Budget 2024-2025: Farmers Flourish, Companies Cheer, but the Middle Class? Left with Crumbs!

Budget 2024-2025: Farmers Flourish, Companies Cheer, but the Middle Class? Left with Crumbs!

The Union Budget for 2024-2025, presented on July 23, 2024, is a significant step towards achieving 'Viksit Bharat'. This budget empowers various stakeholders, including farmers, investors, MSMEs, employers, taxpayers, and students. Each group stands to benefit from specific initiatives designed to foster growth and inclusivity, although the middle class may feel they have received the short end of the stick.

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Farmers

The budget places a strong emphasis on agriculture, with several initiatives aimed at supporting farmers:

  • Natural Farming Initiatives: One crore farmers will be initiated into natural farming within the next two years, supported by certification and branding.
  • Digital Infrastructure: Development of a digital public infrastructure for farmers, including a digital crop survey in 400 districts and the issuance of Kisan Credit Cards.
  • Support for Shrimp Farming: Financing for shrimp farming, processing, and export will be facilitated through NABARD.

These measures aim to empower farmers, enhance their incomes, and ensure food security for the nation.

Investors

For investors, the budget presents a favourable environment with several key measures:

  • Simplified Tax Regime: Efforts to create a simpler tax regime for domestic and foreign investments, including reducing corporate tax rates for foreign companies from 40% to 35%.
  • Investment in Infrastructure: A significant allocation of ?1.5 lakh crore to states as long-term interest-free loans for infrastructure development is expected to attract private investment.
  • Support for Startups: The abolition of ANGEL tax and provisions for safe harbour rates for foreign mining companies signal a favorable environment for investment.

These initiatives aim to foster a conducive investment climate, encouraging both domestic and foreign investments in various sectors.

Micro, Small, and Medium Enterprises (MSMEs)

The budget recognizes the critical role of MSMEs in driving economic growth. Key measures include:

  • Credit Support: The limit of Mudra loans under the 'Tarun' category is enhanced from ?10 lakh to ?20 lakh, providing more financial support to MSMEs.
  • Credit Guarantee Scheme: Enhanced scope for mandatory onboarding on the Trade Receivables Discounting System (TReDS) to improve cash flow for MSMEs.
  • Support for Food Safety: Establishment of MSME units for food irradiation, quality, and safety testing to enhance product standards.

These initiatives aim to improve access to credit, streamline operations, and enhance the competitiveness of MSMEs.

Employers

The budget also addresses the needs of employers, particularly in terms of job creation and workforce development:

  • Incentives for Hiring: The government will reimburse EPFO contributions of employers up to ?3,000 per month for two years for all new hires, expected to generate 50 lakh jobs.
  • Support for Skill Development: Funding for training programs and internships to ensure that new employees are adequately prepared for the workforce.
  • Loan Facilities: Enhanced access to loans for employers to facilitate business expansion and job creation.

These measures are designed to stimulate hiring and support employers in building a skilled workforce.

Taxpayers

The budget introduces several tax reforms aimed at simplifying the tax structure and providing relief to taxpayers:

  • Standard Deduction Increase: The standard deduction for salaried employees is increased from ?50,000 to ?75,000, providing immediate relief to middle-class taxpayers.
  • Capital Gains Tax Rationalization: Short-term gains on financial assets will attract a 20% tax rate, while long-term gains will be taxed at 12.5%, simplifying the tax landscape.
  • Abolition of ANGEL Tax: This measure aims to encourage investments in startups by alleviating the tax burden on angel investors.

These reforms are designed to enhance compliance, reduce the tax burden, and stimulate economic activity among taxpayers.

Students

Recognizing the importance of education and skill development, the budget includes significant allocations for students:

  • Higher Education Loans: Financial support for loans up to ?10 lakh for students pursuing higher education in domestic institutions.
  • Skill Development: Commit to skill 20 lakh youth over five years and upgrade 1,000 industrial training institutes to align with industry needs.
  • Direct Benefits: E-vouchers for 1 lakh students annually and a one-month wage incentive for new entrants, aiming to create a skilled workforce ready for the job market.

These initiatives are expected to enhance educational access and employment opportunities for students.

Conclusion

The 2024-2025 Indian Budget reflects a comprehensive approach to empower key stakeholders, including farmers, investors, MSMEs, employers, taxpayers, and students. By focusing on inclusive growth and economic empowerment, the budget sets the stage for a more developed and equitable India. The successful implementation of these initiatives will be crucial in realizing the vision of 'Viksit Bharat'.

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