Interim Budget 2024: Key Highlights

In Parliament today, Finance Minister Nirmala Sitharaman presented the interim Union Budget for 2024-25. This is the sixth budget of the current government under Prime Minister Narendra Modi's second term. Since the elections are coming up, the usual  budget has been replaced with an interim budget.

In spite of the interim nature, FM Sitharaman has announced schemes and benefits that bring relief to the general public. In this year's budget, the theme is "Viksit Bharat Budget 2024," emphasizing Atmanirbhar Bharat. The focus of this year’s interim budget was on the welfare of the poor, women, youth, and farmers.

Here are the highlights of Interim Budget 2024

Taxation:

• The Finance Minister announced that there will be no changes in the tax rates for direct taxes in FY 2024-25.
• Individuals with an income of up to Rs.7 lakh will have no tax liability under the new tax regime.
• Corporate taxes will remain at a 22% rate for existing domestic companies.
• Certain new manufacturing companies will enjoy a reduced corporate tax rate of 15%.
• Direct tax collections have more than tripled over the last ten years.
• The number of return filers has increased by 2.4 times.
• The average processing time of tax returns has reduced from 93 days in 2013-14 to 10 days in 2023-24.
• The Finance Minister proposed an extension in the time limit for certain tax benefits for start-ups and investments by sovereign wealth funds/pension funds.
• Tax exemption for specific IFSC units, expiring on March 31, 2024, has been extended until March 31, 2025.

Infrastructure Development:

• In the last four years, spending on building things roads and bridges has gone up three times, helping the country's economy and creating more jobs.
• The Finance Minister plans to increase this spending even more by 11.1% in the coming year, setting aside a total of 11.11 lakh crore, which is 3.4% of the country's total economic output.
• Railways Enhancement:
• The government is improving the train system by turning 40,000 normal bogis into safer and more comfortable ones called Vande Bharat.
• They are also planning three new railway corridors to connect ports, energy-mineral-cement areas, and busy routes, making train travel smoother and boosting the economy.
• Electricity Reforms:
• The budget introduced a scheme for rooftop solarisation, enabling 10 million households to receive up to 300 units of free electricity monthly. This aligns with the government's commitment to renewable energy and cost savings.
• Measures were outlined to meet the 'net zero' commitment by 2070, including viability gap funding for offshore wind energy, coal gasification capacity expansion, and mandatory blending of compressed biogas.

Green Energy

• In line with the commitment to achieve 'net zero' by 2070, the government announced the following measures:
•  Funding support will be given to bridge the viability gap for tapping into offshore wind energy potential, starting with an initial capacity of one gigawatt.
• Plans are underway to establish coal gasification and liquefaction capacity of 100 million tonnes by 2030. This move aims to reduce dependence on imports of natural gas, methanol, and ammonia.
•  A phased approach will be implemented, making it mandatory to blend compressed biogas (CBG) with compressed natural gas (CNG) for transportation and piped natural gas (PNG) for domestic use.
• Financial assistance will be provided to procure biomass aggregation machinery, supporting the collection of biomass.

'Lakhpati Didi' Initiative

The Finance Minister announced that a scheme called 'Lakhpati Didi' is making a positive impact in rural areas. A total of 83 lakh self-help groups (SHGs) with nine crore women are playing a key role in transforming the socio-economic landscape by promoting empowerment and self-reliance. The success of the scheme has already helped nearly one crore women achieve the status of 'Lakhpati Didi.' Encouraged by this success, the government has decided to raise the target from 2 crore to 3 crore women.

Investment Promotion and Technology Advancements:

• The government's focus on Foreign Direct Investment (FDI) and negotiations for bilateral investment treaties aims to attract and sustain foreign investment, fostering economic growth and development.
• A corpus of ₹1 lakh crore was allocated for a fifty-year interest-free loan, aiming to encourage research and innovation in emerging technologies. This initiative positions India as a global technology leader.

Healthcare:

• Girls aged between 9-14 years are actively encouraged to get vaccinated against cervical cancer.
• The Saksham Anganwadi and Poshan 2.0 scheme aim to upgrade Anganwadi centers, focusing on improving nutrition delivery and early childhood care and development.
• The U-WIN platform will be introduced to enhance the immunization efforts of Mission Indradhanush.
• Ayushman Bharat scheme's health coverage will now include all ASHA, Anganwadi workers, and helpers.
• A committee will be established to study challenges in setting up more medical colleges in India.

Housing:

• The Pradhan Mantri Awas Yojana (Grameen) is close to achieving the target of 3 crore houses, with an additional goal of 2 crore houses in the next 5 years.
• A new scheme for middle-class housing will be launched to encourage home buying or construction.

MSME Empowerment and Agriculture Support:

• The budget emphasized the importance of training for MSMEs to compete globally. The government's commitment to upskilling and reskilling includes the establishment of new Industrial Training Institutes (ITIs).
• Efforts to boost farmers' income and promote value addition in the agricultural sector were highlighted, aiming to encourage private and public investment in post-harvest activities.

Government's Focus on Inclusive Growth:

Finance Minister Sitharaman underscored the government's commitment to the progress of four major 'castes' - women, youth, poor, and farmers. Several schemes and initiatives were outlined to uplift these segments, leading to overall economic development.

Additional Highlights:

• The government pulled 25 crore people out of poverty in ten years, providing free food for 80 crore people through various schemes.
• Direct Benefit Transfers of ₹34 lakh crore through PM Jan Dhan Yojana led to savings of ₹2.7 lakh crore.
• The PM Vishwakarma Yojana provides support to artisans, with credit assistance to 78 lakh street vendors under the PM-SVANidhi scheme.
• Over 1.4 crore youth were trained under the Skill India Mission, with 43 crore loans sanctioned under PM Mudra Yojana.
• The India-Middle East-Europe Economic Corridor's role in world trade was highlighted, and attention will be given to developing the East for India's growth.
• Inflation is within the target band (2%-6%), and economic growth has increased, with the average real income of people rising by 50%.
• The government will subsidize the construction of 30 million affordable houses in rural areas.
• A new department, 'Matsya Sampada,' will be set up to address the needs of fishermen.

Fiscal Numbers:

• The fiscal deficit target for FY25 was set at 5.1 percent of GDP. The FY24 fiscal deficit target was revised down to 5.8 percent.
• The government's gross and net borrowings for 2024-25, at ₹14.13 lakh crore and ₹11.75 lakh crore, respectively, are lower than 2023-24.cha