Fiscal Policy
Union Budget 2024-25
Every year, the Government of India presents a budget that shows where it plans to get money from and how it will spend it. Let's understand India's ₹48 lakh crore budget.
The Big Picture
Here are the most important numbers from this year's budget
What is the Union Budget?
- Union Budget(केंद्रीय बजट)
- The Union Budget is the annual financial statement of the Government of India. It shows expected income (revenue) and planned expenses (expenditure) for the financial year (April to March).
The Finance Minister presents the budget in Parliament every year, usually on February 1st. The budget is divided into two main parts:
- 1.Revenue Budget — Day-to-day income and expenses (salaries, pensions, interest)
- 2.Capital Budget — Building assets like roads, bridges, and factories
Budget Calendar
Key dates in the annual budget process
Jan
Economic Survey preparation begins
Feb 1
Budget presented in Parliament
Feb
General discussion in both Houses
Mar
Demands for Grants, voting
Mar 31
Appropriation Bill passed
Apr 1
New financial year begins
Where Does the Money Come From?
Government's sources of income
Tax Revenue Breakdown
Key Takeaway
Where Does the Money Go?
Major areas of government spending
Top Ministry Allocations
Capital vs Revenue Expenditure
Building assets vs running the government
- Revenue Expenditure(राजस्व व्यय)
- Money spent on day-to-day running of the government — salaries, pensions, interest payments, subsidies. This spending doesn't create any assets and is consumed in the same year.
- Capital Expenditure(पूंजीगत व्यय)
- Money spent on creating assets — roads, bridges, buildings, machinery, defence equipment. This spending creates long-term value and is considered "productive spending".
Expenditure Breakdown
Why Capital Expenditure Matters
Major Subsidies
Government support to keep prices low
- Subsidy(सब्सिडी)
- Money the government pays to keep prices of essential items affordable for common people. When you buy subsidized LPG or ration shop wheat, the government pays the difference.
Total Subsidies: ₹4.4 lakh crore
What is Fiscal Deficit?
When government spends more than it earns
- Fiscal Deficit(राजकोषीय घाटा)
- The difference between what the government spends and what it earns. If the government spends ₹100 but earns only ₹70, the fiscal deficit is ₹30.
This Year's Deficit
The government will borrow this money by issuing bonds. This is why managing fiscal deficit is important — too much borrowing means higher interest payments in the future.
Government Debt
How much does the government owe?
- Government Debt(सरकारी कर्ज)
- The total amount of money the government has borrowed over the years and hasn't repaid yet. Every year's fiscal deficit adds to this debt pile.
Total Government Debt
₹185 lakh crore
Debt-to-GDP Ratio
56.8%
For every ₹100 of goods and services India produces, the government owes about ₹56.8. This is considered manageable compared to countries like Japan (260%) or USA (120%), but higher than China (80%) or Indonesia (40%).
Interest Burden
10-Year Fiscal Deficit Trend
How has the deficit changed over the years?
* The spike in 2020-21 was due to COVID-19 pandemic and stimulus spending