Budget 2024: Finance Minister Nirmala Sitharaman unveiled Modi 3.0's first Union Budget on Tuesday, July 23, making history by presenting her seventh consecutive budget. The budget's key focus areas on simplifying the income tax regime, macroeconomic stability, and fiscal support for states. The finance minister said the government would also push reforms across factors of production, including land and labour, while presenting the budget in the Lok Sabha.
"In this budget, we particularly focus on employment, skilling, small businesses, and the middle class," she said, adding that subsequent budgets would build on these focus areas. Despite the new spending, India cut its fiscal deficit target to 4.9 per cent of gross domestic product (GDP) in 2024-25, from 5.1 per cent in February's interim budget, helped by a large dividend surplus from the central bank.
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The finance minister also listed productivity and resilience in agriculture, employment and skilling, inclusive human resource development and social justice, manufacturing and services, urban development, energy security, infrastructure, innovation, research and development, and next-generation reforms as nine priority areas for the government.
Sitharaman highlighted the Modi government's nine crucial priorities for transforming India into a developed country by 2047. The nine priorities for generating ample opportunities for Indians included:
-Productivity and resilience in agriculture
-Employment and skilling
-Inclusive human resource development
-Social justice
-Urban development
-Energy security
-Infrastructure
-Innovation, research and development
-Next-generation reforms.
In her budget speech, Sitharaman introduced an increased standard deduction and revised tax rates for salaried individuals under the new tax regime. Sitharaman announced a significant set of income-tax reforms for the fiscal year 2024-25, aimed at simplifying tax laws, promoting compliance, and fostering economic growth.
The government has proposed raising the capital gains exemption limit on certain financial assets to ₹1.25 lakh per year for the middle and upper middle class. The finance minister also announced that those opting for the new tax regime would increase the standard deduction for salaried employees from ₹50,000 to ₹75,000.
The new income tax slabs announced in the Budget 2024 for the new regime are as follows:
Up to ₹3 lakh: 0 per cent
₹3 lakh to ₹7 lakh: 5 per cent
₹7 lakh to ₹10 lakh: 10 per cent
₹10 to ₹12 lakh: 15 per cent
₹12 to ₹15 lakh: 20 per cent
Above ₹15 lakh: 30 per cent
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Fiscal Deficit: Budget 2024 proposed lowering the budget gap to 4.9 per cent of GDP for FY25, down from the 5.1 per cent forecast in the Interim Budget. The government aims to reach 4.5 per cent by the end of next year.
Capex Target: The capex outlay for infrastructure is seen at ₹11.1 lakh crore, unchanged from the interim budget's capex target pegged in February.
Gross market borrowing: The finance minister proposed lowering the gross market borrowing target to ₹14.01 lakh crore from ₹14.13 lakh crore, announced during the February interim budget.
Housing boost: Budget 2024 proposes allocating ₹10 lakh crore to provide one crore houses to the urban poor and middle class. A rental housing scheme has been announced for the working class.
Boost for youth: Budget 2024 proposed to incentivise 30 lakh youth to enter the job market by providing a one-month provident fund (PF) contribution. Sitharaman, in her budget speech, proposed creating employment for about 4.1 crore youth over the next five years. Towards this, the finance minister has allocated ₹2 lakh crore.
Similarly, to skill the citizens to generate job opportunities, she proposed ₹1.48 crore. 20 lakh youth will be skilled over a five-year period. A total of 1,000 industrial training institutes will be upgraded.
