined New revenues are expected to amount to ₹26 taxes. 02 lakh crore, while the GST collections increased to ₹1. The Budget size for the year was estimated at Rs. 65 lakh crore in fiscal December 2023. The increase in percentage is expected at 5 for the fiscal deficit. The market borrowings touched ₹ 14 based on 1% of GDP. 13 lakh crore In case of gross borrowings gross borrowings for the current fiscal are pegged at ₹13 lakh crore and net borrowings at ₹11. undefined

**Taxation**

The exemptions and deductions are s upported by continued retention of existing tax rates, both direct and indirect. The corporate tax is set at 22 percent for the existing companies whereas 15 percent for new manufacturing firms only. Furthermore, no taxes will be charged for residents under the new tax system when the salary does not exceed ₹7 lakhs. It’s worth to define that tax preferences for start-ups and investors have been valid until March 31, 2022, but it has been further amended and might remain valid till March 31, 2025.

**Priorities**
The budget emphasizes support for various groups:The budget emphasizes support for various groups:
– **Poor:** It claimed that 25 crore people have been taken out of multidimensional poverty, 78 lakh street vendors benefited from the credit facility under ‘Pradhan Mantri Street Vendors AtmaNirbhar the Investment Drive’ (PM-SVANidhi).
– **Women:** 30 crore Mudra Yojana loans have been sanctioned to the women entrepreneurs, female enrollment in STEM is at 43% and 1 crore women have been benefited through 83 lakh SHGs.
– **Youth:** 1. Considering the goals of the VAYNT: 4 crore youth have been trained on skill India mission and 43 crore loan have been disbursed through scheme mudra yojana.
– **Farmers:** Financial aid has been sought for the following; 11. 8 crore farmers to give benefits under PM-KISAN, crop insurance cover to 4 crore farmers through Fasal Bima Yojana and connectivity of 1,361 mandis under eNAM.

### Major Budget Documents

The budget presentation includes several key documents:The budget presentation includes several key documents:
– #### Annual Financial Statement (Article 112) The annual financial statement referred to in article 112 should give the Council express indication of the revenue figures to be generated out of SLFRS.
– **Demands for Grants** (Article 113)
– **Finance Bill** which is a money bill may originate either in the House of Commons or the House of Lords.
– **Fiscal Policy Statements** within FRBM Act and these are, the Macro Economic Framework Statement and the Medium Term Fiscal Policy cum Fiscal Policy Strategy Statement.

Other descriptive documents are also prepared including Expenditure Budget, Receipt Budget, Expenditure Profile, Budget at a Glance, Key Features of Budget 2024-25, and Implementation of Budget Announcements for 2023-24.

### History of the Budget

**Pre-Independence**
The budget was for the first time presented on the 7 April 1860 by James Wilson after shifting of political power of India from the East India company to British monarchy. Mr. Liaquat Ali Khan placed the budget for 1947-48 as a member of the interim Government.

**Post-Independence**
India’s first and founding Finance Minister, R K Shanmukham Chetty, is credited with presenting the Allowance Camera for the first time on November 26th of the year 1947. From the above description, the issue of the budget has emerged as a very important element of public financier and an affirmation of democracy in determining the pace and direction of the economy within a given country.

 

 

### Interim Budget 2024-25

Given that 2024 is an election year, an Interim Budget will be presented instead of a full budget. This short-term financial plan will cover government expenses until the elections and outline anticipated revenues and expenditures until a new government takes office. As part of this, Parliament will pass a vote-on-account, representing an advance payment from the Consolidated Fund of India to meet immediate expenditure requirements.

### Vision and Development Mantra

**Vision: Viksit Bharat by 2047**
The budget aims for a prosperous India harmonizing with nature, boasting modern infrastructure, and providing opportunities for all.

**Development Mantra: Sabka Saath, Sabka Vikas, Sabka Vishwas**
The budget’s approach emphasizes inclusivity across societal and geographical segments, embodying a ‘whole of nation’ approach through ‘Sabka Prayas.’ This philosophy aims to ensure social and geographical inclusivity, covering all strata of society and promoting balanced regional development.