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Budget Explained: Where does India spend each rupee it earns?
- Written by ZeeBiz WebTeam
Published: 3:06 PM, Jul 15, 2024| Updated: 8:41 PM, Jan 22, 2025
It's that time of the year when the country awaits what's in store for the economy and the common man in the finance minister's annual 'bahi khata' in the form of the Union Budget.
With all eyes on the Union Budget for the financial year 2025-26, here's an overview of where the Government of India spends each rupee that it earns, as per the July 2024 Budget documents.
For instance, interest payments, defence, subsidies and pensions, and centrally-sponsored schemes form 45 per cent of the government's total expenditure.
These details are laid out clearly in the 'Budget at a Glance' document, part of the Budget documents tabled in Parliament.
Let's look at the latest Budget at a Glance to understand several expenditure-side aspects of the central government's Budget profile.
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This is where every Government of India spends each rupee it earns
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1/7Central sector schemes, interest payments, and states' share of taxes and duties form the lion's share of Budget expenditure, amounting to 56 per cent of the total expenditure, as per official data.
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Defence
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2/7Out of the every rupee of the government's total spending, a share of eight paise is dedicated to defence.
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Centrally-sponsored schemes
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3/7Another eight paise are spent on centrally-sponsored schemes.
These schemes are funded jointly by the central and state governments of India, with the majority of the share coming from the Centre.
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24% expenditure goes into central sector & centrally-sponsored schemes
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4/7In fact, 24 per cent of the total expenditure is dedicated to central sector and centrally-sponsored schemes.
Central sector schemes are completely funded by the central government.
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4 paise go into pensions
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5/7Pensions take about 4 paise out of Government of India's total expenditure.
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6 paise go into subsidies
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6/7Out of the total expenditure, about six per cent goes into clearing subsidy-related bills.
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Now, take a look at the Budget Profile
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7/7Part 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.
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