Economic growth over the time

Published On:

 Overall Economic Growth

1. GDP growth rate of 8.2% in 2023-24

 2. Projected growth above 7% for FY25

 Key Priority Areas

 1. Productivity and resilience in agriculture

 2. Employment and skilling

 3. Inclusive human-resource development and social justice

 4. Manufacturing and services

 5. Urban development

Budget Allocation for Agriculture

 1. Agriculture Budget: Rs 1.52 trillion for agriculture and allied sectors. 5% increase from FY24 (barely covering inflation)

 2. Ministry of Fisheries, Animal Husbandry and Dairying: Increased 27% from Rs 56 billion (RE) in FY24 to Rs 71 billion (BE).

 3. Department of Agricultural Research and Education (DARE): Rs 99.4 billion, a marginal 0.7% increase from Rs 98.8 billion (RE) in FY24. It is considered as decrease in Real terms in allocation

 4. Agriculture R&D Expenditure: Peaked at Rs 160 billion in 2020-21, 89% public sector, 11% private sector.

 Measures

 1. Support Measures: Food and Fertiliser Subsidies; MGNREGA (Mahatma Gandhi National Rural Employment Guarantee Act); PM-KISAN (income support); Credit Subsidies; PM-Fasal Bima Yojana (crop insurance)

 2. Budget for Welfare and Subsidy Measures: Rs 5.52 trillion for FY25, down from Rs 5.8 trillion (RE) in FY24.

 3. Food Subsidy: Rs 2.05 trillion, down from Rs 2.12 trillion in FY24, mainly benefiting consumers.

 Challenges and Recommendations

 1. Current Issues: Policies harming natural resources, soil fertility, groundwater depletion, increased emissions, and public health.

 2. Future Vision: Transform agriculture into an engine of growth by re-orienting subsidies to benefit both farmers and the environment.

 3. Next Steps: Expected in future budgets to increase value addition in agriculture, boost farmers' incomes, and create opportunities in food processing and export

Fiscal Consolidation and its need

 Fiscal Consolidation

 1. Fiscal Deficit Target: It is changed over the time frame which is required.

 2. Debt to GDP Ratio: Projected to reduce from 58.2% to 56.8%.

 3. Flexible Policy Making: No clear roadmap beyond 2025-26, allowing for adaptable policymaking but limiting predictability.

 Expenditure Augmentation

 1. Utilization of Tax Revenues: Increased allocations for various spending programs due to buoyant tax revenues.

 2. Surplus from RBI: Resources for fiscal consolidation sourced from the Reserve Bank of India's surplus.

 3. Comparison with Interim Budget: Observations of slight additions to expenditure and marginal compression in tax revenues.

 Medium-Term Economic Initiatives

 1. Economic Survey Insights: Addressing employability and infrastructure concerns.

 2. Employability Initiatives: Focus on skilling and financial support for provident fund contributions.

 3. Economic Policy Framework: Proposed to establish consistent medexpansionium-term expectations and reforms.

 Tax Reforms

 1. Indirect Taxes

 Customs Duties: Regular recalibration to address economic concerns, aiming for stability and predictability.

 2. Direct Taxes

 Income Tax Act Review: Proposal to make the Act concise, lucid, and easy to understand.

 Addressing Inequality

 1. Global Discussions: Concerns about increasing inequality and differential taxation of labor and capital income.

2. Capital Gains Tax: Increased taxes on short-term and long-term capital gains with some relief for retail investors.

 3. Securities Transaction Tax: Enhanced tax on futures and options transactions to stabilize capital.

Antarctic warming

 1. Warming in Antarctica: It increased approx 0.4 degree celsius over the time.

 2. Antarctic Peninsula's Temperature Rise: It creates five times more than temperature increase.

 3. Extreme Heat Waves: Record-breaking heat waves have occurred, with temperatures reaching up to 28°C above normal in July 2024.

 4. Sea Ice Loss: sea ice Level extent is second lowest in 2024.

 5. Increased Vegetation: A new study reveals that plant cover on the Antarctic Peninsula has expanded 14-fold in the past 35 Years.

 6. Greening Acceleration: The rate of greening increased by over 30% between 2016 and 2021, with mosses and lichen thriving due to the warmer temperatures.

 7. Ecosystem Impact: The rising temperatures and increased plant cover could lead to soil formation.

 8. Albedo Effect: The increase in vegetation could lower the albedo (reflectivity) of the Antarctic Peninsula.

9. Climate Change Indicator: The expansion of plant life in Antarctica serves as a clear indicator of the profound effects of climate Change.

10. Global Impact: It contributes to global sea rise over the time.