Farmers in Punjab reacted to the Union Budget saying that it "ignored" the farming sector and also remained silent on giving legal guarantee to minimum support price (MSP).
"There is neither anything about giving a legal guarantee to the MSP nor any farm loan waiver in the Budget," said Kisan Mazdoor Morcha (KMM) leader Sarwan Singh Pandher.
"It is a directionless and disappointing Budget. It does not have any vision for the agriculture sector," he said.
Another farmer leader Harmeet Singh Kadian called the Union Budget a "flop budget" for the farmers.
Flop Budget for Punjab & Farmers !
— Harmeet Singh Kadian (@HarmeetKadian) July 23, 2024
No Loan waiver
No Diversification Package
No Agro Export
No Agro- industrial package
No budget to legalise MSP #Budget2024
"The Modi government's 'copycat budget' could not even copy the Congress' Nyay Patra properly! The Modi government's budget is distributing half-hearted 'rewadis (freebies)' to dupe its coalition partners so that the NDA survives," Congress President Mallikarjun Kharge said reacting to the Union Budget.
कांग्रेस के न्याय के एजेंडे को ठीक तरह से कॉपी भी नहीं कर पाया मोदी सरकार का "नकलची बजट" !
— Mallikarjun Kharge (@kharge) July 23, 2024
मोदी सरकार का बजट अपने गठबंधन के साथियों को ठगने के लिए आधी-अधूरी "रेवड़ियां" बाँट रहा है, ताकि NDA बची रहे।
ये "देश की तरक्की" का बजट नहीं, "मोदी सरकार बचाओ" बजट है !
1⃣10 साल बाद…
The Centre has allocated Rs 5,958 crore for the Union Territory of Ladakh in the Union Budget 2024-25, a massive 32 per cent rise from last year's allotment of Rs 4,500 crore.
The Ladakh UT, which was carved out of Jammu and Kashmir after the abrogation of Article 370 in 2019, has received Rs 2,035.49 crore for establishment expenditure of the Centre to meet its secretariat-related expenses and establishment of other departments and offices.
The Budget has allocated to Ladakh Rs 3,922.51 crore for other Central sector expenditure, including agriculture and allied schemes, water supply and sanitation, rural development, power, forestry and wildlife, medical and public health, and education among other departments.
Maharashtra Chief Minister Eknath Shinde lauded the Union Budget presented by Finance Minister Nirmala Sitharaman, saying it is centred around the common man.
"The Budget centres around the common man. It is a start to achieve the goal of making India a $5 trillion economy," he said.
Meanwhile, Shiv Sena (UBT) leader Aaditya Thackeray pointed out that Maharashtra was not mentioned even once in the minister's budget speech and alleged bias against the state despite being the largest taxpayer.
I can understand the bjp wanting to save its government and giving Bihar and Andhra Pradesh a huge sum of the budget.
— Aaditya Thackeray (@AUThackeray) July 23, 2024
But what is Maharashtra’s fault?
That we are the largest taxpayer?
What did we get against what we contribute?
Was Maharashtra even mentioned once in the…
Congress leader and Leader of Opposition in Lok Sabha Rahul Gandhi termed the Union budget as a 'kursi bachao' move which makes hollow promises to BJP allies at the cost of other states.
Gandhi also alleged that the budget presented by Finance Minister Nirmala Sitharaman is a copy paste of the Congress manifesto and the previous budgets. He added that the budget doesn't give any relief to the common Indian.
The National Stock Exchange (NSE) CEO and MD, Ashish Chauhan on Tuesday termed the Union budget's moves on securities transaction tax and short term capital gains tax as "minor changes" which will not impact markets much.
On the correction in markets right after these announcements by Finance Minister Nirmala Sitharaman in her budget speech, Chauhan said the sell-off is a result of investors not understanding the implications of the moves.
West Bengal Chief Minister and TMC supremo Mamata Banerjee alleged that the Union budget presented by Finance Minister Nirmala Sitharaman is politically biased.
Banerjee pointed out that her state was completely deprived in the budget. It doesn't look into interests of poor people, she said.
Employment Linked Incentive schemes will help people and employers only if the employers need that many people to be employed.
The internship programme is a good idea, but will the top 500 firms need an average of 4,000 apprentices per year for the next five years? Given that the government support is limited, is the scheme attractive for employers and employees?
The NCP (SP) responded to the Union Budget presented by Finance Minister Nirmala Sitharaman saying that it was not designed for India but for the NDA allies of Bihar and Andhra Pradesh.
In a post on 'X', NCP (SP) spokesperson Clyde Crasto said Maharashtra was neglected in the Budget
❓️❓️❓️❓️❓️❓️
— Clyde Crasto - क्लाईड क्रास्टो (@Clyde_Crasto) July 23, 2024
Did Mrs.@nsitharaman just present the #Budget for #Bihar and #AndhraPradesh ?
This is a hold on to 'Crutches #Budget2024'.@BJP4India led #NDA government knows that if the Budget is not favorable for Bihar and Andhra Pradesh, their government will fall.…
Lauding Finance Minister Nirmala Sitharaman and her team for bringing out a budget that is designed to "empower all sections of the society," Prime Minister Narendra Modi in his remarks said that the budget also stresses on targeted measures for addressing the problems faced by the youth of the country.
He said the budget will will open many new opportunities for youngsters.
Housing Boost: Government will spend Rs 2.2 lakh crore over five years—under the Pradhan Mantri Awas Yojana-urban—to help build homes for 1 crore poor and middle-class families in cities. They will also offer cheaper loans to make buying homes more affordable.
Impact on rental housing: New rules will make renting homes easier and more transparent. They will also create dorm-style housing for factory workers.
Impact on tax changes: Rent from property will now be taxed differently, and there will be clearer rules for property sales and penalties for illegal property deals.
Duty Reduction on Mobile Phones: Basic Customs Duty (BCD) on mobile phones, mobile PCBA (printed circuit board assembly), and chargers cut to 15% from higher rates.
Impact on Industry: Expected to boost competitiveness and support growth in India’s mobile phone industry, which has seen significant increases in domestic production and exports.
Industry Response: Mobile phone industry body ICEA supports the move, highlighting that it will enhance manufacturing, exports, and competitiveness.
Consumer Benefit: Lower import duties are anticipated to benefit consumers by potentially reducing the costs of mobile devices and accessories.
Finance Minister Nirmala Sitharaman has proposed increasing the Securities Transaction Tax (STT) on futures and options (F&O) trading to discourage retail investors from participating in these high-risk instruments.
Key Changes:
STT on the sale of options will rise from 0.0625% to 0.1% of the option premium.
STT on the sale of futures will increase from 0.0125% to 0.02% of the trade price.
Context:
The Economic Survey highlighted concerns over the rising interest of retail investors in speculative F&O trading.
Derivatives trading caters to gambling instincts and can lead to significant gains or losses.
SEBI data revealed that 89% of individual traders in the equity F&O segment suffered losses, with an average loss of Rs 1.1 lakh in FY22.
Implications:
This tax hike aims to reduce the allure of speculative trading among retail investors and encourage safer investment practices.
The SEBI has also approved stricter norms to limit the entry of individual stocks into the derivatives segment, ensuring that only stocks with consistent turnover remain in F&O trading.
Samajwadi Party president Akhilesh Yadav slammed the Union Budget, claiming that it has ignored the interests of the youth and farmers.
Speaking to reporters after Finance Minister Nirmala Sitharaman presented the budget in Parliament, Yadav linked her announcements of several development measures for Bihar and Andhra Pradesh to the BJP's political compulsion to "save" its government and asked if there was anything for Uttar Pradesh, India's most populous state.
Yadav said Uttar Pradesh has given the country its prime minister, claiming that the state's farmers have received nothing despite the government's earlier promises of doubling their income.
The state has no "mandi" for farmers, and the budget's announcement for the highway from Buxar in Bihar should have included extension to Purvanchal Expressway, he said.
Yadav played down the announcement of internship for the youth, saying they want permanent jobs and not short-term measures.
"Will reservation be given for these short-term employment initiatives," he asked, blaming the government for unemployment.
The government announced the removal of the 'Angel Tax' on startups for all classes of investors.
What is Angel tax?
This was a tax on funding raised by startups if their valuation was higher than their fair market value.
What is the impact?
By abolishing this tax, the government aims to encourage investment in startups, promote innovation, and support budding entrepreneurs.
In simple terms, removing the angel tax makes it easier and more attractive for people to invest in startups, helping these new businesses grow without worrying about extra taxes on their investment.
A hike in the standard deduction by 50% from 50,000 to Rs 75,000 means that salaried employees can reduce their taxable income by Rs 75,000 before calculating the income tax they owe.
Here's a simple breakdown:
Previous Deduction: Earlier, the standard deduction was Rs 50,000. So let's assume your annual salary was Rs 5,00,000. You could subtract Rs 50,000, leaving you with Rs 4,50,000 as taxable income.
New Deduction: Now, the deduction has increased to Rs 75,000. So, for the same Rs 5,00,000 salary, you can subtract Rs 75,000, leaving you with Rs 4,25,000 as taxable income.
Impact: This means you have less income on which you need to pay tax, reducing your overall tax bill, with more take-home pay.
FM @nsitharaman has announced ELI
— Praveen Chakravarty (@pravchak) July 23, 2024
I laud the govt’s effort to take an idea from the @INCIndia manifesto for the larger benefit of youth and the nation. https://t.co/gWoZ0hM871
The Indian National Congress had proposed a GST 2.0 – a Good and Simple Tax - to replace the bureaucratic monstrosity that the non-biological Prime Minister’s Government set up. This is a widely popular demand, echoed by State Governments, industry bodies, MSME organisations,… pic.twitter.com/JHsv8vVZIz
— Jairam Ramesh (@Jairam_Ramesh) July 23, 2024
Major variations in expenditures between RE2023-24 and BE2024-25@NewIndianXpress @Dipak_Journo @santwana99 pic.twitter.com/FSx3npSnOi
— TNIE Business (@TNIEBiz) July 23, 2024
Senior Congress leader P Chidambaram took a swipe at the government over the Union Budget, saying he is glad that Finance Minister Nirmala Sitharaman has read the Congress 2024 manifesto after the Lok Sabha poll results.
Chidambaram said he was also pleased to hear that the Finance Minister will abolish the Angel Tax.
The Congress has pleaded for its abolition for many years and most recently in the Congress manifesto on page 31, he said.
I am glad to know that the Hon'ble FM has read the Congress Manifesto LS 2024 after the election results
— P. Chidambaram (@PChidambaram_IN) July 23, 2024
I am happy she has virtually adopted the Employment-linked incentive (ELI) outlined on page 30 of the Congress Manifesto
I am also happy that she has introduced the…
The government on Tuesday announced that it will undertake a comprehensive review of the Income Tax Act to make it easy to read.
Finance Minister Nirmala Sitharaman also said the government will come out with SoP (standard operating procedure) for TDS defaults and simplify and rationalise compounding of such offences.
She added that two tax exemption regimes for charitable trusts will be merged into one.
Also, 58 per cent of corporate tax have come from simplified tax regime in FY23.
More than two-thirds of individuals availed of the new income tax regime, Sitharaman said in the Lok Sabha.
The FM further announced that DPI apps will be developed for credit, e-commerce, education, health, law, MSME service delivery, and urban governance.
Finance Minister Nirmala Sitharaman on Tuesday said the government will come out with an economic policy framework to usher in next-generation reforms to boost economic growth.
She said the Centre will provide assistance to Odisha for the development of tourism, adding that the government will operationalize the Anusandhan National Research Fund.
The finance minister also proposed to support development of corridors at Vishnupad Temple and Mahabodhi Temple in line with Kashi Vishwanath Temple.
For promoting women-led development, Finance Minister Nirmala Sitharaman on Tuesday said the Budget carries an allocation of more than Rs 3 lakh crore for schemes benefitting women and girls.
Sitharaman said this signals the government's commitment in enhancing women's role in economic development.
"For promoting women-led development, the Budget carries an allocation of more than Rs 3 lakh crore for schemes benefitting women and girls," she said.
Sitharaman said the government will set up working women hostels to promote their participation in the workforce.
Return of the Idea of Team India
— Shankkar Aiyar 🇮🇳 (@ShankkarAiyar) July 23, 2024
Incentives for States to Liberate
Factors of Productivity
Land Labour Technology Entrepreneurship #BudgetSession2024
Standard Deduction: Increased from Rs 50,000 to Rs 75,000 for those under the new tax regime.
Increased tax deductions on family pension for pensioners from Rs 15,000 to Rs 25,000.
Salaried employee in New Tax Re.gime stands to save up to Rs 17,500 in income tax based on changes.
New Tax Slabs:
No tax on income up to Rs 3 lakh
Income from Rs 3 lakh to Rs 7 lakh taxed at 5%
Income from Rs 7 lakh to Rs 10 lakh taxed at 10%
Income from Rs 10 lakh to Rs 12 lakh taxed at 15%
Income from Rs 12 lakh to Rs 15 lakh taxed at 20%
Income above Rs 15 lakh taxed at 30%
#WATCH | On personal income tax rates in new tax regime, FM Sitharaman says, "Under new tax regime, tax rate structure to be revised as follows - Rs 0-Rs 3 lakh -Nil; Rs 3-7 lakh -5% ; Rs 7-10 lakh-10% ; Rs 10-12 lakh-15%; 12-15 lakh- 20% and above Rs 15 lakh-30%." pic.twitter.com/zQd7A4OsnT
— ANI (@ANI) July 23, 2024
FM Minister Nirmala Sitharaman says, "A comprehensive review of the customs duty structure over the next 6 months. TDS rate on e-commerce to be reduced to 0.1%. I propose that two tax exemption regimes for charities merge into one. I propose to decriminalize TDS delay up to the filing of tax date."
Duty on gold and silver has been reduced.
FM Sitharaman says, "I propose to reduce customs duties on gold and silver to 6% and 6.5% on platinum."
First Timers Scheme: Government will provide a one-month wage to all individuals newly entering the workforce in formal sectors, disbursed in 3 installments. Direct benefit transfer of up to Rs 15,000 will be given to employees with salaries up to Rs 1 lakh per month. This scheme will benefit 2.1 crore youth.
Manufacturing Jobs Assistance: Incentives will be provided to both employees and employers in the manufacturing sector during the first 4 years of employment. This will benefit 30 lakh youth and employers.
Support to Employers: For additional employment in all sectors with a salary of up to Rs 1 lakh per month, the government will provide Rs 3,000 per month for 2 years to cover EPFO charges. This will incentivize the creation of up to 50 lakh additional jobs.
Skilling Initiative: 20 lakh youth will be skilled over the next 5 years.
Education Loans: Financial support of up to Rs 10 lakh for higher education in domestic institutions, with an annual interest subvention of 3%.
Raising Productivity and Climate-Resilient Varieties
Thrust on Natural Farming: 2 crore farmers to be supported in the next 2 years (certificates).
Atmanirbharta in Oil Seeds
Vegetable Production: Large-scale clusters.
DPI in Agricultural Infrastructure: Coverage of farmers and their land within three years. Digital crop survey in 400 districts this year only. Issuance of Jan Samarth-based certificates.
Shrimp Brood Stocks: Shrimp farming.
National Co-operation Policy for the Co-operative Sector
Finance Minister proposes Rs 1.5 lakh cr long-term interest-free loans to support states towards infra development.
"Urban Housing: Under the PM Awas Yojana-Urban 2.0, the housing needs of 1 crore poor and middle-class families will be addressed with an investment of Rs 10 lakh crores. This will include the central assistance of Rs 2.2 lakh crores in the next five years," announces FM.
Additional debt recovery tribunals to be set up: FM in Lok Sabha
Appropriate changes will be made to IBC and steps will be taken to strengthen tribunals: FM
An internship allowance of Rs 5,000 per month, along with one-time assistance of Rs 6,000, will be provided under this scheme
Backward region grant will be provided to 3 districts of Andhra Pradesh: FM in Budget.
Andhra Pradesh to get funds to promote industrial development for essential infra like water, power, railways, roads: FM
SIDBI to open 24 new branches to serve MSMEs clusters: FM Nirmala Sitharaman
Public sector banks to build in-house capability for credit assessment of MSMEs: FM
Govt will reduce turnover threshold of MSME buyers for mandatory onboarding on TReds platform from Rs 500 cr to Rs 250 cr: FM
Union government to arrange financial assistance to Bihar through aid from multilateral development agencies: FM Sitharaman
Govt to set up airports, medical colleges and sports infra in Bihar: FM
Power projects, including setting up a new 2400 MW power plant at Pirpainti in Bihar, will be taken up.
Govt to provide e-vouchers directly to 1 lakh students every year with interest subvention of 3 per cent of loan amount: FM
Govt to set up working women hostels to promote women participation in workforce
Govt to provide incentive to 30 lakh youth entering job market by providing 1 month PF contribution
Fast-tracking growth of rural economy and employment opportunity will be policy goal
New centrally-sponsored scheme for skilling in collaboration with states, industry; 20 lakh youth to be skilled over 5 years
Model skilling loan scheme will be revised to facilitate loans up to Rs 7.5 lakh
1,000 ITIs to be upgraded in hub and spoke model
In next two years, one crore farmers will be initiated in natural farming: FM Sitharaman in LS.
Government to strengthen production, storage and marketing of pulses
Government, in partnership with states, will promote digital public infrastructure for agriculture
Large scale vegetable production clusters would be promoted to increase production
Government will provide finance for shrimp farming and marketing
Jan Samarth-based Kisan Credit Card to be introduced in five states
India's economic growth continues to shine: FM Sitharaman
Global economy is still in the grip of policy uncertainty, says Finance Minister
FM Sitharaman says, "The people of India have reposed their faith in the government led by PM Modi and re-elected it for the historic third term."
She says the Budget's focus will be on youth, women, poor and farmers.
Budget to also focus on employment, skilling, MSME and middle class: Sitharaman
Union Finance Minister Nirmala Sitharaman says "As mentioned in the interim Budget, we need to focus on 4 different castes, the poor, women, youth and the farmer/ For farmers, we announced higher Minimum Support Prices for all major crops delivering on the promise for at least a… pic.twitter.com/Saj2ee3IU5
— ANI (@ANI) July 23, 2024
The Union Cabinet, headed by Prime Minister Narendra Modi, has approved the full budget for 2024–25. This is the first budget of the BJP-led NDA government in its third term in office.
Nirmala Sitharaman, the first full-time woman finance minister of the country, has presented five full budgets since July 2019 and an interim budget on February 1, 2024.
Emphasising the need for measures to address inflation, particularly the soaring prices of essential commodities and life-saving drugs, the Congress has voiced the expectations of the middle class for the Union Budget.
Expressing his expectations from the budget, Congress leader Ajay Rai said on Tuesday, "In this budget, inflation should be controlled. The price of garlic is Rs 500 per kg, and the prices of vegetables and medicines have gone up. The price of life-saving drugs has increased. Employment opportunities also need to be generated. All these factors need to be worked upon."
Shiv Sena Uddhav Balasaheb Thackeray's (UBT) faction leader, Priyanka Chaturvedi, echoed similar expectations, stating that the finance minister should concentrate on tackling unemployment and inflation.
"I hope Nirmala Sitharaman ji will provide some relief from rising inflation and unemployment, and the government will talk about 'Jan ki baat' and not the PM's 'mann ki baat,'" Chaturvedi said.
Expressing disappointment with the unfulfilled promises of the last six budgets, Dravida Munnetra Kazhagam (DMK) leader TKS Elangovan said, "What they did in the first ten years, they will continue because Nirmala Sitharaman is presenting her 7th budget."
#WATCH | On Union Budget, Congress MP Gaurav Gogoi says, "The PM through the Budget will help the 'crorepatis' who are close to him. The middle class and the sincere taxpayers will not get anything except hollow promises." pic.twitter.com/iEq0ePa8em
— ANI (@ANI) July 23, 2024
Finance Minister Nirmala Sitharaman began presenting the Modi 3.0 government's first Union Budget in Parliament today, stating that the budget will continue to focus on four key areas: the poor, women, youth, and farmers.
She also added that the Union Budget's nine priorities include productivity, jobs, social justice, urban development, energy security, infrastructure, and reforms.
"We need to focus on the garib, mahilaye, yuva, and annadata. For annadata, we announced higher MSP a month ago for all major crops, delivering on our promise. The PM Garib Kalyan Anna Yojana was extended for five years, benefiting more than 80 crore people. Administrative actions for the approval and implementation of various schemes announced in the interim budget are well underway."
Attention will be on the major announcements by the finance minister and the government's guidance on the overall economy. The budget is expected to focus on changes to the income tax structure and improving the ease of doing business in India.
Meanwhile, the government released its Economic Survey on Monday, which projected India to remain the fastest-growing major economy in 2024–25, with an expected growth rate of 6.5–7%.
WATCH UNION BUDGET 2024 LIVE HERE
Here are the key numbers to watch out for the first full Budget of Modi 3.0
Fiscal Deficit: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal is 5.1 per cent as projected in the Interim Budget in February, against 5.8 per cent in the last fiscal year. The full Budget is expected to provide better-than-earlier projections as there has been tax buoyancy. The government has projected fiscal deficit at 4.5 per cent of the GDP in FY26.
Capital Expenditure: The government's planned capital expenditure for this fiscal year is budgeted at Rs 11.1 lakh crore, higher than Rs 9.5 lakh crore in the last fiscal year. The government has been pushing infrastructure creation and also incentivizing states to step up capex.
Tax Revenue: The Interim Budget had pegged gross tax revenue at Rs 38.31 lakh crore for 2024-25, an 11.46 per cent growth over the last fiscal. This includes Rs 21.99 lakh crore estimated to come from direct taxes (personal income tax + corporate tax), and Rs 16.22 lakh crore from indirect taxes (customs + excise duty + GST).
GST: Goods and Services Tax (GST) collection in 2024-25 is estimated to rise to Rs 10.68 lakh crore, an increase of 11.6 per cent. The tax revenue figures will have to be watched out for in the final Budget for the 2024-25 fiscal year.
Borrowing: The government's gross borrowing Budget was Rs 14.13 lakh crore in the current financial year as per the Interim Budget. The government borrows from the market to fund its fiscal deficit. The borrowing number will be watched by the market, especially on the back of more-than-expected dividend from the RBI and financial institutions.
Nominal GDP: India's nominal GDP growth (real GDP plus inflation) in the current fiscal year is estimated to be 10.5 per cent to Rs 327.7 trillion as per the Interim Budget. In view of the expected normal monsoon, improvement in revenue collections and pick up in rural consumption, is expected that there could be an upward revision in growth estimate. Real GDP growth in the current fiscal is projected at 7.2 per cent, as per the RBI.
Dividend: The interim Budget had projected Rs 1.02 lakh crore from RBI and financial institutions. This will be revised upwards as the RBI has already made surplus transfer of Rs 2.11 lakh crore earlier in May.
At the same time, Rs 43,000 crore is expected to be garnered from Central Public Sector Enterprises (CPSEs).
Spotlight would also be on spending on key schemes like NREGA as well as key sectors like health and education.
Finance Minister Nirmala Sitharaman on Tuesday called on President Droupadi Murmu before presenting the full Budget for 2024-25.
As per established tradition, the finance minister met the President at the Rashtrapati Bhavan before heading to Parliament.
President Murmu offered 'dahi-chini' (curd-sugar), considered auspicious, to Sitharaman before she left for Parliament to present the Union Budget.
The Union Cabinet met thereafter to clear the Budget.
Before the actual presentation in Parliament, the Cabinet headed by Prime Minister Narendra Modi will approve the Budget for fiscal 2024-25 (April 2024 to March 2025).
Finance Minister Nirmala Sitharaman will once again present the Union Budget 2024–25 using a digital tablet wrapped in a traditional 'bahi-khata' style pouch. Similarly, the practice of presenting the budget at 11 am, instead of 5 pm, began with Yashwant Sinha during the Atal Bihari Vajpayee government.
Sitharaman broke away from the colonial practice of using a budget briefcase, adopting the 'bahi-khata' for the first time in 2019. This method of presentation, initiated in 2019, continues the trend of paperless Budgets.
And on Budget Day, the finance minister traditionally poses with the Budget bag outside Parliament, a practice mirrored in the UK by the Chancellor of the Exchequer.
Past finance ministers used a variety of briefcases, a tradition rooted in British history.
RK Shanmukham Chetty (1947), India's first finance minister, used a leather portfolio to present the country's first budget. TT Krishnamachari (1950s) carried a file bag for his budget presentations. Jawaharlal Nehru used a black briefcase during his tenure as finance minister.
Manmohan Singh (1991) presented the landmark economic liberalisation budget with a black briefcase Pranab Mukherjee emulated the British tradition by using a red briefcase similar to the Gladstone case during his time as finance minister under Prime Minister Manmohan Singh.
Piyush Goyal (2019) is the last finance minister to use a traditional budget briefcase, carrying a red one to Parliament for the interim budget.
Finance Minister #NirmalaSitharaman and other members of the finance ministry leave the ministry to present the budget at the Parliament in #NewDelhi.#BudgetWithTNIE
— The New Indian Express (@NewIndianXpress) July 23, 2024
Express Photos | @Shekharyadav02 pic.twitter.com/OclLyLd5JO
Rumki Majumdar, Economist at Deloitte India, said the survey has highlighted measures to boost talent and productivity through private sector investment in skills (in addition to what the government is initiating). She cited MSMEs, agriculture, education and employment, and upskilling as key pillars for uplifting the masses through jobs, income and skills.
Aditi Nayar, Chief Economist and Head of Research & Outreach, ICRA, said the survey stresses that in the medium term, growth needs to be supported by the private corporate sector as well as the state governments.
Once again, the question raised is whether Digital India can satisfactorily address issues which have brought lakhs of farmers, especially in north India, on the warpath since December 2020.
Even with higher allocations, more subsidies and free distribution of food grains, the new Budget needs to provide a healing touch for the farming communities.
Worrisome for the Union Finance Minister Nirmala Sitharaman is not just the increased reliance on imports of pulses but inflationary pressures across domestic markets which the Budget has to address, year after year.
With the first Union Budget after the Lok Sabha elections all set to be unveiled, there are great expectations regarding major policy and tax reforms. The reforms are expected in the following areas: manufacturing, renewable energy sector, electronics industry, pharma sector, tax benefits for individual taxpayers and measures for ease of doing business.
Though India is steering towards becoming the world’s third-largest economy, it is an uphill journey and the government’s support would be needed at each step.
Economic Surveys are expected to assess the current State of the Economy and outline the path that we can potentially take for progress and prosperity and being an economic powerhouse.
The current survey (2023-24) that was released on July 22, like last year's survey, does inform us that we are in good shape, but it does not seem to reflect the confidence that the economic leadership was demonstrating last year about our economic future.
Global economic and geopolitical conditions, combined with AI, will hold back India’s progress.
Labour and capital productivity are the most important drivers of Growth, but the survey does not discuss them.
The 2024 Economic Survey packs the power of three.
Not only does it have the usual suspects of hindsight, insight and foresight with regards to the state of the economy, it also talks again and again about the tripartite pact between the private sector, states and the Centre.
In fact, it firmly believes that such an alliance is the only magical passageway capable of granting our greatest wishes of growth, jobs and high incomes.
The tax-cut expectations are back in the spotlight.
With the BJP failing to form the government alone, coalition partners will pressure the finance minister to be generous, particularly towards personal income taxpayers, who often seek lower taxes.
While we await the actual announcements, it's speculated that the government is considering a pretty wide range of things to do.
All union budgets focus on only four broad areas—farmers, youth, women and taxpayers.
But few manage to crack the mysterious alchemy of rightly balancing spending and taxation. And regardless of the efforts, budgets are often questioned over a lack of zinger.
But what will set the FY25 budget apart?
Needy sectors like agriculture, infrastructure, and MSMEs got budgetary policy interventions, although it can be debated whether the measures were adequate enough.
Private forecasts are flashing red. While CMIE data pegs the FY24 unemployment rate at about 8%—higher than last year—a Citigroup report stressed that even with a 7% GDP growth rate, India may add just about 8-9 million jobs a year as against the needed 11-12 million.
Another area that needs urgent attention is the rural economy, where the twin-evils of unemployment and inflation seem to have caused untold voter resentment.
The second edition of TNIE's Shadow Budget takes a long-term perspective on both resource allocation and resource mobilisation, but with achingly specific details on how to rebuild growth. The state of the Indian economy isn't sound, with pockets of stress seen everywhere.
The shadow budget seeks to lower tax rates for low- and middle-income households and rationalisation of capital gains taxation is expected.
But how does India's budget look like, when it's free from the pulls and pushes of trade, industry and investor lobbies?
GDP Growth Forecast: The Economic Survey projects a conservative GDP growth rate of 6.5–7% for the current fiscal year, lower than the previous year's 8.2% and the RBI's 7.2% estimate.
Job Creation: Emphasises the need to generate an average of nearly 7.85 million jobs annually in the non-farm sector until 2030, highlighting private sector job creation
Inflation Targeting: The report suggests targeting inflation excluding food prices, which are more influenced by supply factors, and supports the current monetary policy framework.
Structural Reforms: Calls for boosting private investment, strengthening small businesses and agriculture, climate change adaptation, easing red tape, and tackling income inequality as focus areas.
Stock Market Caution: It warns of potential speculation in soaring stock markets due to increased retail investor participation and overconfidence.
Artificial Intelligence and Mental Health: Flags the impact of AI on jobs and rising mental health issues as key concerns that need attention for maintaining productivity.
Chinese Investment: The survey backs increased Chinese direct investments to boost exports, despite strained ties, while advocating for reduced imports from China.
In the first full budget of the third term under PM Narendra Modi, Finance Minister Nirmala Sitharaman unveiled revised income tax slabs, potentially offering taxpayers an annual gain of approximately Rs 17,500.
She also announced the scrapping of 'Angel Tax' for all class of investors and reduced customs duty on mobile phones, accessories, and chargers to 15%. She also announced a reduction of customs duties on gold and silver to 6% and 6.5% on platinum.
Additionally, Sitharaman announced a program to provide 12-month internship opportunities for 1 crore youth in the top 500 companies over five years. The government will offer an internship allowance of Rs 5,000 per month and a one-time assistance of Rs 6,000, while companies will cover the training costs and 12% of the internship expenses.
The government will extend financial support for education loans up to Rs 10 lakh for domestic institutions.
The budget also emphasized development in Bihar and Andhra Pradesh, responding to demands from JD(U) and TDP, key NDA allies.
Sitharaman committed financial assistance to Bihar through multilateral development agencies and allocated Rs 15,000 crore for developing Amravati as Andhra Pradesh's capital.
Furthermore, the Centre will implement the ‘Purvodaya’ plan for the comprehensive development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh.
Expert take on the budget by Professor Anil Sood:
The ideas and schemes announced in the budget are consistent with the analysis that the economic survey had provided us on Monday.
Consequently, the message is – all is well, and we do not have to do anything significantly to accelerate growth or solve problems that households and businesses face, particularly lower and middle-income households and MSMEs.
As for MSMEs, the belief is that credit will solve all their problems. As for households, the argument seems to be that Rs 30,000 crores relief will help accelerate consumption as well as savings.
Employment Linked Incentive schemes will help people and employers only if the employers need that many people to be employed. If the private consumption expenditure continues to grow at low rates and private sector capital expenditure does not grow as expected, the country will not need the estimated number of workers, i.e., 210 lakhs. Economic survey mentions that we do not need more than eighty lakh jobs per year in any case.
The internship programme is a good idea, but will the top 500 firms need an average of 4,000 apprentices per year for the next five years? Given that the government support is limited, is the scheme attractive for employers and employees?
The urban development proposals are likely to push up real-estate prices and consequently the cost of doing business and living. We have had no or limited success with PPPs in the past. We will, therefore, need to see if the new provisions for the proposed viability gap funding schemes address the old problems.
One noticeable feature of budget proposals is that we are likely to see an increased participation of multilateral agencies in financing infrastructure projects.
The government continues to focus on fiscal consolidation and, therefore, we may not see greater public investment even during the next few years. In short, the budget is growth neutral and does not make a sincere effort to address key problems facing the country.
