Under the Modi government, Finance Minister Nirmala Sitharaman, on 23 July 2024, announced her seventh budget for fiscal year 2024-25. She is the first Finance Minister to announce seven consecutive Budget speeches, surpassing Morarji Desai. This is the first budget by BJP-led NDA since they were re-elected in June 2024. ”The people have given the government a unique opportunity to take the country on the path of solid development and prosperity. In the Interim Budget, we promised to present a detailed roadmap for our pursuit of ‘Viksit Bharat’,” Nirmala Sitaraman quoted. The government's focus on four primary sectors– Employment, Skilling, MSMEs, and Middle Class- aims to foster growth and development in these crucial areas. The centre point for this year's Budget is the concentration on four significant castes: ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth), and ‘Annadata’ (Farmer), reflecting the government's unwavering commitment to the welfare of these sections of society, making them feel valued and cared for.
The fiscal year 2024-25 budget has earmarked a substantial amount of Rs 1.52 lakh crore to benefit the Agriculture and Allied sectors, underscoring the government's unwavering commitment to their growth and development. The government will release 109 new high-yielding varieties of 32 field and horticulture crops for farmers' cultivation. This unprecedented initiative, set to revolutionise farming practices, is a beacon of hope for the future of agriculture, promising to boost agricultural productivity significantly and make the audience feel hopeful about the future of agriculture.
Through a new centrally sponsored scheme for skilling, the government, in collaboration with state governments and industries, is set to skill 20 lakh youth over five years. This ambitious effort is a testament to the government's commitment to addressing unemployment and boosting the skilling ecosystem. The model skill loan scheme is being revised to facilitate loans up to Rs7.5 lakh with a guarantee from a government fund to benefit 25,000 students every year. As part of the Employment incentive– people entering formal sectors with new workforce wages up to Rs15000, incentivising manufacturing job creation, linked to first-time hires, and reimbursing employers Rs 3000/month for two years per employee for their contribution towards EPFO.
The government has formulated a package covering financing, regulatory changes, and technology support for MSMEs. For entrepreneurs who have availed of and successfully repaid previous loans under the Tarun category, the limit of Mudra loans will be enhanced to INR 20 Lakh. While being in the Special Mention Account (SMA) stage for reasons beyond their control, MSMEs will have access to credit to continue their business and avoid getting into the NPA stage. Credit availability will be supported through a guarantee from a government-promoted fund. Lowering the TReDS platform's turnover threshold to INR 250 Cr aims to help MSMEs convert trade receivables into cash, boost their working capital, and attract more CPSEs, companies, and medium enterprises.
Under the New Tax Regime, new income tax slabs for FY 2024-25 hiked in the standard deduction. The standard deduction was hiked from Rs 50,000 to Rs 75,000. Also, the tax slab limit for a 5% tax rate was changed from Rs 5 lakh to Rs 7 lakh. The capital gains tax regime was completely revamped, and tax rates were increased. On the expected line, no changes were announced in the old income tax regime since the government wants to incentivise the new regime. Income tax rates under the new regime in Budget 2024:
Nil up to Rs 3 lakh,
5% from Rs 3 lakh to Rs 7 lakh,
10% from Rs 7 lakh to Rs 10 lakh,
15% from Rs 10 lakh to Rs 12 lakh,
20% from Rs 12 lakh to Rs 15 lakh,
and 30% above Rs 15 lakh.
Budget 2024, marks a transformative milestone with its focus on 'Viksit Bharat'. The budget prioritises agriculture with substantial investments and innovative projects while enhancing support for employment, skill development, and MSMEs. The new tax system introduces gradual adjustments to streamline taxation. Overall, Budget 2024 lays a foundation for inclusive growth, leveraging technology and reforms to foster prosperity and economic resilience across all sectors of society.
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