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  • 26/07/2024

Union Budget 2024

Nirmala Sitharaman, Hon’ble Finance Minister presented the first budget of the current government. The budget, particularly focuses on employment, skilling, MSMEs, and the middle class and for all-around prosperity. The budget also details nine priorities for generating ample opportunities for all and suggests specific actions and reforms required to realise the goal of Viksit Bharat.


This budget emphasizes sustainable growth, social welfare, and digital infrastructure. Key highlights include increased allocations for healthcare and education, aiming to bolster the nation's human capital. A notable focus on green energy initiatives reflects India's commitment to environmental sustainability. Additionally, the budget introduces incentives for start-ups and MSMEs, fostering innovation and entrepreneurship. Tax reforms and measures to enhance ease of doing business further underline the government's intent to create a more conducive economic environment. Overall, the Union Budget 2024 is a strategic effort to balance growth with inclusivity and sustainability, setting a forward-looking agenda for India's development.

 

Budget Theme:

  • Focus on employment, skilling, MSMEs, and the middle class.
  • Announcement of Prime Minister’s package of 5 schemes and initiatives to facilitate employment. Skilling and other opportunities for 4.1 Cr youth over a 5-year period with a central outlay of INR 2 Lakh Cr.
  • Provision of INR 1.48 Lakh Cr for education, employment and skilling.

 

Budget Priorities:

  • In line with the Viksit Bharat strategy set out in the interim budget, the budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.
  • Productivity and resilience in Agriculture
  • Employment & Skilling
  • Inclusive Human Resource Development and Social Justice
  • Manufacturing & Services
  • Urban Development
  • Energy Security
  • Infrastructure
  • Innovation, Research & Development and
  • Next Generation Reforms

Subsequent budgets will build on these, and add more priorities and actions.

                               

Priority 1: Productivity and Resilience in Agriculture

 

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.

 

Digital Public Infrastructure for Agriculture

  • The government, in partnership with the states, 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 Cr 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.

 

Priority 2: Employment & Skilling

Skilling programme 

  • Through a new centrally sponsored scheme for skilling in collaboration with state governments and Industry:
  • 20 Lakh youth will be skilled over a 5-year period
  • 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with an outcome orientation
  • Course content and design will be aligned with the industry demand, and new courses will be introduced for emerging needs.

Education Loans

  • For helping youth not covered under any benefit under government schemes and policies, financial support for loans up to INR 10 Lakh for higher education in domestic institutions will be provided.

 

Priority 3: Inclusive Human Resource Development and Social Justice

 

Purvodaya:

  • A plan for the all-round development of the eastern region, including  Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh, will be formulated. The plan will cover the development of human resources, infrastructure, and the generation of economic opportunities.
  • On the Amritsar Kolkata Industrial Corridor, which will catalyse the industrial development of the eastern region, an industrial node at Gaya will be developed. 
  • In Bihar, development of road connectivity and power projects will be supported and new airports, medical colleges and sports infrastructure will be constructed.  

    Women-led development
  • For promoting women-led development, the budget carries an allocation of more than INR 3 Lakh Cr for schemes benefitting women and girls. 

 

Priority 4: Manufacturing & Services


Credit Guarantee Scheme for MSMEs in the Manufacturing Sector

  • For facilitating term loans to MSMEs for the purchase of machinery and equipment without collateral or third-party guarantee, a credit guarantee scheme will be introduced. The scheme will operate on the pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, a guarantee covering up to INR 100 Cr, while the loan amount may be larger. 

 

Mudra Loans

  • The limit of Mudra loans will be enhanced to INR 20 Lakh for those entrepreneurs who have availed and successfully repaid previous loans under the Tarun category.
     

E-Commerce Export Hubs

  • To enable MSMEs and traditional artisans to sell their products in international markets, E-Commerce Export Hubs will be set up in PPP mode. These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export-related services under one roof.


Measures for promotion of Manufacturing & Services 

Industrial Parks:

  • Twelve industrial parks under the National Industrial Corridor Development Programme are to 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.

 

Shipping Industry:

  • Ownership, leasing and flagging reforms will be implemented to improve the share of the Indian shipping industry and generate more employment.

 

Digital Public Infrastructure Applications

  • Development of 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.

 

Priority 5: Urban Development
 

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, the housing needs of 1 Cr urban poor and middle-class families will be addressed with an investment of INR 10 Lakh Cr. This will include the central assistance of INR 2.2 Lakh Cr in the next 5 years.
  • Enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place.

 

Water Supply and Sanitation 

  • In partnership with the State Governments and Multilateral Development Banks, water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects will be promoted. These projects will also envisage the use of treated water for irrigation and filling up of tanks in nearby areas.

 

Priority 6: Energy Security:


PM Surya Ghar Muft Bijli Yojana

  • PM Surya Ghar Muft Bijli Yojana has generated remarkable response with more than 1.28 Cr registrations and 14 Lakh applications, and the government will further encourage it. 

Advanced Ultra Super Critical Thermal Power Plants

  • The development of indigenous technology for Advanced Ultra Super Critical (AUSC) thermal power plants with much higher efficiency has been completed. A joint venture between NTPC and BHEL will set up a full-scale 800 MW commercial plant using AUSC technology. The government will provide the required fiscal support. Moving forward, development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy.

 

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. Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase.

 

Priority 7: Infrastructure
 

Infrastructure investment by Central Government

  • Strong fiscal support for infrastructure to continue over the next 5 years, in conjunction with imperatives of other priorities and fiscal consolidation. This year, INR 11,11,111 Cr has been provisioned for capital expenditure. This would be 3.4% of our GDP.

 

Infrastructure investment by state governments

  • Encouragement to states to provide support of similar scale for infrastructure, subject to their development priorities. A provision of 1.5 Lakh Cr for long-term interest-free loans has been made to support the states in their 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.

 

Tourism

    • Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported to transform them into world-class pilgrim and tourist destinations.
    • Comprehensive development of Rajgir. 
    • The development  of Nalanda as a tourist centre besides reviving Nalanda University.

 

Priority 8: Innovation, Research & Development
 

  • Anusandhan National Research Fund for basic research and prototype development to be operationalised. Further, a mechanism to be established for spurring private sector-driven research and innovation at commercial scale with a financing pool of INR 1 Lakh Cr.

 

Space Economy

  • With government's continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of INR 1,000 Cr will be set up. 

 

Priority 9: Next Generation Reforms

 

Economic Policy Framework

  • For promoting competitive federalism and incentivizing states for faster implementation of reforms, a significant part of the 50-year interest-free loan to be earmarked. Working with the states, following reforms will be initiated: 

 

  1. Land-related reforms by state governments
      • Rural land-related actions will include: Assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, Digitization of cadastral maps, Survey of map sub-divisions as per current ownership, Establishment of land registry, and Linking to the  farmers registry. These actions will also facilitate credit flow and other agricultural services.
      • Land records in urban areas will be digitized with GIS mapping. An IT-based system for property record administration, updating, and tax administration will be established. These will also facilitate the improvement of the financial position of local urban bodies.

 

 2. Reforms

      • Shram Suvidha and Samadhan portals will be revamped to enhance  ease of compliance for industry and trade.

 

3. Taxonomy for climate finance

      • A taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation to be developed. This will support achievement of the country’s climate commitments and green transition. 


 

4. Variable Capital Company structure

      • Governemnt will seek the required legislative approval for providing an efficient and flexible mode for financing leasing of aircrafts and ships, and pooled funds of private equity through a ‘variable company structure’.
         

5. Foreign Direct Investment and Overseas Investment

      • The rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to facilitate foreign direct investments, nudge prioritization, and  promote opportunities for using Indian Rupee as a currency for overseas investments. ​​​​​​
         

 6. Use of Technology 

      • Adoption of technology towards digitalization of the economy to be enhanced.
         

7. Ease of Doing Business

      • For enhancing ‘Ease of Doing Business’, the government is already working on the Jan Vishwas Bill 2.0. Further, states will be incentivized for implementation of their Business Reforms Action Plans and digitalization.
         

8. Data and Statistics

      • For improving data governance, collection, processing and management of data and statistics, different sectoral data bases, including those established under the Digital India mission, will be utilized with active use of technology tools.

 

Taxation

 

Revised tax rate under New Tax Regime as follows:

 

  • ₹0-3 lakh  - nil tax
      
  • ₹3-7  lakh  - 5%

 
  • ₹ 7-10 lakh – 10%
  • ₹10-12 lakh – 15%
  • ₹12-15 lakh – 20%
  • Above ₹15 lakh – 30%

 

Conclusion:

In conclusion, the Union Budget 2024 sets a comprehensive and forward-looking agenda for India's economic and social development. By prioritizing sustainable growth, healthcare, education, and green energy, the budget aims to address both immediate needs and long-term goals. The focus on digital infrastructure and support for start-ups and MSMEs highlights the government's commitment to fostering innovation and entrepreneurship. With tax reforms and measures to enhance the ease of doing business, the budget endeavors to create a more robust and dynamic economic environment. Ultimately, the Union Budget 2024 strives to balance economic expansion with social welfare and environmental sustainability, paving the way for a prosperous and resilient future for India.

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