In a decisive move aimed at steering India through global economic uncertainties, Finance Minister Nirmala Sitharaman presented a forward-looking budget for the fiscal year 2024-25. Against a backdrop of challenging global conditions, India’s economic resilience shone through as Sitharaman outlined a comprehensive strategy focused on inclusive growth and sectoral revitalization.

The budget for the fiscal year has been crafted with a comprehensive approach, focusing on inclusive growth, economic reforms, and sectoral development while addressing the needs of the poor, women, youth, and farmers.

Economic Landscape and Fiscal Outlook

FM Nirmala Sitharaman opened her budget speech by highlighting India’s robust economic performance, positioning it as a standout amidst global challenges. She emphasized the government’s commitment to maintaining low and stable inflation, which is on track to meet the 4% target. This economic stability forms the foundation for the budget’s expansive measures aimed at bolstering various sectors crucial for sustained growth.

Key Priorities and Initiatives

The budget outlines nine key priority areas that will guide the government’s policies and expenditures:

1. Productivity and Resilience in Agriculture: Significant investments are earmarked for transforming agricultural research to enhance productivity and develop climate-resilient crop varieties. This includes a comprehensive review of the agricultural research setup.
2. Employment and Skilling: A central focus is on creating employment opportunities, especially for the youth. The budget introduces five schemes with a ₹2 lakh crore outlay to benefit 4.1 crore young individuals over five years. Special incentives for first-time employees, including wage support and direct benefit transfers, aim to integrate more youth into the formal workforce.
3. Inclusive Human Resource Development and Social Justice: The budget emphasizes inclusive growth through enhanced skilling programs and workforce participation initiatives tailored for women.
4. Manufacturing and Services: Measures to boost manufacturing and service sectors include financial incentives, technology support packages for MSMEs, and expansions in SIDBI’s reach with 24 new branches to serve MSME clusters.
5. Urban Development: A substantial ₹2.2 lakh crore allocation aims to make urban housing more affordable, benefiting middle-class families and the urban poor.
6. Energy Security: The budget allocates resources for energy projects, including the development of small and modular nuclear reactors, ensuring long-term energy security.
7. Infrastructure: Significant investments are planned for infrastructure development, including new airports, medical facilities, and sports infrastructure in Bihar, and the construction of highways and power plants in Eastern India.
8. Innovation and Research & Development: Initiatives to foster innovation and R&D are prioritized to propel technological advancements and economic growth.
9. Next Generation Reforms: The budget outlines comprehensive reforms across sectors to stimulate growth and enhance competitiveness in the global market.

Sector-Specific Initiatives

– Education and Skilling: ₹1.48 lakh crore has been allocated this year to enhance education, employment, and skilling initiatives. This includes financial support for higher education loans and a comprehensive internship scheme for youth.

– Rural Development: ₹2.66 lakh crore is allocated for rural development, focusing on infrastructure and agricultural initiatives such as natural farming practices.

– Women Empowerment: The budget includes provisions for setting up working women hostels and promoting women’s workforce participation through targeted skilling programs.

– Tax Reforms: The budget proposes a comprehensive review of the Income Tax Act to simplify compliance and reduce disputes. Changes in tax rates aim to provide relief to middle-class taxpayers and promote investment.

– Social Welfare: Extension of schemes like PMGKAY (Pradhan Mantri Garib Kalyan Anna Yojana) and initiatives benefiting women and girls with over ₹3 lakh crore in allocations highlight the government’s commitment to social welfare.

– Infrastructure Development: Besides urban housing, the budget emphasizes PPP initiatives for rental housing and the development of industrial infrastructure.

Tax Reforms and Simplification

Finance Minister unveiled significant reforms in the tax regime aimed at easing compliance and providing relief to taxpayers. The budget proposes a revised tax slab structure that offers progressive rates designed to benefit different income brackets.

For instance, individuals earning between ₹0-3 lakh annually will pay no tax, while those in the ₹3-7 lakh bracket face a reduced rate of 5%. The rates progressively increase to 30% for incomes exceeding ₹15 lakh. Additionally, the standard deduction for salaried employees is set to rise from ₹50,000 to ₹75,000, offering relief to approximately 4 crore taxpayers. Pensioners will also benefit from an increased deduction on family pensions, raised from ₹15,000 to ₹25,000. These measures are expected to simplify tax calculations, reduce disputes, and enhance disposable income, thus stimulating consumption and bolstering economic growth.

The budget for FY 2024 outlines a holistic strategy aimed at fostering inclusive growth, bolstering key sectors, and fortifying India’s economic foundations. With a focus on innovation, infrastructure, and social development, the government seeks to navigate global uncertainties while positioning India as a beacon of economic stability and opportunity for its citizens. As the fiscal year progresses, the implementation of these initiatives will be critical in realizing the budget’s vision of a prosperous and resilient India.