BUDGET 2024-25: A DEVELOPMENT ORIENTED BUDGET

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By Dr. Adviti D, Assistant Professor, Economics, SRM University, AP

Earlier this year, Finance Minister, Mrs. Nirmala Sitharaman, announced the budget for 2024-25 on July 24, 2024, with a major focus on Agriculture, Skilling, MSME’s and Middle Class. Additionally, they choose to focus on the improvement of the four vulnerable sections of poor, youth, farmer and women. A brief review of the budget would depict otherwise, with notable deviations from the same.

The theme of the NDA govt has largely been development oriented, with a large proportion of the budget expenditure accounted by the capital expenditure and investments. The theme of this year’s budget remains significantly the same, with a marginal increment in the focus on the social welfare of the vulnerable sectors. Like the themes as before, the major focus of this budget has also been investment in the capital and infrastructure, with the ministry of transport and defense taking up a major chunk of the budget. The development of states has been prioritized, with the state transfers exceeding 50000 crores increment from the budget allocation of 2023-2024. In contrast with the previous year’s budget, rural development has been prioritized, with an increase of 27000 crores (approx.) in the budget allocated to the ministry of rural development. This is in line with the theme of the budget as announced by the finance minister and is a much-needed change to reduce the gap between the rural and urban development levels. The ministry of Home Affairs and Education have also been focused on, with an increment in the budget of 17000 crores each (approx.). This falls in place with their third priority of inclusive HR development and social justice.

The sectors that needed and could have received more attention are agriculture and allied activities, along with the energy sector. Although agriculture and allied activities stand as the top priorities according to the budget’s theme, the increase in the budget for the same is not very significant, at 11000 crores. The last couple of decades have witnessed a shift in the occupation from agriculture to largely IT and services sector, which implies that lesser food production in the coming decades, even after accounting for the developments in the trends of agriculture (in-house farming, better irrigation facilities, etc.). While the need for superior infrastructure can’t be denied, it is equally important to focus on food security for a nation as large as India. Another raging concern is the shift to non-renewable energy resources. Having said that, the move towards natural farming as well as bio-based inputs is most welcome and is much needed for sustainability in the short-term as well as long-term. The geopolitical uncertainties in the last decade (Russia-Ukraine war, etc.) have time and again proved that India is largely dependent on the external world for energy supply. Given the consistent presence of geopolitical instability, and reliance on the external supply of fuel, prioritizing energy would have been more beneficial in the mid-term.

All-in-all, the budget allocation enhances their ideology of need for development and could have witnessed better allocation in terms of funds allocated to the agriculture sector, energy sector.