Indian Union Budget 2024 analysis (a layman introduction to Budget analysis)

It's not very difficult to understand budget. Forget the main stream media who are paid to focus on small and minor points. You only need to understand 4 technical terms -

• Income,
• Expenditure,
• Fiscal deficit and
• GDP.

Please refer to the below document called 'Budget at a glance' published by Government of India. This blog will guide you to analyze a union budget by yourself.

Budget at a glance

Why is this important?

This will help to understand how the Government runs and we can surely challenge the Government for better financial management. This will in turn lead to a prosperous country. Even if you are able to optimize 0.1% of the budget expenditures, you can save 34 billion rupees (or 450 million dollars). You can effectively generate 45000 jobs (with a 7.5 lakh salary per year for each employee).

That’s why it's important!!

Feb 2024 updates - 2024-25 budget at a glance

Below are my analysis and comments:

	Budget Estimates for 2024 - 25 financial year in Feb 2024	Comments
Income	30.8 trillion INR	Income generation has to go up by 3.6 trillion compared to previous year.
Expenditure	47.65 trillion INR ​	Previous year Expenditure was 45.03 trillion. Government will spend 2.6 trillion INR more than the last year.
Fiscal Deficit	Expenditure minus Income = 16.85 trillion INR (5.1% of GDP).	Fiscal deficit accounts for ~35% of the total expenditure and is ~55% of total income generated. Better ratios than last year!
GDP	330.4 trillion INR (3.92 trillion $ economy)	GDP has gone up by 28 trillion INR from 2023/24.
Total Loans taken by Gov.	168.3 trillion INR (up from 152 trillion a couple of years ago)	This is the real danger!

Feb 2023 updates - 2023-24 budget at a glance

Below are my analysis and comments:

	Budget   Estimates for 2023 - 24 financial year in Feb 2023	Comments
Income	27.17  trillion INR	Income generation has to go up by 3 trillion dollars compared to previous year. How does the government plan this?
Expenditure	45.03  trillion INR	Previous year Expenditure was 41.87 trillion. Government will spend 3.1 trillion INR more than the last year.
Fiscal Deficit	Expenditure minus Income = 17.86 trillion INR (5.9% of GDP).	Fiscal deficit accounts for ~40% of the total expenditure and is ~67% of total income generated. Pathetic state of affairs!
GDP	302.7  trillion INR (3.7 trillion $ economy)	GDP has gone up by a 100 trillion INR from 2020/21. but this is not seen on ground with huge unemployment, inflation etc.
Total Loans taken by Gov.	152.4  trillion INR (up from 120 trillion a couple of years ago)	Economic collapse is happening as we speak!

Budget analysis for 2021 - 22

Budget at a glance for 2021 - 22 tells you a simple summary of the income and expenditure that happened in financial year 2020-21 (Apr 1 2020 to March 31 2021). Since, this is presented on Feb 1 2021, its still an estimate (called revised estimate 2020 21). But, for practical purposes, we can treat it almost final numbers on income and expenditure.

Let us go back to 2020 Feb 1 and see what was the estimate for the financial year 2020-21 and then only you will understand the financial mismanagement and you can also see how our country is being driven to bankruptcy. This has been happening from 1947 but this year (2020 - 21) has been the mother of all fiscal mismanagement in the name of a virus.

This is irrespective of any party in power - I don’t support BJP/Congress/AAP/BSP. To me - all are same. They are political parties and they play politics.

Budget estimates as of Feb 1 2020 i.e before covid started(source link)::

1) Total estimated income in 2020 - 21 financial year = 22.4 trillion INR . This is derived from the number 2245893 crores (2020926 revenue income plus  224967 in capital income). For simplicity, we can say this is approximately 22.4 lakh crores or 22.4 trillion INR

2) Total estimated expenditure in 2020 - 21 financial year = 30.4 trillion INR. In the doc, this is represented as 3042230 crores INR

Quick Note: you will notice expenditure (30.4 trillion) is more than income (22.4 trillion). That’s the scam that has been running from 1947. We will go into these details another day.
This is the reason politicians fall at your feet every election.

• They want the power to tax you and spend whatever they like (for example new Parliament complex is estimated to cost 1000 crores) !!!
• They want the power to spend more than what they collect as taxes. This means they will borrow the money and enjoy. You and I will pay for this loan through taxes in the future years!!!!

For now, lets understand that the difference between Expenditure and Income is called Fiscal deficit. The Government will borrow loans for this amount.

3) Estimated fiscal deficit for 2020 - 21 financial year =~8 trillion INR or 796337 crores.

This fiscal deficit is calculated and expressed in another way i.e as the percentage of GDP (gross domestic product).

What does it mean by GDP of Indian economy for one year?

(This is a simplified explanation) GDP means the total earnings of the entire economy in one year. For example if you earn 10 lakhs as salary in a year from your company - then that’s part of the overall GDP.

4) Estimated GDP of Indian economy for 2020 - 21 financial year was 224 trillion INR (~3 trillion dollars). That’s why India is called a three trillion dollar economy. For comparison, China is ~15 trillion dollar economy, USA is ~22 trillion dollar economy.

Now, let us look at the actual incomes and expenditures (The numbers as on Feb 1 2021 is called revised estimate but it will be close to the actual numbers as there are only two months left in the financial year 2020 - 2021).

As provided above, actual numbers are (source link)

1) Income for 2020 -21 = ~15.5 trillion INR

2) Expenditure = ~34.5 trillion INR.

3) Fiscal deficit = ~18.5 trillion INR. (9.5% of GDP)

4) GDP = 194 trillion INR.

Take a moment to digest these numbers. Everything is DEEP RED and you will realize our country is headed towards a bleak economic future.

Overall, here's the summary

1. Country is in deep financial crisis.
2. Taxes are going to increase over the next 10 years substantially.
3. Lot of Government assets will be sold to private people (maybe foreigner bankers/foreign powers). Effectively, country is getting sold!!!
4. There is absolutely no room for any people benefiting schemes. Most of our taxes will go into returning the principal amount and the interest for the borrowed loans leaving no room for any development activities.

 

Wake up - There is time - Till then, the governments will loot you!!

 

2021 22 FY analysis

Source: https://www.indiabudget.gov.in/doc/Budget_at_Glance/budget_at_a_glance.pdf

For seeing the comparative numbers at state level and city level budget analysis, you can check this blog.
Here I have analyzed Karnataka state budget and BBMP budget for 2021 - 22.