Govt kept its word on fiscal consolidation: FM in Rajya Sabha

The Union budget balanced elements of growth, employment, welfare spending and capital investments even as the government kept its word on the fiscal consolidation glide path, finance minister Nirmala Sitharaman said.

“Keeping in line with the vote-on-account budget which was passed in February, Budget 2024 that was presented on 23 July 2024 highlights and continues the feature that capital expenditure will be sustained, as was indicated earlier at ₹11.11 trillion,” the finance minister said on Thursday, noting the rise in capex had had a multiplier effect and aided private investment.

“Capex route is not only meeting the domestic challenge of reviving the economy after covid, but is also helping to mitigate the increasing number of global challenges,” Sitharaman said in her reply to the budget discussion in Rajya Sabha.

She added that the total resources proposed for transfer to states in Budget Estimates of 2024-25 estimated at ₹22.91 trillion were not lower than earlier, but an increase of about ₹2.49 trillion over revised estimates of 2023-24. Similarly, outlays for all Union Territories increased from ₹61,118 crore in BE 2023-24 to ₹68,660 crore in 2024-25.

Allocation for agriculture and allied sectors was also increased, from ₹1.44 trillion to ₹1.52 trillion this year, an increase of ₹8000 crore, countering Opposition members that have highlighted lower allocation for states as well as for critical sectors.

Speaking on tax reforms, the minister said income tax refunds had improved over the last three to four years, where the average processing time of returns has reduced from 93 days in 2013-14 to 10 days in 2023-24.

"From the days of rent-seeking and tax terrorism, we now have a faceless regime infusing confidence among taxpayers," the minister added.

On exempting some drugs from custom duties, Sitharaman said that the government’s approach has been to progressively exempt all life-saving drugs and medicines imported for personal use.

She added that the government tried taking many steps to make angel tax softer, but ultimately, removed it totally.

“Defaulting promoters were not allowed to rebid for their own company so that we don't have them coming through the back door and getting it for lesser price,” the finance minister said, while pointing to reforms made for better governance.

She also highlighted that since subsuming of the railway budget into the main budget, the allocations have not reduced but have risen. “So subsuming of the Railway Budget into the General Budget has not made the Railways suffer in any way,” she said.