Watch: Budget 2024 | What is in store for West Bengal?

Updated – July 24, 2024 08:55 pm IST

Published – July 24, 2024 08:05 pm IST

The Chief Minister raised questions on Centre’s proposal to provide flood assistance to neighbouring Sikkim. In her Budget speech, Ms. Sitharaman referred to devastating flash floods and landslides that wreaked havoc in Sikkim and added that the government will provide assistance to the State. The BJP had won most of seats in north Bengal including Darjeeling Lok Sabha seat.

The Finance Minister in the Budget also referred to West Bengal while stressing on a plan, Purvodaya, “for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh”.

Reporting: Shiv Sahay Singh

Production: Yuvasree S

Watch: What do people think about Budget 2024?

| Video Credit:
Vishnoo Jotshi

In this episode of Vox Pop, we go to people in Delhi to know their expectations or thoughts about the Union Budget 2024, which will be presented by Union Finance Minister Nirmala Sitharaman during the Parliament budget session on July 23, 2024. 

On the first day of the monsoon session of Parliament, on July 22, Union Finance Minister Nirmala Sitharaman will be tabling the Economic Survey 2024-25. File
| Photo Credit: PTI

Union Finance Minister Nirmala Sitharaman will be tabling the Economic Survey 2024-25 on July 22, the first day of the monsoon session of Parliament.

The Economic Survey is an official report card on the government’s financial performance and the state of the economy during the year ending March 31. It also provides an outlook on future policy changes. It is usually released by the Ministry of Finance a day before the Union Budget is tabled.

According to the Economic Survey 2023-24 which was tabled on February 1, 2023, it asserted that not only are the pandemic-induced blues over, but the outlook for the years ahead is also rosier than in the pre-COVID years.

Ms. Sitharaman will be tabling the Union Budget 2024-25 on July 23.

Union Finance Minister Nirmala Sitharaman is seen with Ministry officials during the ‘halwa’ ceremony, which marks the final stage of Budget preparation in New Delhi on July 16, 2024. Photo: X/@FinMinIndia

Finance Minister Nirmala Sitharaman on July 16 participated in a traditional ‘halwa’ ceremony, marking the final stage for preparation of Union Budget 2024-25 to be unveiled on July 23 in Lok Sabha.

The ceremony is a ritual in which traditional dessert ‘halwa’ is prepared and served to officials and staff members of the finance ministry who are involved in the preparation of the budget.

It is organised in the basement of North Block, which houses the ministry in the national capital and is attended by the finance minister and other high-ranking officials.

“The final stage of the Budget preparation process for Union Budget 2024-25 commenced with the customary Halwa ceremony in the presence of Union Minister for Finance and Corporate Affairs Smt. @nsitharaman, in New Delhi, today,” the Finance Ministry said in a post on X.

As part of the ceremony, the finance minister also took a round of the Budget Press and reviewed the preparations besides extending her best wishes to the officials concerned.

Like the previous three full Union Budgets and one Interim, the full Union Budget 2024-25 will also be delivered in paperless form.

All the Union Budget documents, including the Annual Financial Statement (commonly known as Budget), Demand for Grants (DG), Finance Bill etc. as prescribed by the Constitution, will be available on the “Union Budget Mobile App” for hassle-free access to Budget.

Besides Sitharaman, Minister of State for Finance Pankaj Chaudhary and other senior officials, including Finance Secretary T V Somanathan, Economic Affairs Secretary Ajay Seth, and Financial Services Secretary Vivek Joshi were present at the ceremony.

Halwa ceremony

It is a kind of a ‘send-off’ for finance ministry officials and staff involved in the preparation of the Union government’s annual financial statement. They enter what is called a ‘lock-in’ period, during which they stay in the basement of North Block, cut off from the world outside with a view to maintaining the secrecy around the final budget document.

They will emerge only after the finance minister completes her Budget speech in the Lok Sabha. It is considered a gesture of appreciation for those who have worked on the Budget. The basement of North Block houses a printing press that was traditionally used to print budget documents for 40 years from 1980 to 2020.

Thereafter, the budget went digital with bare minimum documents printed and the bulk distribution happening via mobile app or on the website. Going digital also meant that the lock-in period has become shorter to just five days from the previous one which lasted up to two weeks.

Printing Press

All Budget-related documents are printed at North Block itself using a dedicated government press. Earlier, the documents were printed at Rashtrapati Bhavan, but this was shifted to a press on Minto Road in the national capital in 1950 after documents were leaked, and in 1980 to North Block. The printing of several hundred copies of the voluminous budget documents was such an elaborate exercise that printing staff had to be quarantined inside the printing press in the basement of North Block for up to two weeks.

Tradition

While the Narendra Modi government has done away with several traditional aspects of the Budget since coming to power in 2014, such as merging the Rail Budget with the main Budget, bringing forward the date of presentation to February 1 instead of the last date of that month, and moving to a digital format — the ‘halwa’ ceremony as a tradition has survived.

Congress general secretary Jairam Ramesh. File
| Photo Credit: PTI

The Congress on July 12 said the forthcoming Budget must address fundamental questions such as why private investment is “very sluggish” and private consumption is not picking up as the party dismissed claims that economic growth is accelerating sharply and large numbers of jobs being created.

Union Finance Minister Nirmala Sitharaman is scheduled to present the Budget for 2024-25 in the Lok Sabha on July 23.

Congress general secretary, in-charge communications, Jairam Ramesh said, “The non-biological PM’s cheerleaders and drumbeaters claim that economic growth is accelerating sharply and that jobs are being created in large numbers. But if this was the case — and it is not — Why is private investment, a key engine of economic growth, still so very sluggish recording a 20-year low during April-June 2024? Why is private consumption, another key engine of economic growth, not picking up except at the high end,” Mr. Ramesh asked.

“Why have household savings plummeted to record lows and household debt shot up to record highs? Why have rural wages continued to fall and why is the wage share of national income declining?” he said, adding, why is manufacturing as a share of GDP at a record low and still decreasing? Why has the informal sector lost 17 lakh jobs in the last seven years? Why did unemployment reach a 45-year peak, with unemployment for young graduates at 42%?” the Congress general secretary said.

“These are fundamental questions that the forthcoming Budget will have to address while the Finance Minister sings praises of the non-biological PM,” Mr. Ramesh said.

On Thursday, the BJP claimed that around 12.5 crore jobs were created in the last 10 years of the Modi government and cited the latest Reserve Bank of India report to assert the creation of “five crore jobs in 2023-24 alone”.

Several experts have urged the government to provide tax relief to the common man to boost consumption and take steps to check inflation and accelerate economic growth.

The economy has recorded a growth rate of 8.2% in 2023-24. Earlier in February, Ms. Sitharaman presented an Interim Budget for 2024-25 in view of the Lok Sabha elections.

Union Finance Minister Nirmala Sitharaman.
| Photo Credit: PTI

The government is likely to introduce amendments to Banking Regulation Act 1949 and other laws to push banking sector reforms during the upcoming Budget session.

Apart from this, amendments in the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970, and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 are needed for privatisation of public sector banks, sources said.

These Acts led to the nationalisation of banks in two phases and provisions of these laws have to be changed for the privatisation of banks, they said.

Amendments, if approved by Parliament, would help bring down government holding in state-owned banks below 51%, improve bank governance and enhance investors’ protection, sources said.

Parliament session beginning on July 22 would witness the Budget presentation on July 23 and conclude with the passage of the Finance Bill on August 12.

It is to be noted that the government had listed amendment to these laws to be taken up during the winter session in 2021, but these bills could not be tabled.

“To effect amendments in Banking Companies (Acquisition and Transfer of Undertakings) Acts, 1970 and 1980 and incidental amendments to Banking Regulation Act, 1949 in the context of Union Budget announcement 2021 regarding privatisation of two Public Sector Banks,” as per the list of legislative business for the winter session.

Finance Minister Nirmala Sitharaman, while presenting the Budget for 2021-22, announced the privatisation of public sector banks (PSBs).

“Other than IDBI Bank, we propose to take up the privatisation of two PSBs and one general insurance company in 2021-22,” she had said.

To ensure privatisation of a general insurance company, the government has already received approval from Parliament for the General Insurance Business (Nationalisation) Amendment Bill, 2021, in the monsoon session ended in August 2021.

The government in April 2020 consolidated 10 PSBs into four and as a result, the total number of PSBs came down to 12 from 27 in March 2017.

As per the amalgamation plan, the United Bank of India and Oriental Bank of Commerce were merged with Punjab National Bank, making the proposed entity the second-largest PSB.

Syndicate Bank was merged with Canara Bank, while Allahabad Bank was subsumed in Indian Bank. Andhra Bank and Corporation Bank were amalgamated with the Union Bank of India.

In a first three-way merger, Bank of Baroda merged Vijaya Bank and Dena Bank with itself in 2019. SBI had merged five of its associate banks — State Bank of Patiala, State Bank of Bikaner and Jaipur, State Bank of Mysore, State Bank of Travancore, and State Bank of Hyderabad — and also Bharatiya Mahila Bank effective April 2017.

India’s Finance Minister Nirmala Sitharaman holds up a folder with the Government of India’s logo as she leaves her office to present the federal budget in the parliament, before the nation’s general election, in New Delhi, India, February 1, 2024.
| Photo Credit: REUTERS

The government under Prime Minister Narendra Modi should focus on adherence to fiscal prudence and continue on the fiscal consolidation path, suggested SBI Research ahead of the much-awaited full Budget for 2024-25 to be tabled on July 23 – the first Budget under Modi 3.0.

What is fiscal deficit?

The difference between total revenue and total expenditure of the government is termed as fiscal deficit. It is an indication of the total borrowings that may be needed by the government.

SBI Research suggested that the Centre should target a fiscal deficit of 4.9%, but it must not obsess too much over the fiscal stance. The Government intends to bring the fiscal deficit below 4.5% of GDP by the financial year 2025-26.

In the Interim Budget earlier this year, the Government has targeted a fiscal deficit of 5.1% of GDP for 2024-25. However, SBI Research believes that the Government may budget a fiscal deficit of less than “5% — may be 4.9% — for 2024-25” due to stellar growth in GST revenues and higher dividends from PSUs and RBI.

State borrowings

As the budgeted fiscal deficit gets lowered, the gross market borrowing of the government will also reduce to around ₹13.5 lakh crore in FY25 compared to ₹14.1 lakh crore in the interim budget and net market borrowing to ₹11.1 lakh crore against ₹11.8 lakh crore earlier, the report, authored and led by Soumya Kanti Ghosh, Group Chief Economic Adviser, SBI, said. “This along with India’s inclusion in Global Bond indices will keep the yield curve movements anchored,” it added.

In 2023-24, the Government pegged the fiscal deficit target for FY2023-24 at 5.9% of gross domestic product (GDP). Later, it was downwardly revised to 5.8%.

The interim budget, tabled on February 1, took care of the financial needs of the intervening period until a government was formed after the Lok Sabha polls, after which a full budget was supposed to be presented by the new government in July.

FM Sitharaman to break record with sixth budget presentation

With this upcoming Budget Presentation,surpassed the record set by former Prime Minister Morarji Desai, who as finance minister, presented five annual budgets and one interim budget between 1959 and 1964.

Mrs. Sitharaman’s upcoming Budget speech would be her sixth.The government on July 6 announced the dates of the Budget session of Parliament which will start on July 22 and conclude on August 12.

Budget session of Parliament will be held from July 22 to August 12, said Union Parliamentary Affairs Minister Kiren Rijiju

Union Parliamentary Affairs Minister Kiren Rijiju, on July 6, said that the Budget session of Parliament will be held from July 22 to August 12. Mr. Rijiju added that the Union Budget 2024-25 will be presented on July 23.

Mr. Rijiju in his X (formerly Twitter) post said “Hon’ble President of India, on the recommendation of Government of India, has approved the proposal for summoning of both the Houses of Parliament for the Budget Session, 2024 from 22nd July, 2024 to 12 August, 2024 (Subject to exigencies of Parliamentary Business). Union Budget, 2024-25 will be presented in Lok Sabha on 23 July, 2024.”

After the general elections 2024, a special session of Parliament was held from June 24. The new Members of Parliament took oath and President Droupadi Murmu addressed the joint session of Parliament on June 27.

This will be the first budget presented by the government led by Prime Minister Narendra Modi in its third term amid high anticipation following President Droupadi Murmu’s assertion that it will be marked by many historic steps.

In her address to a joint sitting of Parliament, she had said major social and economic decisions will be a highlight of the budget.

An interim budget was presented in February due to the Lok Sabha polls, which were held in April-June.

Andhra Pradesh Chief Minister N Chandrababu Naidu meets Union Finance Minister Nirmala Sitharaman during a meeting, in New Delhi on July 5, 2024.
| Photo Credit: PTI

Ahead of the Union Budget presentation, Andhra Pradesh Chief Minister N Chandrababu Naidu on July 5 met Union Finance Minister Nirmala Sitharaman, pressing for enhanced financial support to the debt-burdened State.

Sources said Mr. Naidu, during the meeting in North Block, highlighted various ongoing projects in Andhra Pradesh that require urgent central assistance.

“The CM presented a detailed memorandum outlining the state’s financial requirements and the rationale behind the demand for increased allocation,” the sources added.

TDP ministers in the Centre were present during the meeting.

Mr. Naidu also met Defence Minister Rajnath Singh and Health Minister J P Nadda.

According to the state government data, the public debt of Andhra Pradesh has increased from 31.02% of the Gross State Domestic Product (GSDP) in 2019-20 to 33.32% in 2023-24 fiscal, indicating deterioration in the fiscal health of the state in the last five years.

Key among Mr. Naidu’s demands were funds for the Polavaram irrigation project, special assistance for backward regions, and support for the development of the new capital, Amaravati.

The Chief Minister also sought resolution of pending issues stemming from the bifurcation of the erstwhile Andhra Pradesh.

The meeting assumes significance as it comes just weeks before the presentation of the Union Budget 2024-25.

The sources indicated that Ms. Sitharaman gave a patient hearing to Mr. Naidu’s concerns and gave an assurance that she will look into Andhra Pradesh’s demands within the broader fiscal constraints.

Mr. Naidu has been vocal about the State’s financial distress and sought increased central support to tide over the fiscal challenges, when he met with Prime Minister Narendra Modi and several Union Ministers on Thursday.

The Naidu-led Telugu Desam Party is a crucial partner of the NDA with its 16 Lok Sabha MPs supporting the Narendra Modi-led government.

Union Finance Minister Nirmala Sitharaman.
| Photo Credit: PTI

States have urged the Centre to make some improvements in the 50-year interest free loan scheme for pursuing capital investment projects, under which the Union government has proposed to give them ₹1.3 lakh crore this year, the same amount as 2023-24.

Ministers from States made suggestions related to the ‘Scheme for Special Assistance to States for Capital Investment’, first launched in 2020-21, during pre-Budget consultations chaired by Union Finance Minister Nirmala Sitharaman on June 22.

Ms. Sitharaman also heard out several suggestions from State Ministers regarding the Union Budget 2024-25 likely to be presented next month, along with requests specific to their regions, and assured them that their ideas and inputs will get “due consideration by the Union Government during the preparation of Union Budget 2024-25”.

Apart from Finance Ministers from several States, the meeting was attended by the Chief Ministers of Goa, Meghalaya, Mizoram, Nagaland, and Sikkim, along with the Deputy Chief Ministers of Bihar, Madhya Pradesh, Odisha, Rajasthan and Telangana.

“In her remarks, the Union Finance Minister underlined Union Government’s support to States through timely tax devolution, Finance Commission grants, and arrears of GST Compensation being provided for providing stimulus to growth,” the Finance Ministry said in a statement.

On the ‘Scheme for Special Assistance to States for Capital Investment’, Ms. Sitharaman iterated that while most of the loans under it are untied, a part of the allocation is conditional and linked to citizen-centric reforms by States and sector-specific capital projects. She requested the States to avail these loans by fulfilling those requisite criteria.