On Tuesday (23rd July), Finance Minister Nirmala Sitharaman presented the Annual Financial Statement (Budget 2024-25) before the Lok Sabha. As per the Budgetary announcement, the government has allocated Rs 1.52 lakh crores for Agriculture and allied sectors. An outlay of more than Rs 3 lakh crore has been marked to achieve Women-led development, and fund schemes benefiting women.
The government has also announced schemes and initiatives for employment, skill development, and other opportunities for 4.1 crore youth over the next 5 years. The total central outlay for this is around Rs 2 lakh crores. Additionally, Rs 2.66 lakh crore have been allocated for rural development, including rural infrastructure. Power projects, including setting up of a new 2,000 Megawatt plant will be taken up at a cost of Rs 21,400 crores. Customs duties on gold and silver have also been reduced to 6% and that on platinum to 6.4%.
Major announcements in the Budget
In a major relief for the Indian start-up ecosystem, the Finance Minister announced that “angel tax” for all classes of investors has been abolished. This has been done to boost the entrepreneurial spirit and support innovation.
The government has also proposed to increase the deduction of expenditure by employers towards NPS from 10 to 14 % of the employee’s salary. This has been done to improve social security benefits.
In a major relief for Income Tax payers, the Union government has increased the limit for Standard deduction from Rs 50,000 to Rs 75,000 and revised the tax slab under the New Tax regime. The new slab, under the new tax regime, is as follows – Rs 0-3 lakh – nil, Rs 3-7 lakh – 5%, Rs 7-10 lakh – 10%, Rs 10-12 lakh – 15%, Rs 12- 15 lakh – 20%, and above Rs 15 lakh – 30%.
Similarly, the deduction on family pension for pensioners is proposed to be enhanced from Rs 15,000/- to ₹ 25,000/-. This will provide relief to about 4 crore salaried individuals and pensioners
The government will also launch Pradhan Mantri Janjatiye Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal majority villages and aspirational districts. This will cover 63,000 villages benefiting 5 crore tribal people. The Finance Minister noted that financial support will be made as necessary for building 3 crores additional Houses under PM Awas Yojana in rural and Urban areas of the country.
The government has also announced that it will formulate ‘Transit Oriented Development’ plans for 14 large cities with a population above 30 lakh.
According to the Budgetary announcement, India’s inflation continues to be low, stable, and moving towards the 4% target. Core inflation (non-food, non-fuel) currently is 3.1 %.
For Annadata (farmers), the government announced a higher MSP, a month ago, for all major crops, delivering on the promise of at least a 50 % margin over costs.
Financial assistance to the state of Bihar through multi-lateral banks
The Union government has also announced that new airports, medical colleges, and sports infrastructures will be developed in Bihar. An additional allocation to support capital investment will be provided. The request of the Bihar government for external assistance from Multi-lateral banks will also be expedited.
Financial assistance for Andra Pradesh
Recognising Andhra Pradesh’s need for capital, the Union government will facilitate special financial support through multi-lateral development agencies. In the current Financial Year, Rs 15,000 crores will be arranged with additional amounts in future years.
The government has also committed to financing and completion of the Polavaram irrigation project, the lifeline for Andhra Pradesh and its farmers. This will help the country’s food security as well. Under the act, for the promotion of Industrial development, funds will be provided for essential infrastructure such as water, power, roads, and railways.
MSMEs in Budget
The government has announced that it will introduce a credit guarantee scheme for facilitating term loans to MSMEs so that they can purchase machinery and equipment without collateral or third-party guarantee.
A separately constituted self-financing guarantee fund will provide, to each applicant, a guarantee covering up to ₹ 100 crore. As per the Budgetary announcement, the Union government has increased the limit of Mudra loans from Rs 10 lakh to Rs 20 lakh. This will be available for all those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.
The government will facilitate the development of investment-ready “plug and play” industrial parks with complete infrastructure in or near 100 cities. Further, 12 industrial parks under the National Industrial Corridor Development Program will also be sanctioned.
Indirect Taxes in the Budget
The government has assured to further simplify and rationalise the tax structure and expand it to the remaining sectors to multiply the benefits of GST. The Basic Customs Duty (BCD) on mobile phones, mobile PCBA, and mobile chargers will now be 15%.
The government has exempt Customs duties on 25 critical minerals for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics. BCD on certain broodstock, polychaete worms, shrimp, and fish feed has been reduced to 5%.
The government has exempted Customs duty on various inputs for the manufacture of shrimp and fish feed.
To increase value addition in the domestic electronics industry, BCD on oxygen free copper for manufacture of resistors has been removed.
To promote domestic aviation and boat & ship MRO, the period for export of goods imported for repairs has been extended from 6 months to 1 year.
Nine Priorities of the government
FM Nirmala Sitharaman listed productivity and resilience in agriculture, employment and skill development, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation, research and development, and next-generation reforms as nine priority areas for the government.
The priority areas for the government, as per the budgetary announcement are as follows –
Productivity and Resilience in Agriculture, transforming Agriculture research
The Union Government has announced that it will undertake a comprehensive review of the agriculture research setup and bring the focus on raising productivity and developing climate-resilient varieties. As per the budgetary announcement, new 109 varieties of climate-resilient and high-yield crops of 32 field and horticulture crops will be released for cultivation.
Priority 1: Productivity and Resilience in Agriculture, transforming Agriculture research
— OpIndia.com (@OpIndia_com) July 23, 2024
Our Government will undertake a comprehensive review of the agriculture research setup and bring the focus on raising productivity and developing climate-resilient varieties. Funding will…
In the next two years, 1 crore farmers across the country will be initiated into natural farming, supported by certification and branding. 10,000 need-based bio-input resource centres will be established, the Finance Minister announced.
The government declared its intent to achieve self-sufficiency (Atmanirbharta) in pulses and oil seeds and for that the government will strengthen their storage, production, and market under Missions for Pulses and Oil seeds. Vegetable production and supply chain: Large-scale clusters will be developed closer to major consumption centres.
Following the success of the Pilot project, the Union government in partnership with the states, will facilitate the implementation of the Digital Public Infrastructure (DPI) for Agriculture for coverage of farmers and their lands in three years.
During this year, crop surveys for Khareef will be taken up using DPI in 400 districts. The details of 6 crore farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth-based Kisan Credit cards will be enabled in five states.
The Union government will bring out a National Cooperation Policy for the systematic, orderly, and all-round development of the cooperative sector.
Employment and Skill development
As part of the Prime Minister’s package, the Finance Minister announced that the Union government will implement three schemes for Employment-linked incentives.
Scheme A: For First timers – This scheme will provide one month wage to all persons newly entering the workforce in all formal sectors. Direct Benefit Transfer (DBT) of one month’s salary in three installments to first-time employees as registered in the EPFO. It will be up to Rs 15,000 and the eligibility limit will be a salary of Rs 1 lakh per month. The scheme is expected to benefit 210 lakh youths.
Scheme B: Job creation in manufacturing: The Union government will incentive additional job creation in the manufacturing sector linked to the employment of first-time employees. Incentives will be provided to both the employees and their employers corresponding to their EPFO contributions in the first four years of employment. This scheme is expected to benefit 30 lakh youth entering employment and their employers.
Scheme C: Support to employers: Employer focus schemes will cover additional employment in all sectors. All additional employment within the salary of Rs 1 lakh per month will be counted.
Under this, the government will reimburse employers up to Rs 3,000 per month for two years for each additional employee’s EPFO contributions. The scheme is expected to incentivize additional employment of 50 lakh persons.
Participation of the Women in the Workforce: Facilitate higher participation of Women in the workforce through setting up women hostels in collaboration with industries and creating partnerships to organize women-specific skilling programs and promotion of market access for women SHG enterprises.
Skill development program: The Union government has announced a new centrally sponsored scheme. As the fourth scheme under the Prime Minister’s package for skilling. In collaboration with states and industries, 20 lakh youth will be skilled over a five year period. 1,000 industrial training institutes will be upgraded in hub and spoke arrangements with outcome orientation and the course content will be aligned with the needs of the industry and new courses will be introduced for emerging needs.
Skill development loans: The model loan schemes will be revised to facilitate loans up to Rs 7.5 lakh with a guarantee from a government-promoted fund. This measure is expected to help 25,000 students every year.
Education loans: the government announced financial support for loans up to Rs 10 lakh for higher education in domestic institutions for those students who have not been eligible for any scheme or policy. E-vouchers will be directly given to 1 lakh students every year for annual interest subvention of 3% of the loan amount.
The 5th scheme under the Prime Minister’s package will be a comprehensive one for providing Internship opportunities in 500 top companies to 1 crore youth in 5 years.
Inclusive Human resource development and social justice: Saturation approach
The government asserted that it is committed to the all-round, all-pervasive, and all-inclusive development of people, particularly farmers, youth, women, and the poor. Current schemes that are already in operation like PM Vishwakarma, PM Swanidhi, National Livelihood missions, and Stand Up India will be stepped up.
Purvauyad for the all-round development of the Eastern part of the country covering Bihar, Jharkhand, West Bengal, Orissa, and Andra Pradesh. This will cover Human resource development, infrastructure, and generation of economic opportunities to make the region attain the role of engine for Viksit Bharat.
More than 1,00 branches of India Post Payment Banks will be set up in the North Eastern Region to expand the banking services.
On the Amritsar-Kolkata industrial corridor, the government will support the development of an industrial nod at Gaya in Bihar to catalyse Industrial development of the easter region. The Industrial node at Gaya will also be a good model for developing ancient centres of cultural importance into future centres of modern economy. This model shall show, Vikas bhi, Virasat bhi.
The government will also support the development of road connectivity projects
- Patna -Purnea expressway,
- Buxar- Bhagalpur highway,
- Bodhgaya- Rajgir-Vaishali- Darbhanga
- An additional two-lane bridge over river Ganga in Buxar at a total cost of Rs 26,000 crores.
Energy Security
To have a greater contribution of Nuclear energy in the energy mix for Viksit Bharat, the Union Government will partner with the private sector for setting up –
- Bharat Small Reactors
- Research & development of Bharat Small Modular Reactor,
- Research & development of newer technologies for nuclear energy.
- A joint venture between NTPC and BHEL will set up a full-scale 800 MW commercial plant using AUSC technology.
Infrastructure
The Union government will make a provision of Rs 1.5 lakh crore for long-term interest-free loans this year to support the states in their resource allocation. Phase IV of Pradhan Mantri Gramin Sadak Yojana (PMGSY) will be launched to provide all-weather connectivity to 25,000 rural habitations to those that have become eligible because of their population increase.
Innovation, Research & Development
The Union government will operationalize the Anusandhan National Research Fund for basic research and prototype development. Additionally, it will set up a mechanism for spurring private sector-driven research and innovation at a commercial scale with a financing pool of Rs 1 lakh crore in line with the announcement in the interim budget.
The government has made continued emphasis on expanding the space economy by 5 times in the next 10 years, and for this, a venture capital fund of ₹ 1,000 crore will be set up.
Next Generation Reforms
The government will incentivise states for Land-related reforms and actions within the next 3 years through appropriate fiscal support. In Urban areas, it will cover urban planning, usage, and building bylaws.
Rural land-related actions will include ULPIN or Bhu-Aadhaar for all lands, digitization of maps, a survey to map sub-divisions as per current ownership, the establishment of a land registry, and linking to the farmer’s registry. These actions will facilitate credit flow and other agri services.
Land records in urban areas will be digitized with GIS mapping. An IT-based system for property records and tax administration will be established. It will improve the financial position of Urban Local Bodies.
This Budget marks Finance Minister Nirmala Sitharaman’s seventh consecutive budget surpassing the late Moraji Desai’s record of six consecutive budgets.
