The Indian Union Budget for 2024-25, presented by Finance Minister Nirmala Sitharaman on July 23, 2024, emphasizes fiscal consolidation, infrastructure development, and job creation. Here are the key highlights:
Fiscal and Economic Overview
- Fiscal Deficit Target: The budget aims to reduce the fiscal deficit to 5.1% of GDP for FY25, down from 5.8% in FY24, with a further goal of 4.5% by FY26.
- Capital Expenditure: A significant allocation of ₹11.11 lakh crore (approximately 3.4% of GDP) is earmarked for capital expenditure, representing an 11% increase from the previous year.
- Standard Deduction: Increased from ₹50,000 to ₹75,000 for salaried individuals, and the family pension deduction rises from ₹15,000 to ₹25,000.
- Angel Tax: Abolished for all classes of investors, aiming to foster a better environment for startups.
Taxation Changes
Income Tax Slabs: The new tax regime introduces revised slabs:
| Tax Slab | Tax Rate |
| Up to ₹3 lakh | 0 |
| ₹3 lakh – ₹7 lakh | 5% |
| ₹7 lakh – ₹10 lakh | 10% |
| ₹10 lakh – ₹12 lakh | 15% |
| ₹12 lakh – ₹15 lakh | 20% |
| Above ₹15 lakh | 30% |
Social and Economic Initiatives
- Employment Generation: The budget allocates ₹2 lakh crore to create job opportunities for 4.1 crore youth over the next five years, with three new employment-linked incentive schemes introduced.
- Rural Development: ₹2.66 lakh crore is designated for rural development, focusing on infrastructure improvements.
- Healthcare and Education: Significant funding is allocated to schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme (₹86,000 crore) and Ayushman Bharat (₹7,500 crore).
Infrastructure and Development
- Transportation: ₹2.4 lakh crore is allocated to the Railways, with plans for new economic corridors to enhance logistics.
- Tourism and Connectivity: Interest-free loans for states to develop tourism and the launch of 517 new air routes under the Udan Scheme.
Items That Will Be Cheaper
- Mobile Phones and Accessories: Basic customs duty reduced to 15% on mobile phones, chargers, and related accessories.
- Precious Metals: Customs duty on gold and silver has been cut to 6%, and platinum to 6.4%.
- Cancer Medicines: Three major cancer treatment drugs have been exempted from customs duties, making them more affordable.
- X-ray Equipment: Exempted from basic customs duty, reducing costs for medical diagnostics.
- Fish and Aquaculture Products: Customs duty on fish feed and shrimp has been reduced to 5%.
- Critical Minerals: Customs duties on 25 critical minerals have been fully exempted, supporting various industries.
- Solar Panel Manufacturing: Expanded exemptions for capital goods used in manufacturing solar panels.
- Leather Goods: Reduced customs duties to enhance competitiveness in the leather sector.
- Footwear and Textiles: Customs duties have been lowered to support these industries and make products more affordable.
Items That Will Be Costlier
- Telecom Equipment: Basic customs duty on specified telecom equipment has increased from 10% to 15%.
- Plastic Products: Customs duty on non-biodegradable plastic has been raised to 25%, aimed at promoting domestic production.
- Ammonium Nitrate: The customs duty on ammonium nitrate has been increased from 7.5% to 10%.
- Cigarettes and Tobacco Products: Higher taxes will lead to increased prices for cigarettes and other tobacco products.
- Imported Vehicles and Electric Vehicles: Duties on imported vehicles and components for electric vehicles have been raised, making them more expensive.
- Kitchen Electric Chimneys: The customs duty on kitchen electric chimneys has also seen an increase.
- Bicycles: The customs duty on bicycles has been raised, contributing to higher retail prices.
Key Beneficiaries of the Budget
- Youth and Job Seekers: The budget allocates ₹2 lakh crore to generate job opportunities for 4.1 crore youth over the next five years, with three new employment-linked incentive schemes aimed at supporting first-time employees and encouraging job creation in the manufacturing sector.
- Farmers and Agriculture Sector: An allocation of ₹1.52 lakh crore is designated for agriculture and allied sectors, which is expected to enhance productivity and support rural livelihoods.
- Rural Development: With ₹2.66 lakh crore earmarked for rural development, including infrastructure improvements, rural communities stand to benefit significantly from enhanced connectivity and services.
- Affordable Housing: The Pradhan Mantri Awas Yojana (PMAY) will assist one crore urban poor and middle-class families, with a substantial investment of ₹10 lakh crore aimed at making homeownership more accessible through interest subsidies.
- Healthcare Sector: The exemption of customs duties on three life-saving cancer medicines will make these treatments more affordable, benefiting patients in need of critical care.
- Small and Medium Enterprises (SMEs): The focus on ease of doing business and the introduction of incentives for MSMEs will help these businesses thrive and contribute to economic growth.
- Women and Minorities: Initiatives aimed at enhancing women’s workforce participation and skill development programs will empower these groups, promoting inclusivity in economic growth
The 2024-25 budget reflects a strategic vision aimed at fostering economic growth, enhancing social welfare, and preparing for a developed India by 2047, termed “Viksit Bharat”. These changes reflect the government’s strategy to support local manufacturing while increasing costs for certain imported goods and products. Overall, the budget is structured to foster inclusive growth, focusing on employment generation, rural development, healthcare, and support for small businesses, thereby aiming to uplift various segments of the population and stimulate economic progress.