Budget Explained: Where does India spend each rupee it earns?
India is set to witness the Narendra Modi government's first Union Budget after the 2024 general elections, with Union Finance Minister Nirmala Sitharaman scheduled to present her seventh Union Budget in Parliament on July 23. Sitharaman will create history by becoming the first finance minister of the country to present the annual document for the seventh time in a row, surpassing former finance minister Morarji Desai's record of six.
India is set to witness the Narendra Modi 3.0 government's first Union Budget, with Union Finance Minister Nirmala Sitharaman scheduled to present her seventh Union Budget in Parliament on July 23. As Sitharaman creates history by becoming the first finance minister of the country to present the annual document for the seventh time in a row, surpassing former finance minister Morarji Desai's record of six, all eyes will be on her Budget speech in Parliament amid hopes for economic reforms and income tax sops. The upcoming Budget will follow an Interim Budget presented in February ahead of the 2024 general elections.
As the country awaits the upcoming Union Budget, due on July 23, here's a summary of where Government of India spends each rupee of the money it earns:
This is where every Government of India spends each rupee it earns
Out of every rupee earned, a total of 40 paise is spent in clearing interest-related liabilities, and paying the share of taxes and duties to states and UTs.
Before moving on to details, take a look at the country's Budget Profile
Part of India's official Budget documents, the Budget Profile page provides a concise summary of the country's key fiscal aspects and allocations. All in all, it serves as a condensed overview that allows policymakers, analysts, and the public to grasp the fiscal strategy and priorities of the government for the upcoming financial year.
24% of total expenditure goes into central sector & centrally-sponsored schemes
Out of Government of India’s total expenditure, about 24 per cent is spent on central sector and centrally-sponsored schemes. While central sector schemes are completely funded by the central government, a portion of the funding for centrally sponsored schemes comes from the state level.
8 paise go into defence
Out of every rupee spent by Government of India, 8 paise go into the defence space.
4 paise go into pensions
Pensions take about 4 paise out of Government of India's total expenditure.
Out of every rupee earned, 6 paise go into subsidies
Out of its total expenditure, about six per cent goes into clearing subsidy-related bills.