Budget 2024 Highlights: Earlier today, Nirmala Sitharaman, Finance Minister, presented the Interim Union Budget for the Financial Year 2024-25 in Parliament.

The current FM presented the sixth budget, and it was the last of the second term of the Narendra Modi government.

After the Lok Sabha elections, the new Government will present the total budget in July this year.

The budget was centred on fiscal consolidation, infrastructure, agriculture, green growth, and railways. The tax rates were not changed, which disappointed salaried people.

The Fiscal Deficit Target for FY25 has been set at 5.1 percent of GDP. This is better than expected. The FY24 target has also been revised downwards to 5.8 percent. The capex target for FY25 has been increased by 11.1% to Rs11.1 lakh.

“India’s economy has changed positively in the past 10 years. The people are hopeful about the future. In 2014, there were many challenges for the country.

The Narendra Modi government has overcome these challenges with Sabka Saath Sabka Vikaas,” Finance Minister Sitharaman said in her budget address.

Sitharaman said that the next five years will bring unprecedented growth and help achieve the goal of a developed nation by 2047.

She said that “the trinity of diversity, democracy, and demography can fulfil the aspirations of every Indian.”

The experts also agree that the budget met their expectations.

The FM has focused on strengthening domestic macro-factors, including sustained investments in Infra and Agriculture. It also adhered to fiscal responsibility, with a smaller fiscal deficit, which could be music for foreign investors.

And the impending inclusion of $25 billion bonds in June will help to bring down yields, as lower budget deficits and reduced borrowings.

Pradeep Gupta is the Co-founder and Vice-Chairman of the Anand Rathi Group. He said that it could open up a rating upgrade.

The budget focuses on research, tourism, infrastructure, and logistics innovation. All of these measures will lead to continuous and sustainable growth in the economy.

Gupta said that this shows the Government’s continued commitment to fiscal prudence, achieving the target fiscal deficit of 4.5 percent of GDP by FY26.

Here Are Highlight of Budget 2024

Tax on Income

“… I do not propose any change in tax rates for direct and indirect taxes, including import duties,” Sitharaman stated during her Budget address.

The FM stated that, even though there were no changes to the tax system in this budget, the amount of tax collected has more than doubled in the past 10 years. She pointed out that this year, the average time for processing tax returns has been reduced to 10 days.

The Finance Minister has announced a significant milestone by citing the doubled tax collection over the last decade.

The current budget keeps the status quo for direct and indirect taxes, including import duties. This predictability may benefit companies’ financial planning and foster a more sustainable business environment,” said Siddhesh Mhta, Samco Securities Research Analyst.

Direct and Indirect Tax

Finance Minister Nirmala Sitharaman has not proposed any changes to direct and indirect taxes, including import taxes.

• The same tax rates are retained for Direct and indirect tax
• The tax break for investments by sovereign wealth funds in start-up businesses has been extended until March 31, 2025
• Focus on improving the service to taxpayers
• Tax reforms have increased tax revenues and widened tax bases
• The Government will withdraw the old direct tax demand of up to Rs. 25,000 for FY2009 and Rs. 10,000 from 2010-11 to 2014.15. This will benefit one crore taxpayers
• FM proposes tax incentives for pension funds
• The processing time for tax returns has been reduced from 93 to 10 days.
• FM: The tax base for GST has more than doubled.
• Since 2014, the number of taxpayers has increased by 2.4 times, and direct tax collections have tripled.
• The projected tax receipts in 2024-25 is Rs 26.02 lakh
• In the last decade, direct tax collections have tripled.
• The number of returns filed has increased by 2.4 times.

Infrastructure Development

The FM announced that to capitalise on the tripling in capital expenditures in the last 4 years, which has had a multiplier effect on economic growth and employment creation, the budget for next year will be increased by 11,1 percent or 11.11 lakh crore. This represents 3.4 percent of GDP.

Air Connectivity

Udan Scheme to launch 517 new routes

Railways

Allocation of Rs 2.55 lakh crore for Railway. FM Sitharaman has announced that 40,000 rail bogies would be converted into Vande Bharat to improve passengers’ safety, convenience, and comfort. Metro Rail, Namo Bharat, and other rail infrastructure projects will be expanded in more cities.

Three major railway corridors have also been announced: the Port Connectivity Corridor, the Energy, Mineral, Cement Corridor, and the High Traffic Density Corridor.

Decongestion will improve passenger train operations, leading to increased safety and speed.

Sitharaman said that these three economic corridor programs and the dedicated freight corridors will increase our GDP and reduce logistics costs.

The FM announced that around 40,000 rail bogies would be converted into Vande Bharat coaches after Vande Bharat’s success. S

anjay Moorjani said that this would create more jobs, reduce travel time, and increase tourism in the country.

CRISIL also noted that creating economic rail corridors for specific commodities can help decongest the existing lines in the country’s east.

It will help India reduce its logistics costs from 12 percent to 10 percent and improve competitiveness in manufacturing and other sectors.

‘Lakhpati Didi’ Scheme

FM reported that 83 lakh SHGs with 9 crore women are transforming the rural socio-economic landscape through empowerment and self-reliance.

Nearly one crore women have already become ‘Lakhpati didi’ because of their success. The success has led to a decision to increase the ‘Lakhpati Didi’ target from 2 to 3 crore.

The Lakhpati Didi Scheme has succeeded dramatically, reaching 83 lakh self-help groups and benefiting nine crore women. This initiative, which will provide Rs 1 lakh to each household of one crore beneficiaries, is set to improve the economic standing of rural women.

This empowerment stimulates rural economies and increases credit demand from micro-financiers. Women and self-help groups are particularly likely to benefit.

Electricity

Roof-top solarisation will allow 10 million households to receive up to 300 accessible units of electricity each month.

Nirmala Sitharaman, FM Nirmala’s deputy, explained that this scheme resulted from the Prime minister’s decision on the historic occasion of the consecration day of Shri Ram Mandir at Ayodhya.

Sitharaman noted that this scheme will allow households to save Rs 15,000-18,000 annually by using free solar energy and selling any surplus to distribution companies.

Green Energy

The following measures have been announced to help achieve the ‘net zero carbon by 2070’ goal.

• The funding gap will be used to harness the potential of offshore wind energy for an initial capacity of one gigawatt.
• By 2030, 100 MT of coal gasification and liquefaction capacity will be installed. It will also reduce the imports of ammonia, methanol, and natural gas.
• The mandatory blend of compressed biogas in compressed natural gases (CNG) used for transportation and piped gas (PNG) intended for domestic use will be phased out.
• The purchase of biomass aggregation equipment will be supported by financial assistance.

Renewable Energy

• Wind energy funding to bridge the viability gap
• Set up coal gasification and liquefaction capacity
• Blending CNG, compressed biogas, and PNG in phases
• Assistance for the purchase of biomass aggregation machines
• Up to 300 accessible units of electricity will be available to 1 crore households per month

Electric Vehicles

The Finance Minister said the Government would expand and strengthen the EV ecosystem by supporting manufacturing and charging facilities.

She said that payment security mechanisms will encourage greater adoption of electric buses for public transport networks.

The Indian budget for 2024-25 is a strategy that addresses the main barrier to EVs and hybrid adoption – namely, the lack of public charging stations. This was evident by the 6,586 stations counted in March 2023.

The budget aims to expand and incentivize the electric vehicle ecosystem, with an investment focused on increasing the number of charging stations.

This initiative is an essential cornerstone for transforming India’s electric vehicle landscape, eliminating range anxiety, and promoting the use of electric vehicles in India as a viable and sustainable transportation solution.

Tourism

FM announced that the states would be encouraged to develop their iconic tourist centres’ branding and marketing comprehensively globally. The rating system will be based on the quality of services and facilities.

States will receive long-term, interest-free loans to finance these developments. We will undertake projects for port connectivity, tourist infrastructure, and amenities on our islands, Lakshadweep included. FM Sitharaman says that this will also help to generate employment.

Promoting Investments

FDI inflows during 2014-23 were $596 billion, marking the golden age. This is more than twice the amount of FDI inflow from 2005-2014.

To encourage sustained foreign investment, the Government is currently negotiating bilateral treaties with foreign investors in the spirit of ‘first develop India,’ said the FM in her address.

Technology

The new technologies and data of the 21st century are changing people’s lives and businesses. The new technologies and data are also creating new economic opportunities and making providing high-quality services more accessible, even at the “bottom of the Pyramid,” said FM Sitharaman.

She announced that a rupee one lakh crore corpus will be created with a loan of fifty years interest-free.

The corpus is intended to provide long-term refinancing or financing with low or no interest rates and long tenors. The private sector will be encouraged to increase research and innovation in the sunrise domains.

She said, “We must have programs that combine our youth’s power with technology.”

The FM said a new scheme would be launched to accelerate the ‘atma nirbharta,’ or accelerated use of deep-tech technologies in defence.

“The loan is interest-free for 50 years and has a corpus value of Rs. The IT industry and the sunrise sectors can see this as a boon.

The funding will boost research and innovation, improving India’s technology leadership in the next decade”, said Manick Waddhwa, director at SKI Capital.

Ayushman Bharat

Sitharaman, Minister of Finance, announced that Ayushman Bharat will cover all Anganwadi and Asha workers. Sitharaman also announced that all maternal-child healthcare schemes would be combined under one comprehensive program.

Healthcare

• All Aasha and Aanganwadi workers will receive healthcare services under Ayushman Bharat.
• The Government plans to build hospitals in all districts
• Vaccination for 9-14-year-old girls against cervical cancer
• Saksham Anganwadi 2.0 and Poshan 2.0 will be expedited to improve nutrition, early childhood care, and development
• The health sector will receive Rs 90,170 Crores, 13.8% more than the RE of Rs 79,220 Crores for 2023/24

Education

The revised estimate for the Education Budget for 2024/25 is Rs 1.25 lakh crores, which is 14.5 percent higher than the Rs 1.1 lakh crores for 2023/24

PM Awas Yojana

Despite challenges caused by COVID, PM Awas Yojana has continued to be implemented, and the centre is nearing its target of 3 crore houses.

Sitharaman said that two crore additional houses would be built in the next five years to meet the demand arising from increased families.

The Pradhan Mantri Awas Yojana Urban Mission, launched on June 25, 2015, aims to provide housing for everyone. In his speech, the Finance Minister stated that the Government had planned to construct 3 crore pucca homes by March 2024.

A plan to build an additional 2 crore houses in the next five-year period shows a commitment. This increased focus on PMAY will trigger increased investments in the construction industry, with multiplier impacts on Housing Finance, Cement, Steel, Paints, and other industries.

MSME

Priority is given to training MSMEs so that they can compete on a global scale. Facilitating their growth will also be necessary. FM Sitharaman said the Government would prepare the financial sector to meet investment needs.

The Skill India Mission initiative, which aims to train 1.4 million young people, upskill 54 lakh youth, and establish 3,000 new Industrial Training Institutes, is crucial in bolstering Make in India and the PLI programs.

This comprehensive approach will increase the manufacturing sector’s contribution from 17% of the GDP to 25% in 2047. It will also create numerous jobs, said Kartik Narayan, CEO of TeamLease Services.

Agriculture and Food Processing

FM announced the intensification of efforts to boost farmers’ income and add value to the agricultural sector. The Pradhanmantri Kisan Sapada Yojana generated employment for 10 lakh people and benefited 38 lakh farmers.

The Pradhan Mantri Formalisation Micro Food Processing Enterprises Yojana assisted 2.4 lakh SHGs and 60 thousand individuals with credit links.

Other schemes complement the efforts to reduce postharvest losses and improve productivity and incomes.

She added that to ensure faster growth in the sector, the Government will continue to promote private and Government investment in postharvest activity, including aggregation and modern storage, efficient supply chains, primary processing and secondary processing, and marketing and branding.

PLI Scheme

PLI scheme gets Rs 6,200 crore

Lokapal Receives Rs 33 crore and CVC Rs 51 Lakh

Lokpal received Rs 44.46 crores for 2023-24. This figure has been revised to Rs 48.73 crores for the current fiscal year.

CVC has allocated Rs 51.31 crores for the next financial period.

The Fiscal Deficit And Other Essential Numbers

• The fiscal deficit is expected to be 5.1 percent of GDP in FY25.
• FY24’s fiscal deficit target was reduced from 5,9 percent to 5.8 percent.
• The fiscal deficit for the nine months of FY24 up to December was Rs 9,82 lakh crore or 55 percent of the annual estimate.
• Capital expenditure for FY25 is Rs 11,1 lakh crores, an increase of 11.1 percent.
• Total expenditure for FY25 is expected to be Rs 30,80 lakh crore. The revised estimate for the total expenditure in FY24 is Rs 44.90 crore.
• The budget estimates for FY24 are higher at Rs 30,03 lakh crore, reflecting the economy’s strong growth momentum and formalisation.
• Gross market borrowing for FY25 is Rs 14.13 lakh crore, and net borrowing is Rs 11.75 lakh crore.
• The target for FY25 is Rs 26.02 lakh crore in gross tax revenue.

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