The Interim Union Budget for the financial year 2024-25 was unveiled on Feb 1, 24 by Finance Minister Nirmala Sitharaman. This year's budget marked the sixth consecutive budget under Sitharaman's stewardship and the last of the second term of the Narendra Modi-led government.
The budget emphasises key sectors such as infrastructure, tourism, logistics, and innovation in research to fuel sustained economic growth. Here are some highlights of the Union Budget 2024 you must know:
1. Taxation
No changes were made in the tax regime this year. However, Finance Minister Sitharaman highlighted that tax collections have more than doubled in the last decade, and the average processing time for tax returns has been reduced to 10 days.
2. Economic indicators
The Fiscal Deficit target for FY25 stands at 5.1% of the Gross Domestic Product (GDP), surpassing expectations.
3. Lakhpati Didi Scheme
Finance Minister Sitharaman acknowledged the transformative impact of the Lakhpati Didi Scheme, which is aimed at empowering rural women. The target for the scheme has been enhanced from 2 crore to 3 crore women, with a financial injection of ₹ 1 lakh per household for one crore beneficiaries. This initiative is expected to uplift the economic status of rural women significantly.
4. Research and innovation
Sitharaman announced that a corpus of ₹ 1 lakh crore will be established with a fifty-year interest-free loan to encourage private sector research and innovation. This corpus aims to provide long-term financing or refinancing with low or nil interest rates.
5. Ayushman Bharat coverage
The Ayushman Bharat coverage will be extended to all Anganwadi and Asha workers, with the aim of consolidating all maternal and child healthcare schemes under one comprehensive scheme. The government hopes to enhance the overall healthcare infrastructure and accessibility with the move.
6. Housing
Despite challenges due to COVID-19, the implementation of Prime Minister Awas Yojana (Grameen) has effectively continued in the past couple of years. The government now plans to take up two crore more houses in the next five years.
7. Renewable energy and Electric Vehicles (EVs)
To move the country towards 'net zero' by 2070, the budget has included measures, such as viability gap funding for offshore wind energy, coal gasification and liquefaction capacity, and phased mandatory blending of Compressed Biogas (CBG). The government also plans to expand the EV ecosystem by supporting manufacturing and charging infrastructure in the country.
Finance Minister Sitharaman also announced a plan to enable 10 million households through roof-top solarisation. The initiative aims to provide these households with up to 300 units of free electricity every month. The potential impact of this scheme is substantial, as it is expected to result in significant annual savings ranging from ₹ 15,000 to ₹ 18,000 for households. Furthermore, households have the opportunity to sell surplus solar electricity back to distribution companies.
8. Tourism development
Indian states will be encouraged to comprehensively develop iconic tourist centres and brands and market them globally. A rating system based on the quality of facilities and services will be established, and long-term interest-free loans will be provided to states for financing these developments. This move aims to promote employment generation through tourism.
9. Infrastructure boost
This amounts to 3.4% of the GDP and is expected to have a considerable impact on economic growth and employment creation.
10. Improved rail infrastructure
Rail infrastructure is set to see significant improvements, with the conversion of 40,000 normal rail bogies to Vande Bharat. The Finance Minister also announced the expansion of key rail projects and the announcement of three major railway corridors, including the Port Connectivity Corridor, the Energy, Mineral, and Cement Corridor, and the High Traffic Density Corridor.
11. Skill development
The Skill India Mission will train 1.4 crore young individuals and upskill and reskill 54 lakh youth. It also aims to establish 3,000 new Industrial Training Institutes (ITIs).
To sum it up
While there have been no announcements on taxation that may be disappointing for the salaried class, the Union Budget 2024 has made some key announcements. With a focus on laying a strong foundation for sustainable economic growth, addressing key sectors like railways, and fostering innovation and development across various segments of the economy, the budget does present some notable aspects.