On July 23, Union Finance Minister Nirmala Sitharaman presented her seventh consecutive budget, marking the first budget by the BJP-led NDA government since its re-election in June. With a strong emphasis on employment, skilling, MSMEs, and the middle class, this budget outlines significant financial allocations and policy changes aimed at fostering growth and development across various sectors.
KEY PRIORITIES
The Finance Minister outlined nine key priorities for Budget 2024:
- Productivity and Resilience in Agriculture
- Employment and Skilling
- Inclusive Human Resource Development and Social Justice
- Manufacturing and Services
- Support for Promotion of MSMEs
- Urban Development
- Energy Security
- Infrastructure
- Innovation, Research, and Development
AGRICULTURE BUDGET
The budget includes several measures to boost the agricultural sector, such as initiating farmers into natural farming, achieving self-sufficiency in pulses and oilseeds, and developing digital public infrastructure.
EMPLOYMENT AND EDUCATION BUDGET
Employment Initiatives
Three new employee-linked incentive schemes were announced, aligning with enrolment in the Employee Provident Fund Organisation. These schemes aim to recognize first-time employees and provide support to both employers and employees.
Education Support
Students who have not benefited from any government schemes will receive support loans up to ₹10 lakh for education in domestic institutions, with e-vouchers provided for interest subvention.
Internship Program
A comprehensive internship scheme will provide exposure to real-life business environments for 1 crore youth over five years.
REGIONAL DEVELOPMENT: BIHAR AND ANDHRA PRADESH
Bihar Development
The “Purvodaya” initiative includes significant investments in infrastructure projects for Bihar, including:
- Building expressways at a cost of ₹26,000 crore
- Power projects
- New airports
- Medical colleges
- Sports infrastructure
Andhra Pradesh Development
For Andhra Pradesh, funds will be provided for supporting basic infrastructure like water, power, and roads under the AP Reorganisation Act.
BUDGET FOR WOMEN
To promote women-led development, the budget allocates over ₹3 lakh crore for schemes benefiting women and girls.
MSMEs BUDGET
The budget introduces a new assessment model for MSME credit by public sector banks, which will be based on the digital footprint of MSMEs rather than only assets and turnover criteria.
PERSONAL INCOME TAX REFORMS
The Finance Minister revised the tax slabs under the new regime, enabling salaried employees to save up to ₹17,500 in income taxes. The changes include:
- Expansion of the ₹3 lakh to ₹6 lakh slab to ₹3 lakh to ₹7 lakh.
- Similar adjustments in other slabs, maintaining the same tax rates but altering the income ranges.
SIMPLIFICATION OF CAPITAL GAINS TAXATION
Changes include:
- Two holding periods for asset classification: 12 months and 24 months.
- Increased tax rates for short-term capital gains on certain securities.
- Increased exemption limit for long-term capital gains from ₹1 lakh to ₹1.25 lakh annually, with an increased tax rate from 10% to 12.5%.
- Removal of the indexation benefit for long-term assets sold after July 23, 2024.
CHANGES IN TDS RATES
TDS rates on specified payments have been reduced to facilitate business and improve taxpayer compliance, effective from October 1, 2024, or April 1, 2025. New provisions include the introduction of TDS on payments made to partners by firms.
SECTOR-SPECIFIC CUSTOMS DUTY PROPOSALS
Medicines and Medical Equipment
- Full exemption of customs duties on three more cancer medicines.
- Changes in the BCD on x-ray tubes and flat panel detectors to synchronize with domestic capacity addition.
Mobile Phone and Related Parts
- Reduction of the BCD on mobile phones, mobile PCBA, and mobile chargers to 15%.
Critical Minerals
- Full exemption of customs duties on 25 critical minerals and reduction on two of them to support strategic sectors like nuclear energy and high-tech electronics.
OTHER KEY SECTORS
Solar Energy
Expansion of the list of exempted capital goods for solar cell and panel manufacturing.
Marine Products
Reduction of BCD on certain broodstock, polychaete worms, shrimp, and fish feed to 5%.
Leather and Textile
Reduction of BCD on real down filling material and expanded exemption list for manufacturing exports.
Precious Metals
Reduction of customs duties on gold and silver to 6% and on platinum to 6.4%.
Other Metals
Removal of BCD on ferro nickel and blister copper, with continued nil BCD on ferrous scrap and nickel cathode.
Electronics
Removal of BCD on oxygen-free copper for resistor manufacturing and exemption for certain parts used in connector manufacturing.
INDIRECT AND DIRECT TAXES
Indirect Taxes
A comprehensive review of the rate structure over the next six months will rationalize and simplify customs duty rates to facilitate trade, remove duty inversion, and reduce disputes.
Direct Taxes
Introduction of measures to support the Indian start-up ecosystem, promote cruise tourism, and develop the diamond cutting and polishing sector. Reduction in corporate tax rate on foreign companies from 40% to 35%.
CONCLUSION
Budget 2024, presented by Finance Minister Nirmala Sitharaman, is a comprehensive plan aimed at driving economic growth, fostering innovation, and supporting various sectors with targeted investments and policy changes. The focus on employment, skilling, MSMEs, and middle-class support, along with significant tax reforms, reflects the government’s commitment to creating a robust and inclusive economy.