Union Budget 2024

Budget 2024 – Date 23rd Jul 2024

The Finance Minister said that “India’s economic growth continues to be shining exception and Inflation moving to 4 percent target”.

Priorities for the year

Nine priorities for this year and coming years

·???????? Productivity and resilience in Agriculture

·???????? Employment and skilling

·???????? Inclusive HRD and social justice

·???????? Manufacturing & services

·???????? Urban development

·???????? Energy security

·???????? Infra

·???????? Innovation, R&D

·???????? Next generation reforms

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Agricultural Research

The Finance Minister stated that the government will undertake a comprehensive review of the agricultural research setup to increase productivity and develop climate-resilient varieties. Domain experts will oversee the conduct of this research to ensure its effectiveness and relevance.

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Focus on the garib, mahilaye, yuva, and annadata

The Finance Minister said, 'We need to focus on the garib, mahilaye, yuva, and annadata. For annadata, we announced higher MSP a month ago for all major crops, delivering on our promise. The PM Garib Kalyan Anna Yojana was extended for five years, benefiting more than 80 crore people. Administrative actions for the approval and implementation of various schemes announced in the interim budget are well underway.'"

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Rural Development

Budget provides Rs 2.66 lakh crore for rural development

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Schemes for Employment & Skilling

The Finance Minister announced a PM Package of five schemes aimed at facilitating employment and skilling, with an allocation of Rs 2 lakh crore. This year, a provision of Rs 1.48 lakh crore has been made for education, employment, and skilling.

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Push on employment-linked skilling

The Finance Minister announced employment-linked skilling through schemes as part of the PM's package. These schemes will be based on enrolment in the EPFO, focusing on recognizing first-time employees. First-timers will receive one month's wage upon entering the workforce in all formal sectors. A direct benefit transfer (DBT) of one month's salary, up to Rs 15,000, will be provided in three instalments. The eligibility limit for this benefit will be a salary of Rs 1 lakh per month, and it is expected to benefit 2.1 lakh youths."

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Job creation in the manufacturing sector

The Finance Minister said that job creation in the manufacturing sector will be incentivized through a scheme linked to the employment of first-time employees. This scheme will provide incentives to both employees and employers concerning EPFO contributions for the first four years of employment. It will benefit 30 lakh youth and cover additional employment in all sectors. The government will reimburse employers up to Rs 3,000 per month for two years towards EPFO contributions for each additional employee. This initiative aims to incentivize the additional employment of 50 lakh people.

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Financial Support for higher education

Government announces financial support for loans up to Rs 10 lakh for higher education

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Women Workforce

The Finance Minister announced that increasing the participation of women in the workforce will be a priority. This will be facilitated by setting up hostels and creating partnerships to organize women-specific skilling programs. Rs 3 lakh crore allocation announced for women centric schemes

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MSME

FM announces special attention on MSMEs

On credit guarantee schemes for MSMEs in manufacturing, FM said, "to facilitate term loans for MSMEs for the purchase of machinery and equipment without collateral and guarantee, a new scheme will be introduced. This guarantee fund will provide guarantees of up to Rs 100 crore."

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Road Connectivity Projects

The Finance Minister has provided Rs 26,000-cr boost to road connectivity projects

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Mudra Loans

The Finance Minister announced that the limit of MUDRA loans will be enhanced to Rs 20 lakh from the current Rs 10 lakh for those who have availed and successfully repaid loans under the TARUN category.

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Industrial Parks

The Finance Minister announced that 12 industrial parks will be sanctioned.

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Critical mineral mission

The Finance Minister stated that a critical mineral will be mission set up for the recycling of critical minerals and their overseas acquisitions. She added that the government will launch the auction of the first tranche of Offshore blocks for mining, building on the exploration already carried out.

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Insolvency & Bankruptcy Code (IBC)

The Finance Minister announced that an integrated tech platform will be set up to improve outcomes under the Insolvency and Bankruptcy Code (IBC). This platform aims to achieve greater consistency, transparency, and better oversight for all stakeholders, including the National Company Law Tribunal (NCLT). The IBC has resolved over 1,000 companies, resulting in a direct recovery of ?3.3 lakh crore to creditors. Additionally, 28,000 cases involving over ?10 lakh crore have been disposed of prior to admission.

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Appropriate changes to IBC will be initiated, additional tribunals will be established

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Affordable Housing

Govt announces Rs 2.2 lakh crore push to make housing more affordable

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Urban housing

The Finance Minister stated that under PM Awas Yojana, Urban 2.0, the housing needs of the urban poor and middle class will be addressed with an investment of Rs 10 lakh crore.

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Stamp duty

The Finance Minister announced that states charging high stamp duty will be encouraged to moderate their rates for all. Additionally, further reductions in duties for properties purchased by women will be considered. These measures will also be incorporated as essential components of urban development schemes.

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Development Projects

Power projects including setting up of a new 2400 MW power plant at Pirpainti will be taken up at the cost of Rs 21,400 crores.

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New airports, medical colleges and sports infrastructure in Bihar will be constructed.

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Industrial node at Gaya on Amritsar Kolkata Industrial Corridor to be developed.

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Road connectivity projects to be developed at the cost of Rs 26,000 crore:

·???????? Patna-Purnia Expressway

·???????? Buxar-Bhagalpur Expressway

·???????? Bodhgaya, Rajgir, Vaishali and Darbhanga Spur

·???????? Additional 2-lane bridge over river Ganga at Buzar

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The Finance Minister stated that the request from the Bihar government for external assistance from multilateral development banks will be expedited.

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Our govt has made efforts to fulfil the commitments in Andhra Pradesh Reorganisation Act. Recognising the state's need for capital, we will facilitate special financial support through multilateral agencies. In the current FY, Rs 15,000 crore will be arranged with additional amounts in future years. Our government is fully committed for the early completion and financing of the Polavaram irrigation project which is the lifeline for Andhra Pradesh and its farmers.

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Flood concerns & assistance

The Finance Minister acknowledged that Bihar has frequently suffered from floods, noting that plans to build flood control structures in Nepal have yet to progress. The government will provide financial support with an estimated cost of Rs 11,500 crore. Assam, which grapples with floods every year, will receive assistance for flood management and related projects. Himachal Pradesh, having suffered extensive losses due to floods, will also receive support for reconstruction through multilateral assistance. Additionally, Uttarakhand, which faced significant damage from landslides and cloudbursts, will be provided with necessary assistance.

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Energy security and PM Surya Ghar Muft Bijli Yojana

The Finance Minister highlighted the focus on energy security, announcing that a policy document on energy transition pathways will be released, emphasizing employment and sustainability. The PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants, providing free electricity up to 300 units per month to 1 crore households. The initiative has already seen 1.28 crore registrations and 14 lakh applications, which is a remarkable achievement.

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Development of small and modular nuclear reactors in focus

On the development of small and modular nuclear reactors in the country, FM Sitharaman says, "The govt will partner with the private sector for setting up Bharat small reactors, research and development of Bharat small modular reactors & research and development of newer technologies for nuclear energy.”

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Private-driven research at commercial scale

The Finance Minister stated that a mechanism will be established to spur private-driven research at a commercial scale, supported by a financial pool of Rs 1 lakh crore

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Space

The Finance Minister stated that there will be a continued emphasis on expanding the space economy by five times over the next 10 years. To support this goal, a venture capital fund of Rs 1,000 crore will be established.

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Tourism

The Finance Minister proposed supporting the development of corridors at Vishnupad Temple and Mahabodhi Temple, following the model of the Kashi Vishwanath Temple. Additionally, the government will back the development of Nalanda in Bihar as a tourist center. Finance Minister Sitharaman also announced that an economic policy framework will be introduced to usher in next-generation reforms aimed at boosting economic growth. Furthermore, the government will provide assistance to Odisha for the development of tourism, as stated by the FM in Lok Sabha.

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FDI rules to be simplified further

The Finance Minister stated that rules and recognition for Foreign Direct Investments (FDIs) will be simplified to facilitate their inflow. This move aims to prioritize and promote the use of the Rupee for overseas investments.

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Fiscal deficit

Fiscal deficit estimate lowered to 4.9% of GDP with market borrowing unchanged at Rs 14.13 lakh crore

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FY 2024-25 receipts is projected at Rs 32.07 lakh crore and expenditure at Rs 48.21 lakh crore

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The Finance Minister stated that the government will endeavor to maintain strong fiscal support for infrastructure. This year, Rs 11.11 lakh crore has been allocated for capital expenditure, which amounts to 3.4% of India's GDP.

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Customs duty on critical minerals

FM Exempts customs duties on 25 critical minerals, and lowers BCD for two of them

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Duty on mobiles and accessories %

The Finance Minister stated that the Indian mobile industry has matured and proposed to reduce the Basic Customs Duty (BCD) on mobile phones, mobile PCDA (Printed Circuit Design Assembly), and mobile charges to 15%.

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Customs duty on gold and silver

The Finance Minister stated that to enhance domestic value addition, the customs duty on gold and silver will be reduced to 6%, while the duty on platinum will be lowered to 6.4%.

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Duty on printed circuit board assemblies (PCBA)

Govt to increase duty on PCBA for specific telecom equipment by 10 to 15%.

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NPS Limit

NPS contribution deduction limit for employer in private sector raised from 10% to 14% of the employee’s basic salary.

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NPS for minors

The NPS Vatsalya programme will be available for parents to invest in on behalf of their children. The account may be passed to the child after they reach adulthood.

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Comprehensive review of Income Tax Act of 1961

Comprehensive review of Income Tax Act of 1961 to be completed in six months

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TDS rate on E-Commerce Operators

TDS rate on e-commerce operators to be reduced from 1% to 0.1 %

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Corporate Tax on Foreign Companies

Corporate tax rate on foreign companies reduced to 25%

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Long-term capital gains

The Finance Minister announced that long-term capital gains on all financial and non-financial assets will attract a tax rate of 12.5%.

Listed financial assets held for more than a year will be classified as long term

Additionally, the limit of exemption for capital gains will be set at Rs 1.25 lakh per year.

Short term gains on certain financial assets will be 20 percent, rest is applicable tax rate

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Angle Tax

In a relief for startups the Government announced to abolish the angle tax.

Angel taxes are taxes funds raised by startups if they exceed the fair market value of the company.

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Security Transaction Tax (STT) on F&Os (Futures & Options)

The Finance Minister announced an increase in the Securities Transaction Tax (STT) on Futures and Options. The STT on futures will rise from 0.0125% to 0.02%, while the STT on options will increase from 0.0625% to 0.10%.

Standard Deduction

Standard Deduction in the new tax regime proposed to be increased from Rs. 50,000 to Rs 75,000

Income Tax Slab Rate

Income Tax Rate for Individuals under new tax regime: -

·???????? Upto Rs. 3 Lakhs – NIL

·???????? Rs. 3,00,001 to Rs. 7,00,000 – 5 %

·???????? Rs. 7,00,001 to Rs. 10,00,000 – 10 %

·???????? Rs. 10,00,001 to Rs. 12,00,000 – 15 %

·???????? Rs. 12,00,001 to Rs. 15,00,000 – 20 %

·???????? Above Rs. 15,00,001 – 30 %

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Some Other highlights

·???????? Pradhan Mantri Janjatiya Unnat Gram Abhiyan announced for 63,000 tribal villages, benefitting 5 crore tribals. The programme aims at achieving saturation coverage for tribal families in tribal-majority villages and aspirational districts.

·???????? Centre to set up 100 branches of India Post Payments Bank in North East

The detailing on all the points can be referred once the fine prints are available.?

Regards,

Vivek Rastogi