Mumbai, July 23: Finance Minister Nirmala Sitharaman presented the Union Budget for the financial year 2024-25, marking her seventh budget and the first of Prime Minister Narendra Modi’s third term. Emphasising India’s robust economic growth, Sitharaman highlighted nine key priorities - agriculture productivity, employment and skilling, inclusive HRD and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation and R&D, and next-generation reforms.

However, no major changes were made in personal income tax, which disappointed salaried individuals. "In this budget, we focus on employment, skilling, MSME, and the middle class," said the Finance Minister. While acknowledging that the global economy is performing better than anticipated, the Finance Minister cautioned about ongoing policy uncertainties. She highlighted significant downside risks to growth and upside risks to inflation. Union Budget 2024: Finance Minister Nirmala Sitharaman Cuts Fiscal Deficit to 4.9% To Keep Economy on Stable Growth Path.

Union Budget 2024–25 Key Takeaways:

Capital Expenditure

The government has allocated INR 11.11 lakh crore for capital expenditure, maintaining the same amount earmarked in February. This is 3.4% of India's GDP, an increase from the previous year's revised estimate of INR 9.5 lakh crore.

Taxation Changes

  • Income Tax: The new tax regime sees an increase in the standard deduction to INR 75,000 from INR 50,000. The revised tax rate structure is as follows:

    - 0-3L: Zero

    - 3-7L: 5%

    - 7-10L: 10%

    - 10-12L: 15%

    - 12-15L: 20%

    - 15L and above: 30%

    Salaried employees in the new tax regime will save up to INR 17,500 in income tax.

  • Capital Gains Tax: Long-term capital gains on all assets will now be taxed 12.5%, up from 10%. Short-term capital gains tax has increased to 20% from 15%, with an exemption limit set at INR 1.25 lakh per year.

  • Futures and Options (F&O): The Securities Transaction Tax (STT) rate has been doubled from 0.01% to 0.02%.

  • Angel Tax: The Angel Tax has been abolished.

Customs Duty Adjustments

  • Mobile Industry: Basic Customs Duty on mobile phones, PCDA, and chargers reduced to 15%.

  • Precious Metals: Customs duty on gold and silver reduced to 6%, and platinum to 6.4%.

  • Telecom Equipment: BCD on printed circuit board assemblies increased from 10% to 15%.

  • Critical Minerals: Customs duties exempted on 25 critical minerals, with lowered BCD for two of them.

Employment and Skilling Initiatives

A PM Package of five schemes has been introduced with an allocation of INR 2 lakh crore, focusing on education, employment, and skilling. The government aims to create 50 lakh new jobs and support 30 lakh youths through various incentives and schemes. Union Budget 2024: What Becomes Cheaper and What’s Costlier?

Women Empowerment

Over INR 3 lakh crore has been allocated for schemes benefiting women and girls, including setting up hostels and creating women-specific skilling programs.

Agriculture and Rural Development

  • Agriculture: INR 1.52 lakh crore allocated to agriculture and allied sectors, with a focus on improving productivity and developing climate-resilient varieties.

  • Rural Development: INR 2.66 lakh crore allocated for rural development initiatives, including introducing 1 crore farmers to natural farming over two years.

Financial Packages to Bihar and Andhra Pradesh

  • Bihar:  Funding for new airports, medical facilities, sports infrastructure, and INR 26,000 crore for highways.

  • Andhra Pradesh: INR15,000 crore allocated for the Pollavaram irrigation project and other capital investments.

MSME Support

A new scheme, supported by an INR 100 crore guarantee fund, will facilitate term loans for MSMEs to purchase machinery and equipment without collateral. SIDBI will open 24 new branches to serve MSME clusters.

Financial Initiatives

  • Mudra Loans: Limit increased to INR 20 lakh from INR 10 lakh.

  • Higher Education Loans: Financial support for loans up to INR 10 lakh, with e-vouchers and a 3% interest subvention.

  • Insolvency and Bankruptcy Code (IBC): An integrated tech platform will be set up to improve outcomes. The IBC has resolved over 1,000 companies and recovered INR 3.3 lakh crore for creditors.

Infrastructure and Development 

An additional INR 26,000 crore was allocated to road connectivity projects. A Critical Mineral Mission will be established, and INR 10 lakh crore will be invested in affordable housing.

Nuclear and Space Initiatives

The government will partner with the private sector to set up Bharat small reactors and expand the space economy by five times over the next decade, supported by an INR 1,000 crore venture capital fund.

However, the Opposition slammed Finance Minister Nirmala Sitharaman's Budget speech for not focusing on uplifting the poor and prioritising NDA allies like Chandrababu Naidu's Telugu Desam Party (TDP) and Nitish Kumar's Janata Dal—United (JDU) at the cost of other states. Leading the charge against the NDA government, opposition leader Rahul Gandhi termed it a "kursi bachao" Budget.

(The above story first appeared on LatestLY on Jul 23, 2024 04:52 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).