BUDGET 2024 HIGHLIGHTS

On July 23, Union Finance Minister Nirmala Sitharaman presented her seventh consecutive budget. This marks the first budget by the BJP-led NDA government since its re-election in June. With a strong emphasis on employment, skilling, MSMEs, and the middle class, this budget outlines significant financial allocations and policy changes aimed at fostering growth and development across various sectors.

FOCUS AREAS AND ALLOCATIONS

The Finance Minister outlined nine key priorities for the Budget 2024:

1. Productivity and Resilience in Agriculture: Initiatives to promote natural farming, self-sufficiency in pulses and oilseeds. Also, development of digital public infrastructure for farmers.
2. Employment and Skilling: Introduction of three new employee-linked incentive schemes to support first-time employees and both employers and employees. Allocation of ₹1.48 lakh crore for education, employment, and skill development. Loans up to ₹10 lakh for students in domestic institutions, with e-vouchers provided for interest subvention.
3. Inclusive Human Resource Development and Social Justice: Comprehensive internship scheme providing exposure to real-life business environments for 1 crore youth over five years.
4. Manufacturing and Services: Support for labor-intensive manufacturing and MSMEs through new credit assessment models by public sector banks.
5. Urban Development: Investment in infrastructure projects, including expressways, power projects, airports, medical colleges, and sports infrastructure, especially in states like Bihar and Andhra Pradesh.
6. Energy Security: Measures to support the energy transition. This also includes the expansion of the list of exempted capital goods for solar cell and panel manufacturing.
7. Infrastructure: Significant investments in infrastructure development, particularly in eastern states as part of the “Purvodaya” initiative.
8. Innovation, Research, and Development: Funding and support for R&D activities to drive technological advancements.
9. Support for Promotion of MSMEs: Special focus on MSMEs, including the introduction of new credit assessment models that rely on digital footprints rather than traditional criteria.

AGRICULTURE BUDGET

The budget includes several measures to boost the agricultural sector, such as initiating farmers into natural farming, achieving self-sufficiency in pulses and oilseeds, and developing digital public infrastructure.

EMPLOYMENT AND EDUCATION BUDGET

Three new employee-linked incentive schemes were announced, aligning with enrolment in the Employee Provident Fund Organisation. These schemes aim to recognize first-time employees and provide support to both employers and employees. Additionally, students who have not benefited from any government schemes will receive support loans up to ₹10 lakh for education in domestic institutions, with e-vouchers provided for interest subvention.

BIHAR AND ANDHRA PRADESH BUDGET

The “Purvodaya” initiative includes significant investments in infrastructure projects for Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. This includes building expressways in Bihar at a cost of ₹26,000 crore, along with power projects, new airports, medical colleges, and sports infrastructure. For Andhra Pradesh, funds will be provided for supporting basic infrastructure like water, power, and roads under the AP Reorganisation Act.

BUDGET FOR WOMEN

To promote women-led development, the budget allocates over ₹3 lakh crore for schemes benefiting women and girls.

MSMEs BUDGET

The budget introduces a new assessment model for MSME credit by public sector banks, which will be based on the digital footprint of MSMEs rather than only assets and turnover criteria.

PERSONAL INCOME TAX

The Finance Minister revised the tax slabs under the new regime, enabling salaried employees to save up to ₹17,500 in income taxes. The changes include:

• Expansion of the ₹3 lakh to ₹6 lakh slab to ₹3 lakh to ₹7 lakh.
• Similar adjustments in other slabs, maintaining the same tax rates but altering the income ranges.

SIMPLIFICATION OF TAXATION OF CAPITAL GAINS

Changes include:

• Two holding periods for asset classification: 12 months and 24 months.
• Increased tax rates for short-term capital gains on certain securities.
• Increased exemption limit for long-term capital gains from ₹1 lakh to ₹1.25 lakh annually, with an increased tax rate from 10% to 12.5%.
• Removal of the indexation benefit for long-term assets sold after July 23, 2024.

CHANGES IN TDS RATES

TDS rates on specified payments have been reduced to facilitate business and improve taxpayer compliance, effective from October 1, 2024, or April 1, 2025. New provisions include the introduction of TDS on payments made to partners by firms.

SECTOR-SPECIFIC CUSTOMS DUTY PROPOSALS

Changes in customs duty rates aim to rationalize and simplify the structure, facilitating trade and reducing disputes. Key sectors affected include medicines, mobile phones, critical minerals, solar energy, marine products, leather and textiles, precious metals, other metals, electronics, chemicals and petrochemicals, plastics, and telecommunications equipment.

DIRECT TAXES AND INVESTMENT

The budget introduces measures to support the Indian start-up ecosystem, promote cruise tourism, and develop the diamond cutting and polishing sector. The corporate tax rate on foreign companies will be reduced from 40% to 35% to attract foreign capital.

CONCLUSION

Budget 2024, presented by Finance Minister Nirmala Sitharaman, is a comprehensive plan aimed at driving economic growth, fostering innovation, and supporting various sectors with targeted investments and policy changes. The focus on employment, skilling, MSMEs, and middle-class support, along with significant tax reforms, reflects the government’s commitment to creating a robust and inclusive economy.