India Budget 2024: A Comprehensive Overview
The Indian Union Budget for the fiscal year 2024-25 has been unveiled, marking a crucial step in the nation's economic strategy. Presented by the Finance Minister, the budget aims to address pressing issues, stimulate growth, and ensure equitable development. This blog delves into the key highlights, sectoral allocations, and implications of the India Budget 2024.
Economic Context
Before diving into the specifics, it's essential to understand the economic backdrop against which this budget has been framed. The global economy has faced significant turbulence due to the lingering effects of the COVID-19 pandemic, geopolitical tensions, and fluctuating commodity prices. Despite these challenges, India has shown resilience, with a steady GDP growth rate, controlled inflation, and a robust digital economy.
Key Highlights
Fiscal Deficit and Revenue
One of the cornerstones of the budget is managing the fiscal deficit. For FY 2024-25, the government has set a target of 5.9% of GDP, down from 6.4% in the previous fiscal year. This reduction aims to ensure fiscal prudence while maintaining growth momentum.
Revenue projections have been made cautiously optimistic, with a focus on enhancing tax compliance and broadening the tax base. The Goods and Services Tax (GST) collections have shown a positive trend, providing a significant boost to the exchequer.
Taxation
Personal Income Tax
The budget has introduced several changes in the personal income tax regime. The basic exemption limit has been increased from ₹2.5 lakhs to ₹3 lakhs, providing relief to the middle class. Additionally, the tax slabs have been restructured to simplify compliance and reduce the tax burden on lower-income groups.
A new optional tax regime has been proposed, which offers lower tax rates but without exemptions and deductions. Taxpayers can choose between the old regime with exemptions and the new regime based on their financial preferences.
Corporate Tax
For corporate taxpayers, the budget maintains the existing tax rates but introduces incentives for startups and MSMEs (Micro, Small, and Medium Enterprises). Startups established before March 2024 will continue to enjoy a tax holiday for three consecutive years out of their first ten years of operation. Additionally, the threshold for MSMEs to avail of a lower corporate tax rate of 15% has been increased.
Infrastructure and Development
Infrastructure development remains a top priority, with a substantial allocation of ₹10 lakh crore for capital expenditure, marking a 33% increase from the previous year. Key projects include the development of highways, railways, and urban infrastructure. The budget also emphasizes the completion of ongoing projects to ensure timely delivery and optimal utilization of resources.
Healthcare
In the wake of the pandemic, healthcare continues to receive significant attention. The budget allocates ₹2.4 lakh crore to the healthcare sector, focusing on improving primary healthcare, expanding medical infrastructure, and promoting research and development. The Ayushman Bharat scheme, aimed at providing health insurance to the underprivileged, sees enhanced funding to cover more beneficiaries.
Education
The education sector receives a boost with an allocation of ₹1.2 lakh crore, a 12% increase from the previous fiscal year. The budget emphasizes digital learning, skill development, and research initiatives. The establishment of new IITs and IIMs, along with the promotion of vocational training institutes, is expected to bridge the skill gap and enhance employability.
Agriculture
Agriculture, the backbone of the Indian economy, receives substantial support with an allocation of ₹1.5 lakh crore. The budget introduces measures to enhance farmers' income, promote sustainable agriculture, and ensure food security. Key initiatives include the expansion of the Pradhan Mantri Fasal Bima Yojana (crop insurance scheme), increased funding for irrigation projects, and incentives for organic farming.
Social Welfare
Social welfare programs see a significant increase in funding, with an emphasis on inclusive growth. The budget allocates ₹1.8 lakh crore for various schemes aimed at poverty alleviation, rural development, and women empowerment. The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) receives enhanced funding to provide job security in rural areas.
Digital Economy and Innovation
Recognizing the transformative potential of the digital economy, the budget allocates ₹50,000 crore to promote digital infrastructure and innovation. This includes funding for the expansion of broadband connectivity, development of 5G technology, and support for startups in the tech sector. The Digital India initiative continues to be a cornerstone of the government's strategy to drive economic growth through technology.
Climate Change and Sustainability
In line with global commitments to combat climate change, the budget introduces several measures to promote sustainability. A dedicated fund of ₹20,000 crore has been established to support renewable energy projects, reduce carbon emissions, and promote green technologies. The government also plans to phase out single-use plastics and incentivize industries to adopt eco-friendly practices.
Implications for Various Sectors
Real Estate
The real estate sector is expected to benefit from increased infrastructure spending and affordable housing schemes. The budget proposes tax incentives for homebuyers and developers, aiming to boost housing demand and construction activity.
Manufacturing
The Make in India initiative receives a significant boost, with incentives for manufacturing units, especially in the electronics and automobile sectors. The budget also promotes the development of industrial corridors and clusters to enhance the competitiveness of Indian manufacturers.
Financial Services
The financial services sector sees several reforms aimed at improving liquidity and enhancing investor confidence. The budget proposes the establishment of a bad bank to tackle non-performing assets (NPAs) and measures to deepen the bond market.
Conclusion
The India Budget 2024 reflects a balanced approach to addressing immediate economic challenges while laying the foundation for long-term growth. With its focus on fiscal prudence, infrastructure development, and social welfare, the budget aims to steer the Indian economy towards a sustainable and inclusive growth trajectory. As the nation navigates the complexities of the global economic landscape, the budget provides a roadmap for resilience and prosperity.
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