India’s Finance Minister Nirmala Sitharaman presented the country’s Budget for the fiscal year 2024-2025, setting the stage for the nation’s economic trajectory as it approaches a pivotal election year.
The budget outlines significant expenditures and reforms aimed at fostering inclusive growth, economic stability, and infrastructural development, all while maintaining a strong focus on sustainability and social justice.
Key Highlights of the Budget
1. Capital Expenditure: One of the standout elements of this year’s budget is the massive capital expenditure outlay, which has been increased by 11.1% to ₹11.11 trillion. This investment is directed towards enhancing infrastructure, including major railway corridors and the expansion of the aviation sector, reflecting the government’s commitment to building a robust logistical framework.
2. Social Programs: The budget allocates ₹86,000 crore to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS), maintaining the same level as the previous year. Furthermore, it introduces measures to provide 300 units of free electricity per month to 10 million households through rooftop solar installations, showcasing a blend of social welfare and green energy initiatives.
3. Taxation Structure: Notably, there are no changes to the income tax slabs, with both the new and old regimes continuing. However, the budget proposes withdrawing historical tax demands up until 2014-15, which is expected to benefit around 10 million taxpayers. This move aims to reduce litigation and improve tax compliance.
Special Packages for Bihar and Andhra Pradesh
Bihar: Bihar has been allocated a special package aimed at boosting its industrial and agricultural sectors. This includes funds for the development of infrastructure such as roads and bridges, as well as support for agricultural modernization and irrigation projects. The package is designed to address long-standing developmental deficits and spur economic growth in the region.
Andhra Pradesh: Andhra Pradesh’s special package focuses on enhancing its education and healthcare infrastructure. Significant investments are earmarked for the expansion of educational institutions and hospitals, alongside support for the development of new smart cities. The package also includes provisions for improving coastal and port infrastructure to leverage the state’s strategic location for trade and logistics.
Reactions from Different Sections
Business Community: The corporate sector has largely welcomed the budget, especially the increased capital expenditure which is expected to create a multiplier effect in the economy. The focus on infrastructure and green energy initiatives has garnered positive reactions from industry leaders, who see it as a step towards sustainable growth and enhanced economic activity.
Agricultural Sector: Farmers and agricultural bodies have expressed mixed reactions. While the support for irrigation and agricultural modernization is appreciated, some stakeholders feel that more direct support, such as increased minimum support prices (MSPs) or direct cash transfers, would have been beneficial.
General Public: The middle class and salaried employees are relieved by the continuation of existing tax slabs and the proposed withdrawal of historical tax demands. However, there is a call for more tangible benefits such as reductions in personal income tax rates to boost disposable income.
Economists: Economists have praised the budget for its balanced approach to fiscal management and growth. The focus on reducing the fiscal deficit to below 4.5% by 2025-26 is seen as a prudent move. However, there are concerns about the government’s ability to mobilize the targeted gross market borrowings of ₹14 lakh crore without crowding out private investment.
The 2024 Budget is a strategic blend of populism and pragmatism, aiming to set a strong foundation for a ‘Viksit Bharat’ (Developed India) by 2047. It addresses key sectors such as infrastructure, agriculture, green energy, and social welfare, while maintaining a focus on economic stability and fiscal prudence. As India heads towards a crucial election, this budget reflects the government’s commitment to inclusive and sustainable development.
Read the Original Union Budget 2024 Document Here: https://www.indiabudget.gov.in/doc/budget_speech.pdf
