Budget balances growth, employment, and welfare goals: FM
Replying to the general discussion on the Budget, she said the Budget is in continuity of the interim Budget and subsumes its features.
The Budget estimates the government’s total receipts, other than borrowings, to be Rs 32.07 lakh crore during 2024-25 and the total expenditure to be Rs 48.21 lakh crore.
------ Union Finance Minister Nirmala Sitharaman and other officials outside the Finance Ministry ahead of the presentation of Interim Budget 2024, in the capital on Thursday.-------Subrata Dutta-----0102-24.
Finance Minister Nirmala Sitharaman on Tuesday presented the Union Budget for 2024-25 in the Lok Sabha, seeking to boost employment and manufacturing through MSMEs, skilling manpower, promoting women-led development, while abolishing angel tax to ease investment and giving income tax relief to salaried individuals and pensioners.
This was the seventh consecutive Budget presented by Ms Sitharaman since 2019 and the first of Prime Minister Narendra Modi’s third consecutive term in office. In her 90-minute speech, the Finance Minister said India continues to be a shining exception of high growth amid global economies gripped by various uncertainties.
The Budget estimates the government’s total receipts, other than borrowings, to be Rs 32.07 lakh crore during 2024-25 and the total expenditure to be Rs 48.21 lakh crore. The net tax receipts are estimated at Rs 25.83 lakh crore. The fiscal deficit is estimated at 4.9 per cent of GDP.
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The government continues to follow the path of high capital expenditure (Capex) for infrastructure development for its multiplier effect and proposes to spend Rs 11,11,111 crore during 2024-25. The amount comes to 3.4 per cent of the total GDP.
The Centre will continue to support States also in their infrastructure expansion and will advance interest-free 50 year loans of Rs 1.50 lakh crore to them.
Coming to Personal Income Tax Rates, the Finance Minister made two announcements for those opting for the new tax regime. First, the standard deduction for salaried employees is proposed to be increased from Rs 50,000 to Rs 75,000.
Similarly, the deduction on family pension for pensioners is proposed to be enhanced from Rs 15,000 to Rs 25,000. This will provide relief to about four crore salaried individuals and pensioners.
As a result of the proposed changes, a salaried employee in the new tax regime stands to save up to Rs 17,500 in income tax, she said amid thumping of desks by MPs.
As per the table given in her speech, in the new tax regime, there will be nil liability for income up to Rs 3 lakh; five per cent on income Rs 3 lakh to Rs 5 lakh; 10 per cent on income Rs 7 lakh to Rs 10 lakh; 15 per cent on income Rs 10 lakh to Rs 12 lakh; 20 per cent on income Rs 12 to Rs 15 lakh and 30 per cent on income above Rs 15 lakh.
As domestic production of mobile phones goes up three times and exports 100 times, the Budget has reduced basic customs duty on mobile phones, mobile (printed circuit board assemblies)PCBAs and chargers to 15 per cent. Precious metals including gold and silver will become cheaper with custom duty on them reduced to six per cent, and on platinum to 6.4 per cent.
The labour-intensive MSME sector will be helped with a credit guarantee scheme for purchase of machinery and equipment without collateral or third-party guarantee. The limit of Mudra loans will be enhanced to Rs 20 lakh from the current Rs 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.
The Finance Minister announced the Prime Minister’s package of five schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a five-year period, with a central outlay of Rs 2 lakh crore. A provision of Rs 1.48 lakh crore for education, employment and skilling has been made for this year.
For youth who have not been eligible for any benefit under government schemes and policies, the Minister announced financial support for loans up to Rs 10 lakh for higher education in domestic institutions.
E-vouchers for this purpose will be given directly to one lakh students every year for annual interest subvention of three per cent of the loan amount.
Employees Provident Fund Scheme-linked schemes have been envisaged to boost employment where incentives will be given to both employers and employees. To provide skilled manpower, 20 lakh youth will be skilled over a 5-year period. As many as 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements.
“We will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches. In addition, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises,” she said.
For promoting women-led development, the Budget carries an allocation of more than Rs 3 lakh crore for schemes benefiting women and girls. “This signals our government’s commitment for enhancing women’s role in economic development,” Ms Sitharaman said.
The Finance Minister said the GST had decreased tax incidence on the common man; reduced compliance burden and logistics cost for trade and industry; and enhanced revenues of the central and state governments.
“It is a success of vast proportions. To multiply the benefits of GST, we will strive to further simplify and rationalise the tax structure and endeavour to expand it to the remaining sectors,” she said.
The government proposes a comprehensive review of the Income-tax Act, 1961 over the next six months to make it concise, lucid, easy to read and understand. The aim is to reduce disputes and litigation, thereby providing tax certainty to the tax-payers, the Finance Minister said.
Capital gains taxation is also proposed to be hugely simplified, she said. Short term gains on certain financial assets shall henceforth attract a tax rate of 20 per cent, while that on all other financial assets and all non-financial assets shall continue to attract the applicable tax rate.
Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 per cent. For the benefit of the lower and middle-income classes, she increased the limit of exemption of capital gains on certain financial assets to Rs 1.25 lakh per year.
Investment in infrastructure by the private sector will be promoted through viability gap funding and enabling policies and regulations, she said, and a market-based financing framework will be brought out.
The Budget has promised FDI reforms. Rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to facilitate foreign direct investments, to nudge prioritisation, and to promote opportunities for using Indian Rupee as a currency for overseas investments.
To attract foreign capital for development needs, the Budget has proposed reducing the corporate tax rate on foreign companies from 40 to 35 per cent.
To boost productivity and resilience in agriculture, new 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers. In the next two years, one crore farmers across the country will be initiated into natural farming supported by certification and branding, the Finance Minister said
The Digital Public Infrastructure (DPI) will be implemented in agriculture for coverage of farmers and their lands in 3 years. During this year, a digital crop survey for Kharif using the DPI will be taken up in 400 districts. Details of six crore farmers and their lands will be brought into the farmer and land registries.
The Anusandhan National Research Fund for basic research and prototype development will be operationalised. A mechanism will be set up for spurring private sector-driven research and innovation at commercial scale with a financing pool of Rs one lakh crore, in line with the announcement in the interim budget.
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