Exclusive Insights – Interim Budget 2024-25

The Finance Minister Nirmala Sitharaman presented the Interim Budget of the financial year 2024-25 dated 23-Jul-2024.

The key takeaways are:

Standard deduction to be increased from Rs 50,000 to Rs 75,000

New Tax Slabs:

Rs 0-3 lakhs: Nil

Rs 3-7 lakhs: 5%

Rs 7-10 lakhs: 10%

Rs 10-12 lakhs: 15%

Rs 12-15 lakhs: 20%

Above 15 lakhs: 30%

Major Achievements:

-> Fiscal deficit lowered to 4.9% of GDP

-> Increased focus on job creation & skill development

-> Boosted agricultural & rural spending

Financial Highlights:

-> Agriculture spending increased to Rs 1.52 lakh crore

-> Provision of Rs 2.66 lakh crore for rural development, including rural infrastructure.

-> Spending on infrastructure will be Rs 11.11 lakh crore

New Initiatives:

-> “PM Surya Ghar Muft Bijli Yojana” for rooftop solar installations

-> Rs 1,000 crore venture capital fund for space economy

-> Reduction in customs duty on gold, silver, and platinum

-> ₹11,500 crore separately allocated for flood management.

-> Govt. cuts duty on mobiles and accessories to 15%.

-> Govt. will launch Phase IV of PM Gram Sadak Yojana

-> The Center will partner with the state for water & sewerage treatment in cities

-> Mudra loan limit increased from 10 lakhs to 20 lakhs.

-> Internship opportunities for 1 crore youth in top 500 companies in India.

Market Trends:

-> Push for infrastructure development in eastern states under the scheme ‘Purvodaya’

-> Focus on green energy

-> Emphasis on women’s workforce participation

Challenges:

-> Need to create 7.8 million non-farm jobs over the next seven years

-> Addressing rising food prices & inflation

-> Balancing fiscal judiciousness with growth incentive

-> STT on “Futures & Options trading”(F&O) increased to 0.02% from 0.01%.

-> Listed financial assets held for more than 1 year will be long-term. Long-term capital gains tax increased to 12.5% from 10%.

Strategic Initiatives:

-> Special focus on Andhra Pradesh & Bihar development

-> Expansion of PM Awas Yojana for housing

-> Promotion of investment-ready industrial parks in 100 cities

Outlook:

-> Continued emphasis on infrastructure and capital expenditure

-> Focus on job creation and skill development

-> Support for startups and MSMEs

Looking ahead to Modi 3.0 in 2024, there appears to be an emphasis on political priorities, signifying an intent to bolster employment opportunities while posing challenges for investors. This budget presented by the Finance Minister strikes a delicate balance between political imperatives & fiscal discipline.

I have referred articles from Moneycontrol.com, The Hindu, TOI, ICICIDirect.com & Economic Times while writing this blog.