Budget 2024-25 follows PM Narendra Modi’s vision of transformative changes in the next five years. It focuses on nine key areas, with a strong emphasis on employment generation, which remains a top priority for the government.
Employment generation
The government is focused on creating ‘well-paying jobs,’ to provide employment and skill training to 4.1 crore youth. Notably, the government’s employment-linked incentive program will cover the employer’s share of Provident Fund and the first month’s wage, up to Rs 15,000, for new EPFO-registered employees.
New schemes to boost employment in manufacturing, increased funding for women in the workforce, and a three% subvention on education loan interest are significant steps toward inclusive growth. The internship programme will also offer one crore youth exposure to the top 500 companies.
Regional development
The budget focuses on Andhra Pradesh and Bihar, with its emphasis on flood irrigation and Kosi river basin management in Bihar being particularly crucial.
MSME support
The budget strengthens MSMEs by enhancing the credit guarantee scheme and raising the Mudra loan limit to Rs 20 lakh, supporting entr preneurship and innovation.
Urban development
Urban development is a priority, with Rs 10 lakh crore allocated for water supply, sanitation, and transit.
Energy transition and infrastructure
Energy transition is highlighted with a new solar rooftop policy. A Rs 1 lakh crore allocation for university research, involving the private sector.
Reforms and fiscal management
The budget introduces reforms in employment, land, and finance to improve ease of business and attract FDI. Budget receipts have increased to Rs 32.07 lakh crore, with the fiscal deficit reduced to 4.9% from 5.1% in the interim budget, due to higher GDP, receipts, and lower expenditures. The actual accounts for 2023-24 show the fiscal deficit has decreased to 5.6%, compared to 5.8% stipulated in the revised budget.
Taxation changes
Although the implication of indirect taxes, particularly GST, is a positive move, there are still many issues with tax reduction and the enhancement of customs duty. The increase in capital gains tax rates has raised concerns among investors.
TV Mohandas Pai
Chairman, Aarin Capital Partners