Budget 2024: Key Takeaways From Sitharaman’s 1:25 Hour Speech

The budget and the policies on which the country will run for the next one year has been announced by Finance Minister Nirmala Sitharaman today. Here we have some of the key features of the Budget 2024-25 which was presented by the Finance Minister in the parliament. 

This budget is the “Roadmap for the pursuit of ‘Viksit Bharat’ according to the government, in which they have focused on the 4 castes which are ‘Gareeb’, ‘Mahilayen’, ‘Yuva,’ and ‘Annadata’. And it was divided into 4 parts that are Employment, Skilling, MSMEs, and Middle Class. 

Key Budget Highlights: 2024-2025

The 2024-2025 budget emphasises a roadmap towards achieving 'Viksit Bharat,' focusing on employment, skilling, support for MSMEs, and the middle class. This budget also highlights targeted benefits for women, the poor, youth, and farmers.

Agriculture and Food Security

• Vegetable Production & Supply Chain: Promotion of Farmer Producer Organizations (FPOs), cooperatives, and startups for efficient vegetable supply chains.
• New Crop Varieties: Introduction of 109 high-yielding and climate-resilient crop varieties.
• National Cooperation Policy: Systematic development of the cooperative sector.
• Oil Seed Self-Reliance: Focus on mustard, groundnut, sesame, soybean, and sunflower.
• Agriculture Research Transformation: Enhancing productivity and developing climate-resilient crop varieties.

Employment & Skilling

• Women Workforce Participation: Establishment of working women hostels and creches in collaboration with industry.
• Incentives for New Entrants: One-month wage in three installments up to ₹15,000 for new entrants in formal sectors.
• EPFO Contribution Support: Government reimbursement of EPFO contributions up to ₹3,000 per month for new hires.
• Student Loans: Loans up to ₹7.5 lakh with government guarantee and interest subvention for higher education.
• Skilling Programmes: 20 lakh youth to be skilled over five years, and upgrading 1,000 Industrial Training Institutes (ITIs).

Social Justice and Inclusive Development

• Purvodaya Initiative: Economic development in Eastern states, including the Amritsar-Kolkata Industrial Corridor.
• Support for Women and Girls: Allocation of over ₹3 lakh crore for schemes benefiting women and girls.
• Tribal Development: Socio-economic upliftment of tribal communities covering 63,000 villages.
• Infrastructure in North East: Over 100 branches of India Post Payment Bank to be set up.

Manufacturing and Services

• National Industrial Corridor Development: Establishment of twelve industrial parks.
• Internship Opportunities: Internships in 500 top companies for 1 crore youth over five years.
• Rental Housing for Industrial Workers: Dormitory-type accommodation in PPP mode.
• Critical Minerals Mission: Domestic production, recycling, and acquisition of critical minerals.

Urban Development

• Stamp Duty Reduction: Encouraging states to lower stamp duties for properties purchased by women.
• Street Markets Development: Establishment of 100 weekly 'haats' or street food hubs.
• Transit-Oriented Development: Plans for 14 large cities.
• Water Management: Promoting water supply, sewage treatment, and waste management projects in 100 large cities.
• PM Awas Yojana Urban 2.0: Addressing housing needs with an investment of ₹10 lakh crore.

Energy and Infrastructure

• Bharat Small Reactors: Development and R&D of small modular reactors.
• Energy Audits: Investment grade energy audits in 60 clusters, expanding to 100 clusters.
• Pumped Storage Policy: NTPC and BHEL to set up an 800 MW commercial plant.
• Infrastructure Investments: ₹1.5 lakh crore to states as long-term interest-free loans.
• Rural Connectivity: Phase IV of PMGSY to provide all-weather connectivity to 25,000 rural habitations.
• Flood Management: Support for flood management projects in Assam, Sikkim, and Uttarakhand.

Innovation, Research & Development

• National Research Fund: Operationalization for basic research and prototype development.
• Space Economy: Establishment of a ₹1,000 crore venture capital fund.

Tax Proposals

• Direct Tax Proposals: Simplification of taxes, including exemptions and reduced rates for various categories.
• Customs Duty Adjustments: Reduced duties on mobile phones, gold, silver, shrimp feed, and more to boost competitiveness.
• Capital Gains Tax: Standardizing tax rates for short and long-term gains on financial assets.

Direct Tax Proposals

Objective:

• Reduce the compliance burden
• Promote entrepreneurial spirit
• Provide tax relief to citizens

Rationalisation of Capital Gains:

• Short term gains of financial assets to attract 20% tax rate.
• Long term gains on all financial and non-financial assets to attract a tax rate of 12.5%.
• Increase in limit of exemption of capital gains on financial assets to ₹1.25 lakh per year.

Employment and Investment:

• Abolish ANGEL tax for all classes of investors.
• Simpler tax regime to operate domestic cruise.
• Provide for safe harbour rates for foreign mining companies (selling raw diamonds).
• Corporate tax rate on foreign companies reduced from 40% to 35%.

Simplifying New Tax Regime:

• Savings up to ₹17,500.
• Tax rates based on income brackets:
  • Nil: ₹0 - ₹3 lakh.
  • 5%: ₹3 - ₹7 lakh.
  • 10%: ₹7 - ₹10 lakh.
  • 15%: ₹10 - ₹12 lakh.
  • 20%: ₹12 - ₹15 lakh.
  • 30%: > ₹15 lakh.
• Standard Deduction for salaried employees increased from ₹50,000 to ₹75,000.
• Deduction on family pension for pensioners increased from ₹15,000 to ₹25,000.

Financial Allocations and Revenue

The budget outlines significant financial allocations and revenue strategies:

Revenue and Expenditure:

• Revenue receipts are projected at ₹31.3 lakh crore for 2024-25.
• Effective capital expenditure is estimated at ₹15.0 lakh crore.

Major Financial Allocations:

• Defence: ₹4,54,773 crore.
• Ministry of Road Transport and Highways: ₹2,65,808 crore.
• Agriculture and Allied Activities: ₹1,51,851 crore.
• Education: ₹1,25,638 crore.
• Health: ₹89,287 crore

Tax Proposals:

• Increase in standard deduction for salaried employees from ₹50,000 to ₹75,000.
• Simplified new tax regime with revised tax slabs.
• Abolition of ANGEL tax for all classes of investors.
• Corporate tax rate on foreign companies reduced from 40% to 35%​

Social Welfare and Development Schemes

Key social welfare and development initiatives include:

• MGNREGA: Allocation of ₹60,000 crore for 2024-25.
• Direct Benefit Transfer - LPG: Ensuring direct benefit transfers for LPG

Tourism and Land Reforms

The budget also focuses on enhancing tourism and land reforms:

• Tourism: Promoting India's rich heritage, including monuments, craftsmanship, wildlife sanctuaries, and pristine beaches.
• Land Reforms: Introducing the Unique Land Parcel Identification Number (Bhu-Aadhaar) for all lands, digitization of cadastral maps, and establishment of land registries for rural and urban areas.

Economic Indicators and Fiscal Management

The budget reflects robust economic foundations and fiscal management:

• Economic Growth: India grew at 8.2% in FY 2024.
• Inflation and Fiscal Deficit: Measures to tame inflation and decrease the fiscal deficit as a percentage of GDP.
• Expansionary PMI Index: Reflecting growth in services and manufacturing sectors.

Allocation to Major Schemes (in ₹ crore)

2023-24(BE) and 2024-25(BE):

• MGNREGA:
  • 2023-24(BE): 60,000
  • 2024-25(BE): 86,000
• Research and Development Projects:
  • 2023-24(BE): 840
  • 2024-25(BE): 1,200
• Nuclear Power Projects:
  • 2023-24(BE): 442
  • 2024-25(BE): 2,228
• PLI for Pharmaceutical Industry:
  • 2023-24(BE): 1,200
  • 2024-25(BE): 2,143
• Development of Semiconductors and Display Manufacturing:
  • 2023-24(BE): 3,000
  • 2024-25(BE): 6,903
• Solar Power (Grid):
  • 2023-24(BE): 4,970
  • 2024-25(BE): 10,000
• Direct Benefit Transfer - LPG:
  • 2023-24(BE): 180
  • 2024-25(BE): 1,500
• Lines of Credit under IDEA Scheme:
  • 2023-24(BE): 1,300
  • 2024-25(BE): 3,849