The current budget marks Finance Minister Sitharaman’s seventh consecutive year in office and the Modi government’s thirteenth consecutive year in office since 2014. In addition, she breaks the record set by former Prime Minister Morarji Desai, who presented six straight budget speeches from 1959 to 1964, by becoming the first finance minister to deliver seven straight budget addresses.
Tuesday, President Droupadi Murmu and Finance Minister Nirmala Sitharaman met at Rashtrapati Bhawan before the latter’s presentation of the Union Budget in Parliament. The President gave her “dahi-cheeni,” an Indian custom in which elders bless their family members with good fortune before they take on significant undertakings.
FM Sitharaman and her group took a typical group photo outside the Finance Ministry earlier in the day. Her saree was off-white in color with a magenta border, and she wore the red ‘bahi-khata’ tablet with the national emblem.
Some of the Highlights of Union Budget 2024-25
Budget significantly boosts the farm industry
In the Budget 2024–25, Finance Minister Niramala Sitharaman planned a spending of Rs 1.52 lakh crore to increase resilience and productivity in the agriculture and related industries.
Utilizing digital public infrastructure, ‘atmanirbharta’ for oil seeds, large-scale vegetable production clusters, and financial support for the network of Nucleus Breeding Centers for shrimp broodstock are some of the strategies revealed to improve productivity and resilience in the agriculture industry.
Referring to “Annadata” (farmers) as one of the four main castes that require attention, the minister stated that the government had raised Minimum Support Prices for all key crops a month prior, fulfilling its pledge to provide at least a 50% profit margin over costs.
Encouraged by the pilot project’s success, the federal government and the states will work together to expedite the adoption of digital public infrastructure (DPI) in agriculture, which will encompass farmers’ holdings and their operations in three years.
According to the Minister of Finance, 400 districts will participate in a digital crop survey for Kharif this year utilizing DPI. The farmer and land registries would contain information on six crore farmers and their holdings. Five states will allow the issuing of Kisan Credit Cards based on Jan Samarth.
According to Sitharaman, a plan is in place to help oil seeds including mustard, peanut, sesame, soybean, and sunflower reach “atmanirbharta.” The government will improve their marketing, warehousing, and production.
Additionally, she stated that large-scale vegetable production clusters will be established in closer proximity to important centers of consumption. For vegetable supply chains, including for product collection, storage, and marketing, the government will support Farmer-Producer Organizations, cooperatives, and start-ups. She said that funding will be made available to establish a network of Nucleus Breeding Centers for shrimp broodstocks. NABARD will assist the financing of shrimp growing, processing, and export.
She said that farmers will be able to cultivate an additional 109 new, high-yielding, climate-resilient varieties of 32 field and horticultural crops. The Minister of Finance additionally declared that one crore farmers nationwide will be introduced to natural farming within the next two years, with certification and branding providing support.
The budget increases defense spending by 4.79 percent to Rs 6.22 lakh crore.
The Ministry of Defence (MoD) has received the largest allocation of all the ministries in the Union Budget 2024–25, totaling Rs 6.22 lakh crore. The funding is intended to support “Aatmanirbharta” in defense technology and production, provide the armed services with cutting-edge equipment and weaponry, and open up employment prospects for young people.
The government has allocated an additional expenditure of Rs 400 crore on innovation in defense through the Acing Development of Innovative Technologies with iDEX (ADITI) scheme, in the Union Budget, which Finance Minister Nirmala Sitharaman presented on Monday. This is in addition to the allocation made to the MoD during the interim Budget.
Through the program, the Defence Ministry can collaborate with entrepreneurs, MSMEs, and creatives to create Def-Tech solutions and provide the Indian military with cutting-edge, homegrown technology. The defense forces’ absolute budgetary allocation for FY 2024–25 under the capital head is Rs 1.72 lakh crore, which is 9.40 percent more than the FY 2023–24 Revised Allocation and 20.33 percent more than the actual expenditure for FY 2022–23.
According to the Defense Ministry, the increased budgetary allocation will satisfy the annual cash outlay requirement for planned capital acquisitions that will outfit the armed forces with cutting-edge specialized technology, deadly weaponry, fighter aircraft, ships, submarines, platforms, unmanned aerial vehicles, drones, specialized vehicles, etc. He said that it will significantly contribute to India’s economy growing to $5 trillion by 2027.
In addition, Rajnath Singh expressed confidence that the Rs 1,72,000 crore capital expenditure would enhance the military’s capabilities. He also expressed hope that the Rs 1,05,518.43 crore set aside for domestic capital procurement would boost “Aatmanibharta” in the defense industry.
The Center maintains capex at Rs 11.11 lakh crore, or 3.4 percent of GDP
The Interim Budget from February set India’s FY25 capital expenditure at Rs 11.11 lakh crore, which Finance Minister Nirmala Sitharaman maintained on Tuesday. This is more than the revised estimate of Rs 9.5 lakh crore from the previous year. According to the Finance Minister, the government will ultimately spend 3.4% of the budget on capital expenditures (capex), which is nearly twice as much as it did five years ago and 3.2% of the budget this year.
The government spent 2.8 times as much on capital projects in FY24 as it did in FY20, totaling Rs 9.5 lakh crore, a YoY increase of 28.2%. According to the Economic Survey, private enterprises increased their capital spending in the fiscal year that ended in March of this year when compared to FY23. The increasing proportion of Gross Fixed Capital Formation (GFCF) to nominal GDP suggests that GFCF is still a significant economic engine.
FM Sitharaman gives Andhra Rs. 15,000 crore and gives Bihar two expressways
In addition to announcing historic projects and funding allocations in Bihar and Andhra Pradesh, the states whose ruling parties are allies with the BJP at the federal level, Finance Minister Nirmala Sitharaman presented her eighth straight budget on Tuesday. She declared the construction of the Patna-Purnia Expressway and the Buxar-Bhagalpur Expressway as two of Bihar’s main expressways. In the Buxar District, two land bridges spanning the Ganga River will also be built. FM Sitharaman also declared that Bihar will get new sports facilities, medical schools, and airports built.
“We will work with multilateral development agencies to arrange special financial assistance. The Finance Minister stated that further funding will be spent in subsequent years in addition to the Rs 15,000 crore that will be set aside in the current fiscal year. FM Sitharaman added that the Polavaram project is Andhra Pradesh’s lifeblood, and the government is firmly committed to funding its early completion since this will improve the nation’s food security. FM Sitharaman continued, “Grants for underprivileged areas of north-coastal Andhra Pradesh will also be provided.”
Union Budget: Increased Mudra loan limit from Rs 10 lakh to Rs 20 lakh
In addition to raising Mudra loans to Rs 20 lakh from Rs 10 lakh, the government on Tuesday unveiled a number of initiatives aimed at improving the mood of MSMEs and the non-farming business community.
The government’s flagship programme, the Pradhan Mantri Mudra Yojana (PMMY), enables microcredit/loans up to Rs 10 lakh to revenue-generating microenterprises operating in the manufacturing, trading, or service sectors, as well as in industries related to agriculture like dairy, beekeeping, and poultry. Through the program, member lending institutions offer financial support to micro and small businesses that generate revenue from non-farm, non-corporate sources.
The Finance Minister unveiled a credit guarantee program for MSMEs operating in the manufacturing sector, which allows term loans for the acquisition of machinery and offers a range of financing options to support MSMEs in their technological endeavors.
Encouragement of youth empowerment and women’s employment
Among other things, Union Finance Minister Nirmala Sitharaman outlined the government’s plans for youth empowerment when she unveiled her seventh budget on Tuesday. One of the budget’s features is the provision of a month’s salary as a Provident Fund contribution to newly hired employees.
Additionally, youth will be encouraged to apply for internships in 500 well-established companies. The Finance Minister added that the internship programme will also provide a one-time assistance of Rs 6,000 and an internship allowance of Rs 5000. “The program is intended for anyone starting a career in any industry. 210 lakh adolescents will profit from it, according to Nirmala Sitharaman.
The government has announced plans worth over Rs 3 lakh crore to help women and girls
The government on Tuesday pledged more than Rs 3 lakh crore for programmes benefiting women and girls, with a focus on women-led development. During the presentation of her seventh Budget, Union Finance Minister Nirmala Sitharaman declared, “Increasing the participation of women in the workforce will be a priority.”
“This will be facilitated by setting up hostels and creating partnerships to organise women-specific skilling programmes and promotion of market access for women Self Help Group enterprises,” she stated. She stated, “We need to focus on the poor, women, youth and farmers.”
In addition, there was a 218.8% increase in funding for women’s welfare and empowerment between FY14 and FY25.
Angel tax eliminated for entrepreneurs to encourage domestic innovation
The government stated on Tuesday that it will remove the angel tax in an effort to better support local talent and innovation, which is a huge relief for the startup sector. In an effort to promote creativity among startups, the industry has pushed for the rationalization of the Angel Tax by eliminating Section 56(2)(viib). They said that doing away with this provision would “greatly aid in capital formation” for the startup sector.
According to JSA Advocates & Solicitors Partner Raj Ramachandran, the much-awaited change in the Budget 2024 is the elimination of the angel tax. “Since introduction, it has created discomfort and confusion for all players alike, and is certainly one change that will be a welcome one for all,” she said.
As stated in its most recent assessment of the Indian economy, the Finance Ministry stated that over 1.14 lakh startups had so far generated over 12 lakh jobs in India. The new standards did not apply to startups that were registered with the DPIIT. The administration emphasized that more than 80,000 entrepreneurs will profit from the exemption.
Budget provides 4 crore salaried people with income tax relief
With the release of the 2024–25 budget, Finance Minister Nirmala Sitharaman promised a fiscal feast for four crore salaried workers and pensioners. FM Sitharaman made two announcements regarding Personal Income Tax Rates for individuals choosing to use the new tax structure.
First, it is suggested to raise the standard deduction for paid workers from Rs 50,000 to Rs 75,000. In a same vein, it is suggested that pensioners’ family pension deduction be increased from Rs 15,000 to Rs 25,000. The Finance Minister stated that around four crore salaried people and pensioners will benefit from this.
The tax rate structure will be updated in the new tax regime in the following ways:
- 0-3 lakh rupee – Zero
- 3-7 lakh – 5 per cent
- 7-10 lakh – 10 per cent
- 10-12 lakh – 15 per cent
- 12-15 lakh – 20 per cent
- 15 lakh and above – 30 per cent
The Finance Minister declared, “Salaried employees in the new tax regime will save up to Rs 17,500 in income tax.” More than two-thirds have benefited from the new personal income tax regime, according to data that is currently available for the most recent fiscal year, she added.
One crore homes for urban poor are announced by the center
Nirmala Sitharaman, the Union Finance Minister, suggested on Tuesday allocating Rs 2.2 lakh crore for urban housing in addition to a Rs 10 lakh crore interest subsidy program under the popular Pradhan Mantri Awas Yojana (PMAY) initiative. This will strengthen the government’s initiative to provide affordable housing.
In her Budget Speech in Parliament, FM Sitharaman stated, “Housing needs of one crore urban poor and middle-class families to be addressed with an investment of Rs 10 lakh crore, including the Central assistance of Rs 2.2 lakh crore over the next five years.” She also brought up the first Cabinet decision of the Modi 3.0 term, stating that PMAY will enable the construction of three crore more dwellings, of which two crore will be in rural regions (Grameen).
One of the most ambitious programs of the Modi administration is the Pradhan Mantri Awas Yojana (PMAY). In the most recent budget announcement, the Pradhan Mantri Awas Yojana-Urban (PMAY-U) was significantly expanded in terms of allocation.
FM promises to designate ULPIN for all rural land
A number of land-related reforms and action initiatives were announced by FM Nirmala Sitharaman, one of which was the assignment of a Unique Land Parcel Identification Number (ULPIN) to every piece of land in rural areas. As part of the Digital India Land Records Modernization Programme (DILRMP), each land parcel is assigned a 14-digit Unique Land Parcel Identification Number, which is determined by the coordinates of its longitude and latitude.
Georeferenced cadastral maps and thorough surveys are necessary for its allocation.
In order to provide Integrated Land Services to the public and all stakeholders, the Department of Land Resources (DOLR), which is part of the Ministry of Rural Development, claims that ULPIN is a single, reliable source of information about any piece of land or property.
Accurate land accounting and statistics via ULPIN will support the growth of land banks. The Integrated Land Information Management System (ILIMS) will be the end result of it. The DOLR claims that this would enhance disaster preparedness and response activities, ease real estate transfers, and assist in resolving property taxes concerns.
It would also lessen border conflicts and make it possible to determine the eligibility of beneficiaries of schemes that are based on the amount of land possessed. ULPIN would prove to be a significant turning point for the government’s 2022 Geospatial Policy,” the agency continues.
ULPIN has currently been implemented in 29 states, and the Andaman & Nicobar Islands, Puducherry, Telangana, Manipur, and other areas have all participated in pilot testing. Certain union territories (UTs) like Jammu, Ladakh, and Madhya Pradesh and Kashmir are also using ULPIN in Survey of Villages Abadi and Mapping with Improvised Technology in Village Areas (SVAMITVA).
The government will waive customs duties on three more cancer medications
Union Finance Minister Nirmala Sitharaman waived customs duties on three cancer medications at the presentation of the Union Budget 2024, providing a significant respite to cancer patients. Osimertinib, Durvalumab, and Trastuzumab Deruxtecan are the three medications. Those fighting the fatal illness may find their financial burden lessened as a result of the customs duty reduction.
The Union Minister also demanded exemptions from customs taxes for flat panel detectors and X-ray tubes in her eighth budget statement. “I also propose changes in the BCD (Basic Customs Duty), X-ray tubes, and flat panel detectors for use in medical X-ray machines under the phased manufacturing programme to synchronise them with domestic capacity addition,” stated FM Sitharaman.
Customs duty on smartphones and component parts is lowered to 15% by the center; industry optimism
The government said on Tuesday that the existing 20% basic customs tax (BCD) will be reduced to 15% for mobile phones, printed circuit board assemblies (PCBAs), and mobile chargers.
Over the past six years, the Indian mobile phone sector has grown, with its domestic manufacturing of mobile phones increasing threefold and its exports rising about 100fold.
Presenting the Union Budget 2024–2025, Nirmala Sitharaman stated, “I now propose to reduce the BCD on mobile phones, mobile PCBA, and mobile chargers to 15% in the interest of consumers.” India is currently producing 99 percent of its smartphones domestically, having greatly decreased its reliance on imports.
Rs 1.48 lakh crore for youth employment, education, and skill development
For young employment, education, and skill development, the Center has allocated Rs 1.48 lakh crore, which is 30% more than the prior amount of Rs 1.13 lakh crore. Finance Minister Nirmala Sitharaman said, “We particularly focus on employment, skilling, MSMEs, and the middle class in this Budget,” during the Tuesday presentation of the Union Budget 2024–25 in Parliament.
The Finance Minister unveiled a bundle of five programs and initiatives from the Prime Minister, carrying on the subject of the first full-year Budget of the recently elected administration. With a central budget of Rs 2 lakh crore, the package promises to encourage employment, skilling, and other possibilities for 4.1 crore youngsters during a 5-year period.”I have allocated Rs 1.48 lakh crore for education, employment, and skill development this year,” the speaker continued.
Going into more depth about the announcement, Sitharaman said that as part of the Prime Minister’s package, the government will execute the following three “Employment Linked Incentive” programs. According to her, they would be determined by enrollment in the EPFO and will center on supporting employers and employees as well as recognizing first-time workers.
In five years, 20 lakh young people will be skilled, according to the Finance Minister. Additionally, the government would contribute up to Rs 10 lakh toward higher education at local universities.
1,000 Industrial Training Institutes will be updated in a hub-and-spoke configuration as part of the program.