24 July 2024, The Indian EXPRESS
Shifting focus from fiscal deficit to debt-GDP ratio
Page no- 6
GS3-Government Budgeting
- Even as the government announced schemes to boost employment and assistance to some states in Union Budget 2024-25, it reiterated its intent to stick to the fiscal consolidation roadmap and announced a lower fiscal deficit target.
- In what could be a signal to rating agencies, the government cut the fiscal deficit target to 4.9 per cent of the Gross Domestic Product (GDP) for financial year 2024-25 from 5.1 per cent in the interim Budget, while underlining that the central government debt will be on a declining path as a percentage of the GDP.
Centre’s subsidy bill to fall to five-year-low in 2024-25
Page no- 6
GS3-Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices
- The Centre’s outgo on subsidies is budgeted to decline to a five-year-low in 2024-25, both in absolute terms and as a percentage of gross domestic product (GDP).
- This is despite no increases in the prices of fertilisers for farmers or that of foodgrains sold through the public distribution system (PDS).
- The subsidy bill peaked at Rs 758,165 crore (3.8 per cent of GDP) in 2020-21, which is expected to fall to Rs 428,423 crore (1.3 per cent) in the current year.
- The lower spend is on account of two factors.
Govt hikes long-term capital gains tax to 12.5% from 10%; clamps down on F&O trading, raises STT
Page no- 7
GS3-Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development
- Finance Minister Nirmala Sitharaman on Tuesday raised taxation on income on short-term and long-term capital gains and also doubled the Securities Transaction Tax (STT) on futures & options (F&O) of securities.
- In the Union Budget 2024-25, Sitharaman announced an increase in the long-term capital gains (LTCG) on all financial and non-financial assets to 12.5 per cent, from 10 per cent.
- However, the exemption limit of Rs 1 lakh for LTCG on these assets has also increased to Rs 1.25 lakh.
Govt decriminalises late payment of TDS, to reduce litigation with Vivad se Vishwas scheme
Page no-8
GS3-Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development
- The Union Budget has proposed a number of tax simplification measures including a comprehensive review of the Income Tax Act, decriminalisation of late payment of tax deducted at source (TDS) and the Vivaad Se Vishwas Scheme 2024 for settling direct tax disputes.
- The other proposed measures include decriminalisation of non-reporting of small foreign assets, a simplified tax regime for charities and a tweak in limits for reassessments to reduce disputes.
To bolster grid, push for thermal & energy storage
Page no- 9
GS3-Infrastructure: Energy
- In an attempt to counterbalance the variability of renewable energy and strengthen India’s baseload power capacity, Finance Minister Nirmala Sitharaman announced plans to set up the country’s first 800 MW advanced ultra supercritical (AUSC) thermal plant based on indigenous technology.
- Sitharaman also unveiled plans to formulate a policy for energy storage focusing on promoting pumped storage projects (a type of hydroelectric energy storage) and underscored the need for developing nuclear energy capacities through private sector collaboration.
Internship for 1 crore youth, industry seeks clarity
Page no- 10
GS2-Issues Relating to Development and Management of Social Sector/Services relating to Human Resources
- Even though the general consensus across the industry about the government’s announcement to create internship opportunities for a crore individuals at hundreds of top companies in the country was largely one of optimism, a number of questions around how the scheme would actually be operationalised on the ground has tempered the sanguine mood.
- The scheme is part of the central government’s larger focus in the Union Budget 2024 on creating employment avenues for the country’s youth, and comes after the issue became a hot button during the Lok Sabha polls held earlier this year.
In govt outreach to tribals, a new scheme for development of 63000 villages
Page no- 12
GS2-Welfare Schemes for Vulnerable Sections of the population by the Centre and States and the Performance of these Schemes
- Union Finance Minister Nirmala Sitharaman on Tuesday announced the implementation of Digital Public Infrastructure (DPI) in agriculture, with farmers across the country and their lands to be covered in three years.
- Using the DPI, digital crop survey of the ongoing Kharif season will be done in 400 districts, she said.
- In her Budget speech, Sitharaman said the government was “buoyed by the success of the pilot project”, and that it would facilitate the implementation of DPI in partnership with states.
Prudence and plumbing
Page no- 14
GS3-Indian Economy and issues relating to Planning, Mobilization of Resources, Growth, Development
- The FY25 budget continues the commitment to being responsible.
- The fiscal deficit is projected at 4.9 per cent of GDP in FY25 and seeks a large 0.9 pp correction relative to FY24 (and a 0.2 pp lower deficit even compared to the interim budget) — a decline of 1.8 pp over the last four years.
- This would be the largest annual reduction in deficit since 2013, excluding the post-Covid normalisation.
- This is despite the skew towards capital spending in the budget (the capital to current ratio increasing from 18 per cent to a projected 30 per cent), with obvious multipliers.
- The Finance Minister also pointed to the plan to bring down the deficit further to 4.5 per cent in FY26, and emphasised the goal to bring sovereign debt on a declining path as a percentage of GDP.
- A modest nominal GDP growth and tax buoyancy also suggest prudence, giving room for upside surprises, and flexibility to deal with unknowns.
4 opp CM to boycott NITI Aayog meeting over ‘discriminatory’ budget
Page no- 20
GS2-Issues and Challenges Pertaining to the Federal Structure
- At least four chief ministers, including three from the Congress, are set to boycott the NITI Aayog meeting scheduled for July 27 in protest against the “discriminatory” Union Budget, presented by Finance Minister Nirmala Sitharaman on Tuesday.
- While Tamil Nadu CM M K Stalin made the announcement at a press conference on Tuesday evening, Congress general secretary K C Venugopal, in a social media post at night, wrote, “The Union Budget presented today was extremely discriminatory and dangerous, which completely goes against the principles of federalism and fairness that the Union Government must follow.
- In protest, INC CMs will be boycotting the NITI Aayog meeting.
Neighbourhood first in External Affairs’ allocation for aid to countries
Page no- 20
GS2-India and its Neighborhood- Relations.
- A month ago, when the NDA government began its third term, India spelt out clearly that it would focus on its neighbourhood.
- The presence of leaders from the neighbourhood and the Indian Ocean region, including Bangladesh Prime Minister Sheikh Hasina and Sri Lanka President Ranil Wickremesinghe, at the inauguration of Prime Minister Narendra Modi’s third term, reaffirmed that policy.
Top court rules out NEET re-test: Paper leak in Patna & Hazaribagh, not systemic breach
Page no- 25
GS2-Issues Relating to Development and Management of Social Sector/Services relating to Education
- The Supreme Court on Tuesday turned down demands for cancellation of the NEET-UG 2024, saying that “at the present stage, there is absence of sufficient material on record to lead to the conclusion that result of the… examination stands vitiated or that there is a systemic breach to the sanctity of the examination”.
