India’s Finance Minister Nirmala Sitharaman broke with tradition when she presented her first Union Budget to Parliament in 2019 with a bright red traditional ledger, known as the *bahi-khata* in Hindi, instead of the customary briefcase — a British India tradition. Her chief economic adviser, Krishnamurthy Subramanian, had then declared this change a symbol of moving away from “the slavery of Western thought”. This marked the inaugural budget of Prime Minister Narendra Modi’s second term.
As Modi’s third term progresses, Sitharaman is set to present her seventh consecutive Union Budget on 23 July. Here’s an examination of how her budgets have transformed over the past five years:
Budget 2019: A 10-point Vision for the Decade
The 2019 Budget was characterised by a focus on a 10-point vision for the decade, emphasising economic development, infrastructure enhancement, and social justice. Key measures included a reduction in the corporation tax rate for existing companies to stimulate economic growth. Schemes like the Pradhan Mantri Kisan Samman Nidhi and the Pradhan Mantri Laghu Vyapari Maan-dhan were introduced. The proposed budget for the financial year was Rs 27.86 trillion (about $333.57 billion).
Budget 2020: Navigating the Covid-19 pandemic
The 2020 Budget aimed at boosting economic growth but faced the unprecedented challenge of the Covid-19 pandemic. Priorities shifted towards healthcare, agriculture, and infrastructure development. The fiscal deficit target was revised to 9.5 per cent of GDP, with a proposed budget of Rs 30.42 trillion ($364.22 billion) for the financial year.
Budget 2021: Economic recovery post-pandemic
Focusing on economic recovery post-pandemic, the 2021 Budget saw increased spending on healthcare and infrastructure. Initiatives like the Agriculture Infrastructure Fund (AIF) and a voluntary vehicle scrappage policy were introduced. The fiscal deficit target was set at 6.8 per cent of GDP, with a proposed budget of Rs 34.83 trillion ($416.76 billion).
Budget 2022: Towards Atma Nirbhar Bharat and a green economy
Sitharaman’s 2022 Budget speech was her shortest yet, with no changes to income tax slabs or exemptions. The budget emphasised a greener economy and support for made-in-India initiatives. The Productivity Linked Incentive (PLI) was introduced in 14 sectors to achieve the vision of Atma Nirbhar Bharat.
Notable proposals included a 30 per cent tax on income from cryptocurrency transactions and a one per cent TDS on such transactions above a certain threshold. The announcement of a ‘Digital Rupee’ based on blockchain technology and e-passports with embedded chips, along with a spectrum auction for the roll-out of 5G mobile services by private firms within the financial year 2022-23, highlighted the budget’s forward-thinking approach. The proposed budget for the financial year was Rs 39.44 trillion ($471.80 billion).
Budget 2023: The Amrit Kaal vision
The 2023 Budget centred on the Amrit Kaal vision, focusing on opportunities for citizens, particularly youth, growth, job creation, and a robust macro-economic environment. Proposed spending amounted to Rs 45.03 trillion ($538.91 billion), with revenue expenditure estimated at Rs 35.02 trillion ($419.29 billion).
Key highlights included raising the income limit for income tax rebates from Rs 5 lakh to Rs 7 lakh in the new regime, reducing the highest surcharge rate on income above Rs 5 crore from 37 per cent to 25 per cent, and increasing the tax exemption limit on leave encashment on retirement for private sector employees to Rs 25 lakh. The capital investment outlay was increased by 33 per cent to Rs 10 trillion.
Interim Budget 2024: Aiming for a Viksit Bharat by 2047
The Interim Budget for 2024 laid out a vision for a developed India by 2047. Key areas of focus included social justice, with the prime minister aiming to uplift four major groups: the poor, women, youth, and farmers.
The slogan “Garib Kalyan, Desh ka Kalyan” (the welfare of the poor is the welfare of the nation) underscored the government’s commitment to poverty alleviation, having assisted 25 crore people out of multidimensional poverty in the past decade. Direct Benefit Transfers (DBT) using PM-Jan Dhan accounts resulted in savings of Rs 2.7 lakh crore ($3.23 trillion) for the government.
The PM-SVANidhi scheme provided credit assistance to 78 lakh street vendors, with 2.3 lakh receiving credit for the third time. The PM-JANMAN Yojana aimed at the development of particularly vulnerable tribal groups (PVTG), while the PM-Vishwakarma Yojana offered end-to-end support to artisans and craftspeople in 18 trades.
Welfare of farmers and women
The PM-KISAN SAMMAN Yojana provided financial assistance to 11.8 crore farmers, and the PM Fasal Bima Yojana offered crop insurance to 4 crore farmers. The Electronic National Agriculture Market (e-NAM) integrated 1,361 mandis (registered agriculture markets), serving 1.8 crore farmers with a trading volume of Rs 3 lakh crore.
Women empowerment saw significant advancements with 30 crore Mudra Yojana loans given to women entrepreneurs, a 28 per cent increase in female enrolment in higher education, and 43 per cent enrolment of girls and women in STEM courses. Over 70 per cent of houses under the PM Awas Yojana were allocated to women from rural areas.
Future plans
The PM Awas Yojana (Grameen) is on track to achieve its target of three crore houses despite Covid challenges, with an additional two crore houses planned over the next five years. Rooftop solarisation and free electricity schemes aim to provide 1 crore households with 300 units of free electricity each month, potentially saving each household Rs 15,000 to Rs 18,000 annually.
Nirmala Sitharaman’s budgets over the past five years reflect a dynamic and evolving approach, adapting to the nation’s needs and challenges while maintaining a vision for a prosperous and self-reliant India by 2047.
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From Vision for a Decade to Developed India by 2047, how Sitharaman’s Budgets have evolved
