Amidst the approaching Lok Sabha elections, Finance Minister Nirmala Sitharaman delivered what was anticipated to be a comprehensive Budget for the fiscal year 2024-25. However, instead of a full-fledged budget, she announced the presentation of an interim budget or a vote on account. Although these terms are often used interchangeably, they hold distinct meanings. During her address today, Finance Minister Nirmala Sitharaman remarked on India's economy undergoing a significant transformation while unveiling the final budget of the Narendra Modi government before the Lok Sabha elections scheduled for May.

Understanding Interim Budgets

An interim budget, also referred to as a vote-on-account, represents a provisional financial plan put forth by a government under specific circumstances. Its characteristics set it apart from a regular budget in several aspects:

Reasons of Presentation Of Interim Budget

Interim budgets are typically presented in two scenarios:

• Transition Period: When a government approaches the end of its term due to impending elections, leaving inadequate time to present a complete budget before a new government assumes office.

• Dissolution of Parliament: If the Parliament undergoes premature dissolution due to various reasons, an interim budget becomes necessary to sustain governmental operations until a new Parliament is elected.

Scope of Coverage

Unlike a full budget, which spans the entire financial year from April 1st to March 31st, an interim budget only encompasses a limited duration, typically 3-4 months. Its focus primarily revolves around essential government expenditures such as salaries, critical services, and ongoing projects. Notably, it refrains from introducing significant economic initiatives, policy reforms, or substantial alterations to tax structures.

Objectives

The principal objective of an interim budget is to grant authorization for government expenditures and uphold essential services during the transitional phase preceding the presentation of a full-fledged budget by a new government. By ensuring the seamless functioning of governmental affairs, it mitigates disruptions even amidst political uncertainties.

Key Highlights from the Interim Union Budget 2024

Finance Minister Sitharaman emphasized the government's commitment to enhancing the welfare of the underprivileged, women, youth, and farmers in her Budget 2024 speech, laying the groundwork for forthcoming welfare initiatives in these domains. Some notable highlights include:

Key Highlights of Interim Budget 2024:

• Focus on Welfare: Ms. Sitharaman emphasized improving conditions for the underprivileged, women, youth, and farmers, hinting at upcoming welfare schemes.

• Vision for 2047: The government aims for a 'Viksit Bharat' (Developed India) by 2047, prioritizing "governance, development, and performance."

• Poverty Reduction: Highlighting achievements, Ms. Sitharaman stated lifting 250 million people out of poverty in a decade.

• Housing and Women Empowerment: The government plans to build 20 million affordable houses. It celebrated the success of self-help groups that empowered 1 crore women to become "Lakhpati didis".
• Education and Gender Equality:  On 'Nari Shakti, FM Sitharaman says, "Female enrolment in higher education up by 28% in 10 years, in STEM courses, girls & women make 43% of enrolment, one of the highest in the world. All these steps are reflected in the increasing participation of women in the workforce. Making triple talaq illegal, reservation of 1/3 seats for women in Parliament and state assemblies, over 70 % houses under PM Awas Yojana to women have increased their dignity."
• Financial Inclusion and Farmer Support: Direct benefit transfers led to government savings, while PM KISAN Yojana benefitted over 11.8 crore farmers. Other schemes like PM-SVANidhi and PM Mudra Yojana promote street vendor and youth entrepreneurship.
• Clean Energy and Healthcare: 1 crore households to receive subsidized solar power under rooftop solarization, and medical colleges will be set up utilizing existing infrastructure.
• Defense and Infrastructure: Defense spending increased by 11.1%, and infrastructure development through railways and airports are prioritized. 40,000 rail bogies to be converted to Vande Bharat standards. Airports to be doubled to 149. Indian carriers have placed orders for 1,000 new aircraft.

• Fiscal Focus: Revised fiscal deficit estimate stands at 5.8% of GDP, and the government aims for sustainable and inclusive growth.
• Tax Simplification: Similar tax rates for direct and indirect taxes, including import duties, are proposed.
• Marching Towards Progress : The government is focused on more comprehensive GDP - governance, development, performance." Ms Sitharaman said. We need to focus on - Garib, Mahilayen, Yuva and Annadata; Their needs and aspirations are our highest priorities. Jai Jawan, Jai Kisan, Jai Vigyan, Jai Anusandhaan (research) is the motto of the Modi govt, she said.

• Fiscal Focus: Revised fiscal deficit estimate stands at 5.8% of GDP, and the government aims for sustainable and inclusive growth.

• Tax Simplification: Similar tax rates for direct and indirect taxes, including import duties, are proposed.

• Marching Towards Progress : The government is focused on more comprehensive GDP - governance, development, performance." Ms Sitharaman said. We need to focus on - Garib, Mahilayen, Yuva and Annadata; Their needs and aspirations are our highest priorities. Jai Jawan, Jai Kisan, Jai Vigyan, Jai Anusandhaan (research) is the motto of the Modi govt, she said.

The interim budget for 2024 reflects the government's steadfast commitment to inclusive growth, sustainable development, and economic prosperity, echoing the overarching vision of a 'Developed India' by 2047.. But remember, this is an interim budget, and major policy announcements are typically reserved for the full budget presented by the new government after elections. This budget primarily ensures smooth government functioning until then.