The Union Budget of India is a highly anticipated annual event that outlines the government’s financial roadmap for the coming fiscal year. The Budget 2024, presented on 23 July 2024 by the Finance Minister, comes at a crucial time when the Indian economy is navigating through post-pandemic recovery, geopolitical tensions, and domestic economic challenges. This budget aims to balance growth with fiscal prudence, addressing key areas such as infrastructure development, social welfare, tax reforms, and digital economy enhancements.
Key Highlights
- Economic Growth and Fiscal Deficit
- The government has set an ambitious GDP growth target of 7% for the fiscal year 2024-25.
- Fiscal deficit for the year is projected at 5.5% of GDP, down from the previous year’s 6.4%, indicating a focus on fiscal consolidation.
- Infrastructure Development
- Allocation of ₹10 lakh crore for infrastructure development, including roads, railways, ports, and airports.
- Launch of a new scheme, “National Infrastructure Pipeline 2.0,” with an emphasis on green and sustainable projects.
- Social Welfare and Employment
- Increased allocation for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to ₹80,000 crore.
- New initiatives for women and child development, including enhanced maternity benefits and support for education.
- Tax Reforms
- Introduction of a new tax regime with simplified slabs and reduced rates.
- Increased threshold for income tax exemption to ₹5 lakh from the previous ₹2.5 lakh.
- Corporate tax rate reduced to 22% for domestic companies to spur investment.
- Digital Economy and Innovation
- Allocation of ₹50,000 crore for the promotion of digital infrastructure and innovation.
- Launch of a new Digital India initiative aimed at enhancing digital literacy and expanding internet connectivity in rural areas.
- Agriculture and Rural Development
- Doubling the allocation for the Pradhan Mantri Fasal Bima Yojana to ₹30,000 crore.
- New measures to support organic farming and sustainable agricultural practices.
- Health and Education
- Significant boost in healthcare spending with a total allocation of ₹2.5 lakh crore.
- New National Health Mission with a focus on preventive healthcare and digital health records.
- Enhanced budget for education with a special focus on digital learning and skill development.
Detailed Analysis
Economic Growth and Fiscal Deficit
The Union Budget 2024 sets the tone for robust economic growth while maintaining fiscal discipline. The projected GDP growth of 7% is ambitious but achievable, given the government’s focus on infrastructure development and investment in key sectors. The reduction in the fiscal deficit to 5.5% of GDP is a positive step towards fiscal consolidation, which is essential for long-term economic stability.
Infrastructure Development
Infrastructure development is a cornerstone of the Budget 2024. The allocation of ₹10 lakh crore for infrastructure projects is expected to have a multiplier effect on the economy. The launch of the National Infrastructure Pipeline 2.0 aims to modernize India’s infrastructure with an emphasis on sustainability. Key projects include:
- Roads and Highways: Expansion of the national highway network and development of expressways.
- Railways: Modernization of railway stations and introduction of high-speed trains.
- Ports and Airports: Upgradation of major ports and airports to enhance connectivity and trade.
- Urban Infrastructure: Development of smart cities and urban transport systems.
Social Welfare and Employment
Social welfare and employment generation are critical components of the Budget 2024. The increased allocation for MGNREGA is expected to provide a safety net for rural households and promote rural development. New initiatives for women and child development aim to address gender disparities and enhance social equity. Key measures include:
- Enhanced Maternity Benefits: Increased financial support for maternity leave and healthcare.
- Education Support: Scholarships and incentives for girls’ education.
- Skill Development: Vocational training programs to enhance employability.
Tax Reforms
Tax reforms are a significant highlight of the Budget 2024. The introduction of a new tax regime with simplified slabs and reduced rates aims to ease the tax burden on individuals and promote compliance. The increased threshold for income tax exemption to ₹5 lakh is expected to benefit middle-class taxpayers. Corporate tax rate reduction to 22% for domestic companies is aimed at boosting investment and economic growth.
Digital Economy and Innovation
The Budget 2024 places a strong emphasis on the digital economy and innovation. The allocation of ₹50,000 crore for digital infrastructure and the launch of the new Digital India initiative are expected to drive digital transformation across the country. Key initiatives include:
- Digital Literacy: Programs to enhance digital literacy in rural areas.
- Internet Connectivity: Expansion of high-speed internet access in remote regions.
- Innovation and Startups: Support for startups and innovation hubs.
Agriculture and Rural Development
Agriculture and rural development receive significant attention in the Budget 2024. The doubling of the allocation for the Pradhan Mantri Fasal Bima Yojana to ₹30,000 crore aims to provide better insurance coverage for farmers. New measures to support organic farming and sustainable agricultural practices are expected to enhance agricultural productivity and environmental sustainability. Key measures include:
- Organic Farming: Support for organic farming initiatives and certification.
- Irrigation Projects: Development of new irrigation projects to ensure water availability.
- Rural Infrastructure: Development of rural roads and electrification projects.
Health and Education
Health and education are critical sectors addressed in the Budget 2024. The significant boost in healthcare spending to ₹2.5 lakh crore is expected to enhance healthcare infrastructure and services. The new National Health Mission aims to promote preventive healthcare and digital health records. Enhanced budget for education with a focus on digital learning and skill development is expected to improve educational outcomes. Key measures include:
- Preventive Healthcare: Programs to promote preventive healthcare and wellness.
- Digital Health Records: Implementation of digital health records for better healthcare management.
- Skill Development: Vocational training programs and digital learning initiatives.
Conclusion
The Union Budget 2024 presents a balanced approach to economic growth and fiscal prudence. The focus on infrastructure development, social welfare, tax reforms, digital economy, agriculture, health, and education is expected to drive inclusive and sustainable growth. The ambitious targets set in the budget, if achieved, will position India as a resilient and dynamic economy in the global arena.
“Frequently Asked Questions (FAQs) About Union Budget 2024”
What is the Union Budget 2024?
The Union Budget 2024 is the annual financial statement presented by the Finance Minister of India, outlining the government’s revenue and expenditure for the upcoming fiscal year.
Who presented the Union Budget 2024?
The Union Budget 2024 was presented by Finance Minister Nirmala Sitharaman.
What are the key highlights of the Union Budget 2024?
Key Highlights:
Significant increase in capital expenditure to boost infrastructure.
Introduction of new tax slabs and rates.
Focus on green energy and sustainability projects.
Allocation for healthcare and education sectors increased.
What changes have been made to the income tax slabs in the Union Budget 2024?
The income tax slabs have been restructured to provide relief to middle-class taxpayers with a higher exemption limit and revised rates for different income brackets.
What is the new exemption limit for individual taxpayers?
The new exemption limit for individual taxpayers has been raised to ₹5 lakh per annum.
How has the corporate tax rate changed in the Union Budget 2024?
The corporate tax rate has been reduced for small and medium enterprises (SMEs) to 15%, while the rate for large corporations remains unchanged.
What are the budget allocations for the healthcare sector?
The healthcare sector has received a 20% increase in allocation, focusing on improving primary healthcare infrastructure and digital health initiatives.
How much has been allocated for the education sector?
The education sector has been allocated ₹1.5 lakh crore, emphasizing digital learning and skill development programs.
What initiatives have been introduced for green energy?
Green Energy Initiatives:
Increased funding for solar and wind energy projects.
Incentives for electric vehicle (EV) manufacturers and buyers.
Launch of a National Hydrogen Mission to promote hydrogen as an alternative energy source.
What are the measures taken for infrastructure development?
The government has earmarked ₹10 lakh crore for infrastructure development, including roadways, railways, and urban development projects.
How does the budget address the issue of unemployment?
The budget proposes various schemes to promote job creation, including incentives for startups, MSMEs, and the manufacturing sector.
What are the new initiatives for the agricultural sector?
Agricultural Initiatives:
Increased funding for agricultural research and development.
Introduction of new schemes to support farmers and enhance crop productivity.
Emphasis on organic farming and sustainable agricultural practices.
How has the defense budget changed?
The defense budget has been increased by 10% to enhance the country’s defense capabilities and modernize the armed forces.
What steps are being taken to improve digital infrastructure?
The budget includes significant investments in digital infrastructure, including the expansion of broadband connectivity in rural areas and the promotion of digital payments.
What is the government’s plan for promoting startups?
The government plans to provide tax reliefs, easier compliance norms, and increased funding opportunities to encourage startup growth and innovation.
How does the budget address environmental concerns?
The budget focuses on sustainable development with increased funding for environmental conservation projects and stricter regulations on pollution control.
What are the proposed changes in GST?
The budget proposes simplification of GST procedures and reduction of GST rates on essential commodities to ease the burden on consumers.
How does the budget support women entrepreneurs?
The budget includes special schemes and financial incentives to support women entrepreneurs and promote gender equality in business.
What is the allocation for the rural development sector?
The rural development sector has been allocated ₹2 lakh crore, focusing on improving rural infrastructure, sanitation, and housing.
How does the budget plan to improve the healthcare system?
The budget plans to improve the healthcare system by increasing funding for public health initiatives, building more hospitals, and enhancing healthcare accessibility in rural areas.
What are the key tax incentives introduced in the budget?
Key Tax Incentives:
Increased standard deduction for salaried employees.
Tax holidays for startups and new manufacturing units.
Incentives for investments in green technologies.
How does the budget address inflation concerns?
The budget includes measures to control inflation, such as reducing import duties on essential goods and increasing supply chain efficiencies.
What are the government’s plans for the housing sector?
The government plans to increase funding for affordable housing projects and provide tax incentives for first-time homebuyers.
How does the budget support the MSME sector?
The budget proposes reduced compliance burdens, increased access to credit, and special schemes to support the growth and development of MSMEs.
What are the key reforms in the banking sector?
Banking Reforms:
Introduction of measures to improve the credit flow to priority sectors.
Steps to enhance the digital banking infrastructure.
Initiatives to strengthen the regulatory framework.
How does the budget promote financial inclusion?
The budget includes initiatives to expand banking services in underserved areas and promote digital financial literacy among the masses.
What is the government’s strategy for fiscal deficit management?
The government plans to manage the fiscal deficit through prudent expenditure management, increased revenue generation, and targeted disinvestment strategies.
How does the budget address the needs of the senior citizens?
The budget provides increased tax exemptions and higher interest rates on savings schemes for senior citizens to ensure their financial security.