Union Budget 2024-2025: Key Highlights & Its Effects of People of Country

Key Highlights of Union Budget 2024 of India

### Summary of Key Announcements from the Union Budget 2024

Capital Gains Tax Exemption:

- The exemption on capital gains tax for long-term assets has been extended from ?1 lakh to ?1.25 lakh per year.

- Short-term gains on some assets will attract a tax rate of 20%.

New Income Tax Slabs:

- ?0-3 lakh: Nil

- ?3-7 lakh: 5%

- ?7-10 lakh: 10%

- ?10-12 lakh: 15%

- ?12-15 lakh: 20%

- Above ?15 lakh: 30%

Previous Income Tax Slabs (New Regime):

- Up to ?3 lakh: Nil

- ?3-6 lakh: 5%

- ?6-9 lakh: 10%

- ?9-12 lakh: 15%

- ?12-15 lakh: 20%

- Above ?15 lakh: 30%

Other Significant Announcements:

- Standard Deduction: Raised to ?75,000.

- TDS Rate on E-commerce Operators: Reduced to 0.1% from 1%.

- Fiscal Deficit Target: Narrowed to 4.9% from 5.1%.

- Duty Exemptions:

- Goods for manufacturing solar cells and panels added to the duty exemption list.

- 25 critical minerals exempt from customs duty.

- Duty on mobile phones and chargers reduced to 15%.

- Three critical cancer treatment medicines exempt from customs duty.

- Capital Expenditure: Target retained at ?11.1 lakh crore (3.4% of GDP).

- Employment and Skilling Schemes: Five schemes with an outlay of ?2 lakh crore to facilitate employment and skilling for 4.1 crore youth over five years.

- Indirect Taxes Simplification: Suggested by industry experts to focus on direct taxes for progressivity.

Benefits of New Tax Regime:

- Full tax rebate on income up to ?7 lakh under Section 87A.

- Lower tax rates compared to the old regime but limited deductions and exemptions.

Benefits of Old Tax Regime:

- Higher tax rates but multiple deductions and exemptions available, including HRA, LTA, and deductions under Sections 80C and 80U.

Industry and Expert Opinions:

- Calls for reduced tax rates to boost consumption and ease financial calculations.

- Suggestions for raising the income tax exemption limit to ?5 lakh and standard deduction to ?3 lakh.

Introduction

The Union Budget 2024, presented by the Finance Minister, outlines the government's financial strategy and policy priorities for the upcoming fiscal year. This budget aims to drive economic growth, ensure fiscal discipline, and address key social and economic challenges. Here, we provide a comprehensive overview of the key highlights across various sectors and policy areas.

1. Economic Overview

GDP Growth and Economic Outlook

The budget projects a GDP growth rate of 6.5% for the fiscal year 2024-25, reflecting optimism in economic recovery post-pandemic. Key drivers include robust domestic consumption, increased investments, and a favorable global economic environment.

Fiscal Deficit

The fiscal deficit is targeted at 5.9% of GDP, a reduction from the previous year, signaling the government's commitment to fiscal prudence. This is to be achieved through enhanced revenue mobilization and controlled expenditure.

Inflation Control

Measures to control inflation include steps to improve agricultural productivity, streamline supply chains, and reduce logistics costs. The government aims to keep inflation within the RBI's target range of 4-6%.

2. Taxation

Direct Taxes

Income Tax

The budget introduces new income tax slabs for individuals, aimed at providing relief to middle-class taxpayers. The basic exemption limit has been increased, and new deductions for housing loans and education expenses have been introduced.

Corporate Tax

Corporate tax rates remain unchanged, but the budget proposes additional incentives for companies investing in green technologies and renewable energy. Start-ups receive extended tax holidays, and compliance procedures are further simplified.

Tax Reforms

Significant tax reforms include the introduction of a new digital tax filing system, enhanced focus on reducing tax litigation, and measures to curb tax evasion through data analytics and artificial intelligence.

Indirect Taxes

Goods and Services Tax (GST)

The budget proposes rationalization of GST rates, with reductions in rates for essential items and simplification of compliance procedures for small businesses. A new amnesty scheme for past GST liabilities is also announced.

Customs and Excise Duties

Customs duties on several items are adjusted to encourage domestic manufacturing and reduce reliance on imports. Excise duties on fuel are calibrated to balance revenue needs with inflation control.

3. Infrastructure Development

Roads and Highways

The budget allocates substantial funds for the development of national highways and rural roads under the Pradhan Mantri Gram Sadak Yojana. The aim is to improve connectivity and support economic activities in rural areas.

Railways

Significant investments are made in modernizing railway infrastructure, enhancing safety measures, and expanding rail networks. A new high-speed rail corridor is announced, linking major metropolitan cities.

Urban Development

Initiatives under the Smart Cities Mission are accelerated, with increased funding for urban infrastructure, affordable housing projects, and public transport systems. A special focus is placed on waste management and water supply.

4. Agriculture and Rural Development

Agricultural Schemes

The budget enhances funding for PM-KISAN, providing direct income support to farmers. New crop insurance schemes and subsidies for fertilizers and seeds are introduced to boost agricultural productivity.

Irrigation

Substantial allocations are made for irrigation projects under the Pradhan Mantri Krishi Sinchai Yojana. The focus is on completing ongoing projects and starting new ones in water-scarce regions.

Rural Employment

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) receives increased funding to provide employment opportunities in rural areas. New rural development schemes are launched to improve infrastructure and living standards.

5. Social Sector

Education

School Education

Funding is allocated to improve school infrastructure, teacher training, and digital education initiatives. A new scheme is introduced to provide tablets and internet connectivity to students in rural areas.

Higher Education

Investments are made in higher education institutions, scholarships, and research grants. New initiatives are launched to promote skill development and vocational training for youth.

Health

Healthcare Infrastructure

The budget expands healthcare facilities, especially in rural areas, under schemes like Ayushman Bharat. New hospitals and primary health centers are planned, with a focus on improving maternal and child health.

Public Health Initiatives

Vaccination drives, disease control programs, and health awareness campaigns receive increased funding. A new initiative to combat non-communicable diseases is launched.

Medical Research

Funding for medical research institutions is increased, with initiatives to promote innovation in healthcare. New research grants are provided for developing vaccines and treatments for emerging diseases.

6. Industry and Commerce

Manufacturing

Incentives for the manufacturing sector include tax benefits and subsidies for Make in India initiatives. New industrial corridors are planned to boost regional development and job creation.

Micro, Small, and Medium Enterprises (MSMEs)

Support for MSMEs is enhanced through credit schemes, technology upgrades, and market access initiatives. A new digital platform is launched to provide MSMEs with easier access to government services and financial products.

Trade and Export Promotion

Measures to boost exports include financial incentives, reduced tariffs, and enhanced global trade relations. New trade agreements are signed with key international partners to expand market access.

7. Financial Sector

Banking Reforms

Initiatives to strengthen the banking sector focus on addressing non-performing assets (NPAs), promoting financial inclusion, and enhancing regulatory frameworks. New measures are introduced to support digital banking and fintech innovations.

Capital Markets

Policies to deepen capital markets include enhanced investor protection, streamlined regulatory processes, and incentives for foreign investment. New financial instruments are introduced to attract long-term investments.

Insurance and Pensions

The budget expands insurance coverage and pension schemes, particularly for unorganized sector workers. New initiatives are launched to promote financial literacy and inclusion.

8. Technology and Innovation

Digital India

Investments in digital infrastructure are increased to promote digital literacy, enhance cybersecurity, and support the growth of the digital economy. New initiatives are launched to provide internet access to remote areas.

Research and Development

Funding for research institutions is increased, with initiatives to foster innovation and technological advancements. New grants are provided for research in critical areas such as artificial intelligence, renewable energy, and biotechnology.

Start-ups

Support for start-ups includes incubation centers, funding, and ease of doing business initiatives. New policies are introduced to encourage entrepreneurship and innovation.

9. Environment and Sustainability

Renewable Energy

Investments in solar, wind, and other renewable energy projects are increased to reduce the carbon footprint. New incentives are provided for the adoption of green technologies.

Climate Change Initiatives

Programs to address climate change focus on promoting sustainable practices, protecting biodiversity, and reducing greenhouse gas emissions. New initiatives are launched to enhance climate resilience in vulnerable regions.

Waste Management

Measures to improve waste management systems include promoting recycling and waste-to-energy projects. New regulations are introduced to reduce plastic waste and encourage sustainable consumption.

10. Welfare Schemes

Poverty Alleviation

Programs aimed at reducing poverty and improving living standards include direct benefit transfers and social security schemes. New initiatives are launched to provide housing, food security, and basic amenities to the underprivileged.

Women's Empowerment

Initiatives to promote gender equality focus on women's health, education, and economic participation. New schemes are introduced to support women entrepreneurs and provide financial assistance to female-headed households.

Child Welfare

Programs for child nutrition, education, and protection are enhanced under schemes like ICDS and mid-day meal programs. New initiatives are launched to support orphaned and vulnerable children.

11. Defense and Security

Defense Budget

The defense budget is increased to modernize the armed forces and acquire new technology. New initiatives are launched to enhance cybersecurity and counter-terrorism efforts.

Internal Security

Measures to enhance internal security include improving border management, increasing police funding, and enhancing intelligence capabilities. New initiatives are launched to combat organized crime and cyber threats.

Veteran Welfare

Programs to support veterans and their families include pensions, healthcare services, and financial assistance. New initiatives are launched to provide vocational training and employment opportunities for ex-servicemen.

12. Regional Development

Northeast India

Special focus is placed on the development of the Northeast region, including infrastructure projects and economic incentives. New initiatives are launched to promote tourism, education, and healthcare in the region.

Aspirational Districts

Initiatives to uplift underdeveloped districts include targeted interventions in health, education, and infrastructure. New programs are launched to improve living standards and economic opportunities in these regions.

Border Areas

Development of border areas focuses on enhancing connectivity and security. New infrastructure projects are planned to improve transportation, healthcare, and education in these regions.

Conclusion

The Union Budget 2024 is a comprehensive blueprint for India's economic and social development. Through prudent fiscal management, strategic investments, and inclusive policies, the budget aims to foster sustainable growth, promote equity, and enhance the overall well-being of the citizens. By addressing key challenges and leveraging opportunities, the government seeks to build a resilient and prosperous India.