India’s Union Budget 2024: A Vision for Growth and Prosperity

Overview of the 2024 Union Budget of India

India’s Union Budget 2024, presented by Finance Minister Nirmala Sitharaman on July 23, 2024, is the first annual budget under the Modi 3.0 Cabinet.

It builds upon the principles of “Reform, Perform, and Transform” and focuses on achieving more efficient and sustainable growth aligned with the Panchamrut goals.

India’s Union Budget 2024 is expected to be presented during the week of July 15-21, 2024, pending the announcement of Parliament’s Monsoon Session schedule. 

India’s Union Budget 2024, It focuses on the welfare of the poor, women, youth, and farmers, aligning with the “Viksit Bharat” vision, which envisions a developed India by 2047.

Expected Focus Areas of the 2024 Union Budget

The upcoming India’s Union Budget 2024 for the financial year 2024-25 is expected to address several critical areas for India’s development:

• Social Welfare: Emphasis on the welfare of the poor, women, youth, and farmers, aligning with the “Viksit Bharat” vision.
• Infrastructure Development: Significant allocation for projects such as the Solar Power Grid and the National Green Hydrogen Mission.
• Capital Expenditure: Increased capital expenditure in FY-25, focusing on sustainable development and infrastructure.
• Economic Growth: Creation of a dynamic and sustainable economic trajectory by fostering economic growth and social development.
• Fiscal Consolidation: Reduction of the India’s Union Budget 2024 deficit in FY-25, lower than the revised fiscal deficit of 6.4% in 2022-23.
• Social Welfare: Increased funding for schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme and the Ayushman Bharat (PMJAY) healthcare program.
• Green Growth: Focus on green growth initiatives, including the introduction of a 5% compressed biogas mandate for all organisations marketing natural and biogas.
• Youth Power: Emphasis on creating opportunities for the youth, particularly through the Pradhan Mantri Kaushal Vikas Yojana 4.0, which aims to skill lakhs of youth within the next three years.
• Financial Sector: Strengthening of the financial sector through the revamped credit guarantee scheme for MSMEs and the establishment of the Urban Infrastructure Development Fund (UIDF).
• Tax Rates: Retention of the same tax rates for direct taxes, with no tax liability for taxpayers with an income up to Rs 7 lakh under the new tax regime.

Key Highlights of the 2024 Union Budget

1. Inclusive Development and Growth: The India’s Union Budget 2024 focuses on inclusive development, emphasizing the welfare of the poor, women, youth, and farmers.
2. Social Justice: The India’s Union Budget 2024 carries an allocation of more than ₹ 3 lakh crore for schemes benefitting women and girls, promoting women-led development.
3. Infrastructure Development: Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations. The budget also emphasizes expanding the space economy by 5 times in the next 10 years with a venture capital fund of ₹ 1,000 crore.
4. Tax Relief for Salaried Individuals and Pensioners: The India’s Union Budget 2024 provides major relief to 4 crore salaried individuals and pensioners in income tax. The standard deduction is increased from ₹ 50,000 to ₹ 75,000/- for those in the new tax regime, and the deduction on family pension is increased from ₹ 15,000/- to ₹ 25,000/-.
5. Boost for Start-ups: Angel tax is abolished for all classes of investors to boost start-ups.
6. Fiscal Consolidation: The government would pursue a broad path of fiscal consolidation to attain a level of Fiscal Deficit lower than 4.5 per cent of GDP by FY 2025-26 with resultant consolidation of Debt to GDP ratio.
7. Agricultural Sector: A provision of ₹ 1.52 lakh crore for the agriculture and allied sector is announced for this year. 1,000 industrial training institutes will be upgraded to provide better skilling opportunities for the youth.
8. Rural Development: A provision of ₹ 2.66 lakh crore is made for rural development, including rural infrastructure.
9. Urban Housing: Under PM Awas Yojana Urban 2.0, the housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of ₹ 10 lakh crore.
10. MSME Sector: The limit of MUDRA loans will be enhanced to ₹ 20 lakh from the current ₹ 10 lakh, providing more credit support to micro and small enterprises.

Economic Outlook and Fiscal Indicators

• India’s Real growth is projected at 8.2 percent and Nominal growth at 9.6 percent in FY 2023-24.
• Private consumption expenditure registered a growth of 4.0 per cent in FY 2023-24, driven by resilient urban demand conditions and recovery in rural demand.
• The Reserve Bank of India projects a growth of 7.2 per cent for India in FY 2024-25.
• Average retail inflation eases to 5.4 per cent in 2023-24 compared to 6.7 per cent in FY 2022-23.
• The Headline inflation stood at 5.1 per cent in June 2024, with much lower core inflation of 3.1 per cent.
• For the year 2024-25, the total receipts other than borrowings are estimated at ₹32.07 lakh crore, and the total expenditure is estimated at ₹48.21 lakh crore.
• The net tax receipts are estimated at ₹25.83 lakh crore.
• The fiscal deficit is estimated at 4.9 per cent of GDP.
• The capital expenditure is pegged at ₹11,11,111 crore (3.4 per cent of GDP), which includes ₹1,50,000 crore of financial assistance to the States for capital expenditure.

Vision for ‘Viksit Bharat’

The budget aims to create an economy with high growth and an environment that enables people to meet their aspirations, aligning with the “Viksit Bharat” vision. The four pillars of Viksit Bharat include the “Garib” (Poor), “Mahilayen” (Women), “Yuva” (Youth), and “Annadata” (Farmers).

The budget also focuses on the all-round development of the eastern region covering Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh through the formulation of a plan called “Purvodaya”.

Conclusion

The 2024 Union Budget of India sets the stage for the country’s continued economic growth and development. By focusing on inclusive development, social welfare, infrastructure, and fiscal consolidation, the budget aims to create a more prosperous and equitable India.

The emphasis on green growth, youth empowerment, and strengthening the financial sector further solidifies the government’s commitment to sustainable and holistic development.