Highlights of the Union Budget Discussion 2024

1. Developmental Priorities: Sitharaman outlined nine developmental priorities, including:

• Enhancing productivity in agriculture
• Fostering employment and skill development
• Promoting inclusive human resource development
• Expanding manufacturing and services sectors
• Urban development initiatives
• Ensuring energy security
• Infrastructure development
• Innovation and next-generation reforms

2. Economic Growth: The government aims to position India as the world's third-largest economy within three years, targeting a GDP of $5 trillion and aspirations of reaching $7 trillion by 2030. This goal is set against the need for significant job creation, with projections indicating that 115 million jobs will be required by 2030.

3. Tax Reforms: The budget proposes revisions to the Income Tax Act and modifications to capital gains taxation to simplify the tax structure and enhance compliance. Key tax proposals include:

• Standard Deduction Increase: Raised from ?50,000 to ?75,000 for salaried employees under the new tax regime.
• Family Pension Deduction: Increased from ?15,000 to ?25,000.
• Income Tax Slabs: The revised structure is as follows:

1. Income Slab (?) 0 – 3,00,000: NIL
2. Income Slab (?) 3,00,001 – 7,00,000: 5%
3. Income Slab (?) 7,00,001 – 10,00,000: 10%
4. Income Slab (?) 10,00,001 – 12,00,000: 15%
5. Income Slab (?) 12,00,001 – 15,00,000: 20%
6. Income Slab (Above ?15,00,000): 30%

• TDS Adjustments: The TDS rate for e-commerce operators has been reduced from 1% to 0.1%, and multiple TDS rates have been merged to simplify compliance.
• Capital Gains Tax: The exemption limit for capital gains has been increased to ?1.25 lakh per year.

4. Focus on Employment: Sitharaman emphasized the need for job creation, particularly in labor-intensive sectors. The government plans to expand the Production Linked Incentive (PLI) scheme to include more sectors, such as handicrafts and electronics, to incentivize employment growth.

5. Digital Presentation: Continuing the trend of digitalization, this budget was presented in a paperless format, accessible via the Union Budget Mobile App, reflecting a commitment to transparency and modern governance.

6. Long-term Vision: The budget aligns with the government's vision of a "Viksit Bharat" (Developed India) by 2047, focusing on long-term economic stability and growth strategies.

Social Welfare Initiatives

• Employment Schemes: Introduction of the Employment Linked Incentive Scheme to generate employment for youth, particularly in rural areas, with the government covering the first month's salary for newly hired employees.
• Support for Farmers: Extension of the PM Garib Kalyan Anna Yojana for five more years, benefiting over 80 crore people, along with higher Minimum Support Prices (MSPs) for major crops.
• Education and Skill Development: Allocation of ?1.48 lakh crore for education, employment, and skilling initiatives, targeting 4.1 crore youth over the next five years.

Conclusion

The Union Budget 2024-25 reflects a balanced approach towards economic growth, tax simplification, and social welfare. While the budget aims to provide tax relief for the middle class and support for agriculture and manufacturing, there are concerns about how effectively it will address the needs of the middle class, which is crucial for driving economic activity. The hope remains that there may be opportunities for leveraging tax provisions in the future.

In the end, as the saying goes, "The top line wins!"

Citations:

[1] https://timesofindia.indiatimes.com/business/india-business/budget-2024-live-updates-nirmala-sitharaman-union-budget-2024-speech-highlights-and-announcement/liveblog/111957138.cms

[2] https://economictimes.indiatimes.com/news/newsblogs/budget-2024-live-updates-union-budget-finance-minister-nirmala-sitharaman-live-speech-key-announcements-takeaways-23-july-budget-impacts-latest-news/liveblog/111936896.cms

[3] https://www.cnbctv18.com/economy/budget-2024-live-updates-nirmala-sitharaman-union-budget-speech-key-highlights-income-tax-slabs-credit-cards-liveblog-19447015.htm

[4] https://www.hindustantimes.com/budget/budget-2024-live-updates-fm-nirmala-sitharaman-speech-key-announcement-highlights-today-23-july-2024-101721689984434.html

[5] https://www.thehindu.com/business/budget/budget-2024-live-updates-nirmala-sitharaman-union-budget-highlights/article68433121.ece