It is a progressive budget that highlights the government's main economic priorities to promote sustainable and inclusive growth while striking a careful balance between revenue generation and fiscal responsibility.

The 2024 Budget, presented by the finance minister, emphasises on essential sectors vital for India's rapid growth and development. It prioritises innovation, infrastructure, capacity expansion, productivity, and more. Regarding tax proposals, it demonstrates a strong commitment to streamlining the taxation system, reducing uncertainty, and enhancing India's appeal as an attractive investment destination.

In this blog, we explore the transformative aspects of the 2024 Budget. We'll cover the comprehensive infrastructure development plans, incentives for MSMEs and startups, initiatives for employment and skilling, and various other key elements.

1. Productivity and Resilience in Agriculture

One crore farmers will be introduced to natural farming over the course of the next two years with the help of branding and certification. Implementation will be carried out by scientific institutions and willing gram panchayats. For increased productivity, 10,000 need-based bio-input resource centres will be built.

The government, will facilitate the implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years. During this year, digital crop survey for Kharif using the DPI will be taken up in 400 districts. The details of 6 Cr farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth based Kisan Credit Cards will be enabled in 5 states.

2. Employment and skilling

The government has initiated a plan to provide one-month wage (up to INR 15,000) to all persons newly entering the workforce in all formal sectors. The eligibility limit will be a salary of INR 1 Lakh per month. The government will reimburse employers up to INR 3,000 per month for 2 years towards their EPFO contribution for each additional employee.

Through a new centrally sponsored scheme for skilling in collaboration with state governments and Industry, 20 Lakh youth will be skilled over a 5-year period. 1000,Industrial Training Institutes will be upgraded in hub and spoke arrangements with an outcome orientation.

For helping youth not covered under any benefit under government schemes and policies, financial support for loans up to INR 10 Lakh for higher education in domestic institutions will be provided.

For promoting women-led development, the budget carries an allocation of more than INR 3 Lakh Cr for schemes benefitting women and girls.

3. Manufacturing, Services & MSMEs

For facilitating term loans to MSMEs for the purchase of machinery and equipment without collateral or third-party guarantee, a credit guarantee scheme will be introduced. A separately constituted self-financing guarantee fund will provide, to each applicant, a guarantee covering up to INR 100 Cr, while the loan amount may be larger.

Public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment. They will also take the lead in developing a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy.

The limit of Mudra loans will be enhanced to INR 20 Lakh for those entrepreneurs who have availed and successfully repaid previous loans under the Tarun category.

SIDBI will open new branches to expand its reach to serve all major MSME clusters within 3 years and provide direct credit to them.

The government has planned the development of DPI applications at the population scale for productivity gains, business opportunities, and innovation by the private sector. These are planned in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.

4. Infrastructural Development

Over the next five years, strong fiscal support for infrastructure has been planned to maintain by the Central Government. For capital expenditure this year, Rs.11,11,111 crore has been allocated that will constitute 3.40% of GDP.

Based on their development priorities, similar scale support for infrastructure to be provided by the State Government. To support states in resource allocation, provision of Rs.1.5 lakh crore for long-term interest-free loans has been announced.

Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations with an increased population.

5. Innovation, Research & Development

With the government's continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of INR 1,000 Cr will be set up. Anusandhan National Research Fund for basic research and prototype development to be operationalised. Further, a mechanism to be established for spurring private sector-driven research and innovation at a commercial scale with a financing pool of INR 1 Lakh Cr.

6. Taxation

The government cut income tax rates for some citizens to boost consumption. The annual income between ₹ 3 lakhs and ₹ 7 lakhs will now attract a 5 per cent tax rate, relaxing the earlier upper end of income of up to ₹ 6 lakhs .The Budget also increases the standard deduction for salaried employees to ₹ 75,000 from ₹ 50,000 earlier.

Short-term capital gains tax on listed equity, equity-oriented mutual funds and units of a business trust has been increased to 20 per cent from 15 per cent while Long Term Capital Gains Tax on these securities is proposed to be hiked to 12.5 per cent from 10 per cent.

The government proposed several changes in the tax deducted at source structure, including reducing the rate for e-commerce operators to 0.1 per cent from existing 1 percent, and allowing TCS credit against TDS deducted on salaries.

The government will abolish angel tax for all classes of investors in startups to "bolster the Indian startup ecosystem".

It proposed a reduction in the rate of income-tax chargeable on income of foreign companies from 40 per cent to 35 per cent.

Reduction of the BCD on mobile phones, mobile PCBA and mobile chargers to 15%. The government has fully exempt three more cancer medicines from customs duties. To enhance domestic value addition in gold and precious metal jewellery in the country, reduction in customs duties on gold and silver to 6% and that on platinum to 6.4%.

Conclusion

The Indian Budget 2024 stands as a pivotal moment in the nation's economic journey. By focusing on inclusive growth, digital transformation, and sustainable development, it aims to address both immediate challenges and long-term aspirations. The emphasis on infrastructure development, agricultural support, and social welfare schemes underscores the government's commitment to holistic progress.

Ultimately, the 2024 budget reflects a balanced approach, striving to cater to the needs of the present while laying a robust foundation for the future. It is an optimistic roadmap, signalling a commitment to growth, equity, and sustainability, and it invites all Indians to participate in this transformative journey.