Budget 2024-25 Highlights- Explained Pointwise

Finance Minister Nirmala Sitharaman presented the Union Budget 2024-25 in the Parliament. This was her 7th consecutive budget. The Budget focused on the poor, women, youth, and farmers. The budget highlighted the plan to increase government spending, generation of jobs, and offering middle-class relief.

What is a budget? What are the basics of a Budget Document?

Budget- Budget is essentially a statement of anticipated receipts and expenditure. The annual budget covers all aspects of government finances, including revenue generation, expenditure allocations, and policy announcements.

Government Receipts

Government receipts

What are the macro-economic highlights of the Budget?

Budget Estimates 2024-25

a. Total Receipts for FY 2024-25-

The total receipts other than borrowings for the year 2024-25, is estimated to be at Rs. 32.07 lakh crore.
The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs.14.01 lakh crore and Rs. 11.63 lakh crore respectively. Both will be less than that in 2023-24.

The net tax receipts are estimated at Rs. 25.83 lakh crore.

Total Expenditure for FY 2024-25- The total expenditure is estimated at Rs. 48.21 lakh crore.

Fiscal Deficit- The fiscal deficit is estimated at 4.9 per cent of GDP.

Inflation Target- India’s inflation continues to be low, stable and moving towards the 4 per cent target. Core inflation (nonfood, non-fuel) currently is 3.1 per cent.

India’s Growth on a robust path-  India’s economic growth continues to be the shining
exception and will remain so in the years ahead. The performance of India on several parameters are mentioned below-

What are the 9 priority areas for the achievement of Viksit Bharat in the Budget 2024-25?

Priority 1: Productivity and resilience in Agriculture

Transforming agriculture research- The focus will be on raising productivity and developing climate resilient varieties. Funding will be provided in challenge mode, including to the private sector.

Release of new varieties- New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers.

Natural Farming- In the next two years, 1 crore farmers across the country will be initiated into natural farming supported by certification and branding. In the next two years, 1 crore farmers across the country will be
initiated into natural farming supported by certification and branding.

Missions for pulses and oilseeds- A strategy is being put in place to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower.

Digital Public Infrastructure for Agriculture- The Use of DPI in agriculture will facilitate the implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years. During this year, digital crop survey for Kharif using the DPI will be taken up in 400 districts. The details of 6 crore farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth based Kisan Credit Cards will be enabled in 5 states.

Shrimp Production & Export- Financial support for setting up a network of Nucleus Breeding Centres for Shrimp Broodstocks will be provided. Financing for shrimp farming, processing and export will be facilitated through NABARD.

National Cooperation Policy- A National Cooperation Policy will be brought for systematic, orderly and all-round development of the cooperative sector.

Priority 2- Employment & Skilling

Employment Linked Incentive- 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers.

Scheme A: First Timers- This scheme will provide one-month wage to all persons newly entering the workforce in all formal sectors. The direct benefit transfer of one-month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to Rs. 15,000. The eligibility limit will be a salary of Rs. 1 lakh per month. The scheme is expected to benefit 210 lakh youth.

Scheme B: Job Creation in manufacturing- An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first 4 years of employment. The scheme is expected to benefit 30 lakh youth entering employment, and their employers.

Scheme C: Support to employers- This employer-focussed scheme will cover additional employment in all sectors. All additional employment within a salary of Rs.1 lakh per month will be counted. The government will reimburse to employers up to Rs. 3,000 per month for 2 years towards their EPFO contribution for each additional employee. The scheme is expected to incentivize additional employment of 50 lakh persons.

Participation of women in the workforce- Facilitation of higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishment of creches. In addition, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.

Skilling programme- A new centrally sponsored scheme will be launched to skill 20 lakh youth over a 5-year period. 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with outcome orientation.

Skilling Loans- The Model Skill Loan Scheme will be revised to facilitate loans up to Rs. 7.5 lakh with a guarantee from a government promoted Fund. This measure is expected to help 25,000 students every year.

Education Loans- Financial support for loans upto Rs. 10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of the loan amount.

Priority 3: Inclusive Human Resource Development and Social Justice

Saturation approach- Saturation approach of covering all eligible people through various programmes including those for education and health will be adopted to empower them by improving their capabilities.

Implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, schedule tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up.

Purvodaya- A plan, Purvodaya, for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh. This will cover  human resource development, infrastructure, and generation of economic opportunities to make the region an engine to attain Viksit Bharat.

The announcements related to Bihar– Industrial node at Gaya, connectivity projects, namely (1) Patna-Purnea Expressway, (2) Buxar-Bhagalpur Expressway, (3) Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and (4) additional 2-lane bridge over river Ganga at Buxar at a total cost of Rs. 26,000 crore.

Andhra Pradesh Reorganization Act- Firm committment to the provisions of the act. In the current financial year Rs. 15,000 crore will be arranged, with additional amounts in future years. Financing and early completion of the Polavaram Irrigation Project and Grants for backward regions of Rayalaseema, Prakasam and North Coastal Andhra.

PM Awas Yojana- Three crore additional houses under the PM Awas Yojana in rural and urban areas in the country.

Women-led development- For promoting women-led development, the budget carries an allocation of more than Rs. 3 lakh crore for schemes benefitting women and girls.

Pradhan Mantri Janjatiya Unnat Gram Abhiyan- The abhiyan aims to improve the socio-economic condition of tribal communities, by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts. This will cover 63,000 villages benefitting 5 crore tribal people.

Bank branches in North-Eastern Region- More than 100 branches of India Post Payment Bank will be set up in the North East region to expand the banking services.

Priority 4: Manufacturing & Services

Support for promotion of MSMEs- Credit Guarantee Scheme for MSMEs in the Manufacturing Sector, New assessment model for MSME credit, Credit Support to MSMEs during Stress Period, enhanced Mudra Loans (from 10 lakhs to 20 lakhs for MSME entrepreneurs who have repaid loans under Tarun category), Enhanced scope for mandatory onboarding in TReDS, SIDBI branches in MSME clusters and 50 MSME Units for Food Irradiation, Quality & Safety Testing.

Internship in Top Companies- A comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities. An internship allowance of Rs. 5,000 per month along with a one-time assistance of Rs. 6,000 will be provided. Companies will be expected to bear the training cost and 10 per cent of the internship cost from their CSR funds.

Industrial Parks- Development of investment-ready “plug and play” industrial parks with complete infrastructure in or near 100 cities. Twelve industrial parks under the National Industrial Corridor Development Programme also will be sanctioned.

Rental Housing- Rental housing with dormitory type accommodation for industrial workers will be facilitated in PPP mode with VGF support and commitment from anchor industries.

Critical Mineral Mission- Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets will be launched.

Digital Public Infrastructure Applications- DPI applications at population scale for productivity gains, business opportunities, and innovation by the private sector. These are planned in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.

Debt recovery and IBC- Steps for reforming and strengthening debt recovery tribunals will be taken. Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act.

Voluntary closure of LLPs- The services of the Centre for Processing Accelerated Corporate Exit (C-PACE) will be extended for voluntary closure of LLPs to reduce the closure time.

Priority 5- Urban Development

Cities as Growth Hubs and Creative redevelopment of cities- Policies will be formulated for the achievement of both these initiatives.

Transit Oriented Development- Transit Oriented Development plans for 14 large cities with a population above 30 lakh will be formulated, along with an implementation and financing strategy.

Urban Housing- Under the PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of ₹ 10 lakh crore. This will include the central assistance of ₹ 2.2 lakh crore in the next 5 years.

Water Supply and Sanitation- The Government will promote water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects in partnership with the State Governments and Multilateral Development Banks.

Street Markets- The development of 100 weekly ‘haats’ or street food hubs in select cities.

Stamp Duty- The states will be encouraged to consider further lowering duties for properties purchased by women.

Priority 6- Energy Security

Initiatives with private sector in Nuclear Energy- Setting up Bharat Small Reactors and R&D of Bharat Small Modular Reactor and newer technologies for nuclear energy.

PM Surya Ghar Muft Bijli Yojana- PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month. The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications, and steps will be taken to further encourage it.

Pumped Storage Policy- A policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

Advanced Ultra Super Critical Thermal Power Plants- A joint venture between NTPC and BHEL will set up a full scale 800 MW commercial plant using Advanced Ultra Super Critical Thermal Power Plants (AUSC) technology.

Roadmap for ‘hard to abate’ industries- Appropriate regulations for transition of these industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode will be put in place.

Support to traditional micro and small industries- An investment-grade energy audit of traditional micro and small industries in 60 clusters, including brass and ceramic, will be facilitated. The scheme will be replicated in another 100 clusters in the next phase.

Priority 7- Infrastructure

Infrastructure provisions- Provision of ₹11,11,111 crore for infrastructure (3.4% of GDP) has been made for capital expenditure. Provision of ₹1.5 lakh crore to states as long term interest free loans to support resource allocation.

Pradhan Mantri Gram Sadak Yojana (PMGSY)- Phase IV of PMGSY will be launched to provide all-weather
connectivity to 25,000 rural habitations which have become eligible in view of their population increase.

Irrigation and Flood Mitigation- Financial support for projects with estimated cost of ₹11,500 crore such as the Kosi-Mechi intra-state link and 20 other ongoing and new schemes.

Tourism- Support for the comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor modelled on the successful Kashi Vishwanath Temple Corridor, to transform them into world class pilgrim and tourist destinations.

Priority 8- Innovation, Research & Development

Anusandhan National Research Fund- Operationalization of the Anusandhan National Research Fund for basic research and prototype development.

Private Sector Driven Research- Private sector-driven research and innovation at commercial scale with a financing pool of ₹1 lakh crore.

Space Economy- A venture capital fund of ₹1,000 crore is to be set up for the development of space economy.

Priority 9- Next Generation Reforms

Economic Policy Framework- Formulation of an Economic Policy Framework to delineate the overarching approach to economic development and set the scope of the next generation of reforms. Initiation and incentivization of reforms for (1) improving productivity of factors of production, and (2) facilitating markets and sectors to become more efficient.

Rural & Urban land related actions- Assignment of Unique Land Parcel Identification Number or Bhu-Aadhaar for all lands. Digitization of cadastral maps, Establishment of land registry and linkage to the farmers
registry. Land records in urban areas will be digitized with GIS mapping.

NPS Vatsalya- A plan for contribution by parents and guardians for minors. On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account.

Ease of Doing Business- Drafting of Jan Vishwas Bill 2.0 for enhancement of ‘Ease of Doing Business’. States will be incentivized for implementation of their Business Reforms Action Plans and digitalization.

Taxonomy for climate finance- Enhancing the availability of capital for climate adaptation and mitigation related investments.

New Pension Scheme (NPS)- A solution will be evolved to addresses the relevant issues in the New Pension Scheme (NPS) while maintaining fiscal prudence to protect the common citizens.

What are the Tax related Proposals in the Budget 2024-25?

The tax related proposals are explained through the following infographs-

Sector Specific Customs Duty Proposals- Comprehensive review of the rate structure for ease of trade, removal of duty inversion and reduction of disputes.

Rationalisation of capital Gains- Short term gains of financial assets to attract 20% tax rate, Long term gains on all financial an non-financial assets to attract a tax rate of 12.5% and Increase in limit of exemption of capital gains on financial assets to ₹1.25 lakh per year.

Simplifying Personal Tax Regime- Standard Deduction for salaried employees increased from ₹50,000 to ₹75,000. Deduction on family pension for pensioners increased from ₹15,000 to ₹25,000.

What are the Major Allocations in the Budget?

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