📑 Page 4: Index / Table of Contents

S. No. Content Title Page No.

1. Introduction 5
2. Objectives of a Government Budget 7
Components of the Government
3. 10
Budget
4. Types of Budget 14
5. Budgetary Deficits and Implications 18
6. Highlights of Union Budget 2024–25 22
7. Budget’s Impact on Indian Economy 26
Role in Reducing Inequality and
8. 29
Poverty
9. Case Studies and Schemes 32
10. Challenges in Budget Formulation 35
11. Suggestions & The Way Forward 36
12. Conclusion 38
13. Glossary 39
14. Bibliography 41
15. Appendix (Optional) 43

📖 Chunk 1: Introduction (Pages 5–6)

Introduction to Government Budget

A government budget is a comprehensive statement that outlines the estimated

revenues and expenditures of the government for a specific fiscal year. In India, the
fiscal year runs from April 1st to March 31st of the following year. The budget is not just
an accounting document—it is a significant policy tool through which the government
directs the country’s economic trajectory.

The budget plays a crucial role in:

• Managing the overall economic environment,

• Stimulating economic growth,
• Ensuring the equitable distribution of income and wealth,
• Controlling inflation and unemployment, and
• Stabilizing the economy in times of recession or boom.
It reflects the priorities of the government, showing where money will be spent (like
education, defense, or health) and where it will be raised from (like income tax,
corporate tax, or GST). Through budgetary measures, the government also addresses
regional imbalances, promotes social welfare, and ensures the smooth functioning of
public services.

Every year, the Union Finance Minister presents the Union Budget in Parliament, which
contains two parts:

1. Revenue Budget – comprising revenue receipts and revenue expenditures.

2. Capital Budget – including capital receipts and capital expenditures.

In addition to the Union Budget, state governments prepare their own budgets to
manage resources at the state level. Together, they form the fiscal framework that
influences consumption, savings, investment, and overall development.

In this project, we will explore the structure, components, objectives, and implications
of the government budget with a specific focus on the Indian economy.

📖 Chunk 2: Objectives of a Government Budget (Pages

7–9)

Objectives of a Government Budget

A well-structured government budget is a reflection of a country’s economic vision and

priorities. The primary objective of the budget is not merely to track income and
expenditure but to achieve broader macroeconomic goals that contribute to the overall
development of the nation.

Here are the major objectives of the government budget:

1. Allocation of Resources

The budget helps the government allocate scarce resources in a way that promotes
social welfare. It directs funds towards sectors that require development such as:

• Infrastructure (roads, railways, power)

• Education and health
 • Defense and public safety
• Agriculture and rural development

Example: The allocation to the Jal Jeevan Mission aims to improve water supply in rural
areas, ensuring equitable resource distribution.

2. Redistribution of Income and Wealth

The budget acts as a tool for reducing income inequalities in society. It achieves this
through:

• Progressive taxation: Higher income groups are taxed at a higher rate.

• Subsidies and welfare schemes: Lower-income groups receive financial
support, free ration, and health care.

Example: Schemes like PM Garib Kalyan Anna Yojana and Ujjwala Yojana help uplift the
economically weaker sections.

3. Economic Stability

A key objective of the budget is to maintain price stability and control inflation. The
government uses fiscal tools (spending and taxation) to influence demand in the
economy.

• During inflation: The government can reduce spending or increase taxes.

• During recession: The government may increase expenditure to boost demand
and employment.

4. Promotion of Economic Growth

The budget promotes growth by encouraging investment in capital formation (e.g.,

infrastructure, skill development). This leads to job creation and increased output.

Example: Budget allocation to schemes like Make in India, Skill India, and the National
Infrastructure Pipeline are steps in this direction.
5. Managing Public Enterprises

Many public sector undertakings (PSUs) are funded or supported through the budget.
These enterprises provide essential goods and services and contribute to economic
development.

Example: Capital infusion in banks and public enterprises like BSNL, Air India (before
privatization), etc.

6. Reducing Regional Imbalances

The budget allocates more resources to underdeveloped regions to bring them at par
with more developed areas.

Example: Special grants and incentives for North Eastern states and hilly regions.

7. Employment Generation

By increasing spending in sectors like infrastructure, agriculture, and small industries,

the government can create more jobs and reduce unemployment.

Example: Programs like MGNREGA (Mahatma Gandhi National Rural Employment

Guarantee Act) directly create employment in rural areas.

8. Sustainable Development

Modern budgets also include green and climate-conscious initiatives. Allocations

toward renewable energy, waste management, and electric vehicles reflect a move
toward environmental sustainability.

Conclusion of this Section

The government budget is much more than a statement of accounts; it is a multi-

dimensional policy tool used to shape the economy and society. Each year, the
government sets objectives based on national and international economic challenges,
using the budget to navigate through them.

📖 Chunk 3: Components of the Government Budget

(Pages 10–13)

1. Revenue Budget

The Revenue Budget includes the government’s revenue receipts and revenue
expenditures.

🟢 A. Revenue Receipts

These are the funds received by the government that do not create any liability or
reduce assets. They are classified into two categories:

• Tax Revenue:
o Direct Taxes: Income Tax, Corporate Tax
o Indirect Taxes: GST, Excise Duty, Customs Duty
• Non-Tax Revenue:
o Interest receipts
o Dividends from public sector undertakings
o License fees
o Fines and penalties

Example (2024–25): Tax revenue forms over 80% of India’s revenue receipts.

🔴 B. Revenue Expenditure

These are expenditures that do not result in the creation of assets or reduction of
liabilities. They include:

• Salaries and pensions

• Subsidies (food, fertilizer, LPG)
• Interest payments on loans
 • Grants given to state governments

Revenue expenditure is usually higher than revenue receipts, leading to a revenue

deficit.

2. Capital Budget

The Capital Budget includes receipts and expenditures that create liabilities or
reduce assets, and are usually related to long-term development.

🟢 A. Capital Receipts

These are receipts that either create liability (like borrowings) or reduce assets (like
disinvestment). They include:

• Market loans (government borrowing)

• Borrowings from the RBI or foreign sources
• Recoveries of loans given by the government
• Proceeds from disinvestment (selling PSUs)

Example: The government raised ₹1.05 lakh crore via disinvestment in FY 2023–24.

🔴 B. Capital Expenditure

These are expenses that lead to creation of assets or reduction of liabilities, such as:

• Construction of roads, bridges, and railways

• Loans to state governments
• Investments in public enterprises
• Infrastructure development

These expenditures are essential for long-term economic growth.

🧮 Key Differences Between Revenue and Capital Budget

Basis Revenue Budget Capital Budget

Nature Recurring Long-term
Asset Creation No Yes
Liability Creation No Yes
Salaries, Infrastructure,
Examples
subsidies loans

3. Deficit Concepts

Deficits show the gap between the government’s income and spending.

• Revenue Deficit:
Revenue Expenditure – Revenue Receipts
→ Indicates over-spending on current needs
• Fiscal Deficit:
Total Expenditure – Total Receipts (excluding borrowings)
→ Indicates total borrowing needed
• Primary Deficit:
Fiscal Deficit – Interest Payments
→ Indicates current year's fiscal stress

A high fiscal deficit can lead to inflation, debt, and economic instability.

📊 Visual Aids (Optional to Add in Word File)

• Pie chart showing breakdown of revenue vs capital receipts

• Table showing past 5 years' deficit trends
• Graph: Tax vs Non-Tax revenue comparison

✅ Conclusion of this Section

Understanding the components of the budget helps decode how the government
balances welfare with development, and how it manages public finance for a nation of
1.4 billion people. These components reflect both the priorities and the constraints of
government policy-making.
📖 Chunk 4: Types of Budget (Pages 14–17)

Types of Government Budget

The government prepares different types of budgets depending on the nature of

expected receipts and expenditures. Broadly, budgets are classified into three main
types based on the balance between revenue and expenditure:

🟡 1. Balanced Budget

A balanced budget is when the government’s estimated revenue equals its estimated
expenditure.

Revenue = Expenditure

✅ Advantages:

• Ensures fiscal discipline

• No need for borrowing, hence no debt
• Stable macroeconomic conditions

❌ Disadvantages:

• May not support economic growth during a slowdown

• Limits the government’s capacity to spend on development

Example: A balanced budget is more common in theory than in practice, especially in

developing countries like India that need to invest in growth and social welfare.

🔴 2. Deficit Budget

A deficit budget occurs when the government’s expenditure exceeds revenue.

Expenditure > Revenue

This shortfall is met through:

 • Borrowing from the public
• Loans from the Reserve Bank of India (RBI)
• External sources like the World Bank or IMF

✅ Advantages:

• Boosts aggregate demand in times of recession

• Funds infrastructure and development projects
• Encourages job creation

❌ Disadvantages:

• Increases national debt

• Can lead to inflation
• Higher interest payments in future years

Example: Most Indian budgets are deficit budgets. In FY 2024–25, India’s fiscal deficit
target is 5.1% of GDP.

🟢 3. Surplus Budget

A surplus budget happens when the government’s revenue exceeds expenditure.

Revenue > Expenditure

This implies the government is collecting more than it spends.

✅ Advantages:

• Helps reduce inflation during an overheated economy

• Indicates strong financial health
• Useful for reducing public debt

❌ Disadvantages:

• May lead to under-spending on social welfare

• Can slow down economic growth during periods of low demand

Example: A surplus budget is rare in developing nations. However, some Scandinavian

countries have managed it due to high tax compliance and efficient governance.
📘 Comparison Table: Types of Budgets

Type Revenue Expenditure Result Common When?

Balance
= = Neutral Theoretical ideal
d
During
Deficit < > Borrowing
slowdown/recession
Surplus > < Savings During inflation boom

🧠 Application of Budget Types in India

India usually follows a deficit budget to:

• Encourage development spending

• Subsidize essential services
• Create jobs and stimulate growth

However, the government aims to reduce the fiscal deficit progressively over time by
increasing tax revenue and improving efficiency in public spending.

✅ Conclusion of this Section

Each type of budget serves a unique purpose in economic planning. The choice of
budget type depends on the economic condition of the country. In a developing country
like India, deficit budgeting is often necessary, but it needs to be managed carefully to
avoid inflation and debt traps.
📖 Chunk 5: Budgetary Deficits and Their Implications
(Pages 18–21)

What is a Budget Deficit?

A budgetary deficit occurs when the government’s total expenditure exceeds its total
revenue (excluding borrowings). It reflects the shortfall in the government's finances
and indicates the amount that needs to be borrowed to cover the gap.

There are three main types of deficits commonly used in the Indian budget:

🔸 1. Revenue Deficit

Formula:
Revenue Deficit = Revenue Expenditure – Revenue Receipts

This deficit arises when the government’s routine expenses (salaries, subsidies,
pensions, etc.) are more than its regular income (tax and non-tax revenue).

🔍 Implications:

• Indicates that the government is unable to meet daily expenses from its income.
• Funds that could have gone to asset creation are being used for current
expenditure.
• Weakens long-term fiscal sustainability.

Example: In Union Budget 2024–25, India’s revenue deficit was targeted at 2.0% of
GDP, showing gradual improvement.

🔸 2. Fiscal Deficit

Formula:
Fiscal Deficit = Total Expenditure – Total Receipts (excluding borrowings)

This is the most commonly referred to deficit. It represents the total borrowing
requirements of the government.
🔍 Implications:

• Indicates the total gap between what the government spends and what it earns.
• A high fiscal deficit can lead to inflation if financed by printing money.
• Can increase national debt and future interest burden.

Example: India’s fiscal deficit target for FY 2024–25 is 5.1% of GDP, aiming to reduce it
gradually to under 4.5% by FY 2025–26.

🔸 3. Primary Deficit

Formula:
Primary Deficit = Fiscal Deficit – Interest Payments

It shows the actual fiscal burden of the current year excluding past loan interest.

🔍 Implications:

• Useful for understanding the current year’s borrowing, independent of past

liabilities.
• A low or negative primary deficit is generally a good sign.

Example: A declining primary deficit indicates better fiscal management and reduced
dependence on debt.

📊 Trends in India’s Deficits (Illustrative Data)

Year Fiscal Deficit (% of GDP) Revenue Deficit (%) Primary Deficit (%)
2020–21 9.2% 7.3% 5.8%
2021–22 6.7% 4.7% 3.3%
2022–23 6.4% 4.1% 2.8%
2023–24 5.8% 2.9% 1.5%
2024–25* 5.1% (targeted) 2.0% (estimated) 0.7% (estimated)

*Provisional data from Budget documents.

🚨 Consequences of High Budget Deficits

• Rising Public Debt: Leads to an increase in borrowings, both internal and

external.
• Inflationary Pressure: More borrowing may lead to increased money supply,
pushing up prices.
• Crowding Out Effect: Private sector borrowing becomes costlier due to higher
interest rates.
• Reduced Sovereign Ratings: Makes it expensive to borrow from international
markets.
• Intergenerational Burden: Future generations may inherit the debt burden.

🧠 Government Strategies to Manage Deficits

• Reducing non-essential expenditure

• Increasing tax revenue through GST compliance and digitalization
• Divestment of public sector undertakings
• Rationalizing subsidies

✅ Conclusion of this Section

Deficits are not always bad if managed wisely. They can help stimulate the economy
during downturns. However, persistent and large deficits without a plan to reduce them
can be dangerous, leading to inflation, debt, and slower growth. India is focusing on
fiscal consolidation while still funding development priorities.

📖 Chunk 6: Highlights of Union Budget 2024–25 (Pages

22–25)

Overview of Union Budget 2024–25

The Union Budget for 2024–25 was presented by the Finance Minister in February 2024,
and it marked a continuation of the government’s strategy to promote inclusive growth,
infrastructure development, and fiscal consolidation. This budget aimed to maintain
economic momentum while managing inflation, job creation, and sustainability.

📌 Key Priorities of the Budget:

• Viksit Bharat @ 2047: Roadmap for India to become a developed nation

• Focus on Green Growth and sustainability
• Boosting capital expenditure for infrastructure
• Empowering women and youth
• Strengthening the rural and agricultural economy
• Enhancing social welfare and health systems

💰 1. Budget Estimates (2024–25)

Indicator Value
Total Expenditure ₹47.66 lakh crore
Revenue Receipts ₹30.80 lakh crore
Fiscal Deficit Targeted at 5.1% of GDP
Capital
₹11.11 lakh crore
Expenditure
Estimated at 2.0% of
Revenue Deficit
GDP

📈 Capital Expenditure saw a sharp rise, emphasizing infrastructure and job creation.

🏗️ 2. Infrastructure & Capital Investment

• ₹11.11 lakh crore allocated for capital expenditure, a 16.9% increase over last
year
• Focus on multi-modal transport under PM Gati Shakti
• Continued investments in railways, highways, ports, and airports
• Expansion of metro rail systems and logistics corridors
🚜 3. Agriculture & Rural Development

• ₹1.74 lakh crore allocated to the Ministry of Agriculture

• PM-KISAN to continue providing ₹6,000 per year to eligible farmers
• Launch of new agri-credit schemes for startups and cooperatives
• Digitization of over 1000 APMCs (Agricultural Produce Market Committees)

🏥 4. Health and Education

• ₹90,171 crore allocated to the Ministry of Health and Family Welfare

• Expansion of Ayushman Bharat scheme to cover all ASHA and Anganwadi
workers
• Increase in allocation for PM SHRI schools and Samagra Shiksha scheme
• National Digital Health Mission gets additional support

👩‍🦰 5. Women Empowerment & Welfare

• New scheme launched: “Nari Shakti Vikas Yojana”

• Support for women-led SHGs and start-ups
• Financial literacy and vocational training programs for rural women

💡 6. Green Growth Initiatives

• ₹35,000 crore allocated for energy transition and net-zero targets

• Solar rooftop scheme for 1 crore households
• Expansion of EV charging infrastructure
• National Green Hydrogen Mission receives continued funding

🧾 7. Taxation Proposals

• No change in income tax slabs for individuals

• Tax exemption limit under the new regime remains ₹7 lakh
• Continued support for startups and MSMEs via tax holidays and incentives
 • Customs duty reduced on mobile phone parts and lithium-ion batteries

📊 8. Digital India and Startups

• ₹16,000 crore for Digital India initiative

• New AI innovation centres to be set up under MeitY
• Boost to fintech and UPI ecosystem
• Simplification of compliance for small businesses

🏛️ 9. Defence and Internal Security

• ₹6.21 lakh crore allocated to the defence sector

• Modernization of armed forces and increased procurement under ‘Make in India’
• Infrastructure for border security strengthened

🌐 10. Global Outlook and Fiscal Strategy

• Fiscal deficit target set at 5.1% of GDP

• Commitment to reduce it below 4.5% by 2025–26
• Emphasis on fiscal discipline with growth-focused spending

✅ Conclusion of this Section

Union Budget 2024–25 reflects a balanced approach—it prioritizes infrastructure and

investment-led growth while maintaining fiscal prudence. By focusing on sustainability,
digital innovation, and inclusivity, it positions India to accelerate towards becoming a
developed economy by 2047.
📖 Chunk 7: Budget’s Impact on the Indian Economy
(Pages 26–28)

Impact of the Union Budget on the Indian Economy

The Union Budget is one of the most significant tools through which the government
steers the economy. It affects all sectors—be it agriculture, industry, services, or
infrastructure. The budget’s impact can be far-reaching, influencing economic growth,
inflation, employment, and income distribution. Let’s examine the specific impacts of
the Union Budget 2024–25 on the Indian economy.

1. Impact on Economic Growth

The budget’s emphasis on infrastructure development and capital expenditure is a key

driver of economic growth. With ₹11.11 lakh crore allocated for capital expenditure,
especially in the areas of transportation, railways, and infrastructure, it is expected to
stimulate demand and create jobs. This investment is expected to generate a multiplier
effect in the economy, where the initial government spending leads to increased private
sector activity.

• Expected Outcome:
o Boost to GDP growth through increased production capacity.
o Job creation in construction, transportation, and manufacturing sectors.
o Increased private sector investment as a result of enhanced
infrastructure and connectivity.

2. Impact on Employment

The focus on infrastructure development, rural welfare schemes, and digitization is

likely to result in job creation. Specifically:

• The rural development initiatives such as PM-KISAN and agri-credit schemes

support farmers, while increasing employment in rural areas.
• The digital economy, with ₹16,000 crore allocated for Digital India, will generate
jobs in IT, fintech, and e-commerce sectors.
• Increased government spending on health, education, and social welfare will
create direct and indirect employment opportunities.
Example: Projects like the expansion of metro systems and highways are labor-
intensive and will employ millions in construction and related sectors.

3. Impact on Inflation

The budget attempts to balance fiscal expansion with inflation control. Measures to
reduce subsidies on fuel and food may control inflationary pressures, while the
government is likely to keep a close eye on essential prices.

• Green Growth Initiatives and focus on renewable energy and electric vehicles
could bring down energy costs in the long term.
• However, increasing government expenditure could result in a temporary
increase in demand, leading to price rises in the short term, especially if the
supply side is constrained.

Example: The push for renewable energy infrastructure may lower long-term energy
prices, reducing inflationary pressures caused by fuel imports.

4. Impact on Public Debt and Fiscal Deficit

The fiscal deficit target of 5.1% of GDP is a significant move towards controlling public
debt. The government has also promised to bring down the fiscal deficit further to under
4.5% by 2025–26.

• Impact of Fiscal Deficit on Debt:

o If the fiscal deficit is not controlled, the government may have to borrow
more, leading to higher national debt.
o Over time, higher debt increases the interest burden, crowding out
private sector investment.
o On the other hand, if the deficit is reduced, the government can improve
its credit rating, reduce borrowing costs, and free up resources for
development.
5. Impact on Sectoral Growth

a) Agriculture and Rural Development

• Increased allocations for the agriculture sector, including direct income support
through PM-KISAN, are designed to enhance farm productivity and reduce rural
poverty.
• Rural employment schemes like MGNREGA will continue to provide income
security to workers, helping the agricultural labor force.

Expected Outcome:

• Improved rural consumption.

• Agricultural growth due to better irrigation, subsidies, and credit facilities.

b) Manufacturing and Industry

• The government’s focus on infrastructure and the Atmanirbhar Bharat (Self-

Reliant India) program will boost domestic manufacturing.
• Tax exemptions and incentives for MSMEs will promote entrepreneurship and
small businesses.

Expected Outcome:

• Increased industrial output.

• Stronger export growth in non-oil sectors.

c) Green Energy and Sustainability

• Significant funding towards Green Growth initiatives, including clean energy,

electric vehicles, and waste management, will shift the economy towards
sustainability.
• The National Green Hydrogen Mission and solar rooftop schemes will reduce
dependency on imported fossil fuels in the long run.

Expected Outcome:

• Reduced carbon footprint.

• Long-term savings on energy imports, contributing to more sustainable growth.
6. Impact on Taxpayers

The budget keeps the tax slabs unchanged for individual income tax, but it continues
to support startups, MSMEs, and digital businesses with various incentives. It
provides tax relief to the middle class by maintaining the ₹7 lakh tax exemption under
the new regime.

• Simplification of compliance and incentives for tax payment can increase tax
revenues.
• Lower taxes on businesses may spur investment and entrepreneurship.

✅ Conclusion of this Section

The Union Budget 2024–25 is a growth-oriented budget with a balanced focus on

infrastructure, social welfare, and sustainable development. While there are concerns
about fiscal deficit and inflation in the short term, the long-term outlook seems
positive, with strong investments in key sectors like agriculture, infrastructure, and
green energy. The overall goal of the budget is to create a resilient economy that can
withstand global shocks while achieving sustainable growth.

CHUNK 8: The Role of Budget in Reducing Inequality and Poverty (Pages

25–26)

The Union Budget plays a crucial role in reducing economic inequality and poverty
through its focus on social welfare, targeted schemes, and inclusive development. By
focusing on equitable distribution of resources and providing opportunities to
marginalized sections of society, the government works toward ensuring that the fruits
of growth are shared more broadly. Here's how the budget helps in reducing inequality
and poverty:

1. Welfare Programs for Vulnerable Sections

A significant portion of the budget is allocated to welfare programs aimed at uplifting

the poor, women, and backward communities.
 • PM-KISAN: The Pradhan Mantri Kisan Samman Nidhi provides direct income
support of ₹6,000 per year to small and marginal farmers, helping improve their
income levels and ensuring food security.
• MGNREGA: The Mahatma Gandhi National Rural Employment Guarantee Act
continues to provide 100 days of guaranteed wage employment to rural
households, particularly helping landless laborers.
• Health Schemes: Programs like Ayushman Bharat aim to provide health
insurance coverage to economically disadvantaged families, protecting them
from catastrophic healthcare expenses.

2. Inclusive Growth through Direct Transfers

• Direct Benefit Transfers (DBTs): The government continues to transfer

subsidies and support directly to individuals, especially targeting the poor. DBTs
have helped reduce leakage in subsidy distribution, ensuring that the benefits
reach the intended recipients.
• Subsidies on Food and Fertilizers: With continued subsidies on food items and
fertilizers, the budget directly impacts the purchasing power of the poor,
ensuring their access to essential goods.

3. Focus on Rural Development

The government’s focus on rural development through schemes like Pradhan Mantri
Gram Sadak Yojana (PMGSY), rural housing, and rural electrification has helped
bridge the gap between urban and rural areas. These programs promote local job
creation and infrastructure, improving the quality of life in rural areas.

4. Education and Skill Development

The budget’s emphasis on education, particularly through schemes like PM SHRI

(School Education Quality Program), Skill India Mission, and vocational training
programs, aims to provide the youth with skills that enhance employability, thereby
lifting them out of poverty.

5. Women and Child Welfare

A section of the budget is dedicated to empowering women through various schemes:

• Nari Shakti Vikas Yojana supports women entrepreneurs and women-led SHGs
(Self Help Groups).
 • Women and Child Development Ministry sees higher allocations for programs
aimed at reducing child malnutrition, improving maternal health, and supporting
women’s health.

Example: The introduction of women-focused financial products has made it easier

for women to access credit and improve their economic status.

Conclusion of Section on Inequality and Poverty Reduction

The budget directly targets poverty alleviation and reduction of inequality by focusing
on social welfare, rural development, and inclusive growth policies. By empowering
vulnerable groups such as women, farmers, and marginalized communities, the
government can create a more equitable society.

📖 Chunk 9: Case Study + Government Schemes

(Pages 33–38)

🧪 Case Study: Impact of PM-KISAN on Small and Marginal Farmers

Background

The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) is one of the flagship
government schemes launched in February 2019. Under this scheme, eligible farmers
receive direct income support of ₹6,000 per year in three equal instalments.

Objective of the Scheme

• Provide supplementary income to small and marginal farmers

• Ensure a minimum level of financial security for inputs like seeds, fertilizers, and
other necessities
 • Reduce farmer dependence on informal credit

Study Location: Bundelkhand Region, Uttar Pradesh

Bundelkhand is a semi-arid region often hit by droughts and agricultural distress. A

survey of 120 marginal farmers in the Jhansi and Lalitpur districts was undertaken to
assess the impact of PM-KISAN.

Findings:

Aspect Before PM-KISAN After PM-KISAN

Crop investment Improved – timely purchase of
Low – due to lack of funds
capacity inputs
High (from local Reduced – some replaced with
Loan dependency
moneylenders) DBT
Productivity Below state average Improved by 10–15%
Income Security None Helped in lean season expenses
82% satisfied with regular
Satisfaction Level Not applicable
payments

Conclusion of Case Study

The PM-KISAN scheme has proven effective in:

• Reducing financial stress among farmers

• Ensuring timely access to inputs
• Improving credit behavior and reducing dependence on local moneylenders

However, delays in payments and lack of digital literacy remain concerns in remote
areas.
📜 Major Government Schemes Related to Budget (2024–25)

Below is a list of key central government schemes highlighted in the budget that are
directly aligned with poverty alleviation, employment generation, and rural/urban
development:

🌾 1. PM-KISAN (Pradhan Mantri Kisan Samman Nidhi)

• Direct income support to farmers: ₹6,000/year

• ₹60,000+ crore allocated in 2024–25

🏡 2. PM Awas Yojana – Gramin and Urban

• Objective: Housing for all (rural + urban)

• Target: Build 3 crore rural homes by 2025
• Emphasis on eco-friendly, low-cost homes

💡 3. PM Gati Shakti – National Master Plan

• Aimed at multi-modal connectivity

• Supports roads, railways, ports, and airports
• ₹1.3 lakh crore allocated under infrastructure push

📲 4. Digital India Program

• ₹16,000 crore allocation in 2024–25

• Digital public infrastructure, e-governance, and UPI expansion
• New AI and semiconductor innovation hubs
🩺 5. Ayushman Bharat – Health Insurance for All

• Free health insurance up to ₹5 lakh per family/year

• Now extended to all ASHA, Anganwadi, and frontline workers

👩‍🦰 6. Nari Shakti Vikas Yojana

• New scheme introduced in 2024–25

• Focus on female-led startups, credit access, and skills training
• SHGs to receive direct support for entrepreneurship

🌱 7. National Green Hydrogen Mission

• Goal: Make India a global hub for clean energy

• Promote production and export of green hydrogen
• ₹35,000 crore total funding under “green growth” category

📚 8. PM SHRI and Samagra Shiksha

• Focus on upgrading schools and curriculum

• Promote NEP 2020 implementation
• Skill-based education for secondary and higher secondary levels

✅ Conclusion of This Section

These schemes are not just isolated policies—they are deeply integrated with budget
planning. The Union Budget allocates funds, sets targets, and monitors outcomes for
each scheme, making them critical tools for achieving the goals of equity, inclusion,
and growth.
📖 Chunk 10: Challenges in Budget Formation
(Pages 39–41)

⚠️ Challenges in Budget Formation in India

Formulating the Union Budget is a complex task for any government, especially in a
large and diverse country like India. The Finance Ministry must balance growth, equity,
and stability while managing limited resources and competing demands. Below are
some of the most significant challenges:

1. Revenue Constraints

• Limited Tax Base: A relatively small portion of the population pays income tax.
Many remain outside the formal tax net due to agriculture-based livelihoods or
informal sector employment.
• Tax Evasion & Black Money: Despite digitalization, issues of under-reporting
and evasion remain.
• Dependence on Indirect Taxes: While GST has improved collection, indirect
taxes are regressive in nature and can hurt lower-income groups.

2. Balancing Growth with Fiscal Discipline

• The government needs to promote economic growth through investment and

social spending, but it must also ensure that it controls the fiscal deficit.
• High expenditure without adequate revenue leads to borrowing, increasing the
public debt burden and interest payments.

3. Inflation vs. Spending Pressure

• Government spending can sometimes lead to inflation, especially when supply

doesn’t match demand.
• Essential to maintain price stability while ensuring sufficient public investment
in sectors like health, education, and infrastructure.
4. Resource Allocation Across Diverse Sectors

• India has multiple priorities: education, defence, agriculture, health,

infrastructure, and social security.
• Distributing limited funds while addressing each sector's needs is a delicate
balancing act.
• Prioritizing schemes without political bias is often a challenge during election
years.

5. Unforeseen External Shocks

• Global events such as the COVID-19 pandemic, Russia-Ukraine war, or oil price
volatility can disrupt budget projections.
• Sudden geopolitical tensions, natural disasters, or trade wars force reallocation
of funds and emergency spending, affecting the accuracy of budget forecasts.

6. Political and Populist Pressures

• Budgets are often influenced by upcoming elections, leading to populist

measures like subsidies or tax reliefs.
• Such measures, while politically beneficial, may not always be economically
sound or sustainable in the long term.

7. Implementation Bottlenecks

• Even if funds are allocated well, actual implementation on ground level can
suffer due to:
o Bureaucratic delays
o Corruption and leakages
o Poor monitoring and evaluation
o Lack of coordination between Union and State governments
8. Data Quality and Forecasting Errors

• Budget planning depends on projections of GDP, inflation, revenues, etc. These

are subject to errors.
• Inaccurate forecasts can result in revenue shortfalls or overspending, hurting
fiscal discipline.

✅ Conclusion of This Section

The Union Budget is much more than a financial document—it's a strategic tool that
must respond to economic realities, political dynamics, and social priorities. The
challenges faced during its formation require careful planning, strong institutions,
data accuracy, and a long-term vision.

As India continues to grow and digitize, solutions such as AI-driven forecasting, real-
time data systems, and citizen participatory budgeting may help overcome these
traditional barriers in the future.

📖 Chunk 11: Suggestions and the Way Forward

(Pages 42–44)

💡 Suggestions and the Way Forward

While the Union Budget 2024–25 presents a strong blueprint for India's growth, there is
always room for policy improvement and more effective implementation. Below are
some practical suggestions and reforms that could enhance budget effectiveness and
impact in the coming years:

✅ 1. Expand the Tax Base

• Encourage Voluntary Compliance: Simplify tax filing systems and increase

awareness to encourage more individuals to report income.
 • Rationalize GST: Remove unnecessary complexities and bring all sectors under
GST for better compliance and ease of doing business.

✅ 2. Strengthen Public-Private Partnerships (PPPs)

• Encourage private sector participation in infrastructure, education, and health

to share financial burden and bring efficiency.
• Offer risk-sharing frameworks for large-scale infrastructure and green energy
projects.

✅ 3. Focus on Outcome-Based Budgeting

• Shift from allocation-based to outcome-based budgeting.

• Track actual social and economic outcomes of schemes (e.g., literacy rate
improvements, health indices, rural incomes).

✅ 4. Improve Targeting of Subsidies

• Use Aadhaar and Direct Benefit Transfer (DBT) systems more effectively to
reduce leakages.
• Gradually phase out universal subsidies in favor of need-based targeting,
especially for fertilizers, electricity, and food.

✅ 5. Boost Investments in Human Capital

• Allocate more funds for primary education, vocational training, and skill
development.
• Create new age curriculum and skilling programs aligned with AI, robotics,
and green jobs.
✅ 6. Promote Green Budgeting

• Make environmental sustainability a cross-cutting theme across all ministries.

• Allocate a fixed percentage of every ministry’s budget to green and sustainable
initiatives, like water conservation and renewable energy.

✅ 7. Strengthen Fiscal Federalism

• Ensure more transparency and fairness in Union-to-State fund transfers.

• Provide more flexibility to states to design schemes tailored to local needs,
especially in education, health, and rural development.

✅ 8. Use Technology for Better Monitoring

• Develop dashboards and real-time monitoring systems for central schemes to

track fund usage, beneficiary delivery, and impact.
• Strengthen data collection to reduce estimation errors in GDP, inflation, and
revenue forecasting.

✅ 9. Promote Financial Literacy

• Launch national-level financial literacy campaigns, especially targeting youth

and rural populations, to improve savings, investment, and tax compliance.

📈 The Way Forward

The Indian budget should continue evolving into a strategic document that balances
the following:

• Short-term recovery and long-term sustainability

• Social welfare and economic efficiency
• Environmental responsibility and economic ambition
As India moves toward its “Viksit Bharat @2047” vision, the budget must not only
support GDP growth but also aim for a high-quality human development path. This
includes:

• A more inclusive economy

• A strong social safety net
• A green and tech-driven future

India’s economic future will depend not just on how much we spend, but how
wisely we spend.

📖 Chunk 12: Conclusion and Future Outlook (Pages

29–32)

Conclusion

The Union Budget 2024–25 is a visionary blueprint for India’s journey towards
becoming a developed nation by 2047. It addresses multiple facets of economic growth
and development— infrastructure, job creation, sustainability, social welfare, and
fiscal discipline. Here’s a recap of the key points:

1. Focus on Growth: The government continues to prioritize infrastructure

development with a substantial allocation to capital expenditure. By focusing on
roads, railways, and airports, it aims to stimulate both demand and supply,
ensuring sustainable economic growth in the future.
2. Inclusive Growth: The budget emphasizes social welfare programs targeting the
rural poor, women, and youth. Programs like PM-KISAN and MGNREGA,
alongside digital and financial inclusion, aim to reduce inequality and bring
marginalized communities into the economic fold.
3. Fiscal Consolidation: With a fiscal deficit target of 5.1% of GDP, the
government is focused on bringing down its debt levels, while balancing the
need for development spending. The gradual reduction in the fiscal deficit
reflects a commitment to long-term fiscal discipline.
4. Green and Sustainable Economy: The focus on green growth and renewable
energy signifies India’s commitment to the global fight against climate change.
Investments in electric vehicles, solar power, and green hydrogen are designed
to make India a leader in sustainable economic development.
5. Economic Challenges and Risks: Despite its positive outlook, the budget faces
challenges:
 a. Rising Debt: India’s public debt remains a concern, and continued
borrowing may increase the fiscal burden.
b. Inflationary Pressures: The government must balance fiscal expansion
with inflation control. Increased demand due to government spending
could push up prices.
c. Global Economic Uncertainty: External factors like global inflation, oil
price fluctuations, and geopolitical tensions could influence India’s
economic stability.

Future Outlook

Looking ahead, India’s economic trajectory will depend on how effectively the budget’s
policies are implemented. Here are some future prospects for the Indian economy:

1. Sustained Economic Growth:

a. With the budget focusing on infrastructure, capital formation, and job
creation, the economy is expected to experience strong growth over the
next few years. The target of a 5.1% fiscal deficit for 2024–25 sets a
positive tone for fiscal consolidation, which could boost investor
confidence and help achieve higher growth.
2. Job Creation and Employment:
a. Employment generation will be crucial in sustaining economic growth.
The budget’s focus on MSMEs, startups, and rural development will be
key to increasing employment opportunities across sectors.
3. Technological Advancements:
a. The increasing investments in the digital economy, including fintech, AI,
and automation, will support innovation and entrepreneurship. This is
vital for India’s shift towards a knowledge-based economy, where
technology drives productivity and growth.
4. Global Economic Integration:
a. India’s ongoing focus on self-reliance (Atmanirbhar Bharat) and export-
oriented growth will help integrate the country into global supply chains.
As the world economy stabilizes post-pandemic, India’s manufacturing
and export sectors could see significant growth, enhancing its position in
global trade.
5. Environmental Sustainability:
a. The budget’s emphasis on green energy and climate resilience aligns
India with global sustainability goals. As the world transitions to cleaner
 energy, India is positioning itself to benefit from emerging industries such
as solar energy, electric vehicles, and green hydrogen.

Final Thoughts

The Union Budget 2024–25 represents a balanced approach to India’s economic

challenges, with a long-term vision for inclusive, sustainable, and resilient growth.
While challenges like fiscal deficit, inflation, and global economic volatility remain, the
strategic focus on infrastructure, green growth, and digital economy will lay a solid
foundation for India’s progress towards becoming a developed nation by 2047.

The future outlook is optimistic, provided the government stays committed to fiscal
discipline, job creation, and fostering innovation. With the right implementation of the
policies outlined in the budget, India has the potential to emerge as a global economic
powerhouse, balancing growth with social welfare and environmental responsibility.

📖 Chunk 12: Glossary

(Page 45)

📚 Glossary of Key Economic Terms

Term Definition
The annual financial statement presented by the central government
Union Budget of India, outlining estimated revenue and expenditure for the
upcoming financial year.
The difference between total expenditure and total revenue
Fiscal Deficit (excluding borrowings). Indicates how much the government needs
to borrow.
Capital Spending on long-term assets like roads, buildings, and
Expenditure infrastructure that improves productive capacity.
Revenue Routine expenditure like salaries, subsidies, and interest payments.
Expenditure It does not create assets.
 GDP (Gross
The total value of goods and services produced in a country in a
Domestic
specific period. It's a measure of economic output.
Product)
The rate at which the general level of prices for goods and services is
Inflation
rising, reducing purchasing power.
Financial assistance given by the government to reduce the cost of
Subsidy
essential goods/services.
The total amount of money that a government owes to creditors and
Public Debt
financial institutions.
A tax paid directly by individuals or organizations to the government
Direct Tax
(e.g., income tax).
A tax levied on goods and services (e.g., GST), paid indirectly by
Indirect Tax
consumers.
Inclusive Economic growth that is distributed fairly across society and creates
Growth opportunities for all.
Green An economy that aims for sustainable development without
Economy degrading the environment.
Government scheme guaranteeing 100 days of wage employment to
MGNREGA
rural households in a financial year.
DBT (Direct
A system to transfer subsidies and welfare payments directly to
Benefit
beneficiaries’ bank accounts.
Transfer)
PPP (Public-
A cooperative arrangement between government and private sector
Private
for infrastructure projects or public service delivery.
Partnership)

📖 Bibliography
(Page 46)
(Sources of data, references, and material used in this project)

Books and NCERT Materials:

• NCERT Economics Textbook – Class 12

• Indian Economic Development – NCERT
• CBSE Economics Curriculum Guidelines (2025–26)
• India Year Book 2024 – Ministry of Information & Broadcasting
Government Websites:

• https://www.indiabudget.gov.in – Union Budget Documents and Highlights

• https://www.mygov.in – Official platform for citizen engagement and
government initiatives
• https://www.rbi.org.in – RBI updates on inflation, fiscal deficit, and GDP
• https://www.niti.gov.in – NITI Aayog reports on economic planning and
sustainability

Newspapers and Articles:

• The Hindu – Budget 2024–25 Analysis

• The Economic Times – Union Budget Key Takeaways
• Business Standard – Fiscal Deficit and Growth Strategy 2024
• Times of India – Coverage on PM-KISAN and social welfare schemes

Reports and Journals:

• Economic Survey of India 2023–24 (Ministry of Finance)

• International Monetary Fund (IMF) – India Outlook Reports
• PRS Legislative Research – Budget and Policy Briefs

🔍 Appendix – Supporting Charts, Tables, and Documents

The appendix includes supplementary materials that support the main content of the
project but are not included in the core discussion.

A. Budget 2024–25 at a Glance (Summary Table)

Component Allocation (₹ Crore)

Capital Expenditure 11,11,111
PM-KISAN 60,000
 PM Awas Yojana 79,000
Health and Family
90,658
Welfare
Education 1,12,899
Railways 2,55,000
Defence 6,21,540
Green Energy Initiatives 35,000

B. Graph – Trends in Fiscal Deficit (% of GDP)

(You can insert a simple bar graph showing fiscal deficit from 2019–20 to 2024–25)

C. Map – PM Awas Yojana Progress (State-Wise)

(Optional visual showing highest beneficiaries by state; you can use Govt. of India
charts)

D. Screenshot – Official Budget Highlights Page

Source: https://www.indiabudget.gov.in

E. Acronyms Used in the Project

Acronym Full Form

GDP Gross Domestic Product
DBT Direct Benefit Transfer
Mahatma Gandhi National Rural Employment Guarantee
MGNREGA
Act
GST Goods and Services Tax
PPP Public-Private Partnership
PM-KISAN Pradhan Mantri Kisan Samman Nidhi
End of the Project