Budget 2024 Highlights, Key Points from FM Sitharaman’s Speech

Budget 2024: Finance Minister Nirmala Sitharaman delivered her sixth consecutive Budget on February 1, wrapping up her speech in just 160 minutes, making it her shortest one yet.

This interim Budget 2024 comes ahead of the 2024 Lok Sabha elections scheduled for May. Sitharaman emphasized India’s thriving economy and disclosed an 11.1 percent increase in the FY25 capital expenditure outlay, reaching Rs 11.11 lakh crore, representing 3.4 percent of the GDP.

Typically, the interim Budget allocates funds to sustain vital government operations until the newly elected government introduces a comprehensive Budget post-election.

In her address, Sitharaman highlighted India’s resilient economy, noting a positive transformation over the last decade. She expressed optimism for the future, reflecting on the challenges faced in 2014 and the government’s successful navigation through them with the philosophy of “Sabka Saath, Sabka Vikaas” under the leadership of Prime Minister Narendra Modi.

Budget 2024 Highlights

Sitharaman had previously mentioned that the Budget 2024 would mainly focus on routine financial matters and not include any extraordinary announcements.

Key highlights from the Budget 2024 include:

1. Expecting a 10.5% growth in the Nominal GDP for the fiscal year 2025.
2. The divestment target for fiscal year 2025 is set at Rs 50,000 crore, while it has been reduced to Rs 30,000 crore for the current fiscal year 2024.
3. The Fiscal Deficit is projected to be 5.1% of the GDP for fiscal year 2025 and 5.8% for the current fiscal year 2024.
4. The goal is to bring down the fiscal deficit to below 4.5% by fiscal year 2026.
5. The Capex Outlay for fiscal year 2025 is planned at 3.4% of the GDP.
6. Gross Market Borrowing for fiscal year 2024 is estimated to be Rs 14.1 lakh crore.
7. Disputed tax demands before the fiscal year 2010, up to Rs 25,000, will be withdrawn.
8. There are plans to construct 2 crore houses in the next five years.

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Budget 2024 Schemes for Citizens

Women:

• The goal is to empower three crore Lakhpati Didis, up from two crore.
• Ayushman Bharat will now include coverage for all ASHA and Anganwadi workers.
• Streamlining maternal and child care schemes under a unified plan for better accessibility.

Salaried Class:

• Resolving pre-FY10 disputed tax demands under Rs 25,000.
• Continuation of airport expansions.
• No alterations in direct and indirect taxation.

Common Man:

• Ambitious plan to construct two crore houses over the next five years.
• Introduction of a housing scheme tailored for the middle class.
• Expanding Metro Rail, extending Namo Bharat to more cities.
• Transformation of 40,000 rail bogies to the Vande Bharat standard.
• Launching a rooftop solar scheme to provide free electricity to one crore people.

FM Nirmala Sitharaman Budget 2024 Speech

The following are the highlights from FM’s Budget 2024 Speech:

1. Over the past decade, the Indian economy has undergone significant changes.
2. Despite facing considerable challenges, the government, with its inclusive approach (Sabka Saath Sabka Vishvaas), has ensured that the benefits of development reach all sections of society.
3. The government is emphasizing four key goals: uplifting the poor, empowering women, supporting the youth, and ensuring the well-being of farmers.
4. In the last 10 years, the government’s inclusive efforts have lifted 25 crore people out of multidimensional poverty.
5. Direct benefit transfers have resulted in government savings of Rs 2.7 lakh crore, contributing to the PM Garib Kalyan fund.
6. Special focus on empowerment for differently-abled individuals signifies a commitment to inclusivity.
7. Under the PM Fasal Bima Yojana, 4 crore farmers have received crop insurance, aiding in food production for both the nation and the world.
8. Integration of 1,361 mandis with a trading volume of 3 lakh crore enhances agricultural trade.
9. The PM Kisan Samman Yojana provides direct financial assistance to 11.8 crore farmers annually, complemented by crop insurance for 4 crore farmers under the PM Fasal Bima Yojana.
10. The Skill India Mission has trained 1.4 crore youth, upskilled and reskilled 54 lakh youth, and established 3,000 new ITIs.
11. In addition to promoting high economic growth, the government is committed to a comprehensive GDP approach, focusing on Governance, Development, and Performance.
12. India’s macroeconomic stability, robust investments, and rapid development of digital, social, and physical infrastructure are noteworthy.
13. GST has simplified taxation, creating a unified market across the nation.
14. Despite global challenges, India, during its G20 Presidency, effectively managed the crises of food, fertilizers, and finances arising from the pandemic.
15. The next five years are anticipated to witness unprecedented development towards achieving the goal of becoming a developed country by 2047.
16. The government will implement economic policies fostering sustainable growth, encouraging investments, and fulfilling aspirations.
17. Upcoming reforms will be pursued collaboratively with states and stakeholders to ensure effective implementation.
18. Special attention will be given to make the eastern region a key driver of growth.
19. A new scheme will assist deserving sections of the middle class in rented houses, slums, chawls, or unauthorized colonies to buy or build their own homes, supporting affordable middle-class housing.

Budget 2024 in Detail

Capital Expenditure (Capex) Target for FY25:

• The FY25 capex target is set at Rs 11.1 lakh crore, marking an 11.1 percent increase.

Fiscal Deficit and Receipts for FY25:

• The fiscal deficit target for FY25 is 5.1 percent of GDP, with total receipts estimated at Rs 38.80 lakh crore.

Market Borrowing Details:

• Government plans gross market borrowing of Rs 14.13 lakh crore through bonds in FY25.
• Net borrowing is projected at Rs 11.75 lakh crore, indicating a lower gross borrowing target compared to the previous year.

Nominal GDP Growth:

• Nominal GDP growth is assumed to be 10.5% for FY25.

Income Tax Updates:

• No proposed changes in taxation, according to the Finance Minister.
• Section 87A of the Income Tax Act offers rebates for individuals with taxable income up to Rs 7 lakh.

Taxation Withdrawals:

• The government proposes to withdraw outstanding tax demands up to Rs 25,000 for FY 2009-10 and up to Rs 10,000 for FY 2010-11 to 2014-15, benefiting approximately a crore taxpayers.

Ayushman Bharat Extension:

• Ayushman Bharat coverage will now include all ASHA and Anganwadi workers to provide health insurance benefits to a broader segment of healthcare workers.

Subsidies and Capital Receipts:

• Major subsidies for FY25 expected at 1.2% of GDP.
• FY24 food subsidy revised to Rs 2.12 lakh crore from Rs 1.97 lakh crore.
• Non-debt capital receipts for FY25 projected at Rs 79,000 crore.

Electric Vehicle (EV) Boost:

• The government aims to expand and strengthen the EV ecosystem, supporting manufacturing and charging infrastructure.
• A new bio-manufacturing scheme will be launched to promote green growth.

Lakhpati Didi Scheme Enhancement:

• The ‘Lakhpati Didi’ scheme, initially set at 2 crore women, has been enhanced to benefit 3 crore women.

Women Empowerment:

• Women’s entrepreneurship and higher education enrollment have shown significant progress in the last decade.

Vande Bharat Initiative:

• The government plans to upgrade 40,000 trains in India to Vande Bharat standards and establish three new railway corridors.

Budget 2024 Impact on Bond Yields:

• After announcing reduced borrowing for FY25, the yield on government securities fell by 8 basis points on February 1.
• The 10-year benchmark bond 7.18 percent 2033 recorded a trading yield of 7.0685 percent, down from the previous session’s 7.1442 percent close.

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Budget 2024 FAQs

Q.1. What is the focus of Budget 2024?
Ans. Budget 2024 emphasizes increased capital expenditure, fiscal responsibility, and schemes for women, the salaried class, and the common man.

Q.2. What are the key fiscal targets for FY25?
Ans. Fiscal targets include a 5.1% GDP projection for the fiscal deficit and a 10.5% growth in Nominal GDP.

Q.3. How does the budget impact income tax?
Ans. No changes in income tax, with rebates for taxable income up to Rs 7 lakh and withdrawals of outstanding tax demands for specific periods.

Q.4. What initiatives support women in Budget 2024?
Ans. Women-focused initiatives include empowering three crore ‘Lakhpati Didis’ and extending Ayushman Bharat coverage to ASHA and Anganwadi workers.

Q.5. How did the budget affect bond yields?
Ans. Bond yields fell by 8 basis points after reduced borrowing for FY25, with the 10-year benchmark bond recording a lower trading yield.