Synopsis of Union Budget 2024-25

Context

The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, marks a significant step towards achieving the vision of a “Viksit Bharat” (Developed India) by 2047. This budget emphasises growth across various sectors, focusing on employment, infrastructure, and social welfare. Below are the key highlights and priorities outlined in the budget.

Budget Estimates for 2024-25

The budget estimates for the fiscal year 2024-25 reflect a commitment to enhancing productivity, resilience, and inclusivity across various sectors. The government has introduced a package of five schemes aimed at employment and skill development, which are crucial for fostering economic growth and reducing unemployment.

Nine Budget Priorities

The budget outlines nine key priorities that align with the government’s long-term vision:

1. Productivity and Resilience in Agriculture
   The government aims to transform agricultural practices through research, the release of new crop varieties, and the promotion of natural farming. This initiative is expected to enhance food security and improve farmers’ incomes.
2. Employment and Skilling
   A focus on skill development is crucial to equip the workforce with necessary skills. The government plans to implement programs that will enhance employability and create job opportunities.
3. Inclusive Human Resource Development and Social Justice
   Initiatives such as the Pradhan Mantri Janjatiya Unnat Gram Abhiyan and support for women-led development are included to ensure that marginalised communities benefit from economic growth.
4. Manufacturing and Services
   The budget proposes a Credit Guarantee Scheme for MSMEs to support small and medium enterprises during challenging times. This includes provisions for Mudra loans and enhanced onboarding for the Trade Receivables Discounting System (TReDS).
5. Urban Development
   Urban housing and transit-oriented development are prioritised to improve living conditions in cities. The government aims to enhance infrastructure to support urbanisation.
6. Energy Security
   The focus on energy transition includes policies for pumped storage, research on small modular nuclear reactors, and the development of advanced thermal power plants, ensuring a sustainable energy future.
7. Infrastructure Development
   Significant investments in infrastructure by both the central and state governments are planned, including improvements in road connectivity, irrigation, and flood mitigation.
8. Innovation, Research, and Development
   The budget emphasises the Space Economy and aims to foster innovation and research to keep India at the forefront of technological advancements.
9. Next Generation Reforms
   The government plans to implement reforms related to land use, labor services, and social security benefits, ensuring a more efficient and equitable system.

Taxation Reforms

Indirect Taxes: 

The budget includes various proposals for indirect taxes, focusing on sectors such as:

• Medicines and Medical Equipment: Adjustments to customs duties to make healthcare more affordable.
• Electronics and Telecommunications: Encouraging local manufacturing through reduced tariffs.
• Solar Energy: Incentives to promote renewable energy sources.

Direct Taxes

The budget proposes simplifications in the taxation process, particularly for charities and capital gains. Key changes in personal income tax under the new tax regime include:

• Income up to ₹3 lakh: Nil
• Income from ₹3 to ₹7 lakh: 5%
• Income from ₹7 to ₹10 lakh: 10%
• Income from ₹10 to ₹12 lakh: 15%
• Income from ₹12 to ₹15 lakh: 20%
• Income above ₹15 lakh: 30%

These changes aim to broaden the tax base while providing relief to the middle class.

Sector-Specific Allocations

The budget allocates significant resources to various sectors, including:

• Defence: An allocation of ₹6,21,940.85 crore, representing 12.9% of the total budget, to strengthen national security and support domestic manufacturing.
• Agriculture: Increased funding for agricultural research and development to enhance productivity and sustainability.
• Social Welfare: Focused investments in programs aimed at uplifting marginalised communities and promoting social justice.

Reactions and Implications

The Union Budget 2024-25 has elicited mixed reactions from various stakeholders. While the government emphasizes its focus on empowering every section of society, opposition parties have criticized it for prioritizing corporate interests over the welfare of the common people. Key leaders have expressed concerns that the budget may not adequately address the needs of the underprivileged and may instead serve political interests.

Conclusion

The Union Budget 2024-25 represents a comprehensive approach to addressing the challenges faced by the Indian economy. By prioritizing key sectors such as agriculture, employment, and infrastructure, the government aims to foster sustainable growth and development. As the country moves towards its goal of becoming a developed nation by 2047, the successful implementation of these budgetary measures will be crucial in ensuring that all citizens benefit from economic progress.