The interim budget for 2024 was presented by Union Finance Minister Nirmala Sitharaman, which was eagerly awaited with a mixture of expectations and cautious optimism.
This blog post will explore the primary highlights and potential implications of the budget, examining its effects on various sectors of Indian society and the economy.
Highlights and Key Points of Interim Budget 2024
1. Tax Stability and Continued Economic Outlook:
In a bid to foster a stable economic environment, the budget for the fiscal year 2024-25 maintains existing tax rates for both direct and indirect taxes. Finance Minister Nirmala Sitharaman’s adjustment of the fiscal gap to 5.8% of the gross domestic product reflects a pragmatic approach to navigating economic challenges, providing assurance to businesses and individuals.
2. Infrastructure Boost:
Allocating a substantial 11% increase in the capital expenditure outlay, amounting to ₹11.11-lakh crore, the government underscores its commitment to fostering infrastructure development. The focus on railways, airports, and highways aligns with the broader goal of positioning India as a global economic force, potentially stimulating job creation and economic growth.
3. Housing for the Middle Class:
An impactful initiative introduces a scheme to assist the middle class in acquiring or constructing their own houses. Particularly beneficial for those in rented houses, slums, chawls, or unauthorized colonies, this move addresses the diverse challenges faced by different segments of the population. The scheme has the potential to address housing needs and stimulate related sectors.
4. Healthcare Expansion:
Expanding healthcare coverage under Ayushman Bharat to ASHA and Anganwadi workers and helpers is a noteworthy step towards ensuring comprehensive health coverage. The commitment to increasing the target for lakpati didis from 2 crores to 3 crores emphasizes the goal of inclusive healthcare, potentially improving health outcomes and reducing financial burdens on vulnerable sections of society.
5. Youth Employment and Manufacturing:
Addressing the pressing concern of youth unemployment, Budget 2024 proposes the potential expansion of Production-Linked Incentive (PLI) schemes to labor-intensive sectors. This strategic move aims to promote manufacturing, create job opportunities, and foster economic growth, aligning with the government’s vision for a brighter future for India’s young population.
6. Fiscal Targets and Infrastructure Development:
The finance minister faces the challenging task of maintaining a delicate balance between substantial infrastructural investments and meeting fiscal targets. The fiscal deficit projection for FY25 at 5.1%, lower than the revised estimate in FY24 (5.8%), indicates a cautious approach. The government’s commitment to borrowing ₹14.13-lakh crore in the next fiscal, a decrease from ₹15.43 lakh crore in FY24, reflects an effort to manage finances prudently.
7. Renewable Energy:
In the budget, provisions are made for the implementation of rooftop solar installations with a target of generating a minimum of 300 units of power. This initiative aims to provide households with complimentary electricity, fostering the uptake of renewable energy sources. By lessening reliance on conventional power grids, this step contributes to a more sustainable and environmentally friendly future.
8. Technology and Cybersecurity Industry:
The budget showcases a forward-thinking stance by dedicating funds to cybersecurity projects, with the allocation seeing a nearly twofold increase to ₹750 crores. This augmented investment is anticipated to strengthen digital defenses, elevate technological capacities, and stimulate innovation within the cybersecurity domain. This strategic move aims to position India as a frontrunner in cyber resilience.
9. Additional Budget Highlights for FY25:
- Income tax demands up to ₹25,000 (till 2009-10) and ₹10,000 from 2010-11 to 2014-15 have been withdrawn, benefiting approximately one crore taxpayers.
- Tax benefits for start-ups and investments by sovereign wealth or pension funds are extended by one year until March 31, 2025.
- A white paper on the mismanagement of the economy before 2014 will be released by the government.
- Next-generation reforms will be unveiled in consultation with states and stakeholders.
Wrap-Up: Here’s all you need to know
The key highlights of the budget are as follows:
No changes were proposed in direct and indirect taxes, including import tax. The existing tax rates for both Direct and Indirect taxes will be retained.
- Interest-free loans will be provided to states to promote tourism.
- Under the Udan Scheme, 517 new routes are set to be launched.
- The capital expenditure (Capex) outlay is pegged at Rs 11.11 lakh crore, accounting for 3.4 percent of the GDP.
- The fiscal deficit target for FY 25 is set at 5.1 percent.
- The Railways receive an allocation of Rs 2.4 lakh crore.
- The Production-Linked Incentive (PLI) scheme is granted Rs 6,200 crore.
- Five integrated Aqua Parks are planned to be established.
- Healthcare facilities under Ayushman Bharat will be extended to all Aasha workers and Aanganwadi workers.
- Vaccination for cervical cancer will be provided to girls aged 9-14.
- The education budget for 2024/25 is estimated at Rs 1.25 lakh crore.
- Under PM Aavas Yojana, 2 crore houses are slated to be built.
- Lokpal is allocated Rs 44.46 crore for the fiscal year 2023-24.
- The Central Vigilance Commission (CVC) is allocated Rs 51.31 crore for the next financial year.
Budget 2024-25 lays the groundwork for a comprehensive approach to addressing India’s economic challenges. From ensuring tax stability to promoting infrastructure development and social welfare initiatives, the budget demonstrates a nuanced understanding of the diverse needs of the population. As India progresses towards becoming a global economic powerhouse, the interim budget provides a foundation for inclusive growth and development, offering hope and opportunities for all sections of society.
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