The sixth straight budget presented by the Union finance minister Nirmala Sitharaman made no big bang announcements, however has promised new scheme to be launched to help the deserving sections of middle class.
The budget promised the government will be launching a scheme to help the deserving sections of middle class, living in rented houses, slums or chawls or unauthorised colonies, which will help them to buy or build their own houses.
According to the finance minister, PM Awas Yojana Rural is close to achieving the target of 3 crore houses and 2 crores more houses will be taken up in the next 5 years to meet the requirement arising from increase in the number of families.
The finance minister announced that the same tax rates will be retained for the direct and indirect taxes including export duties. Further, she also announced that the capex outlay for the next year will be increased by 11% to 11.1 lakh crore.
While the tax rates have been left unchanged in the interim budget, income tax benefits have been extended by a year in three key areas: startups, Indian units of foreign banks in GIFT City (Gandhinagar, Gujarat) and sovereign funds and foreign pension funds.
While announcing the budget for this fiscal year, aiming to reach a fiscal deficit level below 4.5 per cent of the GDP by 2025-26, Finance Minister Nirmala Sitharaman has fixed the deficit for 2024-25 at 5.1%, below the revised 5.8% budgeted for 2023-24.
The lower fiscal deficit target for 2024-25 was expected on hopes of strong tax collections and expenditure rationalisation, while a relatively lower spending on subsidies is likely to create space for the lower fiscal deficit target.
The budget hikes capital expenditure by 11 per cent for the next fiscal to sustain world-beating economic growth rate while trimming the deficit in a reform-oriented interim budget that also gave relief to common man from disputed small tax demands of up to Rs 25,000.
For youth, poor, women and farmers, the minister also highlighted that the healthcare cover under Ayushman Bharat will be extended to all ASHA and Anganwadi workers and helpers.
Further she has raised expenditure on defence to Rs 6.25 lakh crore from Rs 5.94 lakh crore in her previous budget. In the budget for FY24, the Defence Ministry saw the highest allocation at Rs 5.94 lakh crore, accounting for around 13.2 per cent of the total budgeted expenditure of the government. The capital outlay of modernisation and infrastructure development was increased to Rs 1.63 lakh crore.
No changes were announced in the standard deduction limit which is allowed as a tax break to salaried individuals and pensioners. Currently, a standard deduction of Rs 50,000 is allowed from salary and pension income to arrive at taxable income thereby reducing the total tax payable.
In a major boost to railway nearly 40,000 normal bogies will be converted to standard Vande Bharat bogies. Three major railway corridors including port connectivity corridor, energy, mineral and cement corridor and high traffic density corridor, were announced.
The interim budget earmarks Rs 11,11,111 crore, topping the existing high of Rs 10 lakh crore allocated during fiscal 2023-24 with goals of faster access-controlled highways, super-efficient ports, safer and speedier trains, with cleaner, and decongested cities.
Union budget 2024 has a “heavy focus on domestic tourism”. States will be offered interest-free loans to boost tourism within their borders, said Finance Minister Nirmala Sitharaman. It holds substantial potential for generating tourism revenue in India and creating numerous job opportunities.
Government will expand and strengthen the electric vehicle (EV) ecosystem by supporting manufacturing and charging infrastructure
FY25 gross borrowing is estimated at Rs 14.13 trillion, achieving a reduction from that of FY24. Research led the growth and development of indigenous oilseeds like mustard, groundnut and sesame to make India self-sufficient. Currently, India imports about 60% of its cooking oil spending over Rs 1.5 trillion in a year.
FM has adopted an aggressive fiscal consolidation target. She has announced an FY25 fiscal deficit target of 5.1% as against the expectation of 5.3% levels. In FY24 the fiscal deficit target of 5.8% has been achieved thanks to better revenue mobilization as against the target of 5.9%.
More medical colleges to be set up using existing infrastructure. Healthcare cover under Ayushman Bharat scheme to be extended to all Anganwadi workers, helpers. Efforts to boost farmers' income will be stepped up. Government to promote private investment in post-harvest activities. The finance minister Sitharaman announced the withdrawal of outstanding disputed tax demands. The move is set to benefit 1 crore taxpayers.
In a disappointment for the taxpayers, the FM chose to keep the tax rates unchanged in the interim Budget 2024, including import duty. However, certain benefits to start-ups and tax exemptions to certain IFSC units expiring in March will be extended to March 2025.
