Union Budget 2024: Transformative Pathways to Viksit Bharat

Finance Minister Smt Nirmala Sitharaman Ji presented the Union Budget 2024 on July 23, marking her seventh consecutive budget presentation. This budget is historic, not only for surpassing the record of former Prime Minister Sri Morarji Desai but also as the first budget since the BJP-led NDA government’s re-election in June. The 2024 budget focuses heavily on infrastructure development and special financial support for regions like Bihar and Andhra Pradesh, emphasizing the government's commitment to human resource development, infrastructure enhancement, and economic opportunities, particularly in the eastern states. Here are the key highlights and implications of the budget.

Income Tax Reforms: Relief for Middle-Income Earners

The government has introduced new income tax slabs under the new regime, which are more progressive and aim to reduce the financial burden on middle-income earners. The new slabs are as follows:

• Up to ?3,00,000: Nil
• ?3,00,001 to ?7,00,000: 5%
• ?7,00,001 to ?10,00,000: 10%
• ?10,00,001 to ?12,00,000: 15%
• ?12,00,001 to ?15,00,000: 20%
• Above ?15,00,000: 30%

Additionally, the Standard Deduction limit has been increased to ?75,000, allowing the salaried class to save up to ?17,500 in taxes. This change is expected to incentivize higher earnings and foster economic growth and stability.

Capital Gains Taxes Overhaul

?Significant changes have been made to the capital gains tax structure:

• Short-term capital gains tax on specified financial assets increased to 20%.
• Long-term capital gains tax on all assets is standardized at 12.5%.
• The exemption limit for capital gains on certain listed financial assets was raised to ?1.25 lakh per year.

These changes aim to simplify and rationalize the capital gains tax system, providing clarity and uniformity across different asset classes.

Infrastructure and Development Initiatives

The budget allocates substantial funds towards infrastructure development:

• Capital expenditure for FY24-25 is set at ?11.11 lakh crore, 3.4% of GDP.
• A special financial support package of ?15,000 crore for Andhra Pradesh, focusing on essential infrastructure in key industrial corridors.
• Introduction of Phase IV of PM Gram Sadak Yojana to improve rural road connectivity.
• Allocation of ?2.66 lakh crore for rural development, enhancing rural infrastructure significantly.

These investments are designed to stimulate economic growth, create jobs, and improve the quality of life in rural and underdeveloped regions.

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Focus on Employment and Skilling

The budget outlines comprehensive plans to boost employment and skill development:

• Five schemes with an outlay of ?2 lakh crore over five years to benefit 4.1 crore youth.
• An internship scheme providing opportunities for one crore youth in top companies, with monthly allowances and one-time assistance.
• Employment-linked incentives, including one month's wage support for first-time employees.
• Increased limit for Mudra loans from ?10 lakh to ?20 lakh, supporting MSMEs.

These initiatives underscore the government’s commitment to creating a future-ready workforce and addressing immediate employment needs.

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Special Attention to Women and Social Justice

The budget also focuses on social justice and women empowerment:

• Over ?3 lakh crore is allocated for schemes benefiting women and girls.
• Extension of the PM Garib Kalyan Ann Yojna for five years, benefiting 80 crore people.
• Launch of the Pradhan Mantri Janjatiya Unnat Gram Abhiyan to improve the socio-economic conditions of tribal communities.

These measures aim to ensure inclusive development, empower marginalized communities, and promote gender equality.

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Technological and Environmental Initiatives

Technological advancements and environmental sustainability are also key components:

• Introduction of climate-resilient seeds for agriculture.
• Promotion of natural farming practices, supported by certification and branding.
• Launch of a policy to support pumped storage projects for renewable energy integration.
• Setting up of 10,000 bio-input resource centers to support sustainable farming.

These initiatives reflect the government's dedication to leveraging technology for sustainable development and addressing climate change challenges.

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MSME: Boosting Small and Medium Enterprises for Economic Growth

The Union Budget 2024 has underscored the pivotal role of Micro, Small, and Medium Enterprises (MSMEs) in driving economic growth. With a host of targeted measures, the budget aims to fortify the MSME sector, ensuring it remains a robust pillar of the Indian economy.

1. Credit Guarantee Scheme and Term Loans: To facilitate term loans for machinery purchase, a new credit guarantee scheme will be introduced. This scheme will operate on cooling credit risks of MSMEs, with a self-financing guarantee fund providing coverage up to ?100 crore per applicant.
2. SIDBI Expansion: The Small Industries Development Bank of India (SIDBI) will open 24 new branches to serve MSME clusters, enhancing financial access and support.
3. Mudra Loan Limit Increase: The Mudra loan limit has been increased from ?10 lakh to ?20 lakh, benefiting companies like SBI, Bank of Baroda, and AU Small Finance Bank. This increase aims to empower small businesses with greater financial resources.
4. Technology Support Package: A comprehensive technology support package for MSMEs will be implemented, aiding in modernization and competitiveness.
5. E-commerce Export Hubs: The establishment of e-commerce export hubs and food irradiation units will facilitate MSMEs in accessing global markets and ensuring product quality.

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Agriculture: Strengthening the Backbone of the Economy

The budget places significant emphasis on agriculture, recognizing it as the backbone of the Indian economy. Several initiatives have been announced to enhance productivity, resilience, and sustainability in the agricultural sector.

1. Natural Farming Initiatives: One crore farmers will be initiated into natural farming practices, supported by certification and branding efforts. This move aims to promote sustainable agricultural practices.
2. Climate-Resilient Seeds: The government will release 109 high-yielding, climate-resilient seed varieties for 32 field and horticulture crops, ensuring better crop productivity and resilience against climate change.
3. Bio-Input Resource Centers: Establishment of 10,000 need-based bio-input resource centers will provide farmers with essential bio-inputs, promoting organic farming practices.
4. Digital Coverage of Farmland: Digital coverage of farmland and farmers will be expanded to ensure timely and accurate delivery of entitlements and benefits.
5. Agriculture Allocation: A substantial allocation of ?1.52 lakh crore has been earmarked for agriculture and allied sectors, reflecting the government’s commitment to bolstering the agricultural economy.

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Employment-Linked Incentive Schemes: Creating Opportunities for the Youth

The Union Budget 2024 has introduced three innovative employment-linked incentive schemes, aimed at generating employment and fostering skill development among the youth.

1. Scheme A: First-Time Employment Incentive

• Objective: To incentivize formal employment for first-time job seekers.
• Benefit: One month’s wage support for all first-time employees entering the workforce across formal sectors. The eligibility is set for a salary up to ?1 lakh per month.

2. Scheme B: Job Creation in Manufacturing

• Objective: To boost job creation within the manufacturing sector.
• Benefit: Additional employment in manufacturing will be incentivized through EPFO contributions. This scheme aims to stimulate job growth and enhance the manufacturing workforce.

3. Scheme C: Youth Internship Opportunities

• Objective: To provide practical, on-the-job training for the youth.
• Benefit: One crore youth will receive internship opportunities in top companies over the next five years, with a monthly allowance of ?5000 and a one-time assistance of ?6000. This initiative is designed to bridge the gap between theoretical education and real-world application, making graduates more job-ready.

By focusing on these critical areas, the Union Budget 2024 aims to foster economic growth, enhance agricultural productivity, and create sustainable employment opportunities for the youth, driving India towards a prosperous future.

Conclusion

The Union Budget 2024, presented by Finance Minister Smt Nirmala Sitharaman Ji, outlines a visionary path towards Viksit Bharat. With its focus on progressive tax reforms, substantial infrastructure investments, employment generation, and social justice, this budget lays the groundwork for a robust and inclusive economic future. By addressing immediate needs and laying a foundation for long-term growth, the government aims to propel India towards becoming a developed nation, ensuring prosperity and well-being for all its citizens.

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