FM Nirmala Sitharaman asserts Union Budget strikes fine balance between growth & financial consolidation

Finance Minister Nirmala Sitharaman has said that the Union Budget strikes a fine balance among priorities like growth, employment, welfare, capital investment, and financial consolidation. She was replying to a debate on the Union Budget 2024-25 and the Budget for Union Territory of Jammu and Kashmir 2024-25 in the Rajya Sabha yesterday. 

Saying that the government believes in the motto of sabka saath, sabka vikas, sabka vishwas, and sabka prayaas, the Finance Minister stressed that the budget has proposed unflinching support for cooperative federalism. She rejected the opposition’s allegation of a reduction in allocation in the agriculture sector. Ms Sitharaman informed us that 1.48 lakh crore has been allocated for education, employment, and skilling. She said tax revenues have seen impressive growth. The Finance Minister said efforts on metering have improved billing and collection efficiency in the power sector, which has also resulted in non-tax revenues increasing from five thousand 148 crore rupees in 22-23 to six thousand 500 crores in 23-24. She said it is a big reform step. 

Ms Sitharaman said the basic duty on crude palm oil, crude soyabean oil, and crude sunflower oil has been reduced from 2.5 per cent to nil. She said this measure allows crude oil to be imported into India for refining, creating jobs and ensuring the availability of edible oil in the country. On the devolution of funds, Ms Sitharaman said the Finance Commission recommends the devolution of taxes as a percentage of the net proceeds, as defined in Article 279



of the Constitution. She said the net proceeds are calculated by deducting cesses, surcharges, and the cost of collection from the gross tax receipts. 

The Finance Minister said it is wrong to calculate devolution based on gross tax receipts and then claim that the centre is devolving less than what is suggested by the Finance Commission. On Jammu and Kashmir, the Finance Minister said, efforts are on to correct lingering fiscal distortions in the UT, and the administration of the UT has brought off-budget borrowings onto its book.

She said that capital expenditure is pegged at 11 lakh 11 thousand crore rupees, which is the biggest ever allocation, registering an increase of about 17 per cent over the revised estimates and provisional actuals of the financial year 2023-24. The Finance Minister highlighted that during the UPA era, Capex allocation was 13.19 lakh crore rupees between 2004-05 to 2013-14, whereas during the NDA tenure from 2014 to 2024, the allocation for Capex has been 43.82 lakh crore rupees.

Ms Sitharaman said that she had promised that the government would work towards reducing the fiscal deficit to below 4.5 per cent by 2025–26, which had reached 9.2 per cent in 2021. and the government is on track to achieve this target.

On the Agniveer scheme, Ms Sitharaman said that it will help keep armed forces battle-ready and young, and there is no need to do politics over this scheme. Proceedings of the Upper House are underway.