Sources and Expenditure of Fund Budget 2024

In this blog, we will go through the fiscal landscape of Budget 2024-25, and understand the
where the money comes from and where it is spent and will offers valuable insights into the
government's financial strategy. This blog provides a complete overview of the sources of funds
and their allocation, illustrating the economic priorities and challenges of the current fiscal year.

Sources of Funds: Where the Money Comes From

The government’s revenue sources are critical for financing public services and infrastructure. In
Budget 2024-25, the key sources of funds include:

1. Tax Revenue

Corporation Tax (17%): This is a significant source of revenue, contributing 17% of the total tax
income. It encompasses taxes levied on corporate profits, crucial for sustaining public finances.

Income Tax (19%): The largest component of tax revenue, income tax, contributes 19%. This
includes personal income taxes and taxes on income from investments.

Customs Duties (4%): Customs duties on imports contribute 4% to the revenue. This is
important for regulating trade and protecting domestic industries.

Union Excise Duties (5%): These duties on goods produced within the country account for 5%
of the revenue. They are essential for managing consumption and generating income.

Goods and Services Tax (GST) & Other Taxes (18%): GST and other indirect taxes contribute
18%. This broad tax base is crucial for a diverse revenue stream.

2. Non-Tax Receipts (9%): This includes earnings from government enterprises, fees, and
charges. In 2024-25, non-tax receipts account for 9% of the total revenue.

3. Non-Debt Capital Receipts (1%): These are funds obtained through the sale of assets or
recovery of loans. They contribute 1% to the total funding.

4. Borrowings and Other Liabilities (27%): To cover gaps between revenue and expenditure,
the government borrows funds. This category, including domestic and international loans,
makes up 27% of the total revenue. It is crucial for financing long-term projects and managing
cash flow.

Expenditure: Where the Money Goes

The expenditure of funds reveals the government's priorities and its approach to addressing
economic and social needs. For Budget 2024-25, the expenditure is allocated as follows:

1.Central Sector Schemes (16%): This includes various government programs and projects
excluding defense and subsidies. It represents 16% of the total expenditure, focusing on
infrastructure, development, and public services.

2. Interest Payments (19%): Paying interest on public debt constitutes 19% of the expenditure.
This reflects the cost of borrowing and managing national debt.

3. Defense (8%): Allocated 8%, this expenditure is crucial for maintaining national security and
modernizing defense capabilities.

4. Finance Commission & Subsidies (6%): This category includes funds allocated based on
recommendations of the Finance Commission and various subsidies. It accounts for 6% of the
total expenditure to support specific sectors and regions.

5. Other Transfers (9%): This encompasses financial transfers to state governments and other
entities, totaling 9%. It includes allocations for various collaborative projects and state-level
initiatives.

6. State Share of Taxes and Duties (21%): States receive 21% of the tax and duty revenue
collected by the central government. This is a critical component for ensuring equitable
distribution of resources.

7. Pensions (4%): Expenditure on pensions, including those for retired government employees
and veterans, constitutes 4% of the total spending.

8. Other Expenditure (9%): This includes miscellaneous spending not categorized elsewhere.
It represents 9% of the budget and covers various administrative and operational costs.

9. Centrally Sponsored Schemes (8%): These schemes, funded partially by the central
government and states, represent 8% of the expenditure. They target specific national priorities
and development goals.

Conclusion

The "Sources and Expenditure of Fund Budget 2024" reflects a nuanced approach to managing
public finances. Revenue sources are diverse, incorporating taxes, non-tax receipts, and
borrowings, while expenditures are strategically allocated to key areas such as defense,
infrastructure, and social services.

Understanding these allocations helps evaluate the government's financial health and
commitment to addressing economic and social challenges. As we progress through the fiscal
year, monitoring these aspects will be essential for assessing the impact of budgetary decisions
and ensuring they align with national priorities and sustainable development goals.