Interim Budget 2024: How India’s government earns and spends every rupee

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India has recently unveiled its interim budget for the upcoming fiscal year, allocating $580 billion for various expenditures commencing on April 1. The budget, presented by Finance Minister Nirmala Sitharaman, reflects the economic priorities of the nation. But what goes into earning every rupee that contributes to this massive financial plan?

Breaking down the sources of income, it is revealed that 28 paise of every rupee comes from government borrowings. Income tax follows closely, contributing 19 paise, while Goods and Services Tax (GST) contributes 18 paise. The corporate sector adds 17 paise, and customs and excise duties together contribute 9 paise. The remaining 9 paise come from various other sources, showcasing a diverse revenue stream.

Turning the focus to expenditures, one-fifth of the government’s budget goes into paying interest on loans, reflecting the economic challenge of managing existing debt. As a federal country, every 16 paise earned is shared with the states and union territories, emphasising cooperative fiscal responsibility.

Government schemes account for at least 24 paise. Pensions and subsidies make up 10 paise, while defence spending constitutes 8 paise. Finance Commission-related fund transfers and other expenses collectively take away the remaining 22 paise.

This comprehensive breakdown of how each rupee is earned and spent provides a glimpse into India’s economic health and its ambitious goal to emerge as a developed country by 2047.  

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