Union Finance Minister Nirmala Sitharaman presented the Budget speech today. She announced several schemes for various sectors. In her Budget Speech she highlighted that India’s economic growth is expected to remain strong in the coming years. However, she also acknowledged potential risks to growth and rising inflation. The Budget for the fiscal year 2024-25 focuses on various sectors with many financial allocations aimed at boosting development and growth. The government has called it ‘Priorities for Viksit Bharat’.
Here’s a look at the major financial allocations announced across different sectors:
Agriculture and Allied Activities
- Natural Farming and High-Yield Varieties: The budget emphasizes promoting natural farming. Over the next two years, 1 crore farmers will be introduced to natural farming, supported by certification and branding. Additionally, 109 new high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation.
- Support for Shrimp Production and Vegetable Supply Chains: Financial support for shrimp farming, processing, and export will be provided through NABARD (National Bank For Agriculture And Rural Development). The promotion of Farmer Producer Organizations (FPOs), cooperatives, and start-ups for collection, storage, and marketing will enhance vegetable production.
- Digital Public Infrastructure (DPI): A three-year plan for DPI coverage of farmers and their lands includes a digital crop survey in 400 districts and issuing Jan Samarth-based Kisan Credit Cards.
Employment Schemes
A comprehensive employment package includes several schemes:
- Scheme A: Incentives for EPFO contributions for first-time employees.
- Scheme B: Job creation focus in the manufacturing sector.
- Scheme C: Government reimbursement of EPFO contributions for employers of new hires, expected to generate 50 lakh jobs.
Skilling Initiatives
Over the next five years, 20 lakh youth will be skilled, with 1,000 Industrial Training Institutes upgraded to align with industry skill needs.
Purvodaya: ‘Vikas Bhi Virasat Bhi’
This initiative targets the development of states in Eastern India, including Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh, with projects like the Amritsar Kolkata Industrial Corridor and industrial node development at Gaya.
Tribal Welfare
The Pradhan Mantri Janjatiya Unnat Gram Abhiyan aims to improve the socio-economic condition of tribal communities across 63,000 villages, benefiting 5 crore tribal people.
Women and Girls’ Welfare
More than ₹3 lakh crore has been allocated for various schemes benefiting women and girls.
Infrastructure Development in Andhra Pradesh
Financial support of ₹15,000 crore in FY 24-25 for the completion of the Polavaram Irrigation Project and other infrastructure projects.
Internship Opportunities
A scheme for providing internship opportunities in 500 top companies to 1 crore youth over five years will be implemented, offering a monthly allowance of ₹5,000 and a one-time assistance of ₹6,000.
MSME Support
The Budget introduces comprehensive support for MSMEs, focusing on financial stability, enhanced credit access, quality and safety, and infrastructure. Key measures include:
Credit Guarantee Scheme for manufacturing MSMEs.
- Expanded Trade Receivables Discounting System (TReDS) for improved liquidity.
- New credit assessment model for easier loan access.
- Mudra Loan limit under the ‘Tarun’ category increased from ₹10 lakh to ₹20 lakh.
- Establishment of food irradiation units for quality and safety.
- Dormitory-type rental housing for industrial workers via Public-Private Partnerships (PPP) with Viability Gap Funding (VGF) support.
- Critical Minerals Mission for stable supply chains.
- Strengthening and establishing tribunals for expedited insolvency resolutions.
Urban Development
- Transit-Oriented Development: Transit-Oriented Development (TOD) will be introduced in 14 large cities, focusing on developing urban areas around public transit hubs.
- Water Management and Sanitation: A significant portion of the urban development budget is allocated to improving water supply, sewage treatment, and solid waste management in 100 large cities.
- Weekly Street Markets: The development of 100 weekly ‘haats’ or street food hubs in select cities to boost local economies.
- PM Awas Yojana Urban 2.0: A ₹10 lakh crore investment for providing affordable housing to 1 crore urban poor and middle-class families.
- Policy and Regulatory Support: Enabling policies and regulations for efficient and transparent rental housing markets.
- Stamp Duty Reductions: Encouragement for states to lower stamp duties for properties purchased by women to promote gender equity in property ownership.
- Free Electricity for Urban Households: Provision of free electricity up to 300 units every month to 1 crore urban households.
- Bharat Small Reactors and Renewable Energy: Setting up Bharat Small Reactors and focusing on the R&D of Bharat Small Modular Reactors. Financial support will be provided for shifting micro and small industries to cleaner forms of energy, and a full-scale 800 MW commercial plant will be established through a joint venture between NTPC and BHEL.
Infrastructure Development
- Provision of ₹11.11 lakh crore for infrastructure, representing 3.4% of GDP.
- Launch of Phase IV of the PMGSY to provide all-weather connectivity to 25,000 rural habitations.
- Financial support for irrigation and flood mitigation projects, including the ‘Kosi-Mechi intra-state link’ and various schemes in Assam, Sikkim, Uttarakhand, and Himachal Pradesh.
- Support for the operationalization of the ‘Anusandhan National Research Fund’ for basic research and prototype development.
Long-Term Loans to States
Allocation of ₹1.5 lakh crore as long-term interest-free loans to states to support resource allocation and infrastructure development.
Tourism Development
Significant investments for developing the ‘Vishnupad Temple Corridor and the Mahabodhi Temple Corridor’, modeled on the successful ‘Kashi Vishwanath Temple Corridor project’.
Comprehensive development plans for Rajgir and Nalanda, and promoting Odisha as a prime tourism destination.
Innovation, Research, and Development
- Operationalization of the Anusandhan National Research Fund to support basic research and prototype development.
- A ₹1 lakh crore financing pool for private sector-driven research and innovation.
- Establishment of a ₹1,000 crore venture capital fund to boost the space economy.
Tax Reforms
- Income Tax Act Review: Comprehensive review of the Income Tax Act of 1961.
- Custom Duty Changes: Reductions in custom duties for key sectors, full exemption on 25 critical minerals.
- Capital Gains Tax: Short-term gains taxed at 20%, long-term gains at 12.5%, exemption limit increased to ₹1.25 lakh per year.
- Standard Deduction Increase: For salaried employees, the standard deduction increased to ₹75,000.
- Family Pension Deduction: Deduction on family pension increased to ₹25,000.
- Abolition of ANGEL Tax: All classes of investors exempt from ANGEL tax.
- Simplified Tax Regimes: Introduction of simpler tax regimes for domestic cruises and safe harbor rates for foreign mining companies selling raw diamonds.
- Sector-Specific Proposals: Comprehensive review of custom duty proposals to ease trade, remove duty inversion, and reduce disputes.
