Union Budget 2024: Where does Centre spend the most money?

Union finance minister Nirmala Sitharaman presented Union Budget in Parliament of Tuesday. The budget documents reveal that interest payments are the biggest drain on resources, followed by expenditure on defence and subsidies.

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Expenditure of major items (as per Budget estimates 2024-25)

1. Interest: ₹11,62,940 crore

2. Defence: ₹4,54,773 crore

3. Subsidy:

Food: ₹2,05,250 crore

Fertiliser: ₹1,64,000 crore

Petroleum: 11,925 crore

4. Rural Development: ₹2,65,808 crore

5. Transport: ₹5,44,128 crore

6. Pension: ₹2,43,296 crore

7. Home Affairs: ₹1,50,983 crore

8. Agriculture and Allied Activities: ₹1,51,851 crore

9. Education: ₹1,25,638 crore

10. IT and Telecom: ₹1,16,342 crore

Note that the Centre also spends a significant portion of its budget on tax administration, GST compensation, and transfers to states and Union territories.

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Aim to reach fiscal deficit below 4.5% next year: Sitharaman

For the year 2024-25, the fiscal deficit is estimated at 4.9 per cent of GDP. Total receipts, excluding borrowings, are projected at ₹32.07 lakh crore, while total expenditure is estimated at ₹48.21 lakh crore, according to FM Sitharaman.

The government aims to reduce the fiscal deficit to below 4.5 per cent of GDP by the financial year 2025-26. The fiscal deficit is the gap between what the government earns and spends, showing how much it may need to borrow.

"The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year," Sitharaman said.

"The government is committed to stay the course. From 2026-27 onwards our endeavour will be to keep fiscal deficit each year such that the central government's debt will be on a declining path as a percentage of GDP," she added.

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No change in infrastructure spend target

The Centre announced it will spend a record ₹11,11,000 crore on infrastructure for the financial year ending March 2025. This spending plan remains unchanged from the interim budget presented in February before the national elections.

"This would be 3.4% of our GDP (gross domestic product)," Finance Minister Nirmala Sitharaman said while presenting the Union Budget.