Union Finance Minister Nirmala Sitharaman on July 23, 2024, presented her seventh consecutive budget for the fiscal 2024-25. This is the first budget of the Bharatiya Janata Party-led NDA government since it was re-elected on June 4.
In the Budget for 2024-25, Finance Minister Sitharaman announced a reduction in the fiscal deficit to 4.9% of GDP, down from 5.1% in the interim budget, with a target of bringing it below 4.5% by FY26.
She outlined nine priorities in the Budget: enhancing agricultural productivity, boosting employment and skills, ensuring social justice, advancing manufacturing and services, promoting urban development, securing energy, improving infrastructure, fostering innovation, and implementing reforms.
Here are the key takeaways from the Budget:
1. Taxation:
New tax regime:
No tax for income up to ₹3 lakh.
5% tax for income between ₹3-7 lakh.
10% tax for income between ₹7-10 lakh.
15% tax for income between ₹10-12 lakh.
20% tax for income between ₹12-15 lakh.
30% tax for income above ₹15 lakh.
Capital gains: The Finance Minister announced that the tax rate on long-term capital gains for all financial and non-financial assets will rise to 12.5% from the previous rate of 10%. Additionally, the tax rate on short-term capital gains will increase to 20%, up from the earlier 15%.
Standard Deduction Increase:
The standard deduction for salaried employees in the new tax regime has been increased by ₹25,000, bringing it to ₹75,000. This change is applicable only to those who opt for the new tax regime.
Angel Tax Abolished:
The Budget proposed the abolition of the "Angel Tax," which was levied on investments received by startups from domestic investors.
2. Employment Education and Skilling
The Finance minister announced a PM Package consisting of five schemes designed to enhance employment and skilling, with a total allocation of ₹2 lakh crore. Of this, ₹1.48 lakh crore is dedicated to education, employment, and skill development.
Job Creation Schemes: The government will launch three schemes offering employment-linked incentives.
EPFO Enrollment and First-Time Employees: New hires can receive up to ₹15,000 in direct benefit transfers (DBT) in three installments, with a salary cap of ₹1 lakh per month, benefiting 2.1 lakh youths.
Employer Reimbursements: Employers will be reimbursed up to ₹3,000 per month for two years for each new hire, aiming to create 50 lakh new jobs and support 30 lakh youths.
Internship Scheme: A new scheme will provide internships to one crore youth over five years. Sitharaman announced that youth will gain 12 months of exposure to real business environments and job opportunities. An internship allowance of ₹5,000 per month will be provided.
Rental Housing: Rental housing for industrial workers will be facilitated through a public-private partnership (PPP) model.
3. Women
₹3 lakh crore has been announced for schemes benefiting women and girls. Sitharaman stated that plans are underway to establish working women’s hostels to enhance workforce participation. She also highlighted new partnerships to organize women-specific skilling programs in India.
"We will facilitate higher participation of women in the workforce by setting up working women hostels in collaboration with industries and the establishment of creches. In addition, the partnership will seek to organise women-specific skilling programmes and promote market access for women SHG enterprises," Sitharaman said.
4. Agriculture
₹1.52 lakh crore will be allocated to agriculture and allied sectors. The FM added that the government will release new 109 high yielding, climate resilient seeds for 32 field and horticulture crops. Additionally, an Initiative to introduce 1 crore farmers to natural farming over 2 years was announced.
5. Customs
The Finance Minister announced the reduction of Basic Customs Duty (BCD) imposed on mobile phones, mobile PCBA (Printed Circuit Board Assembly), and mobile chargers to 15%. Customs duties on gold and silver will be reduced to 6%, and on platinum to 6.4%.
Additionally, the FM exempted customs duties on 25 critical minerals and lowered the BCD for two of them.
6. Assistance to BIhar, Andhra Pradesh and Odisha
The Finance Minister announced ₹15,000 crore for Andhra Pradesh's development this year, with more funds promised for future years. This includes support for the Polavaram Dam and grants for backward regions.
For Bihar, she unveiled plans for new airports, medical colleges, sports infrastructure, and a ₹26,000 crore allocation for highways, including major expressways and a new Ganga bridge. She also said that the government will back the development of Nalanda in Bihar as a tourist center.
Additionally, a 2,400 MW power plant and an industrial corridor node in Gaya were announced.
7. Infrastructure and Development
The allocation for capital expenditure is Rs 11.11 lakh crore, representing 3.4% of India’s GDP. The FM announced that the government will launch Phase IV of the PM Gram Sadak Yojana in 25 rural areas that have qualified due to population growth.
Under PM Awas Yojana Urban 2.0, the housing needs of 1 crore urban poor and middle-class families will be met with a ₹10 lakh crore investment. This includes ₹2.2 lakh crore in central assistance over the next 5 years.
8. Tourism Promotion:
States will receive interest-free loans to promote tourism, aiming to boost domestic travel and attract international tourists