New Delhi: Union Finance Minister (FM) Nirmala Sitharaman unveiled her seventh consecutive budget on Tuesday. She laid out a ‘Viksit Bharat’ plan by 2047, emphasising manufacturing, employment, skill development and agriculture.
The Union Budget appears to be strong for jobs, has challenges for investment, and is high on the political agenda. The key highlights:
Over Rs 3 lakh crore for schemes benefiting women and girls
On Tuesday, the government pledged more than Rs 3 lakh crore for programmes benefiting women and girls, focusing on women-led development.
“The growth is indicative of India’s determination to shift from women-led development to women’s development, as stated in the Economic Survey 2023–2024,” the Finance Minister said.
Further, the women’s welfare and empowerment allocation jumped 218.8 percent from FY14 to FY25.
“Increasing the participation of women in the workforce will be a priority. This will be facilitated by setting up hostels, creating partnerships to organise women-specific skilling programmes, and promoting market access for women Self Help Group enterprises. We need to focus on the poor, women, youth and farmers,” said FM Nirmala Sitharaman while presenting her seventh Budget.
Angel tax abolished on startups to boost local innovation
On Tuesday, the government announced that it would abolish the angel tax to boost local talent and innovation further. This would be a major relief for the startup ecosystem.
The industry had sought to rationalise Angel Tax by removing Section 56(2)(viii) to further nurture innovation among startups, saying scrapping this section would “greatly aid in capital formation” for the startup sector.
Under Section 56(2) (viii) of the Income Tax Act, a startup must meet certain conditions to become eligible for angel tax exemption. The industry claims these conditions are cumbersome and prevent startups from attracting more investments.
Raj Ramachandran, Partner, JSA Advocates & Solicitors, said the much-anticipated update in Budget 2024 is the abolition of the angel tax.
“Since introduction, it has created discomfort and confusion for all players alike and is certainly one change that will be a welcome one for all,” he said.
The Finance Ministry said in its latest review of the Indian economy that more than 1.14 lakh startups in India have created over 12 lakh jobs.
Union Budget: Vishnupad, Mahabodhi Temple corridors to boost spiritual tourism in Bihar
The FM proposed supporting the development of temple corridors in Gaya and Bodh Gaya to harness Bihar’s tourism potential. This is expected to give a solid boost to enhancing spiritual tourism in Bihar.
She also said that Rajgir will be comprehensively developed.
Underscoring Bihar’s tourism potential, the Finance Minister said Nalanda would be developed as a tourist centre, and Nalanda University would be revived to its glorious stature.
In her speech, the Finance Minister announced a Rs 26,000 crore bonanza for the state and unveiled the government’s plans to develop Gaya City as an industrial hub.
“Development of an industrial node at Gaya will be a good model for developing ancient learning centres. This model shall showcase ‘Vikas’ with ‘virasat’,” she said while dedicating two mega expressways in Bihar to enhance road connectivity in the state.
Union Budget: Mudra loan limit enhanced to Rs 20 lakh from Rs 10 lakh
While delivering the Union Budget 2024-2025 speech in the Lok Sabha, Finance Minister Nirmala Sitharaman said that this extension applies to those who have availed and paid previous Mudra loans.
Pradhan Mantri Mudra Yojana (PMMY) is a government flagship scheme that facilitates micro credit/loans up to Rs 10 lakh to income-generating micro-enterprises engaged in the non-farm sector in manufacturing, trading or service sectors, including activities allied to agriculture such as poultry, dairy, beekeeping etc.
The scheme provides financial assistance extended by member lending institutions to micro and small entities’ income-generating non-corporate, non-farm sector activities.
The budget also provides special attention to MSMEs and manufacturing.
The Finance Minister announced a credit guarantee scheme for MSMEs in the manufacturing sector, facilitating term loans to purchase machinery and a formulated package to finance technology support for MSMEs.
Budget offers income tax sops for 4 crore salaried individuals
The Finance Minister offered a bonanza to four crore salaried individuals and pensioners with the Budget announcements for 2024-25.
On Personal Income Tax Rates, FM Sitharaman announced two announcements for those opting for the new tax regime.
First, the standard deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000.
Similarly, the Finance Minister said the deduction on family pension for pensioners is proposed to be enhanced from Rs Rs 15,000 to Rs 25,000/-. This will provide relief to about four crore salaried individuals and pensioners.
In the new tax regime, the tax rate structure is to be revised as follows:
* 0-3 lakh rupee – Zero
* 3-7 lakh – 5 per cent
* 7-10 lakh – 10 per cent
* 10-12 lakh – 15 per cent
* 12-15 lakh – 20 per cent
*15 lakh and above – 30 per cent
“Salaried employees in the new tax regime will save up to Rs 17,500 in income tax,” the Finance Minister said.
According to data available for the last fiscal year, more than two-thirds have taken advantage of the new personal income tax regime.
FM Sitharaman gifts 2 Expressways to Bihar and allots Rs 15,000 cr for Andhra
The Finance Minister announced landmark projects and fund allocations in Bihar and Andhra Pradesh, the states whose ruling parties are allies with the BJP at the Centre.
The announcement is crucial because both states, after their bifurcation, demand special category status and special packages.
Also, Bihar’s JD(U) and Andhra’s TDP-Janasena are BJP’s ally partners at the Centre.
FM Sitharaman announced two major Expressways for Bihar, namely the Patna-Purnia Expressway and the Buxar-Bhagalpur Expressway.
Moreover, two land bridges over the Ganga River will appear in the Buxar District.
These projects, which cost Rs 26,000 crore in total, will give Bihar’s road infrastructure a major facelift and open new avenues for growth.
FM Sitharaman also announced that new airports, medical colleges and sports infrastructure will be constructed in Bihar.
Addressing Andhra Pradesh’s monetary concerns, she said the government had made concerted efforts to recognise the state’s need for capital, as per the Andhra Pradesh Re-organisation Act.
“We will facilitate special financial support through multi-lateral developmental agencies. A sum of Rs 15,000 crore will be arranged in the current fiscal, with additional outlays in future years,” said the Finance Minister.
FM Sitharaman also said that the government is fully committed to financing the early completion of the Polavaram project, which is Andhra Pradesh’s lifeline. This will facilitate the country’s food security, too.
“Grants for backward regions of north-coastal Andhra Pradesh will also be provided,” FM Sitharaman added.
Centre announces one crore houses for urban poor.
Finance Minister Nirmala Sitharaman proposed allocating Rs 2.2 lakh crore for urban housing and a Rs 10 lakh crore interest subsidy scheme in the flagship Pradhan Mantri Awas Yojana (PMAY) scheme.
This will further impetus the government’s programme to provide affordable housing.
“Housing needs of one crore urban poor and middle-class families to be addressed with an investment of Rs 10 lakh crore, including the Central assistance of Rs 2.2 lakh crore over the next five years,” FM Sitharaman said in her Budget Speech in Parliament.
She also mentioned the first Cabinet decision of Modi’s 3.0 term and said that the construction of three crore additional houses will be facilitated under the PMAY scheme, of which two crore will be in rural areas under PMAY (Grameen).
Pradhan Mantri Awas Yojana (PMAY) is among the most ambitious schemes of the Modi government.
The allotment is a significant expansion of the Pradhan Mantri Awas Yojana-Urban (PMAY-U), which was announced in the latest budget.
Employment, skilling top focus in Budget: FM Sitharaman
The Union Budget focuses on supporting consumption via higher allocation for the rural economy, taxation reforms, infrastructure push, thrust on local manufacturing, job and skill creation, and increased production-linked incentive (PLI) allocation to more labour-intensive sectors.
The Finance Minister announced three schemes in a major push to create employment. “The government will set up three schemes for employment generation. A scheme for first-timers is to provide one month’s wage to all persons newly entering the workforce in all sectors. The first-time employment scheme will benefit 2.1 crore lakh youths,” said the FM.
While presenting the Budget in the Lok Sabha, she said, “People of India have reposed their faith in the government led by PM Modi and re-elected it for a historic third term.”
She said the PM Garib Kalyan Anna Yojana was extended by five years, benefiting more than 80 crore people in the country.
As the Modi government’s focus is the farming community, the Finance Minister said, “New 109 high-yielding, climate-resilient varieties to be released to farmers. One crore farmers will be initiated into natural farming over two years.”
Other highlights are:
10,000 need-based bio-input centres to be established
Large-scale clusters for vegetable production are to be developed closer to consumption centres.
Digital crop survey for Kharif to be taken up in 400 districts in FY25
Rs 1.52 lakh crore will be set aside for agriculture and allied sectors in FY25
— IANS
