Explainer: How full Budget 2024 compares with Interim Budget

The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, has been hailed as a transformative financial blueprint, focusing on empowering the youth, women, farmers, and the poor. The budget has introduced bold initiatives to increase employment and enhance incomes in these priority segments of society, reflecting the government’s commitment to inclusive development. The budget has allocated a significant Rs 2 lakh crore towards the Prime Minister’s package, comprising five schemes aimed at facilitating employment and skilling. This is part of a broader push to create more jobs and stimulate economic growth.

The budget has also allocated Rs 3 lakh crore towards programmes that will enable more women to enter the workforce, aligning with the ‘Viksit Bharat’ goal. This is a significant step towards gender equality and economic empowerment for women. In a bid to boost the agricultural sector, a robust allocation of Rs 5.2 lakh crore has been made for agriculture and allied sectors. This is expected to enhance the earnings of farmers, a key segment of the Indian economy. The budget also provides a significant increase in support for micro, small, and medium enterprises (MSMEs), recognizing their potential for generating large-scale employment.

The budget has also strengthened the country’s financial consolidation path. The fiscal deficit target has been reduced to 4.9 per cent of the GDP for 2024-25, compared to 5.1 per cent fixed in the Interim Budget. This is a significant step towards fiscal prudence and economic stability. The government has also reduced its planned gross market borrowing by Rs 12,000 crore for FY 2025, setting the new target at Rs 14.01 lakh crore. This reduction has been made possible due to higher than expected tax collections and a significant dividend from the Reserve Bank of India (RBI).

The reduced borrowings by the government will leave more money in the banking system for companies to borrow for investments, which will help to spur growth and create more jobs. A lower fiscal deficit also helps to keep inflation in check, ensuring a stable growth path for the economy. The budget has also proposed wide-ranging changes in customs duties, aimed at boosting domestic production and exports. The Finance Minister has announced a comprehensive review of the Income Tax Act, 1961, aimed at reducing disputes and litigation. This is expected to enhance tax certainty for taxpayers and improve the ease of doing business.

The budget has also introduced revised tax slabs under the new tax regime, with the lowest slab increased to Rs 3 lakh from Rs 2.5 lakh. The tax rates were set as follows: 5% for the slab of Rs 3-7 lakh, 10% for Rs 7-10 lakh, 15% for Rs 10-12 lakh, and 20% for Rs 12-15 lakh. Additionally, the standard deduction was raised from Rs 50,000 to Rs 75,000, benefiting salaried individuals.

For businesses, the Budget proposed a comprehensive review of the Income Tax Act, 1961, aimed at reducing disputes and litigation. The TDS rate on e-commerce transactions was reduced from 1% to 0.1%, which will simplify tax compliance for e-commerce operators and potentially boost the sector. The government also aimed to incentivize states to increase infrastructure spending by providing Rs 1.5 lakh crore in long-term interest-free loans.

The Union Budget of 2024-25 has also retained an allocation of Rs 6.22 lakh crore for the Ministry of Defence (MoD), which is the highest among the ministries. The government has earmarked an additional outlay of Rs 400 crore, in the Union Budget presented on Tuesday, on innovation in Defence through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme. The allocation is aimed to promote ‘Aatmanirbharta’ in Defence technology and manufacturing and equip the armed forces with modern weapons/platforms along with creation of job opportunities for the youth.

The Union Budget 2024-25 is a comprehensive financial plan that aims to boost economic growth, create jobs, and empower various segments of society. It reflects the government’s commitment to fiscal prudence, inclusive development, and economic stability. The budget’s focus on job creation, women’s empowerment, agricultural growth, and fiscal consolidation is expected to have a positive impact on the Indian economy in the coming years. The budget has been hailed as a transformative financial blueprint, focusing on empowering the youth, women, farmers, and the poor. The budget has introduced bold initiatives to increase employment and enhance incomes in these priority segments of society, reflecting the government’s commitment to inclusive development.