India’s Financial Outlook for 2024-25: Navigating Growth and Fiscal Responsibility

The Indian government\’s financial approach for the fiscal year 2024-25 is focused on balanced revenue generation and prudent expenditure management. This blog explores the government\’s projected income and expenditure, presents a detailed breakdown, and highlights key export and import sectors of the Indian economy.

Total Income and Expenditure

Government Income

For 2024-25, the Indian government’s total receipts (excluding borrowings) are estimated at ₹32,07,200 crore, representing a 15% increase compared to the previous fiscal year. The breakdown of this income is as follows:

Net Tax Revenue: Projected at ₹25,83,499 crore, marking an 11% increase from the previous year.
Gross Tax Revenue: Expected to grow by 10.8%, reaching about ₹30,00,000 crore.
Non-Tax Revenue: Estimated at ₹5,45,701 crore, showing a significant 36% increase, mainly due to higher dividends from the Reserve Bank of India (RBI) and nationalized banks.

Government Expenditure

The total expenditure for 2024-25 is projected at ₹48,20,512 crore, reflecting an 8.5% increase over the revised estimates for 2023-24. The expenditure breakdown is as follows:

Interest Payments: Approximately ₹11,57,000 crore, accounting for 24% of the total expenditure.
Central Sector Schemes: Budgeted at ₹15,16,176 crore, which is a 4.8% increase from the previous year.
Centrally Sponsored Schemes: Estimated at ₹5,05,978 crore, reflecting a 9.8% increase.
Grants to States: The government plans to transfer ₹23,48,980 crore to states and union territories.

Fiscal Deficit

The fiscal deficit for 2024-25 is targeted at 4.9% of GDP, signaling a commitment to fiscal discipline while promoting economic growth.

Income and Expenditure Breakdown

Government Income Breakdown (Per ₹1 Earned)

For every ₹1 the government earns, the breakdown is as follows:

Component	Percentage of Total Income	Amount (₹ Crore)
Net Tax Revenue	80.5%	₹25,83,499
Gross Tax Revenue	93.7%	₹30,00,000
Non-Tax Revenue	17%	₹5,45,701

Government Expenditure Breakdown (Per ₹1 Spent)

For every ₹1 spent by the government, the expenditure breakdown is:

Component	Percentage of Total Expenditure	Amount (₹ Crore)
Interest Payments	24%	₹11,57,000
Central Sector Schemes	31.4%	₹15,16,176
Centrally Sponsored Schemes	10.5%	₹5,05,978
Grants to States	48.7%	₹23,48,980

Major Exports and Imports

Major Exports

India\’s export portfolio is varied, with key sectors contributing significantly to its foreign exchange earnings:

Petroleum Products: A major contributor to export revenue.
Gems and Jewelry: A vital sector in India’s export mix.
Pharmaceuticals: India is known as the \”pharmacy of the world.\”
Textiles and Garments: A longstanding stronghold for exports.
Engineering Goods: Including machinery and transport equipment.

Major Imports

India\’s imports are equally diverse and include essential raw materials and goods:

Crude Oil: India’s largest import, driven by its energy demands.
Gold and Silver: Key imports for jewelry manufacturing.
Electronic Goods: Including mobile phones and components.
Machinery: Required for various manufacturing and industrial sectors.
Chemicals: Used in agriculture, manufacturing, and other sectors.

Services Trade

India’s services sector plays a key role in trade:

IT Services: A major export sector, with India being a global leader in IT services.
Tourism Services: Contributing significantly to foreign exchange earnings.
Business Process Outsourcing (BPO): A major contributor to employment and revenue.

Conclusion

The Indian government\’s financial strategy for 2024-25 balances the need for revenue growth with careful expenditure management. By focusing on key sectors for exports and carefully managing imports, India aims to strengthen its economic standing globally. The government\’s fiscal outlook and strategic investments are set to shape India’s economic future, positioning it for sustained growth.