Employment, skill development, and agriculture have been significantly prioritized in Finance Minister Nirmala Sitharaman’s seventh Budget. This 2024 Budget, the first under the Modi 3.0 government, aims to set the foundation for India’s transformation into a ‘Developed Bharat’ by 2047.
Union Budget 2024
Finance Minister Nirmala Sitharaman presented the Union Budget for the financial year 2024-25 in Parliament today. This is her seventh budget and the first for Prime Minister Narendra Modi’s government in its third term.
The Finance Minister emphasized India’s strong economic growth, stating it will continue to be a standout. Despite the global economy performing better than expected, it faces policy uncertainties, risks to growth, and rising inflation.
The budget outlines nine key priorities: enhancing agricultural productivity and resilience, creating jobs and improving skills, promoting inclusive human resource development and social justice, boosting manufacturing and services, advancing urban development, ensuring energy security, building infrastructure, fostering innovation and R&D, and implementing next-generation reforms.
These priorities aim to create jobs and stimulate consumption, which could benefit the consumer goods, real estate, and auto sectors.
However, there were no significant changes in personal income tax, which disappointed many salaried individuals. “This budget focuses on employment, skilling, MSMEs, and the middle class,” stated the Finance Minister.
Also Check: Budget 2024, Benefits Expected for Both Old and New Income Tax Regimes
Union Budget 2024 Key Highlights
Here are the main highlights of the 2024 Budget, covering everything from income tax changes to employment benefits:
Capital Expenditure:
For FY25, the government has allocated ₹11.11 lakh crore for capital expenditure, equaling 3.4% of India’s GDP. This amount, set in February, is higher than last year’s revised estimate of ₹9.5 lakh crore.
Tax:
The Finance Minister has announced updates to the tax regime that will bring notable changes. The standard deduction will increase from ₹50,000 to ₹75,000.
Revised tax rates in the new tax regime:
- 0-3 lakhs: 0%
- 3-7 lakhs: 5%
- 7-10 lakhs: 10%
- 10-12 lakhs: 15%
- 12-15 lakhs: 20%
- Above 15 lakhs: 30%
In terms of capital gains, long-term gains will now be taxed at 12.5%, up from the previous 10%, while short-term gains will face a higher tax rate of 20%, up from 15%. The exemption limit for capital gains has been set at ₹1.25 lakh per year.
For Futures and Options (F&O) traders, the Securities Transaction Tax (STT) has been increased from 0.01% to 0.02%, effectively doubling the tax for equity and index trades.
The government has officially abolished Angel Tax, a tax levied on investments in startups. This change aims to support entrepreneurs and investors by removing financial barriers. By eliminating Angel Tax, the government hopes to boost investments in new businesses and stimulate growth within the startup community.
Customs Duty:
The Finance Minister announced key changes affecting India’s mobile and precious metals industries. The government plans to cut the Basic Customs Duty (BCD) on mobile phones, mobile Printed Circuit Design Assemblies (PCDA), and mobile chargers to 15%.
Customs duties on gold and silver will drop to 6%, while platinum duties will be reduced to 6.4%. Additionally, BCD on printed circuit board assemblies used in specific telecom equipment will rise from 10% to 15%. Furthermore, the Finance Minister has exempted customs duties on 25 critical minerals and reduced BCD on two of these minerals.
Employment and Skilling Initiatives
PM Package Overview: Finance Minister Nirmala Sitharaman has unveiled a comprehensive PM Package with five schemes to enhance employment and skills development, backed by a ₹2 lakh crore budget. Of this, ₹1.48 lakh crore is specifically allocated for education, employment, and skill-building initiatives.
Job Creation Efforts: The government is launching three new schemes designed to boost job creation. These include incentives for EPFO enrollment and support for first-time employees. New hires can receive up to ₹15,000 in direct benefit transfers (DBT) over three installments, provided their monthly salary does not exceed ₹1 lakh. This program aims to assist 2.1 lakh young individuals.
Employers will also be eligible for up to ₹3,000 per month for each new employee for two years, targeting the creation of 50 lakh new jobs and benefiting 30 lakh youths. Additionally, a new scheme will offer internships to one crore youths over five years, and rental housing options for industrial workers will be developed through public-private partnerships (PPP).
Women Empowerment
Promoting women’s participation in the workforce is a key focus, with more than ₹3 lakh crore earmarked for initiatives supporting women and girls. This funding will be used to establish hostels and develop training programs tailored specifically for women.
Agriculture and Rural Development
Agricultural Sector: The government will invest ₹1.52 lakh crore in agriculture and related fields. This funding aims to boost productivity through a detailed review of agricultural research and the creation of climate-resilient crop varieties.
Rural Development: ₹2.66 lakh crore will be dedicated to enhancing rural areas, supporting various development projects.
Natural Farming Initiative: Over the next two years, 1 crore farmers will be introduced to natural farming practices.
Financial Boost for Bihar and Andhra Pradesh
Support for Bihar: The budget will accelerate Bihar’s request for funding from international development banks. This includes new airports, healthcare facilities, sports infrastructure, and ₹26,000 crore for highway development.
Funding for Andhra Pradesh: Andhra Pradesh will receive ₹15,000 crore this year, with more funds planned for future years. This money will support the Pollavaram irrigation project and other key investments to drive economic growth.
MSME and Manufacturing Support
A new initiative will provide term loans for MSMEs to buy machinery and equipment without needing collateral. To back these loans, a guarantee fund of up to ₹100 crore will be established, offering credit support for manufacturing MSMEs. Additionally, a technology support package will be introduced for MSMEs, and SIDBI will open 24 new branches to better serve MSME clusters.
Financial Initiatives
Mudra Loans: The loan limit for Mudra loans will increase from ₹10 lakh to ₹20 lakh for borrowers who have successfully repaid previous loans.
Higher Education Loans: Students will receive financial aid of up to ₹10 lakh for higher education. The government will provide e-vouchers directly to 1 lakh students each year, along with a 3% interest subsidy.
Insolvency and Bankruptcy Code (IBC): A new tech platform will enhance the IBC process by improving consistency, transparency, and oversight. The IBC has resolved over 1,000 companies, recovered ₹3.3 lakh crore for creditors, and handled 28,000 cases involving over ₹10 lakh crore before admission.
Simplification of FDI Rules: The Finance Minister announced plans to further simplify rules for Foreign Direct Investments (FDIs) to encourage more investment.
Infrastructure and Development Update
Infrastructure Investment: The government will invest an extra ₹26,000 crore in enhancing road connectivity.
Critical Mineral Mission: A new mission will focus on recycling critical minerals and acquiring them from abroad. Plans are underway to auction the initial set of offshore mining blocks.
Affordable Housing: A significant ₹10 lakh crore will be allocated to meet the housing needs of 1 crore urban poor and middle-class families. Additionally, the PM Surya Ghar Muft Bijli Yojana will provide rooftop solar panels to 1 crore households.
Nuclear and Space Initiatives
The government plans to collaborate with private companies to develop Bharat small reactors and advance research in Bharat small modular reactors and new nuclear technologies. Additionally, there will be a strong focus on growing the space economy fivefold over the next decade. To achieve this, a ₹1,000 crore venture capital fund will be set up.
Also Check: Interim Budget 2024 Highlights
Union Budget 2024 FAQs
Q.1. What are the key priorities of the 2024 Budget?
Ans. The 2024 Budget focuses on employment, skill development, agriculture, infrastructure, and enhancing the space economy, with significant investments in these areas to drive growth.
Q.2. How will the 2024 Budget impact personal income tax?
Ans. The Budget introduces changes such as increased standard deduction, revised tax rates, higher capital gains tax, and an abolished Angel Tax to support startups.
Q.3. What are the new initiatives for job creation in the 2024 Budget?
Ans. New schemes include incentives for EPFO enrollment, direct benefit transfers for new hires, and internships for youth. The aim is to create 50 lakh new jobs and support 30 lakh youths.
Q.4. What investments are planned for agriculture and rural development?
Ans. The Budget allocates ₹1.52 lakh crore for agriculture to boost productivity and ₹2.66 lakh crore for rural development, including natural farming initiatives for 1 crore farmers.
Q.5. How is the 2024 Budget supporting MSMEs and manufacturing?
Ans. The Budget provides term loans for MSMEs, a ₹100 crore guarantee fund, technology support, and new SIDBI branches to enhance credit and support manufacturing growth.
