On 23^rd July, Nirmala Sitharaman, Indias Finance Minister, presented the Union Budget 2024-2025 in Parliament. This budget marks her seventh budget in a row under the Narendra Modi-led India Government and the first budget of the BJP-led alliance. 

Union Budget 2024 Key Highlights

The union budget provides an overview of the governments financial strategy for the upcoming fiscal year, encompassing both revenues and expenditures. Below are some key highlights:

Vision for Viksit Bharat

The budget is designed to foster a prosperous and equitable India by 2047, with a key emphasis on boosting economic growth, generating employment opportunities, and enhancing infrastructure. 

Key Proposals

• Tax Reforms: Several changes in income tax structure can be anticipated.

• Infrastructure: Enhanced financial support for infrastructure projects.

• Tribal Communities: Upgraded aid and investment for tribal communities.

Budget Speech Structure

The Finance Ministers speech covers discussions on economic circumstances, policy measures and industry-specific funding distributions. 

It provides understanding of the governments priorities and fiscal management. 

The Annual Union Budget in India is a crucial financial event that details the governments revenue and expenditure for the next fiscal year.   

Below is how the budget speech is presented and the structure of the speech: 

Union Budget Speech presentation

In Lok Shaba (the lower house of the Parliament), the finance minister presents the Union Budget, which is an event held usually in February.

The presentation of the union budget comprises the finance bill, which outlines tax proposals and the appropriation bill, which authorizes government expenditures. 

The budget needs to be approved by the Lok Sabha before it can be effective on April 1, the start of Indias financial year. 

The Structure of the Budget Speech

The budget speech delivered by the finance minister is divided into two primary segments: Part A and Part B 

Part A of the Budget Speech

Part A of the budget speech begins with a thorough examination of past and present economic situations. It also provides a summary of economic expansion, inflation, budget deficits and other important aspects. 

Part B of the Budget Speech

Part B of the budget speech includes the current budget projections, funding distribution and policy declarations. It encompasses different areas like farming, education, healthcare, infrastructure and defense. It also highlights important programs, tax revisions and government priorities. 

What can we expect from Union Budget 2024?

The Union Budget is expected to bring changes to income tax structures, developments in infrastructure, job creation and measures for supporting the farmers. Although tax relief is expected to maintain fiscal discipline, which is important.

Major takeaways of the Union Budget

Education and Employment

PM Package:  

5 schemes with 2 lakh crore allocation from employment and skilling. 

Budget Provision: 

1.48 lakh crore for employment, education and skilling. 

Incentives for First-Time Employees: 

• One-month wage upon joining

• Up to 15,000 in three DBT instalments for eligible employees earning up to 1 lakh/month

• Benefiting 210 lakh youths

Higher Education Support: 

Financial assistance for loans up to 10 lakh. 

Youth Internships: 

• One crore youth to receive internships in 500 companies over five years.

• 5,000 monthly allowance.

• Training costs are to be covered by companies using CSR funds.

Jobs in Manufacturing 

Scheme to incentivize job creation in manufacturing: 

• EPFO contribution benefits for first-time employees and their employers for 4 years.

• Upto 3,000 monthly for two years for employers, aiming to benefit 30 lakh youths and create 50 lakh new jobs across all sectors.

Agriculture

• Crops: 109 new high yielding and climate-resilient varieties of 32 field and horticultural crops.

• National Cooperation Policy for National Development announced

• Digital infrastructure: Introduction of Kisan credit cards in 5 states.

• Shrimp farming promoted

• Focus on large-scale vegetable production

• Self-sufficiency in pulses and oilseeds: Government to strengthen production, storage and marketing

• Natural farming: One crore farmer will transition to natural farming with support for certification and branding, with 10,000 bio-input resource centres to be established.

State Assistance

Bihar: 

• A new 2400 MW power plant in Pirpainti, Bihar

• New airports, medical colleges and sports infrastructure

Andra Pradesh 

• Financial support, including 15,000 crore this fiscal year

• Completion and financing of the Polavaram irrigation project

Odisha 

• Assistance to Odisha for the development of tourism

MSMES gets a push

Mudra Loans: 

Limit enhanced from 10 lakh to 20 lakh for those who have availed and successfully repaid loans previously taken under the Tarun category. 

New Credit Guarantee Scheme: 

A new credit guarantee scheme to enable collateral-free term loans for machinery and equipment with the cover of up to 100 crore. 

Angel and Income Tax 

Abolish Angel Tax: Eliminating angle tax for all investor classes 

Income Tax Act Review 

A comprehensive review of the Income-tax Act, 1961 in six months to make it concise, lucid and reduce disputes and litigation. 

TDS Changes 

• E-commerce rate reduced from 1% to 0.1%.

• Decriminalized delays in payments up to filing due date

• Simplified reassessment for cases over 50 lakh

Capital Gains Tax 

• Short-term gains on certain financial assets taxed at 20%

• Exemption limit raised to 1.25 lakh annually for some assets.

• Taxes on unlisted bonds, debt mutual funds and market-linked debentures.

Additional Tax

• Securities Transaction Tax: Increased to 0.2% for futures and 0.1% for options.

• NPS Contributions: Deduction limit raised from 10% to 14% of salary.

• Standard Deduction: Increased from 50,000 to 75,000

• Family Pension Deduction: increased from 15,000 to 25,000.

Urban and Rural Development

• PM Awas Yojana Urban 2.0

10 lakh crore to address housing needs for one crore poor and middle class, including 2.2 lakh crore of central assistance over five years. 

• Street Markets

Develop 100 weekly haats or steet food hubs in select cities 

• Transit-Oriented Development:

For 14 large cities with a population above 30 lakhs 

• Water Management:

Water supply, sewage treatment and solid waste management projects and services for 100 large cities 

• PM Awas Yojana (Rural Development):

2.66 lakh crore for rural development, including construction of three crore houses. 

Womens Welfare

• Female Workforce Participation

To be increased through hostels and women-specific skilling programs. 

• Funding Increase

218.8% rise in womens welfare and empowerment funding from FY14 to FY25. 

• Stamp Duty Reduction

States are encouraged to lower stamp duties for properties purchased by women. 

• Energy Security

PM Surya Ghar Muft Bijli Yojana offers free electricity up to 300 units per month to 1 crore households by installing rooftop solar plants. The focus is on developing small and modular nuclear reactors. 

Foreign Investments

• Corporate tax rate cut on foreign companies from 40% to 35%

• FDI rules to be simplified further

• Promote use of rupee for overseas investments

Special Announcements

• Phase IV of the Pradhan Mantri Gram Sadak Yojana was announced

• Space Economy

Plan to quintuple the space economy over the next 10 years, supported by a 1,000 crore venture capital fund. 

• Cancer Meds

Exemption of customs duties on three cancer drugs 

• Spirirtual tourism

Developing tourism corridors at Vishnupad and Mahabodhi Temples and supporting Nalanda as a tourist center. 

What Got Costlier after the Union Budget 2024?

• Ammonium nitrate

• Non-Biodegradable plastics

• Specified telecom equipment

• Imported Garden Umbrellas

• Notified goods of value worth more than 10 lakh

What Got Cheaper after the Union Budget 2024?

• Imported Gold, Silver and Platinum

• Mobile phones and chargers

• Ferro Nickel and Blister Cooper

• Shrimp and Fish Feed

• X-Ray Machines

• Seafood

• Some cancer medicines

• Leather goods

• 25 essential minerals for industries such as nuclear energy and space

• Capital goods for solar panel manufacture