The Union Finance Minister, Nirmala Sitharaman, presented the Central Budget 2024. It was the seventh consecutive budget presented by the Finance Minister, setting a unique record by surpassing the record set by former Prime Minister Morarji Desai. It is also the first budget after the BJP-led NDA Government was elected for a record third term.
The most important features of the budget presented by the Finance Minister include:
- Withdrawal of the 2% equalization levy
- The standard deduction for salaried employees hiked to ₹75,000, from ₹50,000
The Finance Minister stated that the focus of the Union Budget 2024-25 is on nine crucial areas. These nine areas have been identified to generate maximum growth opportunities.
- Productivity and Resilience in Agriculture
- Next Generation Reforms
- Employment and Skilling
- Research and Development
- Inclusive Human Resource Development and Social Justice
- Manufacturing and Service
- Infrastructure, Innovation
- Urban Development
- Energy Security
The NDA government depends on two of its allies for crucial support: the Telugu Desam and JD(U).
Both parties have been demanding hefty financial aid from the central government.
While the JD(U) is asking for a hefty financial aid package and special status for Bihar, the Telugu Desam is asking for huge aid for the development of a new capital for Andhra Pradesh in Amaravati.
The Finance Minister has announced huge packages for both states, including a boost in infrastructure and special financial support.
Another important announcement made by the Finance Minister is the abolition of the angel tax for all classes of investors in startups.
This was one of the demands also featured in the Congress manifesto.
Congress leaders Shashi Tharoor and former Finance Minister P. Chidambaram have hailed the abolition of the Angel Tax.
However, the hike in STT (Securities Transaction Tax) on F&O (Futures and Options) securities hurt the Stock Exchange, and the BSE tanked by more than 1,266.17 points after this announcement.
The nation’s defence budget also received a boost and was set at ₹6.21 lakh crore for 2024-25.
This includes ₹1,05,518.43 crore for domestic capital procurement which will provide further impetus to the Atmanirbhar Bharat or Make in India initiative.
However, there has only been a marginal increase in the defence budget as compared to last year.
A new provision was made for the creation of a fund of ₹56 crore to establish the Bharatiya Bhasha Anubhag for the development of a platform to facilitate the translation of various languages into Hindi and vice-versa.
A sum of ₹88 crore has been set aside for the development of Islands in Union Territories.
The nation recently saw the unveiling of new Criminal Laws, and the development of forensic capacity is a crucial element in the newly implemented criminal laws.
Hence, the Finance Minister has set aside ₹700 crore for the Modernization of Forensic Capacity.
The fund for the rehabilitation of Sri Lankan refugees and Tibetans has been reduced, while the budget for the SPG, which only protects the Prime Minister, has been increased by ₹73 crore.
The UPSC, which is much in the news these days, has been allocated ₹200 crore for expenditure on the “examination and selection” of civil servants.
An important feature in the present budget is the allocation of ₹1,248.91 crore for salaries of Union Ministers, entertainment of State guests, and ex-governors.
This is substantially lower than the ₹1,803.01 crore earmarked in 2023-24.
The Railways, which had a separate budget in the past, has been given ₹2,55,393 crore, which is the highest ever and is a very substantial increase in recent years.
The Finance Minister has also taken big steps to encourage investments by foreign entities and this includes new tax structures for charities, foreign shipping companies, and the rationalization of capital gains.
The FM also proposed reducing corporate tax on foreign companies from 40 to 35%.
The FM also suggested allocating ₹11,11,111 crore towards capital expenditure, which amounts to 3.4% of the GDP and is crucial for investment in infrastructure by the central government.
Regarding taxation, a lion’s share of 63 paise will come from direct and indirect taxes, according to the Union Budget 2024-25 documents.
The remaining 27 paise will come from borrowings and other liabilities, 9 paise from non-tax revenue like disinvestment, and 1 paise from non-debt capital receipts.
GST will contribute the largest chunk, 18 paise, in every rupee of revenue.
The government will earn 5 paise out of every rupee from excise duty and 4 paise from customs levies.
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