BUDGET 2024-2025 NIRMALA SITHARAMAN

India’s Budget 2024: A Comprehensive Review of Key Investments and Allocations

The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, marks a significant milestone in India’s economic planning. This budget, her seventh consecutive presentation, comes amidst global economic uncertainties but showcases the resilience of India’s economy, with inflation moving towards a stable 4% and core inflation at 3.1%. Let’s delve into the major investments and allocations detailed in this transformative budget, reflecting the government’s commitment to holistic development and economic growth.

 Removal of Angel Tax: A Big Boost for Startups

The “angel tax” refers to a tax levied on the capital raised by unlisted companies via the issue of shares, where the share price exceeds the fair market value of the shares. Introduced in 2012, this tax aimed to curb money laundering but had unintended negative consequences on startups.

Key Details of the Angel Tax Removal:
– Budget Announcement: The 2024-25 budget announced the complete removal of the angel tax for startups, eliminating the tax burden on investments made by angel investors.
– Impact on Startups: This change will encourage more investments in startups by reducing the tax liability on funds raised through angel investors, helping startups access the capital they need to grow and scale their operations.
– Ease of Doing Business: The removal simplifies the process of raising funds, making it easier for startups to attract investment without the fear of additional tax scrutiny.

Development Initiatives for Andhra Pradesh

Amaravati Development:
– The Finance Minister announced a substantial financial endowment of ₹15,000 crore for the development of Amaravati, Andhra Pradesh’s nascent capital. This allocation is part of the current fiscal cycle, with assurances of additional funds in subsequent years.

Polavaram Irrigation Project:
– The budget ensures sustained funding to complete the Polavaram project, crucial for Andhra Pradesh’s agricultural sector.

Vizag-Chennai Industrial Corridor:
– A specialized package for the enhancement of the Vizag-Chennai industrial corridor was announced, aiming to boost industrial growth and economic development in the region.

Grants for Underdeveloped Regions:
– Grants will be allocated to underdeveloped regions such as Rayalaseema and coastal Andhra Pradesh, addressing socio-economic challenges and ensuring balanced regional development.

Development Initiatives for Telangana

Hyderabad Pharma City:
– The budget allocates ₹5,000 crore for the development of Hyderabad Pharma City, aimed at making it the largest integrated pharmaceutical manufacturing hub in the world. This initiative will bolster Telangana’s position as a leader in the pharmaceutical industry, driving investment and job creation.

Kakatiya Mega Textile Park:
– ₹2,000 crore has been allocated to expedite the development of the Kakatiya Mega Textile Park in Warangal. This park aims to provide world-class infrastructure to textile manufacturers and attract significant investment, thereby boosting employment and economic growth in the region.

Mission Bhagiratha:
– An allocation of ₹1,500 crore has been made to support the ongoing Mission Bhagiratha, ensuring safe and sustainable drinking water supply to all households in Telangana.

Tribal Development:
– Special grants amounting to ₹800 crore have been earmarked for the development of tribal areas in Telangana, focusing on infrastructure, healthcare, and education to uplift these communities.

Purvodaya Scheme

The Purvodaya scheme, aimed at the holistic advancement of states including Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh, received a significant boost. This comprehensive scheme focuses on socio-economic development through infrastructure investments, job creation, and social welfare programs.

Key Financial Metrics and Allocations

The Union Budget 2024-25 delineates an ambitious financial plan aimed at fostering economic stability and growth.

Receipts and Expenditure:
– The Revised Estimate of total receipts, excluding borrowings, is ₹32.07 lakh crore. The total expenditure is projected at ₹48.21 lakh crore. The government has retained ₹11.11 lakh crore for capital expenditure.

Sources of Revenue:
– Borrowings and Other Liabilities
– Income Tax, GST, and Other Taxes
– Corporation Tax

 

Expenditure Allocations:
– States’ Share of Taxes and Duties: 21% allocated to states’ shares.
– Central Sector Schemes and Other Expenditures: ₹30.07 lakh crore dedicated to central sector schemes.
– Interest Payments: A significant portion of the expenditure.
– Finance Commission Grants and Transfers to States: Supporting state-level initiatives and balanced regional development.

 Core Welfare Schemes Allocation

The budget emphasizes core welfare schemes pivotal for socio-economic development, including:

– Pradhan Mantri Awas Yojana (PMAY): Continued support for affordable housing initiatives.
– Pradhan Mantri Fasal Bima Yojana (PMFBY): Insurance schemes for farmers.
– Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA): Ensuring rural employment.
– Pradhan Mantri Krishi Sinchayee Yojana (PMKSY): Investments in irrigation projects.

Investments in Infrastructure and Urban Development

Substantial investments in infrastructure and urban development are aimed at enhancing connectivity and promoting urbanization:

– Smart Cities Mission: Continued investment in developing smart cities.
– Atal Mission for Rejuvenation and Urban Transformation (AMRUT): Focus on urban infrastructure.
– Bharatmala Pariyojana: Investments in road infrastructure.
– Sagarmala Project: Enhancing port infrastructure.

 Energy Security and Innovation

The budget allocates significant funds for energy security and innovation, critical for sustainable development:

– Renewable Energy Projects: Investments in solar, wind, and other renewable energy sources.
– Research and Development: Funding for innovation and technology development.

 Social Justice and Job Creation

The budget also emphasizes social justice and job creation, ensuring inclusive growth:

– Scheduled Castes Sub Plan (SCSP) and Tribal Sub Plan (TSP): Allocations for the socio-economic development of SCs and STs.
– Skill India Mission: Investments in skill development programs to enhance employability.

 Sectoral Allocations

Agriculture and Food Security:

– Transforming Agriculture Research: ₹1.52 lakh crore for agriculture and allied sectors.
– Natural Farming Initiative: One crore farmers to adopt natural farming practices.
– Pulses and Oilseeds Mission: Achieving self-sufficiency in pulses and oilseeds.
– Digital Public Infrastructure for Agriculture: Expansion of digital crop surveys and farmer-land registries.

Employment and Skilling:

– Prime Minister’s Employment Linked Incentive Schemes: ₹2 lakh crore over 5 years for job creation.
– Participation of Women in the Workforce: Setting up working women hostels and creches.
– Skilling Program: Upgradation of 1,000 Industrial Training Institutes (ITIs).

Inclusive Human Resource Development and Social Justice:

– Purvodaya Initiative: ₹2.66 lakh crore for rural development.
– Women-led Development: More than ₹3 lakh crore for schemes benefiting women and girls.

Energy Security and Green Initiatives:

– PM Surya Ghar Muft Bijli Yojana: Installation of rooftop solar plants.
– Nuclear Energy Development: Development of Bharat Small Modular Reactors.
– Pumped Storage Policy: Promoting electricity storage.

Infrastructure Development:

– Infrastructure Investment: ₹1.11 lakh crore for capital expenditure.
– Pradhan Mantri Gram Sadak Yojana (PMGSY) Phase IV: Providing all-weather connectivity to rural habitations.
– Flood Mitigation and Irrigation Projects: Support for flood control structures and irrigation projects.
– Tourism Development: Comprehensive development of major tourist centers.

 Tax Rates and Reforms

Personal Income Tax Rates (New Tax Regime):
– 0-3 lakh rupees: Nil
– 3-7 lakh rupees: 5%
– 7-10 lakh rupees: 10%
– 10-12 lakh rupees: 15%
– 12-15 lakh rupees: 20%
– Above 15 lakh rupees: 30%

Standard Deduction:

– Increased from ₹50,000 to ₹75,000 for salaried employees.
– Family pension deduction increased from ₹15,000 to ₹25,000.

Corporate Tax Rate for Foreign Companies:

– Reduced from 40% to 35%.

Capital Gains Tax Simplification:

– Short-term gains on certain financial assets taxed at 20%.
– Long-term gains on all assets taxed at 12.5%.
– Exemption limit for capital gains increased to ₹1.25 lakh per year.

Goods and Services Tax (GST):

– Continued simplification and rationalization of the tax structure.

 Conclusion

Union Finance Minister Nirmala Sitharaman’s Budget 2024-25 is a comprehensive financial plan to foster economic growth, social justice, and sustainable development. With significant allocations for key projects and initiatives, the budget reflects the government’s commitment to holistic development and economic resilience. From the substantial endowment for Amaravati to the sustained support for the Polavaram project and the Purvodaya scheme, the budget lays the groundwork for a prosperous and inclusive future.

 FAQs

What are the key highlights of the Union Budget 2024-25?

– Substantial endowment for Amaravati, support for the Polavaram irrigation project, enhancement of the Vizag-Chennai industrial corridor, and significant allocations for core welfare schemes like PMAY and MGNREGA.

How does the budget address regional disparities?

– By allocating grants to underdeveloped regions such as Rayalaseema and coastal Andhra Pradesh and emphasizing the Purvodaya scheme for holistic development.

What are the major sources of revenue in the Union Budget 2024-25?

– Borrowings and other liabilities, income tax, GST, other taxes, and corporation tax.

How much has been allocated for capital expenditure in the Union Budget 2024-25?

– ₹11.11 lakh crore, maintaining the level set in the Interim Budget 2024-24.

What are the significant investments in infrastructure and urban development?

– Smart Cities Mission, AMRUT, Bharatmala Pariyojana, and the Sagarmala Project.

How does the budget promote energy security and innovation?

– Through substantial investments in renewable energy projects and funding for research and development.

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