India's Union Budget presented in July 2024

Government of India- Union Budget - July 2024

1. India Budget: (2024-2025) Prepared By: Vinay July 2024 Source: Times of India 23-07-2024

2. The government has identified 9 priority areas for focused development in Union Budget 2024 The Budget envisages sustained efforts on priorities for generating ample opportunities for all Productivity and resilience in Agriculture Employment & Skilling Inclusive Human Resource Development and Social Justice Manufacturing & Services Urban Development Energy Security Infrastructure Innovation, Research & Development Next Generation Reforms Source: Times of India 23-07-2024

3. For Increasing Employment India's economic growth continues to be the shining exception and will remain so in years ahead. India's inflation continues to be low and stable moving towards the 4% target. Government announce the Prime Minister's package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over 5 years with a central outlay of Rs 2 lakh crores. This year we have made a provision of Rs 1.48 lakh crores for education, employment and skilling. Government to provide financial support for loans up to Rs 10 lakhs for higher education in domestic institutions , These will be based on enrollment in the EPFO and focus on recognition of the first time employees and support to employees and employers. The budget proposes significant benefits for new and additional employment to propel growth. Government will implement three schemes for employment-linked incentives as part of the Prime Minister's package which include one month wage upto Rs 15,000 for first time employee with salary upto Rs.100,000 . Benefit will disbursed in 3 Installments , Internship scheme for 1 crore youths announced, in which the government is set to launch an internship scheme for 1 crore youths in over 500 firms with Rs 500 0 per month as internship allowance a nd one-time assistance of Rs 6000 . Source: Times of India 23-07-2024

4. For Bihar and Andhra Pradesh Bihar Andhra Pradesh The Union government has allocated Rs 26,000 crore for various road projects in Bihar, as announced by Finance Minister Nirmala Sitharaman in her Budget for 2024-25. The Centre will secure financial assistance for the state through aid from multilateral development agencies. Government will facilitate special financial support for development of capital city in Andhra Pradesh. Government will also arrange Rs 15,000cr this fiscal and in future years for development of capital city of Andhra Pradesh. In addition to road projects, the government has plans to establish airports, medical colleges, and sports infrastructure in Bihar. The Centre will also develop a comprehensive plan called ' Purvodaya ' to foster all-round development in Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. Furthermore, the government will support the development of an industrial corridor in the eastern region. Andhra Pradesh Reorganisation Act- Government has made efforts to fulfil the commitments in Andhra Pradesh Reorganisation Act. Recognising the state's need for capital, we will facilitate special financial support through multilateral agencies. In the current FY, Rs 15,000 crore will be arranged with additional amounts in future years Source: Times of India 23-07-2024

5. MSME’s Announcements Details Sidbi to open 24 new branches to serve MSMEs clusters An increase in the Mudra loan limit to Rs 20 lakh from the current Rs 10 lakh for borrowers who have successfully repaid loans under the Tarun category Credit guarantee scheme for MSMEs to be introduced For facilitating term loans to MSMEs, a credit guarantee scheme will be introduced. The scheme will operate on the cooling of credit risks of such MSMEs. A self-financing guarantee fund will provide to each applicant cover of up to Rs 100 crore while loan amount may be larger. Special attention to MSMEs A new mechanism announced for facilitating continuation of bank credit to MSMEs during their stress period. Limit of Mudra loans increased from Rs 10 lakh to 20 lakh. Turnover threshold of buyers for mandatory onboarding on TREDS platform to be reduced from Rs 500cr to & Rs 250cr. Financial support for 50 multi-product food irradiation units in MSME Sector. E-Commerce export hubs to be set up in PPP* mode to enable MSMEs & traditional artisans to sell their products in international markets. Source: Times of India 23-07-2024

6. Agriculture Introduction of 109 high-yielding, climate-resilient varieties of seeds is salutary The introduction of 109 high-yielding, climate-resilient varieties of seeds is salutary. It will reduce production volatility and help stabilise prices over the medium term. This is crucial considering the increasing incidents of inclement weather over the past few years, which have impacted crop yields and contributed to food inflation. Boost for digital agriculture infrastructure Setting up of digital agriculture infrastructure, annual digital crop survey and mapping of farmers to their land parcels will facilitate better credit risk assessment, and enhance formal credit penetration in agriculture, which stands at around 60% today 10,000 need-based bio-inputs units The establishment of 10,000 need-based bio-inputs units will support the area under organic farming, which has increased at a compound annual growth rate of 23% between 1990 and 2023. This comes at a time when chemical fertilisers have been significantly affecting the crop response ratio (quantity of fertilisers used versus yield) Source: Times of India 23-07-2024

7. Infrastructure 1 PM Awas Yojana -Urban 2.0 to fulfill housing needs of 1 crore people Under the PM Awas Yojana -Urban 2.0, the housing needs of 1 crore poor and middle-class families will be addressed with an investment of Rs 10 lakh crores. This will include the central assistance of Rs 2.2 lakh crores in the next five years, Further, the government will facilitate dormitory type rental housing for industrial workers in PPP mode. Budget provides Rs . 2.66 lakh crore for rural development  Substantial sum of Rs . 2.66 lakh crore has been earmarked for the development of rural areas, which includes the enhancement of rural infrastructure. This allocation is expected to significantly improve the living conditions and economic opportunities in rural regions across the country. An ambitious plan to build an additional three crore houses under the PM Awas Yojana . These houses will be constructed in both rural and urban areas, providing affordable housing solutions to a large number of people. Free electricity upto 300 units per month for 1cr household under solar panel scheme Rooftop solar panels that would enable 1 crore households to have electricity free of cost upto 300 units per month. PM Suryaghar Muft Bijli Yojana has been launched to install rooftop solar panels to enable 1 crore households to obtain free electricity upto 300 units each month. Further she said that a "joint venture between NTPC and BHEL will set up 100 MW commercial thermal plant using AUSC (advanced ultra supercritical) technology." Source: Times of India 23-07-2024

8. Infrastructure 2 Will develop corridors in Gaya on the model on Kashi Vishwanath model Government will develop corridors in Vishnupath temple at Gaya, and Mahabodhi temple in Bodhgon the model of the successful Kashi Vishwanath corridor to make them a world-class tourist destination. A comprehensive development initiative for Rajgir and Nalanda , in Bihar will be pursued. We will support tourism in Odisha that has scenic beauty, temples, craftsmanship, natural landscapes, wildlife sanctuaries and pristine beaches. This came in an effort to promote tourism across India with major focus on Bihar and Odisha. We will R&D in nuclear energy sector to form a crucial part of ' Viksit Bharat' Research and development of small and modular nuclear reactors - nuclear energy is expected to form a very significant part of the energy mix for ' Viksit Bharat'. Towards that pursuit, our government will partner with private sector for- Setting up Bharat Small Reactors; Research and development of Bharat Small Modular Reactor; Research and development of newer technologies for nuclear energy. The R&D funding announced the in the interim Budget will be made available for this sector also." Major fillip to the Eastern Dedicated Freight Corridor The development of the Gaya node along the Amritsar-Kolkata route will offer a major fillip to the Eastern Dedicated Freight Corridor. Ports in eastern India will benefit over the medium term. Government provides Rs 11.11 lakh crore towards capex for FY25 The government would maintain a strong fiscal support for infrastructure projects for the next 5 years. Private sector investment in infrastructure would be facilitated via Viability Gap Funding. Further, the government is set to launch Phase IV of PM Gram Sadak Yojana in 25 rural habitations, due to increase in the population. Source: Times of India 23-07-2024

9. Macroeconomics Point of view  Fiscal deficit estimated at 4.9% of GDP, The aim is to reach the deficit below 4.5% Custom duties on gold, silver reduced to 6% Govt. propose to reduce customs duties on gold and silver to 6% and 6.5% on platinum Income Tax slabs under new income tax regime Income Tax slabs for FY 2024-25 for the new income tax regime have been revised. The new income tax regime tax slabs are: Up to Rs 3 lakh the tax is NIL From Rs 3 lakh to Rs 7 lakh the tax rate is 5% From Rs 7 lakh to Rs 10 lakh the tax rate is 10% From Rs 10 lakh to Rs 12 lakh the tax rate is 15% From Rs 12 lakh to Rs 15 lakh the tax rate is 20% Above Rs 15 lakh income the tax rate is 30% FM announces review of income tax A comprehensive review of the Income Tax Act 1961. This will reduce disputes and litigation. It is proposed to be completed in 6 months," Sitharaman said. Government reduces basic customs duty on mobile phones, mobile chargers to 15% Government would exempt customs duty on 25 critical minerals. Source: Times of India 23-07-2024

10. Macroeconomics Point of view Government abolishes Angel tax in a bid to boost investment Angel tax is a tax imposed on the funding that startups receive from angel investors, particularly when the investment amount exceeds the fair market value of the startup's shares. This tax was introduced in India in 2012 to prevent money laundering through investments in unlisted companies at inflated valuations. The difference between the amount received and the fair market value is considered as income and is taxed accordingly. For startups, this can be problematic because early-stage investments are often based on future potential rather than current value, making it difficult to justify the valuations. As a result, startups could face significant tax liabilities, which may hinder their growth and deter investors. FM proposes hike in STT on F&Os to discourage retail participation Govt. to increase the rate of securities transaction tax (STT) on futures and options (F&O) trade to discourage retail investors' participation in the risky instrument. The rates of STT on the sale of an option in securities from 0.0625 per cent to 0.1 per cent of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 per cent of the price at which such futures are traded. TDS rate on e-commerce operators reduced from 1% to 0.1% A comprehensive review of the customs duty structure over the next 6 months. TDS rate on e-commerce to be reduced to 0.1%. I propose that two tax exemption regimes for charities merge into one. I propose to decriminalize TDS delay up to the filing of tax date, Source: Times of India 23-07-2024