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Union Budget 2024 – Key Highlights, Key Takeaways and Its Impact
Union Finance Minister Nirmala Sitharman on July 23 announced her seventh consecutive budget. The presentation on July 23 was the first Budget by the BJP-led NDA government since it was re-elected in June. Ms. Sitharaman said that the Budget will focus on employment, skilling, MSME and middle class. An allocation of ₹1.48 lakh crore for education, employment and skill development was announced. The Union Budget 2024, presented by the Finance Minister of India, is a critical financial document that sets the direction for the country’s economy. This budget has been crafted amid global economic uncertainties, domestic challenges, and the ongoing efforts to recover from the disruptions caused by the COVID-19 pandemic.
Key Highlights of the Budget
- Increased Capital Expenditure: The government has significantly increased capital expenditure to spur economic growth. This includes investments in infrastructure, transportation, and digital initiatives.
- Tax Reforms: Simplification of tax structures and introduction of new measures to widen the tax base are crucial elements. Reduction in corporate tax rates and incentives for startups are noteworthy.
- Focus on Green Economy: Emphasis on renewable energy, electric vehicles (EVs), and sustainable practices reflects the government’s commitment to environmental sustainability.
- Healthcare and Education: Enhanced allocation for healthcare and education sectors to improve the overall quality of life and build human capital.
- Agriculture and Rural Development: Increased support for the agriculture sector and rural development programs to boost rural income and reduce urban-rural disparity.
- Digital Transformation: Continued focus on digital infrastructure, fintech, and e-governance to drive efficiency and transparency.
Budget Profile 2024
HIGHLIGHTS OF THE UNION BUDGET 2024-25
The Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget 2024-25 in Parliament today. The highlights of the budget are as follows:
Part-A
Budget Estimates 2024-25:
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- Total receipts other than borrowings: `32.07 lakh crore.
- Total expenditure: `48.21 lakh crore.
- Net tax receipt: `25.83 lakh crore.
- Fiscal deficit: 4.9 per cent of GDP.
- Government aims to reach a deficit below 4.5 per cent next year.
- Inflation continues to be low, stable and moving towards the 4% target; Core inflation (non-food, non-fuel) at 3.1%.
- The focus of budget is on EMPLOYMENT, SKILLING, MSMEs, and the MIDDLE CLASS.
Package of PM’s five schemes for Employment and Skilling
- Prime Minister’s Package of 5 Schemes and Initiatives for employment, skilling and other opportunities for 4.1 crore youth over a 5-year period.
- Scheme A - First Timers: One-month salary of up to `15,000 to be provided in 3 installments to first-time employees, as registered in the EPFO.
- Scheme B - Job Creation in manufacturing: Incentive to be provided at specified scale directly, both employee and employer, with respect to their EPFO contribution in the first 4 years of employment.
- Scheme C - Support to employers: Government to reimburse up to `3,000 per month for 2 years towards EPFO contribution of employers, for each additional employee.
- New centrally sponsored scheme for Skilling
- 20 lakh youth to be skilled over a 5-year period.
- 1,000 Industrial Training Institutes to be upgraded in hub and spoke arrangements.
- New Scheme for Internship in 500 Top Companies to 1 crore youth in 5 years
Nine Budget Priorities in pursuit of ‘Viksit Bharat’:
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- Productivity and resilience in Agriculture
- Employment & Skilling
- Inclusive Human Resource Development and Social Justice
- Manufacturing & Services
- Urban Development
- Energy Security
- Infrastructure
- Innovation, Research & Development and
- Next Generation Reforms
Priority 1: Productivity and resilience in Agriculture
- Allocation of `1.52 lakh crore for agriculture and allied sectors.
- New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops to be released for cultivation by farmers.
- 1 crore farmers across the country to be initiated into natural farming, with certification and branding in next 2 years.
- 10,000 need-based bio-input resource centres to be established for natural farming.
- Digital Public Infrastructure (DPI) for Agriculture to be implemented for coverage of farmers and their lands in 3 years.
Priority 2: Employment & Skilling
- As part of the Prime Minister’s package, 3 schemes for ‘Employment Linked Incentive’ to be implemented - Scheme A - First Timers; Scheme B - Job Creation in manufacturing; Scheme C - Support to employers.
- To facilitate higher participation of women in the workforce,
- working women hostels and crèches to be established with industrial collaboration
- women-specific skilling programmes to be organized
- market access for women SHG enterprises to be promoted
Skill Development
- New centrally sponsored scheme for Skilling under Prime Minister’s Package for 20 lakh youth over a 5-year period.
- Model Skill Loan Scheme to be revised to facilitate loans up to
`7.5 lakh. - Financial support for loans upto `10 lakh for higher education in domestic institutions to be provided to youth who have not been eligible for any benefit under government schemes and policies.
Priority 3: Inclusive Human Resource Development and Social Justice
Purvodaya
- Industrial node at Gaya to be developed along the Amritsar-Kolkata Industrial Corridor.
- Power projects, including new 2400 MW power plant at Pirpainti, to be taken up at a cost of `21,400 crore.
Andhra Pradesh Reorganization Act
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- Special financial support through multilateral development agencies of `15,000 crore in the current financial year.
- Industrial node at Kopparthy along Vishakhapatnam-Chennai Industrial Corridor and at Orvakal along Hyderabad-Bengaluru Industrial Corridor.
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Women-led development
- Total allocation of more than `3 lakh crore for schemes benefitting women and girls.
Pradhan Mantri Janjatiya Unnat Gram Abhiyan
- Socio-economic development of tribal families in tribal-majority villages and aspirational districts, covering 63,000 villages benefitting 5 crore tribal people.
Bank branches in North-Eastern Region
- 100 branches of India Post Payment Bank to be set up in the North East region.
Priority 4: Manufacturing & Services
Credit Guarantee Scheme for MSMEs in the Manufacturing Sector
- A credit guarantee scheme without collateral or third-party guarantee in term loans to MSMEs for purchase of machinery and equipment.
Credit Support to MSMEs during Stress Period
- New mechanism to facilitate continuation of bank credit to MSMEs during their stress period.
Mudra Loans
- The limit of Mudra loans under ‘Tarun’ category to be enhanced to `20 lakh from `10 lakh for those who have successfully repaid previous loans.
Enhanced scope for mandatory onboarding in TReDS
- Turnover threshold of buyers for mandatory onboarding on the TReDS platform to be reduced from `500 crore to `250 crore..
MSME Units for Food Irradiation, Quality & Safety Testing
- Financial support to set up 50 multi-product food irradiation units in the MSME sector .
E-Commerce Export Hubs
- E-Commerce Export Hubs to be set up under public-private-partnership (PPP) mode for MSMEs and traditional artisans to sell their products in international markets.
Critical Mineral Mission
- Critical Mineral Mission to be set up for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets.
Offshore mining of minerals
- Auction of the first tranche of offshore blocks for mining, building on the exploration already carried out.
Digital Public Infrastructure (DPI) Applications
- Development of DPI applications in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.
Priority 5: Urban Development
Transit Oriented Development
- Formulation of Transit Oriented Development plans and strategies to implement and finance 14 large cities above 30 lakh population.
Urban Housing
- Investment of `10 lakh crore, including the central assistance of `2.2 lakh crore in next 5 years, under PM Awas Yojana Urban 2.0 proposed to address the , housing needs of 1 crore urban poor and middle-class families.
Street Markets
- New scheme to support the development of 100 weekly ‘haats’ or street food hubs every year for the next 5 years in select cities.
Priority 6: Energy Security
Energy Transition
- Policy document on ‘Energy Transition Pathways’ to balance the imperatives of employment, growth and environmental sustainability to be brought out.
Pumped Storage Policy
- Policy for promoting pumped storage projects for electricity storage to be brought out.
Research and development of small and modular nuclear reactors
- Government to partner with private sector for R&D of Bharat Small Modular Reactor and newer technologies for nuclear energy, and to set up Bharat Small Reactors.
Advanced Ultra Super Critical Thermal Power Plants
- Joint venture proposed between NTPC and BHEL to set up a full scale 800 MW commercial plant using Advanced Ultra Super Critical (AUSC) technology.
Roadmap for ‘hard to abate’ industries
- Appropriate regulations for transition of ‘hard to abate’ industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode to be put in place.
Priority 7: Infrastructure
Infrastructure investment by Central Government
- `11,11,111 crore (3.4 % of GDP) to be provided for capital expenditure.
Infrastructure investment by state governments
- Provision of `1.5 lakh crore for long-term interest free loans to support states in infrastructure investment.
Pradhan Mantri Gram SadakYojana (PMGSY)
- Launch of phase IV of PMGSY to provide all-weather connectivity to 25,000 rural habitations.
Irrigation and Flood Mitigation
- Financial support of `11,500 crore to projects such as the Kosi-Mechi intra-state link and other schemes in Bihar.
- Government to provide assistance to Assam, Himachal Pradesh, Uttarakhand and Sikkim for floods, landslides and other related projects.
Tourism
- Comprehensive development of Vishnupad Temple Corridor, Mahabodhi Temple Corridor and Rajgir.
- Assistance for development of temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes and pristine beaches of Odisha.
Priority 8: Innovation, Research & Development
- Anusandhan National Research Fund for basic research and prototype development to be operationalised.
- Financing pool of `1 lakh crore for spurring private sector-driven research and innovation at commercial scale.
Space Economy
- Venture capital fund of `1,000 crore to be set up for expanding the space economy by 5 times in the next 10 years.
Priority 9: Next Generation Reforms
Rural Land Related Actions
- Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands
- Digitization of cadastral maps
- Survey of map sub-divisions as per current ownership
- Establishment of land registry
- Linking to the farmers registry
Urban Land Related Actions
- Land records in urban areas to be digitized with GIS mapping.
Services to Labour
- Integration of e-shram portal with other portals to facilitate such one-stop solution.
- Open architecture databases for the rapidly changing labour market, skill requirements and available job roles.
- Mechanism to connect job-aspirants with potential employers and skill providers.
NPS Vatsalya
- NPS-Vatsalya as a plan for contribution by parents and guardians for minors.
PART B
Indirect Taxes
GST
- Buoyed by GST’s success, tax structure to be simplified and rationalised to expand GST to remaining sectors.
Sector specific customs duty proposals
Medicines and Medical Equipment
- Three cancer drugs namely TrastuzumabDeruxtecan, Osimertinib and Durvalumab fully exempted from custom duty.
- Changes in Basic Customs Duty (BCD) on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme.
Mobile Phone and Related Parts
- BCD on mobile phone, mobile Printed Circuit Board Assembly (PCBA) and mobile charger reduced to 15 per cent.
Precious Metals
- Customs duties on gold and silver reduced to 6 per cent and that on platinum to 6.4 per cent.
Other Metals
- BCD removed on ferro nickel and blister copper.
- BCD removed on ferrous scrap and nickel cathode.
- Concessional BCD of 2.5 per cent on copper scrap.
Electronics
- BCD removed, subject to conditions, on oxygen free copper for manufacture of resistors.
Chemicals and Petrochemicals
- BCD on ammonium nitrate increased from 7.5 to 10 per cent.
Plastics
- BCD on PVC flex banners increased from 10 to 25 per cent.
Telecommunication Equipment
- BCD increased from 10 to 15 per cent on PCBA of specified telecom equipment.
Trade facilitation
- For promotion of domestic aviation and boat & ship MRO, time period for export of goods imported for repairs extended from six months to one year.
- Time-limit for re-import of goods for repairs under warranty extended from three to five years.
Critical Minerals
- 25critical minerals fully exempted from customs duties.
- BCD on two critical minerals reduced.
Solar Energy
- Capital goods for use in manufacture of solar cells and panels exempted from customs duty.
Marine products
- BCD on certain broodstock, polychaete worms, shrimp and fish feed reduced to 5 per cent.
- Various inputs for manufacture of shrimp and fish feed exempted from customs duty.
Leather and Textile
- BCD reduced on real down filling material from duck or goose.
- BCD reduced, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.
Direct Taxes
- Efforts to simplify taxes, improve tax payer services, provide tax certainty and reduce litigation to be continued.
- Enhance revenues for funding development and welfare schemes of government.
- 58 per cent of corporate tax from simplified tax regime in FY23, more than two-thirds taxpayers availed simplified tax regime for personal income tax in FY 24.
Simplification for Charities and of TDS
- Two tax exemption regimes for charities to be merged into one.
- 5 per cent TDS rate on many payments merged into 2 per cent TDS rate.
- 20 per cent TDS rate on repurchase of units by mutual funds or UTI withdrawn.
- TDS rate on e-commerce operators reduced from one to 0.1 per cent.
- Delay for payment of TDS up to due date of filing statement decriminalized.
Simplification of Reassessment
- Assessment can be reopened beyond three years upto five years from the end of Assessment Year only if the escaped income is ₹ 50 lakh or more.
- In search cases, time limit reduced from ten to six years before the year of search.
Simplification and Rationalisation of Capital Gains
- Short term gains on certain financial assets to attract a tax rate of 20 per cent.
- Long term gains on all financial and non-financial assets to attract a tax rate of 12.5 per cent.
- Exemption limit of capital gains on certain financial assets increased to ₹ 1.25 lakh per year.
Tax Payer Services
- All remaining services of Customs and Income Tax including rectification and order giving effect to appellate orders to be digitalized over the next two years.
Litigation and Appeals
- ‘Vivad Se Vishwas Scheme, 2024’ for resolution of income tax disputes pending in appeal.
- Monetary limits for filing direct taxes, excise and service tax related appeals in Tax Tribunals, High Courts and Supreme Court increased to ₹60 lakh, ₹2 crore and ₹5 crore respectively.
- Safe harbour rules expanded to reduce litigation and provide certainty in international taxation.
Employment and Investment
- Angel tax for all classes of investors abolished to bolster start-up eco-system,.
- Simpler tax regime for foreign shipping companies operating domestic cruises to promote cruise tourism in India.
- Safe harbour rates for foreign mining companies selling raw diamonds in the country.
- Corporate tax rate on foreign companies reduced from 40 to 35 per cent.
Deepening tax base
- Security Transactions Tax on futures and options of securities increased to 0.02 per cent and 0.1 per cent respectively.
- Income received on buy back of shares in the hands of recipient to be taxed.
Social Security Benefits.
- Deduction of expenditure by employers towards NPS to be increased from 10 to 14 per cent of the employee’s salary.
- Non-reporting of small movable foreign assets up to ₹20 lakh de-penalised.
Other major proposal in Finance Bill
- Equalization levy of 2 per cent withdrawn.
Changes in Personal Income Tax under new tax regime
- Standard deduction for salaried employees increased from ₹50,000 to ₹75,000.
- Deduction on family pension for pensioners enhanced from ₹15,000/- to ₹25,000/-
- Revised tax rate structure:
0-3 lakh rupees | Nil |
3-7 lakh rupees | 5 per cent |
7-10 lakh rupees | 10 per cent |
10-12 lakh rupees | 15 per cent |
12-15 lakh rupees | 20 per cent |
Above 15 lakh rupees | 30 per cent |
Salaried employee in the new tax regime stands to save up to ₹ 17,500/- in income tax
Budget allocations for Andhra Pradesh and Bihar
What is the New Budget's impact on the economy and sectors?
The new budget of a country plays a significant role in the growth of the economy. It sets out the government's spending plans, which can boost the economy by investing in areas like infrastructure. The budget also determines the fiscal deficit, which is the difference between what the government spends and what it earns. A higher deficit may lead to more borrowing, potentially affecting interest rates and the overall stability of the economy.
The budget also allocates resources to different sectors such as healthcare and education, shaping the development of industries and creating job opportunities. Tax policies outlined in the budget also influence consumer spending and business investments. Changes in tax rates and structures can impact how much people spend and how much businesses invest in their operations.
Moreover, the budget's decisions on government spending, taxation, and borrowing can affect inflation levels and investor confidence. These factors, in turn, influence economic activity by shaping how much people and businesses are willing to spend and invest.
- The Indian economy has witnessed a profound transformation in the last 10 years.
- The budget will empower the four pillars of developed India, namely the young, poor, women, and farmers.
- This is a budget for creating India’s future and is a reflection of the aspirations of a young India
- Budget empowers the poor and middle class and will create countless employment opportunities for youth
- The “historic" budget has also offered rebates for start-ups.
- It has provisions for a huge capital expenditure of ₹11.11 lakh crore while keeping the fiscal deficit under control
What is the impact on the budget and market sector?
The budget can affect the stock market in several ways. When the government introduces new policies, it can impact specific industries and companies, causing their stock prices to go up or down.
The budget announcement also affects how investors feel – it can make them optimistic or uncertain, leading to changes in stock prices. Different parts of the economy may be affected differently by the budget, with some industries benefiting from good policies and others facing challenges.
The budget's impact on interest rates is also important because it can change how much it costs for companies to borrow money, which can affect their profits and stock prices. Lastly, if the budget introduces new rules for foreign investment, it can influence stock prices, especially in industries where a lot of foreign investors are involved.
The budget also allocates resources to different sectors, such as healthcare and education, which can shape industry development and employment opportunities. Tax policies in the budget can influence consumer spending and business investments by changing tax rates and structures.
The impact of the Union Budget 2024 on the economy is expected to focus on the following sectors:
- Manufacturing: Enhancing investment.
- Infrastructure: Improving infrastructure.
- Job Creation: Boosting job creation.
- Agricultural Sector: Supporting agriculture.
- Tax Environment: Providing a stable, dispute-free tax environment.
- Innovation and Entrepreneurship: Fostering innovation and entrepreneurship1.
- Primary Sectors: Higher investments in agriculture and fishery.
- Education and Upskilling: Investment in education and upskilling.
- Green Power and Energy Security: Focus on renewable energy.
- Digitalization and AI: Adoption of new technologies.
Please click on the following link for : Key Highlights of the Budget 2024 , Highlights of Union Budget 2024-25 , SUMMARY OF THE UNION BUDGET 2024-2025, Budget for 2024 - 2025
Source: PIB, Ministry of Finance, Indian Express, The Hindu, Money Control, LiveMint, Union Budget 2024: Impact and Job Opportunities – Placement Consultancy in Pune, Clear Tax
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