Finance Minister Nirmala Sitharaman presented the Union Budget 2024 today in Parliament, marking the beginning of a new fiscal strategy under the Modi 3.0 government. The budget, themed around empowerment of the poor, women, youth, and farmers, outlines a series of fiscal measures aimed at boosting economic growth, enhancing job creation, and providing relief to various sectors through strategic tax reforms and targeted investments.
Tax Reforms:
One of the pivotal announcements in the budget pertains to significant changes in the taxation framework. Sitharaman unveiled revised income tax slabs under the New Tax Regime, offering relief to middle-class taxpayers. The new slabs are structured as follows:
- Up to Rs 3 lakh: No tax
- Rs 3 – 7 lakh: 5%
- Rs 7 – 10 lakh: 10%
- Rs 10 – 12 lakh: 15%
- Rs 12 – 15 lakh: 20%
- Above Rs 15 lakh: 30%
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Moreover, the standard deduction under the New Tax Regime has been raised from Rs 30,000 to Rs 75,000, providing substantial savings to taxpayers. Further, deductions for family pensioners have been increased from Rs 15,000 to Rs 25,000.
In a bid to simplify capital gains taxation, the Finance Minister announced a fixed rate of 20% for short-term capital gains and 12.5% for long-term capital gains on specified assets. Additionally, the much-debated Angel Tax has been abolished for all investor classes, a move aimed at fostering a more conducive environment for startups and angel investors.
Customs Duty Adjustments:
The budget also introduces adjustments in customs duties aimed at boosting domestic manufacturing and controlling imports. Basic customs duties on gold, silver, and platinum have been reduced to 6%, while certain essential items like cancer medicines and mobile phones will benefit from reduced duties, effectively lowering their retail prices. Conversely, customs duties on ammonium nitrate and non-biodegradable plastics have been raised to 10% and 25% respectively, aligning with environmental and security imperatives.
Sector-Specific Allocations and Initiatives:
The budget allocates substantial funds towards critical sectors:
- Agriculture: Rs 1.52 lakh crore has been earmarked for agriculture and allied sectors, focusing on research, high-yielding varieties, and climate-resilient farming practices.
- Infrastructure: A capex outlay of Rs 11.1 lakh crore is retained, emphasizing development in infrastructure across various states including Bihar and Andhra Pradesh.
- Housing: Rs 10 lakh crore has been allocated for urban housing, targeting the construction of 1 crore houses for the urban poor and middle class.
Employment and Social Welfare Initiatives:
In a bid to enhance employment opportunities, Sitharaman announced the launch of multiple employment-linked schemes with a budgetary allocation of Rs 2 lakh crore over the next five years. Additionally, measures such as enhanced NPS deductions for employers and financial assistance for higher education loans aim to further bolster the job market and skill development initiatives.
Conclusion:
In her budget speech, Finance Minister Sitharaman reiterated the government’s commitment to inclusive growth and fiscal prudence. The Union Budget 2024 sets a robust foundation for economic revival and sustainable development, reflecting the government’s resolve to navigate global uncertainties while maintaining India’s economic resilience and stability.
As the budgetary proposals unfold, stakeholders across sectors eagerly anticipate the implementation and impact of these measures on India’s economic trajectory in the coming fiscal year.
