INTERIM BUDGET- 2024-25
On Thursday 1st February 2024, Finance Minister Nirmala Sitharaman achieved a historic milestone by unveiling her sixth consecutive budget, a feat equalling that of former Prime Minister Morarji Desai. Just ahead of the Parliamentary elections, Sitharaman highlighted the significant positive transformation witnessed in the Indian economy over the past decade. During the presentation of the interim Budget 2024-25, she articulated the government's commitment to steering India towards developed status by 2047, emphasizing its focus on the well-being of the poor, women, youth, and farmers.
India currently stands as the fastest-growing major economy globally, poised to ascend to the position of the world's third-largest economy with a projected $5 trillion GDP in the coming years. The Budget 2024 Vote On Account, put forth by FM Nirmala Sitharaman, is anticipated to chart a course towards realizing this ambitious economic milestone.
Major Highlights of the Interim Budget 2024-25
Welfare
In the span of these 10 years, guided by the principle of 'Sabka Saath,' the Government has empowered 25 Crore individuals to break free from multi-dimensional poverty. The implementation of the 'Direct Benefit Transfer' mechanism, channeling 34 Lakh Crore through PM-Jan Dhan accounts, has resulted in a substantial Government savings of 2.7 Lakh Crore.
The PM-SVANidhi initiative has extended credit assistance to 78 Lakh street vendors, with 2.3 Lakh among them benefiting for the third time. The PM-JANMAN Yojana reaches out to particularly vulnerable tribal groups, previously untouched by developmental efforts. Furthermore, the PM-Vishwakarma Yojana offers comprehensive support to artisans and craftspeople across 18 trades.
Annually, through the PM-KISAN SAMMAN Yojana, 11.8 Crore farmers, including marginal and small farmers, receive direct financial assistance. Additionally, 4 Crore farmers benefit from crop insurance under the PM Fasal Bima Yojana. The Electronic National Agriculture Market, integrating 1361 mandis, caters to 1.8 Crore farmers, facilitating trade with a volume of INR 3 Lakh Crore. These initiatives collectively signify a significant stride towards inclusive development and empowerment.
Youth Empowerment
The National Education Policy 2020 has initiated transformative reforms, with the PM Schools for Rising India (PM SHRI) emerging as instrumental in providing quality education and fostering the development of well-rounded individuals.
Under the Skill India Mission, 1.4 Crore youth have undergone training, with 54 Lakh individuals benefiting from upskilling and reskilling initiatives, and the establishment of 3000 new Industrial Training Institutes (ITIs).
The commitment to higher education is evident through the establishment of numerous institutions, including 7 Indian Institutes of Technology (IITs), 16 Indian Institutes of Information Technology (IIITs), 7 Indian Institutes of Management (IIMs), 15 All India Institutes of Medical Sciences (AIIMS), and 390 universities.
In support of entrepreneurial endeavors, the PM Mudra Yojana has sanctioned 43 Crore loans, amounting to 22.5 Lakh Crore, to fuel the aspirations of young entrepreneurs. Additionally, initiatives such as Fund of Funds, Start-Up India, and Start-Up Credit Guarantee schemes play a pivotal role in providing assistance to the youth in their entrepreneurial pursuits. These comprehensive efforts signify a commitment to empowering the youth and fostering a dynamic and skilled workforce for the nation.
Empowering Women
A notable achievement in empowering women entrepreneurs is the disbursement of Thirty Crore Mudra Yojana loans specifically tailored for women. Over the past decade, there has been a commendable twenty-eight per cent increase in female enrollment in higher education. Furthermore, in Science, Technology, Engineering, and Mathematics (STEM) courses, girls and women now constitute forty-three per cent of the total enrollment, positioning India among the global leaders in fostering gender inclusivity in STEM education. These developments underscore the commitment to enhancing opportunities for women in entrepreneurship and education, contributing to a more equitable and empowered society.
Geo-Politics
The recently revealed India-Middle East-Europe Economic Corridor is poised to be a strategic and economic game-changer, not only for India but also for the other nations involved. This corridor signifies a significant step towards fostering stronger economic ties and regional cooperation between India, the Middle East, and Europe. The project is expected to enhance connectivity, trade, and investment opportunities, thereby contributing to economic growth and development in the participating regions. The establishment of such a corridor reflects a forward-looking approach to regional collaboration, emphasizing the potential for mutually beneficial partnerships and a more integrated global economy.
Mission and Vision for Viksit Bharat
The vision for 'Viksit Bharat' is one of a "Prosperous Bharat in harmony with nature, with modern infrastructure, and providing opportunities for all citizens and all regions to reach their potential." This comprehensive vision underscores the commitment to fostering prosperity while maintaining ecological balance, ensuring inclusive development with modern infrastructure, and offering opportunities that empower citizens across all regions.
In the upcoming full budget presentation in July, the Government will unveil a detailed roadmap outlining the strategies and initiatives that will drive the realization of this vision for 'Viksit Bharat.' This roadmap is expected to provide a comprehensive plan for achieving economic growth, sustainable development, and equitable opportunities that align with the overarching vision for a flourishing and harmonious India.
A significant provision of INR 75,000 Crore is proposed for this year, structured as a fifty-year interest-free loan. This financial support is intended to bolster milestone-linked reforms undertaken by State Governments. The provision acknowledges the importance of empowering states in implementing crucial reforms and reflects the commitment to providing substantial financial assistance to facilitate and incentivize transformative changes at the state level.
Amrit Kaal Startegy
The Government is committed to adopting economic policies that not only foster and sustain growth but also facilitate inclusive and sustainable development. The overarching goal is to improve productivity, create opportunities for all citizens, enhance their capabilities, and generate resources for investments that fulfill aspirations. Guided by the principle of 'Reform, Perform, and Transform,' the government aims to undertake next-generation reforms and build consensus with states and stakeholders for effective implementation.
In particular, the focus is on supporting Micro, Small, and Medium Enterprises (MSMEs) by ensuring timely and adequate finances, providing relevant technologies, and offering appropriate training. The regulatory environment will be oriented to facilitate the growth of MSMEs, forming a crucial element of the policy mix.
Additionally, the government is committed to sustaining high and resource-efficient economic growth, with a particular emphasis on energy security concerning availability, accessibility, and affordability. To meet investment needs, the government will prepare the financial sector in terms of size, capacity, skills, and regulatory framework. This multifaceted approach reflects the government's dedication to comprehensive economic development, innovation, and effective governance.
Pradhan Mantri Gramin Awas Yojna
India is on the verge of achieving the target of constructing three crore houses. In the next five years, an additional two crore houses will be initiated to address the growing demand resulting from an increase in the number of families. This commitment to housing development underscores the government's dedication to ensuring adequate and quality housing for its citizens, aligning with the broader goal of inclusive and sustainable urbanization. The ambitious plan reflects a proactive approach to meeting the evolving needs of the population and advancing towards the goal of providing housing for all.
Muft Bijli and Rooftop Solarization
The initiative of rooftop solarization aims to empower one crore households, allowing them to receive up to 300 units of free electricity monthly. This effort is anticipated to yield several benefits:
1. Financial Savings: Households stand to save between fifteen to eighteen thousand rupees annually, deriving value from the provision of free solar electricity and the potential to sell surplus energy to distribution companies.
2. Electric Vehicle Charging: The rooftop solarization will facilitate the charging of electric vehicles, contributing to the promotion of sustainable and clean energy for transportation.
3. Entrepreneurship Opportunities: The initiative is expected to create entrepreneurial avenues for a substantial number of vendors engaged in the supply and installation of solar infrastructure.
4. Employment Opportunities: The youth with technical skills in manufacturing, installation, and maintenance of solar systems will find employment opportunities, fostering skill development and contributing to job creation in these sectors.
Overall, this comprehensive approach to rooftop solarization not only addresses energy needs but also brings about economic and employment opportunities, aligning with broader sustainability and economic development goals.
Middle-Class Housing
The government is set to introduce a scheme aimed at assisting deserving sections of the middle class who reside in rented houses, slums, chawls, and unauthorized colonies to purchase or construct their own houses. This initiative underscores the commitment to providing affordable housing solutions and empowering individuals in economically challenged living conditions to achieve homeownership. By extending support to those living in diverse housing situations, the scheme aims to enhance accessibility and affordability, fostering a sense of stability and upward mobility within the middle-class demographic.
Medical
The government is planning to establish additional medical colleges by leveraging the existing hospital infrastructure across various departments. To oversee this initiative, a dedicated committee will be formed to examine relevant issues and provide recommendations, ensuring efficient utilization of resources.
In a proactive move towards preventive healthcare, the government will encourage the vaccination of girls aged 9 to 14 years to prevent cervical cancer. This reflects a commitment to promoting women's health through immunization.
To enhance maternal and child care, various schemes will be integrated into a comprehensive program for better coordination and implementation synergy. The modernization of anganwadi centers under "Saksham Anganwadi and Poshan 2.0" will be expedited, focusing on improving nutrition delivery and early childhood care and development.
The introduction of the U-WIN platform for managing immunization, coupled with intensified efforts from Mission Indradhanush, will be rapidly implemented nationwide to enhance vaccination coverage and disease prevention.
Furthermore, the government aims to extend healthcare coverage under the Ayushman Bharat scheme to include all ASHA workers, Anganwadi Workers, and Helpers, recognizing their crucial role in public health and well-being. This holistic approach to healthcare signifies a commitment to comprehensive health coverage and preventive measures across various segments of the population.
Agriculture and Food Processing
The government is intensifying efforts to add value to the agricultural sector and boost farmers' income. The Pradhan Mantri Kisan Sampada Yojana has proven beneficial, reaching 38 Lakh farmers and generating employment for 10 Lakh individuals. Additionally, the Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has provided support to 2.4 Lakh Self-Help Groups (SHGs) and sixty thousand individuals through credit linkages.
To achieve self-reliance ('Atmanirbharta') in oilseeds like mustard, groundnut, sesame, soybean, and sunflower, a comprehensive strategy will be developed. This includes research for high-yielding varieties, widespread adoption of modern farming techniques, establishing market linkages, implementing procurement measures, focusing on value addition, and providing crop insurance.
In the fisheries sector, the implementation of the Pradhan Mantri Matsya Sampada Yojana (PMMSY) will be accelerated, aiming to enhance aquaculture productivity from the current 3 to 5 Tonnes per hectare. The goal is to double exports to INR 1 Lakh Crore and generate 55 Lakh employment opportunities in the near future. Additionally, five integrated aquaparks will be established, contributing to the overall development of the fisheries sector. These initiatives collectively demonstrate a commitment to holistic growth in the agricultural and fisheries sectors, emphasizing productivity, employment generation, and income enhancement for farmers and stakeholders.
Infrastructure
The allocation for the upcoming year is set to increase by 11.1%, reaching a total of eleven lakh, eleven thousand, one hundred and eleven crore rupees (INR 11,11,111 Cr). This amount represents 3.4% of the Gross Domestic Product (GDP). The significant rise in the budgetary outlay reflects a commitment to allocate substantial resources to various sectors, projects, and initiatives, indicating a focus on economic development and addressing the needs of the nation.
Railways
The government is set to implement three major economic railway corridor programs, which include:
1. Energy, Mineral, and Cement Corridors: These corridors aim to enhance the transportation infrastructure for energy resources, minerals, and cement, facilitating efficient movement and boosting industrial connectivity.
2. Port Connectivity Corridors: Focused on improving connectivity to ports, these corridors intend to streamline the transportation of goods to and from ports, enhancing trade and logistics efficiency.
3. High-Traffic Density Corridors: These corridors are designed to address areas with high traffic density, ensuring smoother and more efficient rail transportation in regions with significant demand.
In addition, the expansion of Metro Rail and NaMo Bharat initiatives is recognized as catalysts for essential urban transformation. The government plans to support the expansion of these systems in large cities, emphasizing transit-oriented development to create sustainable and well-connected urban areas. This comprehensive approach to rail infrastructure underscores the commitment to economic development, efficient transportation, and urban transformation across the nation.
Investments
The period from 2014 to 2023 has been deemed a golden era for Foreign Direct Investment (FDI) in India, with an impressive inflow of $596 billion. This figure is twice the FDI inflow recorded during the preceding decade from 2005 to 2014. In an effort to encourage sustained foreign investment, the government is actively engaged in negotiating bilateral investment treaties with foreign partners, guided by the principle of 'First Develop India.' This approach reflects a commitment to fostering economic growth, creating a favorable investment climate, and strengthening partnerships with global investors to propel India's development and prosperity.
TAX
In the latest announcement, there are no proposed changes in the tax structure for both direct and indirect taxes, including import duties. Additionally, under the new tax regime, taxpayers with an income of up to ₹7 lakh will not have any tax liability.
Furthermore, there is a proposal to withdraw outstanding direct tax demands up to ₹25,000 related to years up to 2009-10 and up to ₹10,000 for the period from 2010 to 2015. This move aims to address and resolve pending tax issues, providing relief to taxpayers with outstanding demands from previous years.
