I would like to express my deepest gratitude to Mr.

Shaji, my economics
teacher, for his invaluable guidance and support throughout the course of
this project on the Government Budget 2024-25. His insightful suggestions,
continuous encouragement, and deep knowledge of the subject have been
instrumental in shaping this project and helping me understand the
complexities of economic policies.

I am thankful for the time and effort he dedicated to reviewing my work and
providing feedback, which greatly enhanced the quality of this project. This
project would not have been possible without his mentorship and patience.

Last but not least, I extend my thanks to my parents for their continuous
support and coordination throughout this endeavour.

Introduction

The Union Budget of India for the financial year 2024-25, presented by the Hon'ble Finance
Minister on February 1st, 2024, outlines the government’s fiscal policy for the year. The 2024
budget focuses on economic recovery, job creation, infrastructure development, and
maintaining fiscal discipline in the wake of global inflation and post-pandemic recovery. With
an emphasis on capital expenditure, the budget aligns with the government’s objective of
long-term economic growth while ensuring fiscal consolidation.

In this case study, we explore the core aspects of the 2024 Union Budget, including the key
financial figures, sectoral allocations, tax reforms, and major policy initiatives.

Key Budget Figures and Financial Estimates for 2024-25

The Union Budget 2024 outlines substantial fiscal policies aimed at growth and prudent
spending. Below are the major figures that define the budget:

1. Total Expenditure: ₹48.21 lakh crore, which marks an 8.5% increase over the
previous year, focusing on both revenue and capital expenditures.
2. Revenue Receipts: ₹32.07 lakh crore, which includes tax revenues of ₹25.83 lakh
crore and non-tax revenues of ₹6.24 lakh crore. The receipts are expected to grow
by 15% from the previous fiscal year.
3. Capital Expenditure: ₹11.11 lakh crore is earmarked for long-term infrastructure
projects, representing 22.8% of total spending. This is a sharp 17.1% increase over
the previous year, with key allocations for roads, railways, and green energy.
4. Fiscal Deficit: The fiscal deficit is targeted at 4.9% of GDP, representing a gradual
reduction from the 5.6% recorded in 2023-24. The government has reaffirmed its
goal to bring the fiscal deficit below 4.5% by 2025
The government also projects gross borrowings of ₹14.01 lakh crore, while net market
borrowings are expected to be ₹11.63 lakh crore

Expenditure Breakdown in the Union Budget 2024-25

The pie chart below illustrates the proportional distribution of the total expenditure,
highlighting major categories such as revenue expenditure, capital expenditure, social
welfare, defense, and infrastructure. This helps in understanding the government's spending
priorities.

Revenue and Taxation Reforms

The 2024 Union Budget includes several key reforms to the taxation system, aimed at
simplifying the tax regime and increasing compliance. These reforms are expected to drive
growth and improve ease of doing business.

1. Personal Income Tax:

The new personal income tax regime has undergone notable changes:

● The standard deduction for salaried employees has been raised from ₹50,000 to
₹75,000.
● A significant revision of the tax slabs has been introduced. Income up to ₹3 lakh
remains exempt, while the slabs have been adjusted for middle and upper-income
groups to reduce the tax burden

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Here’s a brief breakdown of the revised income tax structure:

2. Corporate Tax:

While the basic corporate tax rates remain unchanged, the budget has simplified compliance
procedures and reduced disputes. The government has emphasized that most businesses
are shifting to the new tax regime, which eliminates several exemptions

3. Capital Gains Tax:

Short-term capital gains on listed assets are now taxed at 20%, while long-term gains are set
at 12.5%. This modification aligns the capital gains tax structure with international practices
and is expected to encourage long-term investments

Sectoral Allocations and Expenditure Breakdown

1. Infrastructure Development

One of the cornerstones of the 2024 budget is the emphasis on infrastructure. The capital
expenditure of ₹11.11 lakh crore primarily targets large-scale projects in sectors such as
transport, energy, and digital infrastructure. The government also continues to support the
National Infrastructure Pipeline (NIP), with new initiatives to promote urban development,
particularly in smart cities.

Key allocations:

● ₹3.14 lakh crore for road transport and highways.

● ₹2.4 lakh crore for railways, the highest ever capital outlay for the sector

2. Social Welfare

The government has made significant investments in healthcare, education, and rural
development, reflecting its commitment to social welfare.

Healthcare:

● ₹1.67 lakh crore is allocated to healthcare, with a focus on strengthening primary

healthcare systems and the Pradhan Mantri Ayushman Bharat Yojana. This scheme
aims to expand access to healthcare services for lower-income groups

Education:
 ● ₹1.2 lakh crore is allocated to the education sector, focusing on implementing the
National Education Policy and promoting digital learning initiatives.

Employment Schemes:

● ₹73,000 crore has been earmarked for the Mahatma Gandhi National Rural
Employment Guarantee Scheme (MGNREGA) to provide rural employment

3. Defense

The budget allocates ₹5.95 lakh crore to defense, including substantial investments in
procurement, research, and modernization. This allocation, accounting for 12.3% of total
expenditure, reflects India’s security needs in a dynamic geopolitical environment

Trends in Revenue and Capital Expenditure (2021-2024)

The line graph below compares the trends in revenue and capital expenditure over the last
four fiscal years. The sharp rise in capital expenditure emphasizes the government's
commitment to infrastructure and development projects, while revenue expenditure
continues to grow to cover operational costs and welfare programs.

Public Opinion on the Union Budget 2024-25

The Union Budget of 2024-25 has sparked diverse reactions from the public, spanning
various segments of society. The budget’s emphasis on infrastructure development, social
welfare, and fiscal discipline has been lauded by some, while others have expressed
concerns over the adequacy of measures in key areas like education and healthcare. Below
is a breakdown of the public sentiment across different groups.

1. Positive Reactions:

Many have praised the government's focus on infrastructure development and fiscal
prudence. The increase in capital expenditure to ₹11.11 lakh crore, which includes
investments in roads, railways, and digital infrastructure, is seen as a significant step toward
long-term economic growth. This is particularly celebrated by industry leaders, urban
planners, and businesses, who expect these investments to create jobs and improve the
ease of doing business.

Additionally, the middle-class taxpayer has largely welcomed the revised income tax slabs,
which provide greater disposable income for lower and middle-income groups. These
changes in personal taxation are viewed as relief during a time when inflation has squeezed
household budgets. The simplified tax regime also appeals to salaried professionals, who
find the elimination of complex deductions and exemptions to be a time-saving benefit.

Entrepreneurs and business owners have expressed support for the corporate tax reforms.
While the basic corporate tax rates remain unchanged, the streamlined compliance
procedures are expected to reduce litigation and improve business operations. Startups and
MSMEs are particularly optimistic about these reforms, as they help create a more
predictable and growth-friendly environment.

2. Mixed Opinions:

Although the emphasis on fiscal consolidation and efforts to bring the fiscal deficit down to
4.9% of GDP are generally seen as responsible measures, economists and analysts have
differing views on the execution. Some believe that the focus on infrastructure and capital
expenditure could limit funds available for sectors like health and education. While the
government has reiterated its commitment to long-term growth, critics argue that this could
come at the expense of immediate needs in social welfare.

Public opinion has also been divided on the adequacy of the allocations for social programs
like MGNREGA and healthcare. While the budget increases in these sectors are
acknowledged, many feel that the allocations are still insufficient, particularly given the scale
of India's rural population and healthcare challenges. Citizens in rural areas, for instance,
have expressed concerns about whether the ₹73,000 crore allocated to MGNREGA will be
enough to address unemployment and poverty in their regions.

3. Criticisms and Concerns:

On the critical side, there is frustration among certain sections of the public over the limited
allocations to the education and healthcare sectors. Education experts have argued that
the ₹1.2 lakh crore allocated to education, while a modest increase, does not adequately
address the gaps in school infrastructure, teacher training, and access to quality education in
rural and underserved areas. Similarly, healthcare advocates argue that while ₹1.67 lakh
crore is a notable investment, it falls short of what is required to bolster India's public health
infrastructure, especially in light of the lessons learned from the COVID-19 pandemic.
Another common criticism comes from environmental groups, who believe that the budget
could have done more to support green energy initiatives. While the budget does allocate
funds for renewable energy projects, critics argue that India’s transition to a green economy
requires more aggressive investments in clean technologies and carbon reduction
strategies. Some feel that the government has missed an opportunity to prioritize climate
action, which could have aligned with global sustainability goals.

Furthermore, the urban middle class has expressed concerns over the rising cost of living.
Although tax reforms have been appreciated, many feel that the budget does not go far
enough to address inflation, particularly rising fuel and food prices, which continue to affect
household budgets. Pensioners and senior citizens, in particular, have expressed
disappointment over the lack of significant provisions to assist them with the increasing costs
of healthcare and daily expenses.

4. Industry and Investor Reactions:

The corporate sector and investors have largely reacted positively to the budget, citing the
focus on infrastructure and the capital markets as steps toward improving the business
climate. The government’s decision to maintain stable corporate tax rates while simplifying
compliance has been seen as a pro-business move. Many industry leaders believe that the
government’s commitment to fiscal consolidation will enhance investor confidence and
attract foreign investment, particularly in sectors like manufacturing, technology, and energy.

Investors have also responded well to the government’s clarification on capital gains tax.
The simplification of long-term and short-term capital gains taxation is expected to
encourage greater participation in the capital markets, both domestically and from
international investors. This move has been appreciated as part of the broader goal to align
India’s tax policies with global standards, making the country more competitive on the global
stage.

Conclusion:

The public opinion on the 2024-25 Union Budget is varied, with strong support from
businesses, the middle class, and investors, balanced by concerns from social welfare
advocates, healthcare experts, and environmentalists. While the budget is seen as a
blueprint for long-term growth, challenges remain in addressing immediate concerns,
particularly in rural welfare, healthcare, and education.

Overall, the budget has garnered cautious optimism, with most stakeholders recognizing the
government’s efforts to balance growth with fiscal prudence. However, much will depend on
the successful implementation of the policies and the government’s ability to manage
potential risks like inflation and global economic uncertainties.

REFERENCES

1. Government of India. :Union Budget 2024-25:

https://www.indiabudget.gov.in
2. Reserve Bank of India: Annual Report 2023-24.
https://www.rbi.org.in
3. Economic Times. (2024). Key Highlights of Union Budget 2024-25
https://economictimes.indiatimes.com
4. Press Releases on Union Budget 2024-25.
5. NITI Aayog. (2024). Economic Survey 2023-24.
These references were used for data and analysis on the Union Budget of India 2024-25.

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