Analysis of Union Budget 2024-25
Nirmala Sitharaman set a record by presenting the Union Budget seven times
Written by Zaif khan
The expenditure proposals for different departments/Ministries:-
Agriculture
- 1.52lakh crore provision is provided to this sector by addressing demand for automobiles in rural market.
- Government will release new 109 high yielding & climate resilient seeds for horticulture crops.
- Digital public infrastructure for agriculture sector is also promised.
- Special focus will be given to shrimp farming, vegetable production & enhancing supply chain.
Education & skilling
Participation of Women in the Workforce
Establishment of working women hostels in collaboration with industry. Women-specific skilling programs. Promotion of market access for women Self-Help Group (SHG) enterprises.
Education & Skilling loans
Under model skill loan scheme up to Rs. 7.5 lakh will be provided by a government-promoted Fund for 25,000 students annually.
To support higher education for students who have not benefited from other government schemes loan up to Rs.10 lakh will be provided with annual interest subvention of 3% on the loan amount. E-vouchers will be provided directly to 1 lakh students annually.
Scheme A: First Timers
- Objective: To support individuals newly entering in the formal workforce.
- Beneficiaries: First-time employees registered under EPFO.
- Benefits:
- One-month salary will be provided in three installments.
- Maximum benefit up to Rs. 15,000.
- Eligibility
- Monthly salary limit of up to Rs. 1 lakh.
- Estimated Impact:
- Expected to benefit 210 lakh (21 million) youth.
Scheme B: Job Creation in Manufacturing
- Objective: To incentivize job creation in the manufacturing sector.
- Beneficiaries: First-time employees and their employers.
- Benefits:
- Incentives linked to EPFO contributions over the first 4 years of employment.
- Estimated Impact:
- Expected to benefit 30 lakh (3 million) youth entering employment, along with their employers.
Scheme C: Support to Employers
- Objective: To encourage additional employment across all sectors.
- Beneficiaries: Employers hiring additional employees.
- Benefits:
- Government will reimburse up to Rs. 3,000 per month for 2 years towards EPFO contribution for each additional employee.
- Eligibility:
- Additional employment within a salary limit of Rs. 1 lakh per month.
- Estimated Impact:
- Expected to incentivize the employment of 50 lakh (5 million) citizens.
Defence
- 6.21 lakh crore spending on defence this term comparatively 4.72% more from last year's outlay that is 5.94 lakh crore. It is 12.9% of total budget of India government this year. To increase startup ecosystem in defence industry 518crore is allocated to iDEX scheme and MSMEs.
Railway
- 2.52 lakh crore is allocated to railway for supporting record capital expenditure of Rs.2,62,200 crore. The large portion (1.08 lakh crore) is expected to be spent on safety related activities.
Road &transport
- The budget allocation for roads & transport ministry is almost same as previous fiscal year i.e. 2.78 lakh crore from 2.76 lakh crore with 0.6% increment. The pace of constructing national highways is slowed down by high number due to financing of the projects.
Urban development
- Transit Oriented Development (TOD) on 14 large cities with populations over 30 lakh, aims to develop plans integrating urban development with efficient public transport systems.
- PM Awas Yojana Urban 2.0 targets housing needs of 1 crore urban poor families. Involves an investment of Rs. 10 lakh crore, with central assistance of Rs. 2.2 lakh crore over 5 years. Offers interest subsidies to facilitate affordable home loans.
- Water Supply and Sanitation partnerships with State Governments and Multilateral Development Banks. Focuses on water supply, sewage treatment, and solid waste management in 100 large cities.
- PM SVANidhi Scheme to develop 100 weekly 'haats' or street food hubs annually for 5 years.
- Stamp Duty changes encourages states to moderate high stamp duty rates universally. Considers reductions for properties purchased by women to promote gender equality in property ownership.
Energy Security
- PM Surya Ghar Muft Bijli Yojana aims to install rooftop solar plants to provide free electricity (up to 300 units/month) to 1 crore households. Currently 1.28 crore registrations and 14 lakh applications underline its popularity and impact.
- Introduces a policy to promote pumped storage projects for efficient electricity storage and integration of renewable energy sources.
- Plans to partner with the private sector for the development and research of Bharat Small Reactors and Small Modular Reactors. Focuses on enhancing nuclear energy's role in India's energy mix through advanced technologies.
- Developed indigenous technology for advanced Ultra Super Critical thermal power plants. Joint venture between NTPC and BHEL to establish an 800 MW commercial plant using this technology, supported by government fiscal aid.
- Formulates a roadmap to transition ‘hard to abate’ industries from energy efficiency targets to emission targets. Proposes regulatory frameworks for their integration into the Indian Carbon Market.
- Conducts energy audits in 60 clusters, including brass and ceramic industries, to evaluate cleaner energy adoption and energy efficiency measures.
Telecommunication
- ₹1.28 lakh crore for telecom projects and public sector firms under the telecom ministry.
- Notably, Bharat Sanchar Nigam Limited (BSNL) is set to receive ₹82,916 crore for technology upgradation and restructuring and 17510 crore for employees.
- Up to 3668.97 crore is given to pay principal amount of MTNL bonds.
Research & development-
- Operationalize the Anusandhan National Research Fund for basic research and prototype development with 1 lakh crore of funds.
- 1000 crore capital venture will be set up for space economy
Finance Bill
Direct tax
- Initiatives to promote the diamond cutting and polishing industry and attract foreign investment by reducing corporate tax rates.
- Proposals to increase Security Transactions Tax on futures and options, and tax income from buyback of shares.
- Increased Tax rate on capital gains on certain financial assets.
- Emphasis on the Income-tax Act, 1961 to enhance clarity by merging tax exemption regimes for charities and simplifying Tax Deducted at Source (TDS) rates.
- Proposals to streamline reassessment provisions and simplify capital gains taxation for both financial and non-financial assets.
- Comprehensive digitalization of major taxpayer services under GST, Customs, and Income Tax, aiming for a paperless environment.
- Measures to boost startups by abolishing the 'angel tax' for all investors.
- Introducing a favorable tax regime for foreign shipping companies in the cruise tourism sector.
- De-penalization of non-reporting of small foreign assets under ₹20 lakh.
- Increase in deductions for expenditure towards National Pension Scheme (NPS) contributions.
Personal Income tax
- The standard deduction for salaried employees is proposed to increase from ₹50,000 to ₹75,000.
- Deduction on family pension for pensioners is proposed to increase from ₹15,000 to ₹25,000.
Under the new tax regime, the proposed revised tax rate structure is as follows:
- Income up to ₹3 lakh: Nil tax
- Income between ₹3 lakh to ₹7 lakh: 5%
- Income between ₹7 lakh to ₹10 lakh: 10%
- Income between ₹10 lakh to ₹12 lakh: 15%
- Income between ₹12 lakh to ₹15 lakh: 20%
- Income above ₹15 lakh: 30%
- This includes ₹29,000 crore from direct taxes and ₹8,000 crore from indirect taxes, while approximately ₹30,000 crore will be additionally mobilized.
Indirect Tax
PVC flex banners due to their non-biodegradable and hazardous for
environment and health. face raised Basic Custom Duty on
them from 10 to 25 per cent to curb their imports.
Steel and copper are important raw materials to reduce its cost of
production, the Basic Custom Duty remove on ferro nickel and blister copper.
Reduced customs duties on gold and
silver to 6 per cent and that on platinum to 6.4 per cent.
For cancer patients, fully exempted three
more medicines from customs duties.
Fiscal Responsibility and Budget Management targets for the fiscal year 2024-25:
- Total Receipts (excluding borrowings): Estimated at ₹32.07 lakh crore.
- Total Expenditure: Estimated at ₹48.21 lakh crore.
- Net Tax Receipts: Estimated at ₹25.83 lakh crore.
- Fiscal Deficit: Estimated at 4.9% of GDP.
- Market Borrowings (gross): Estimated at ₹14.01 lakh crore, with net borrowings at ₹11.63 lakh crore, lower than the previous fiscal year.
- The government also aimed to achieve a fiscal deficit below 4.5% of GDP next year, continuing the fiscal consolidation path initiated in 2021.
- Beyond 2026-27, efforts will focus on reducing the fiscal deficit annually to ensure that the Central Government debt declines.
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