The Union Budget 2024-25
The Union Budget 2024-25 was presented by the Union Minister of Finance and Corporate Affairs, Smt. Nirmala Sitharaman, in Parliament on 23 July,2024.
- This was her seventh consecutive budget.
- This budget is significant as it surpasses the record of six consecutive budgets presented by the late Morarji Desai.
CONSTITUTIONAL PROVISIONS WRT BUDGET
The Budget in constitution refers to as Annual Financial Statement. Article 112 deals with
the annual financial statement.
- Budget is a statement covering estimated expenditure and receipts for the Government of India in a financial year.
- Other than that, budget contains estimated revenue and capital receipts, ways to increase revenues, details for receipts and expenditure of the closing financial year and economic and financial policy for the upcoming year.
- Earlier the Government of India had two budgets
- In 2016, Modi government merged the railway budget to the general budget and scrapped the 92 years old practices.
BUDGET ESTIMATES
Total Receipts: ₹32.07 lakh crore
- Total Expenditure: ₹48.21 lakh crore
- Net Tax Receipts: ₹25.83 lakh crore
- Fiscal Deficit: Estimated at 4.9% of GDP
- Borrowings: Gross ₹14.01 lakh crore, Net ₹11.63 lakh crore
OVERVIEW OF THE BUDGET
- Economic Context: Despite global uncertainties, India remains a standout in economic growth. Inflation is stable and moving towards the target of 4%. The budget emphasizes stability and growth amid global challenges.
- Interim Budget Recap: Focus remains on ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth), and ‘Annadata’ (Farmers), as outlined in the interim budget.
- Budget Theme: Emphasizes employment, skilling, MSMEs, and middle-class welfare. Aims to enhance productivity and resilience across various sectors.
BUDGET PRIORITIES
Outlines nine key priorities for fostering opportunities:
- Productivity and resilience in Agriculture
- Employment & Skilling
- Inclusive Human Resource Development and Social Justice
- Manufacturing & Services
- Urban Development
- Energy Security
- Infrastructure
- Innovation, Research & Development
- Next Generation Reforms
- Productivity and resilience in Agriculture
- Introduction of 109 high-yielding and climate-resilient crop varieties.
- Promotion of natural farming for 1 crore farmers.
- Establishment of 10,000 bio-input resource centers.
- Focus on self-sufficiency in pulses and oilseeds.
- Rollout of Digital Public Infrastructure (DPI) in agriculture.
- Employment & Skilling
- Launch of schemes under PM’s package for employment and skilling.
- Creation of 5 schemes for youth employment, with a ₹2 lakh crore outlay.
- Enhancement of skilling through new schemes and revision of Model Skill Loan Scheme.
- Inclusive Human Resource Development and Social Justice
- Expansion of schemes for artisans, self-help groups, SC/ST entrepreneurs, and street vendors.
- Launch of Purvodaya Yojana for development in eastern states and Pradhan Mantri Janjatiya Unnat Gram Abhiyan for tribal communities.
- Manufacturing & Services
- Support for MSMEs through financing and credit enhancement measures.
- Expansion of Mudra loans and establishment of food irradiation units and quality testing labs. (Limit was earlier Rs. 10 Lakh. It has increased to Rs. 20 Lakh)
- Launch of internship schemes in top companies for youth.
- Urban Development
- PM Awas Yojana Urban 2.0 for housing 1 crore urban poor and middle-class families.
- Promotion of water supply, sanitation, and street food hubs under PM SVANidhi.
- Energy Security
- Launch of PM Surya Ghar Muft Bijli Yojana for rooftop solar plants.
- Emphasis on nuclear energy for a sustainable energy mix.
- Infrastructure
- Allocation of ₹11,11,111 crore for capital expenditure over the next year.
- Expansion of PMGSY and support for irrigation and flood management projects.
- Innovation, Research & Development
- Establishment of Anusandhan National Research Fund and venture capital fund for space economy.
- Promotion of private sector-driven research and innovation.
- Next Generation Reforms
- Formulation of Economic Policy Framework for sustainable growth.
- Simplification of FDI and overseas investment regulations.
- Introduction of NPS Vatsalya and reforms in New Pension Scheme.
TAXATION REFORMS & ECONOMIC POLICIES
- Direct Taxation: The Union Budget 2024-25 aims to simplify and rationalize direct taxes, reducing compliance burdens and broadening tax nets.
- It increased the standard deduction for salaried employees opting for the new tax regime from ₹50,000 to ₹75,000.
- Similarly, the deduction on family pension for pensioners was enhanced from ₹15,000 to ₹25,000. Assessments can now be reopened up to 5 years for incomes exceeding ₹50 lakh, enhancing scrutiny on high-income groups.
- Corporate and Personal Income Tax: Over 58% of corporate tax receipts in the previous fiscal came from a simplified tax regime. The majority of individual taxpayers have shifted to the new personal income tax regime, appreciating its streamlined approach without exemptions and deductions.
- Entrepreneurship and Start-ups: The budget abolished angel tax across all classes of investors to boost start-up investments. It introduced a simpler tax regime for foreign shipping companies operating domestic cruises and reduced corporate tax rates for foreign companies from 40% to 35%, aiming to attract more foreign capital.
- Indirect Taxes and GST: The budget proposed comprehensive rationalization of the GST tax structure to improve tax base and support domestic manufacturing. Custom duty rates were also reviewed to ease trade and reduce disputes. The government plans to further digitalize Customs and Income Tax services to enhance efficiency and reduce paperwork.
- Customs Duty Adjustments: To benefit various sectors, the budget fully exempted three cancer treating medicines from customs duties.
- Basic Customs Duty (BCD) on X-ray machines, mobile phones, and components like Printed Circuit Board Assembly (PCBA) and mobile chargers was
- BCD on critical minerals like lithium was fully exempted to boost processing and refining capacities.
- Import duties on gold, silver, platinum, and specific industrial goods were lowered to stimulate demand and production.
- Capital Gains Tax: The budget revised the capital gains tax structure to provide relief to lower and middle-income classes. Short-term gains on financial assets now attract a 20% tax rate, while long-term gains on all assets will be taxed at 12.5%. The exemption limit for capital gains was raised to ₹1.25 lakh per year, benefiting a wider segment of taxpayers.
- Dispute Resolution: A new scheme, Vivad se Vishwas Scheme 2024, was introduced to resolve pending income tax disputes. Monetary limits for appeals related to direct taxes, excise, and service taxes in higher courts were increased, aiming to reduce litigation and provide certainty in tax matters.
NEW TAX SLAB INTRODUCED
CONCLUSION
The Union Budget 2024-25 reflects a proactive approach towards economic reforms and tax rationalization. It aims to simplify tax structures, reduce compliance burdens, and stimulate economic growth across various sectors.
The emphasis on boosting entrepreneurship, promoting start-ups, and enhancing manufacturing through revised GST and Customs Duty regimes underscores the government’s commitment to fostering a competitive and investor-friendly economic environment.
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