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Interim Budget Review 2024-25

February 02, 2024



The automobiles and auto components sector for FY25E will receive a substantial amount of Rs. 3,500 crore as incentives under the PLI scheme, as allocated by the government. Expand and strengthen the e-vehicle ecosystem by supporting manufacturing and charging infrastructure. FM stated that India will establish a Payment Security Mechanism for EV buses.


The fertilizer subsidy has been reduced from Rs 1.89 lakh crore in FY24RE to Rs 1.64 lakh crore for FY25E. Specifically, the urea subsidy has decreased from Rs 1.28 lakh crore in FY24RE to Rs 1.19 lakh crore, while the nutrient-based subsidy has been lowered from Rs 60,000 crore in FY24RE to Rs 45,000 crore.

Aviation, Hospitality, & Tourism

The rate of Tax Collected at Source (TCS) on overseas tours and remittances by authorized dealers has been decreased to 5% from the previous rate of 20% for amounts less than Rs. 7 lakhs.

Projects for enhancing port connectivity, developing tourism infrastructure, and improving amenities will be undertaken in various islands, including Lakshadweep.

Banking & NBFCs

The Revised Estimate of the fiscal deficit is 5.8 per cent of GDP. Further, The fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP.

Over the next five years, a total of 20 million houses will be constructed under the Pradhan Mantri Awas Yojana-Gramin (PMAY-G). The allocation for PMAY has been raised from Rs 54100 cr in the Revised Estimate (RE) for 2023-24 to Rs 80670 cr in the Budget Estimate (BE) for 2024-25.

Capital Goods and Consumer Durables

The Production Linked Incentive Scheme (PLI) under the Ministry of Electronics and Information Technology (MEITY) has witnessed a significant increase in its allocation for the fiscal year 2025. The allocation for FY25BE stands at Rs 6200 Cr, which is a notable rise compared to the previous year's estimated allocation of Rs 4560 cr (FY24RE).

Over the next five years, a total of 20 million houses will be constructed under the Pradhan Mantri Awas Yojana-Gramin (PMAY-G) scheme.

Financial support for the acquisition of biomass aggregation equipment.


Encouraging private sectors to enhance research and innovation, a corpus of Rs 1 lakh crore is allocated, along with a 50-year interest-free loan and the provision of long-term financing or refinancing at low or even zero interest rates.


The updated capital expenditure for FY24 is Rs9.5tn, representing a 30% increase compared to FY23A and slightly below the projected expenditure of Rs10tn. In FY25, the government has allocated Rs11.1tn for capital expenditure, which are 11% higher than the FY24 budget estimate (BE) and 17% higher than the FY24 revised estimate (RE).

The government has unveiled a new initiative aimed at assisting the deserving segments of the middle class who reside in rented accommodations, slums, chawls, or unauthorized colonies to purchase or construct their own homes.


Allocation for rural spend has not been increased on an overall basis.

FM proposed that PM Matsaya Sampada Scheme will be stepped up for Aqua Culture productivity. Aim to double Seafood exports to Rs.1 lakh cr. 5 integrated Aqua parks will be set up.


The computerization program is projected to receive an investment of Rs 726 crore in FY25E, compared to Rs 690 crore in FY24RE. Additionally, the cyber security projects are expected to receive an investment of Rs 759 crore in FY25E, a significant increase from Rs 400 crore in FY24RE.

Infrastructure & Railways

Government is planning to convert 40,000 normal rail bogies to Vande Bharat standard to enhance the safety, convenience, and comfort of passengers, allocated an outlay for carriages and wagons – Rs 23,435 crore. Key rail infrastructure projects including Metro Rail and Namo Bharat will be expanded to more cities.

Under PM Gati Shakti, the government announced 3 new railway corridors - the Port connectivity corridor, the energy, mineral, and cement corridor, and the High traffic density corridor.


For the year FY25, the government has earmarked Rs11.1tn for capital expenditure which is 11% ahead of FY24BE and 17% ahead of FY24RE.

Under PM Gati Shakti, the government announced 3 new railway corridors - the Port connectivity corridor, the energy, mineral, and cement corridor, and the High traffic density corridor.

Oil & Gas

Coal gasification and liquefaction capacity of 100 MT will be set up by 2030. This will also help in reducing imports of natural gas, methanol, and ammonia. The government has proposed to allocate a sum of Rs 9,094 crore for the fiscal year 2025E in order to provide LPG connections to impoverished households.

Pharma & Healthcare

Healthcare cover under Ayushman Bharat scheme will be extended to all ASHA workers, Anganwadi Workers and Helpers.

Healthcare budget increased from Rs 79,200 crore in FY24 RE to Rs 90,200 crore for FY25E.

PLI scheme (Pharma) from Rs 1700 crore in FY24 RE to Rs 2143 crore for FY25E.

Power & Renewables

In the context of rooftop solarization, approximately one crore households have the potential to receive up to 300 units of complimentary electricity on a monthly basis. A budget of Rs 10,000 crore has been assigned for the implementation of solar power (grid) in the fiscal year 2025.


The government has earmarked a sum of Rs. 4,492 crore for Signalling and Telecom in the financial year 2025, which is an increase from the revised allocation of Rs. 3,581 crore in the previous fiscal year 2024.


The government has chosen to prioritize fiscal consolidation and set ambitious goals. Several efforts have been made to reduce the fiscal deficit for the current financial year by 10 basis points to 5.8% of GDP. We hold a positive view on the fiscal deficit target for FY25, which stands at 5.1%. A reduction in the fiscal deficit is expected to result in a decrease in bond yields. In general, the current budget was merely an interim one, as no populist measures were announced (as expected by the market due to the upcoming elections). The speech delivered by the FM suggests that the government's primary emphasis is on capital expenditure and investment in infrastructure. The budget has also focused on sectors like Railways, New energy, Defence and affordable housing.

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