Kurukshetra Magazine September 2024 - 2 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

 Page 1


he Union Budget, presented by 
Hon’ble Finance Minister on 23 July 
2024, is for a period of eight months, 
much shorter than a financial year. 
Yet, it is a continuum of initiatives 
which builds on the foundations laid by recent Budgets, 
including the Interim Budget presented in February, 
* Dr. Ishita G. Tripathy
* The author is Additional Development Commissioner in Ministry of MSME, Government of India.
   E-mail: igtripathy@gmail.com
This article analyses Budget 
2024 announcements, 
especially those related 
to the manufacturing and 
services sectors. This  
elucidates the ‘Whole of 
Government’ approach 
adopted in the Budget 
priorities and the action 
points contained therein. It 
also provides examples of 
linkage of on-going schemes 
and the new initiatives 
which underscore the 
Government’s commitment 
to Viksit Bharat. The Budget 
announcements instill 
renewed vigour in recent 
initiatives taken by the 
Government of India.
T
2024. It also provides the foundation on which future 
plans and programmes can be built, which can lead to 
a Viksit Bharat.
Economic Survey 2023-24 was presented in the 
Parliament a day before the Budget. The Survey 
mentions that the Indian economy grew at 9.7 percent 
and 7.0 percent in 2021-22 and 2022-23, respectively, 
Budget 2024-25:  
A Step Towards 
Viksit Bharat
Page 2


he Union Budget, presented by 
Hon’ble Finance Minister on 23 July 
2024, is for a period of eight months, 
much shorter than a financial year. 
Yet, it is a continuum of initiatives 
which builds on the foundations laid by recent Budgets, 
including the Interim Budget presented in February, 
* Dr. Ishita G. Tripathy
* The author is Additional Development Commissioner in Ministry of MSME, Government of India.
   E-mail: igtripathy@gmail.com
This article analyses Budget 
2024 announcements, 
especially those related 
to the manufacturing and 
services sectors. This  
elucidates the ‘Whole of 
Government’ approach 
adopted in the Budget 
priorities and the action 
points contained therein. It 
also provides examples of 
linkage of on-going schemes 
and the new initiatives 
which underscore the 
Government’s commitment 
to Viksit Bharat. The Budget 
announcements instill 
renewed vigour in recent 
initiatives taken by the 
Government of India.
T
2024. It also provides the foundation on which future 
plans and programmes can be built, which can lead to 
a Viksit Bharat.
Economic Survey 2023-24 was presented in the 
Parliament a day before the Budget. The Survey 
mentions that the Indian economy grew at 9.7 percent 
and 7.0 percent in 2021-22 and 2022-23, respectively, 
Budget 2024-25:  
A Step Towards 
Viksit Bharat
21 Kurukshetra       September 2024
and is estimated to grow at 8.2 percent in real terms in 
2023-24. The figures compare well with those of other 
economies of the world. The high growth rates have 
been a result of prudent fiscal and monetary measures. 
The Survey mentions that the inflation rate is under 
control; the trade deficit in 2023-24 is lower than that 
of the preceding year; the foreign exchange reserves 
are sufficient and public sector investment has caught a 
momentum.In this backdrop, this paper analyses some 
Budget 2024 announcements, especially those related 
to the manufacturing and services sectors. 
Budget Priorities
The focus of the Interim Budget 2024 was on the 
Poor, Women, Youth and Farmers. Taking this forward, 
the recent Budget emphasizes on employment, skilling, 
Micro, Small and Medium Enterprises (MSMEs) and the 
middle class. There is a common thread, underscoring 
all-round development, which runs through all the 
nine priorities of Union Budget 2024-25. The nav ratna 
priorities are as follows:
i. Productivity and Resilience in Agriculture;
ii. Employment and Skilling;
iii. Inclusive Human Resource Development and Social 
Justice;
iv. Manufacturingand Services;
v. Urban Development;
vi. Energy Security;
vii. Infrastructure;
viii. Innovation, Research and Development; and
ix. Next Generation Reforms
As clear from the above list, the priorities are not 
mutually exclusive. For example, one of the actions 
envisaged for priority number two on ‘Employment 
and Skilling’ is ‘Job Creation in Manufacturing’, 
which is clearly linked to priority number four on 
‘Manufacturing and Services’ priority.The proposal 
for job creation in manufacturing is envisaged to 
incentivize both employer and employee for ensuring 
additional employment in themanufacturing sector. 
It is expected that 30 lakh youth will benefit 
from it. Complementing this proposal, is another 
announcement which states that the Government 
will reimburse employers up to Rs. 3,000 per month 
for 2 years towards their Employees’ Provident 
Fund Organisation contribution for each additional 
employee. This scheme is intended to benefit 50 lakh 
additional employees. Such a convergence highlights 
the significance of a ‘Whole of Government’ approach 
to growth. 
Another example is the announcement of 
stepping up of programmes such as PM Vishwakarma 
under priority number three on ‘Inclusive Human 
Resource Development and Social Justice’. With 
a Budgetary provision of Rs. 13,000 crore for five 
years aimed at benefitting 30 lakh artisans and 
craftspeople, who work with their hands, using tools, 
the PM Vishwakarma Scheme was launched on 17 
September 2023. The Scheme envisages a holistic 
support to the beneficiaries through the three-fold 
objective of Samman, Samarthya and Samriddhi by 
providing them recognition; skill upgradation; loans 
up to Rs. 3 lakh; toolkits up to Rs. 15,000; incentives 
for digital transactions; and marketing support. 
Within 10 months since the launch, there have been 
more than 2.3 crore enrolments in the Scheme, with 
15 lakh having successfully registered, after the 
three-stage verification process of the applicants. 
The overlap between priorities three and four is 
explained by the fact that artisans and craftpeople 
in 18 trades are eligible under PM Vishwakarma to 
avail of the benefits. These 18 trades which span 
across manufacturing and services are armourers, 
barbers, basket/mat/broom makers/coir weavers, 
blacksmiths, boat makers, carpenters, cobblers, doll 
and toy makers, fishing net makers, garland-makers, 
goldsmiths, hammer and toolkit makers, locksmiths, 
masons, potters, sculptors/stone breakers, 
washermen and tailors.   
Page 3


he Union Budget, presented by 
Hon’ble Finance Minister on 23 July 
2024, is for a period of eight months, 
much shorter than a financial year. 
Yet, it is a continuum of initiatives 
which builds on the foundations laid by recent Budgets, 
including the Interim Budget presented in February, 
* Dr. Ishita G. Tripathy
* The author is Additional Development Commissioner in Ministry of MSME, Government of India.
   E-mail: igtripathy@gmail.com
This article analyses Budget 
2024 announcements, 
especially those related 
to the manufacturing and 
services sectors. This  
elucidates the ‘Whole of 
Government’ approach 
adopted in the Budget 
priorities and the action 
points contained therein. It 
also provides examples of 
linkage of on-going schemes 
and the new initiatives 
which underscore the 
Government’s commitment 
to Viksit Bharat. The Budget 
announcements instill 
renewed vigour in recent 
initiatives taken by the 
Government of India.
T
2024. It also provides the foundation on which future 
plans and programmes can be built, which can lead to 
a Viksit Bharat.
Economic Survey 2023-24 was presented in the 
Parliament a day before the Budget. The Survey 
mentions that the Indian economy grew at 9.7 percent 
and 7.0 percent in 2021-22 and 2022-23, respectively, 
Budget 2024-25:  
A Step Towards 
Viksit Bharat
21 Kurukshetra       September 2024
and is estimated to grow at 8.2 percent in real terms in 
2023-24. The figures compare well with those of other 
economies of the world. The high growth rates have 
been a result of prudent fiscal and monetary measures. 
The Survey mentions that the inflation rate is under 
control; the trade deficit in 2023-24 is lower than that 
of the preceding year; the foreign exchange reserves 
are sufficient and public sector investment has caught a 
momentum.In this backdrop, this paper analyses some 
Budget 2024 announcements, especially those related 
to the manufacturing and services sectors. 
Budget Priorities
The focus of the Interim Budget 2024 was on the 
Poor, Women, Youth and Farmers. Taking this forward, 
the recent Budget emphasizes on employment, skilling, 
Micro, Small and Medium Enterprises (MSMEs) and the 
middle class. There is a common thread, underscoring 
all-round development, which runs through all the 
nine priorities of Union Budget 2024-25. The nav ratna 
priorities are as follows:
i. Productivity and Resilience in Agriculture;
ii. Employment and Skilling;
iii. Inclusive Human Resource Development and Social 
Justice;
iv. Manufacturingand Services;
v. Urban Development;
vi. Energy Security;
vii. Infrastructure;
viii. Innovation, Research and Development; and
ix. Next Generation Reforms
As clear from the above list, the priorities are not 
mutually exclusive. For example, one of the actions 
envisaged for priority number two on ‘Employment 
and Skilling’ is ‘Job Creation in Manufacturing’, 
which is clearly linked to priority number four on 
‘Manufacturing and Services’ priority.The proposal 
for job creation in manufacturing is envisaged to 
incentivize both employer and employee for ensuring 
additional employment in themanufacturing sector. 
It is expected that 30 lakh youth will benefit 
from it. Complementing this proposal, is another 
announcement which states that the Government 
will reimburse employers up to Rs. 3,000 per month 
for 2 years towards their Employees’ Provident 
Fund Organisation contribution for each additional 
employee. This scheme is intended to benefit 50 lakh 
additional employees. Such a convergence highlights 
the significance of a ‘Whole of Government’ approach 
to growth. 
Another example is the announcement of 
stepping up of programmes such as PM Vishwakarma 
under priority number three on ‘Inclusive Human 
Resource Development and Social Justice’. With 
a Budgetary provision of Rs. 13,000 crore for five 
years aimed at benefitting 30 lakh artisans and 
craftspeople, who work with their hands, using tools, 
the PM Vishwakarma Scheme was launched on 17 
September 2023. The Scheme envisages a holistic 
support to the beneficiaries through the three-fold 
objective of Samman, Samarthya and Samriddhi by 
providing them recognition; skill upgradation; loans 
up to Rs. 3 lakh; toolkits up to Rs. 15,000; incentives 
for digital transactions; and marketing support. 
Within 10 months since the launch, there have been 
more than 2.3 crore enrolments in the Scheme, with 
15 lakh having successfully registered, after the 
three-stage verification process of the applicants. 
The overlap between priorities three and four is 
explained by the fact that artisans and craftpeople 
in 18 trades are eligible under PM Vishwakarma to 
avail of the benefits. These 18 trades which span 
across manufacturing and services are armourers, 
barbers, basket/mat/broom makers/coir weavers, 
blacksmiths, boat makers, carpenters, cobblers, doll 
and toy makers, fishing net makers, garland-makers, 
goldsmiths, hammer and toolkit makers, locksmiths, 
masons, potters, sculptors/stone breakers, 
washermen and tailors.   
22 Kurukshetra       September 2024
Manufacturing and Services
The contribution of industry and services sectors 
at 27.6 percent and 54.7 percent, respectively, to Gross 
Value Added (GVA) at current prices in 2023-24, justify 
the focus of the Budget on manufacturing and services. 
Manufacturing is a sub-sector within industry. Economic 
Survey 2023-24 analyses that the high output share of 
manufacturing indicates its tremendous backward and 
forward linkages. The average annual growth rate of the 
manufacturing sector over the past decade has been 5.2 
percent, despite the adverse impact of the pandemic. 
The services sector recorded a real growth rate of more 
than 6 percent in most years of the past decade, i.e. 
except 2020-21. In 2023-24, estimates indicate a growth 
of 7.6 percent for the services sector. 
Entrepreneurship
Entrepreneurship development, bolstered by 
facilitating access to finance, technology and marketing, 
along with easing out doing business, have been 
at the forefront of GoI’s policies and programmes. 
Entrepreneurs are known to grab opportunities, even in 
the worst adverse situations, the case in point being the 
challenges posed by the recent global COVID pandemic 
of 2020 to 2022, which debilitated a substantial part 
of the world. But the enterprising ones were quick 
to seize the chance and transformed challenges into 
opportunities viz. developing and distributing vaccines; 
reaching the unreached through contactless home 
deliveries, devising innovative ways of working from 
home, and encouraging online services at workplaces to 
help reducing overall consumers’ and producers’ costs.
Irrefutably, the factor of production in a business 
venture, which deals with the vagaries of risk and 
uncertainty, is entrepreneurship. Besides nurturing the 
other three factors of production, viz. land, labour and 
capital, for an enterprise to flourish, it is imperative to 
hone entrepreneurial skills. Schumpeter’s competitive 
strategy advocated ‘creative destruction’, resting on 
the principle of continuous replacement through 
new innovation and invention, entailing new product 
performance, new processes, new markets, new 
technologies and new forms of organisations. 
Two necessary conditions for entrepreneurship 
are ensuring flexibility in establishing business venture, 
creativity and innovation; and enabling economic 
conditions that give enterprises an opportunity to 
gain and grow. Recent surveys have observed that 
the level of entrepreneurial activity varies across all 
regions and income groups, with the highest levels 
of entrepreneurial activities being found in the Latin 
American and Caribbean region, as illustrated in 
‘Global Entrepreneurship Monitor, 2024’. Further, 
an environment encouraging entrepreneurship 
development may exist despite the level of income 
of the economy and the examples of India and China 
illuminate the point.
Economic Survey 2023-24 prescribed “greater 
formalisation of smaller manufacturers, alleviating their 
supply chain bottlenecks, facilitating market access 
and improving access to finance”. Recent Government 
initiatives, through the Budget announcements or 
otherwise, have focussed on exactly this prescription. 
Since the adoption of twin criteria of investment in 
plant and machinery and turnover for categorizing 
enterprises as micro, small and medium in 2020, as 
many as 4.81 crore enterprises have registered on 
Government of India’s Udyam Registration Portal and 
Udyam Assist Platform. This has been a result of special 
formalisation drives taken up by the Government along 
with other stakeholders. While 30 percent of these 
enterprises are into manufacturing, the remaining 
provide services. The registered MSMEs together 
provide employment to 21 crore people. As expected, 
on an average, registered MSMEs involved in the 
manufacturing provide employment to 7 people per 
enterprise and registered MSMEs rendering services, 
excluding traders, provide employment to 4 people 
per enterprise. In this backdrop, Budget 2024 rightly 
Page 4


he Union Budget, presented by 
Hon’ble Finance Minister on 23 July 
2024, is for a period of eight months, 
much shorter than a financial year. 
Yet, it is a continuum of initiatives 
which builds on the foundations laid by recent Budgets, 
including the Interim Budget presented in February, 
* Dr. Ishita G. Tripathy
* The author is Additional Development Commissioner in Ministry of MSME, Government of India.
   E-mail: igtripathy@gmail.com
This article analyses Budget 
2024 announcements, 
especially those related 
to the manufacturing and 
services sectors. This  
elucidates the ‘Whole of 
Government’ approach 
adopted in the Budget 
priorities and the action 
points contained therein. It 
also provides examples of 
linkage of on-going schemes 
and the new initiatives 
which underscore the 
Government’s commitment 
to Viksit Bharat. The Budget 
announcements instill 
renewed vigour in recent 
initiatives taken by the 
Government of India.
T
2024. It also provides the foundation on which future 
plans and programmes can be built, which can lead to 
a Viksit Bharat.
Economic Survey 2023-24 was presented in the 
Parliament a day before the Budget. The Survey 
mentions that the Indian economy grew at 9.7 percent 
and 7.0 percent in 2021-22 and 2022-23, respectively, 
Budget 2024-25:  
A Step Towards 
Viksit Bharat
21 Kurukshetra       September 2024
and is estimated to grow at 8.2 percent in real terms in 
2023-24. The figures compare well with those of other 
economies of the world. The high growth rates have 
been a result of prudent fiscal and monetary measures. 
The Survey mentions that the inflation rate is under 
control; the trade deficit in 2023-24 is lower than that 
of the preceding year; the foreign exchange reserves 
are sufficient and public sector investment has caught a 
momentum.In this backdrop, this paper analyses some 
Budget 2024 announcements, especially those related 
to the manufacturing and services sectors. 
Budget Priorities
The focus of the Interim Budget 2024 was on the 
Poor, Women, Youth and Farmers. Taking this forward, 
the recent Budget emphasizes on employment, skilling, 
Micro, Small and Medium Enterprises (MSMEs) and the 
middle class. There is a common thread, underscoring 
all-round development, which runs through all the 
nine priorities of Union Budget 2024-25. The nav ratna 
priorities are as follows:
i. Productivity and Resilience in Agriculture;
ii. Employment and Skilling;
iii. Inclusive Human Resource Development and Social 
Justice;
iv. Manufacturingand Services;
v. Urban Development;
vi. Energy Security;
vii. Infrastructure;
viii. Innovation, Research and Development; and
ix. Next Generation Reforms
As clear from the above list, the priorities are not 
mutually exclusive. For example, one of the actions 
envisaged for priority number two on ‘Employment 
and Skilling’ is ‘Job Creation in Manufacturing’, 
which is clearly linked to priority number four on 
‘Manufacturing and Services’ priority.The proposal 
for job creation in manufacturing is envisaged to 
incentivize both employer and employee for ensuring 
additional employment in themanufacturing sector. 
It is expected that 30 lakh youth will benefit 
from it. Complementing this proposal, is another 
announcement which states that the Government 
will reimburse employers up to Rs. 3,000 per month 
for 2 years towards their Employees’ Provident 
Fund Organisation contribution for each additional 
employee. This scheme is intended to benefit 50 lakh 
additional employees. Such a convergence highlights 
the significance of a ‘Whole of Government’ approach 
to growth. 
Another example is the announcement of 
stepping up of programmes such as PM Vishwakarma 
under priority number three on ‘Inclusive Human 
Resource Development and Social Justice’. With 
a Budgetary provision of Rs. 13,000 crore for five 
years aimed at benefitting 30 lakh artisans and 
craftspeople, who work with their hands, using tools, 
the PM Vishwakarma Scheme was launched on 17 
September 2023. The Scheme envisages a holistic 
support to the beneficiaries through the three-fold 
objective of Samman, Samarthya and Samriddhi by 
providing them recognition; skill upgradation; loans 
up to Rs. 3 lakh; toolkits up to Rs. 15,000; incentives 
for digital transactions; and marketing support. 
Within 10 months since the launch, there have been 
more than 2.3 crore enrolments in the Scheme, with 
15 lakh having successfully registered, after the 
three-stage verification process of the applicants. 
The overlap between priorities three and four is 
explained by the fact that artisans and craftpeople 
in 18 trades are eligible under PM Vishwakarma to 
avail of the benefits. These 18 trades which span 
across manufacturing and services are armourers, 
barbers, basket/mat/broom makers/coir weavers, 
blacksmiths, boat makers, carpenters, cobblers, doll 
and toy makers, fishing net makers, garland-makers, 
goldsmiths, hammer and toolkit makers, locksmiths, 
masons, potters, sculptors/stone breakers, 
washermen and tailors.   
22 Kurukshetra       September 2024
Manufacturing and Services
The contribution of industry and services sectors 
at 27.6 percent and 54.7 percent, respectively, to Gross 
Value Added (GVA) at current prices in 2023-24, justify 
the focus of the Budget on manufacturing and services. 
Manufacturing is a sub-sector within industry. Economic 
Survey 2023-24 analyses that the high output share of 
manufacturing indicates its tremendous backward and 
forward linkages. The average annual growth rate of the 
manufacturing sector over the past decade has been 5.2 
percent, despite the adverse impact of the pandemic. 
The services sector recorded a real growth rate of more 
than 6 percent in most years of the past decade, i.e. 
except 2020-21. In 2023-24, estimates indicate a growth 
of 7.6 percent for the services sector. 
Entrepreneurship
Entrepreneurship development, bolstered by 
facilitating access to finance, technology and marketing, 
along with easing out doing business, have been 
at the forefront of GoI’s policies and programmes. 
Entrepreneurs are known to grab opportunities, even in 
the worst adverse situations, the case in point being the 
challenges posed by the recent global COVID pandemic 
of 2020 to 2022, which debilitated a substantial part 
of the world. But the enterprising ones were quick 
to seize the chance and transformed challenges into 
opportunities viz. developing and distributing vaccines; 
reaching the unreached through contactless home 
deliveries, devising innovative ways of working from 
home, and encouraging online services at workplaces to 
help reducing overall consumers’ and producers’ costs.
Irrefutably, the factor of production in a business 
venture, which deals with the vagaries of risk and 
uncertainty, is entrepreneurship. Besides nurturing the 
other three factors of production, viz. land, labour and 
capital, for an enterprise to flourish, it is imperative to 
hone entrepreneurial skills. Schumpeter’s competitive 
strategy advocated ‘creative destruction’, resting on 
the principle of continuous replacement through 
new innovation and invention, entailing new product 
performance, new processes, new markets, new 
technologies and new forms of organisations. 
Two necessary conditions for entrepreneurship 
are ensuring flexibility in establishing business venture, 
creativity and innovation; and enabling economic 
conditions that give enterprises an opportunity to 
gain and grow. Recent surveys have observed that 
the level of entrepreneurial activity varies across all 
regions and income groups, with the highest levels 
of entrepreneurial activities being found in the Latin 
American and Caribbean region, as illustrated in 
‘Global Entrepreneurship Monitor, 2024’. Further, 
an environment encouraging entrepreneurship 
development may exist despite the level of income 
of the economy and the examples of India and China 
illuminate the point.
Economic Survey 2023-24 prescribed “greater 
formalisation of smaller manufacturers, alleviating their 
supply chain bottlenecks, facilitating market access 
and improving access to finance”. Recent Government 
initiatives, through the Budget announcements or 
otherwise, have focussed on exactly this prescription. 
Since the adoption of twin criteria of investment in 
plant and machinery and turnover for categorizing 
enterprises as micro, small and medium in 2020, as 
many as 4.81 crore enterprises have registered on 
Government of India’s Udyam Registration Portal and 
Udyam Assist Platform. This has been a result of special 
formalisation drives taken up by the Government along 
with other stakeholders. While 30 percent of these 
enterprises are into manufacturing, the remaining 
provide services. The registered MSMEs together 
provide employment to 21 crore people. As expected, 
on an average, registered MSMEs involved in the 
manufacturing provide employment to 7 people per 
enterprise and registered MSMEs rendering services, 
excluding traders, provide employment to 4 people 
per enterprise. In this backdrop, Budget 2024 rightly 
23 Kurukshetra       September 2024
provides special attention to MSMEs, especially the 
labour-intensive ones which are into manufacturing. 
The comprehensive package for MSMEs consists of 
financing, regulatory changes and technology support, 
with the objective of making them globally competitive. 
Financing 
The objective of loan guarantees is to protect 
the lender against default by the borrower, who 
typically has a low credit rating and may not have any 
collateral. Based on this principle, the Ministry of MSME 
implements the Credit Guarantee Scheme for Micro 
and Small Enterprises with the objective of providing 
guarantee coverage of 75-85 percent on loans up to 
Rs. 5 crore. Since the roll out of the Scheme in 2000, 
more than 93 lakh guarantees worth Rs. 7 lakh crore 
have been provided to Micro and Small Enterprises. 
Complementing this Scheme, is the announcement 
of Budget 2024 regarding the introduction of another 
Credit Guarantee Scheme, which would be for 
strengthening the manufacturing sector by facilitating 
term loans to MSMEs for the purchase of machinery and 
equipment, without collateral or third-part guarantee. 
The guarantee coverage to each MSME 
applicant will be up to Rs. 100 crore, although 
the loan amount may be larger. For this 
purpose, there will be separately constituted 
self-financing guarantee fund. 
Traditional assessments of credit 
eligibility do not always capture the potential 
of MSMEs. In this context, the Budget 
announcement regarding an alternate system 
of public sector banks to assess MSMEs for 
their credit eligibility based on their digital 
footprints is a welcome step. Further, to 
prevent MSMEs from slipping into a non-
performing asset, a new mechanism has been 
proposed so that they can continue receiving 
bank credit even when they are under stress. 
This will ease their financial duress. The 
ceiling on small-sized loans, i.e. Mudra, has 
been enhanced from Rs. 10 lakh to Rs. 20 
lakh to accommodate the growing demand, 
which is encouraging. To ensure timely payments to 
MSMEs, the Budget has reduced the turnover threshold 
of buyers on Trade Receivables Discounting System 
(TReDS) from Rs. 500 crore to Rs. 250 crore. Since the 
ceiling on turnover for the MSME sector is Rs. 250 crore, 
this announcement will bring all enterprises larger than 
MSMEs into the ambit of TReDS.
The concept of enabling enterprises to use 
common facilities at relatively lower cost rests on the 
economic principle of reaping benefits of economies 
of scale.The announcement regarding SIDBI opening 
new branches to serve all major MSME clusters within 
3 years to provide direct credit to them will have a 
multiplier effect on a large number of MSMEs. Further, 
the Budget focusses on ensuring quality of MSME 
products, especially in the food sector, and promotion 
of e-commerce export hubs.  
Holistic Approach 
The budget announcements range from incentivizing 
additional employment to setting up working women’s 
hostels; from designing content of courses as per skilling 
needs of the industry to Government guaranteed loans; 
Table: Expenditure of Government of India (Rs. crore)
2022-23 Actuals 2023-24 Budget Estimates 2023-24 Revised Estimates 2024-25 Budget Estimates
41,93,157 45,03,097 44,90,486 48,20,512
Page 5


he Union Budget, presented by 
Hon’ble Finance Minister on 23 July 
2024, is for a period of eight months, 
much shorter than a financial year. 
Yet, it is a continuum of initiatives 
which builds on the foundations laid by recent Budgets, 
including the Interim Budget presented in February, 
* Dr. Ishita G. Tripathy
* The author is Additional Development Commissioner in Ministry of MSME, Government of India.
   E-mail: igtripathy@gmail.com
This article analyses Budget 
2024 announcements, 
especially those related 
to the manufacturing and 
services sectors. This  
elucidates the ‘Whole of 
Government’ approach 
adopted in the Budget 
priorities and the action 
points contained therein. It 
also provides examples of 
linkage of on-going schemes 
and the new initiatives 
which underscore the 
Government’s commitment 
to Viksit Bharat. The Budget 
announcements instill 
renewed vigour in recent 
initiatives taken by the 
Government of India.
T
2024. It also provides the foundation on which future 
plans and programmes can be built, which can lead to 
a Viksit Bharat.
Economic Survey 2023-24 was presented in the 
Parliament a day before the Budget. The Survey 
mentions that the Indian economy grew at 9.7 percent 
and 7.0 percent in 2021-22 and 2022-23, respectively, 
Budget 2024-25:  
A Step Towards 
Viksit Bharat
21 Kurukshetra       September 2024
and is estimated to grow at 8.2 percent in real terms in 
2023-24. The figures compare well with those of other 
economies of the world. The high growth rates have 
been a result of prudent fiscal and monetary measures. 
The Survey mentions that the inflation rate is under 
control; the trade deficit in 2023-24 is lower than that 
of the preceding year; the foreign exchange reserves 
are sufficient and public sector investment has caught a 
momentum.In this backdrop, this paper analyses some 
Budget 2024 announcements, especially those related 
to the manufacturing and services sectors. 
Budget Priorities
The focus of the Interim Budget 2024 was on the 
Poor, Women, Youth and Farmers. Taking this forward, 
the recent Budget emphasizes on employment, skilling, 
Micro, Small and Medium Enterprises (MSMEs) and the 
middle class. There is a common thread, underscoring 
all-round development, which runs through all the 
nine priorities of Union Budget 2024-25. The nav ratna 
priorities are as follows:
i. Productivity and Resilience in Agriculture;
ii. Employment and Skilling;
iii. Inclusive Human Resource Development and Social 
Justice;
iv. Manufacturingand Services;
v. Urban Development;
vi. Energy Security;
vii. Infrastructure;
viii. Innovation, Research and Development; and
ix. Next Generation Reforms
As clear from the above list, the priorities are not 
mutually exclusive. For example, one of the actions 
envisaged for priority number two on ‘Employment 
and Skilling’ is ‘Job Creation in Manufacturing’, 
which is clearly linked to priority number four on 
‘Manufacturing and Services’ priority.The proposal 
for job creation in manufacturing is envisaged to 
incentivize both employer and employee for ensuring 
additional employment in themanufacturing sector. 
It is expected that 30 lakh youth will benefit 
from it. Complementing this proposal, is another 
announcement which states that the Government 
will reimburse employers up to Rs. 3,000 per month 
for 2 years towards their Employees’ Provident 
Fund Organisation contribution for each additional 
employee. This scheme is intended to benefit 50 lakh 
additional employees. Such a convergence highlights 
the significance of a ‘Whole of Government’ approach 
to growth. 
Another example is the announcement of 
stepping up of programmes such as PM Vishwakarma 
under priority number three on ‘Inclusive Human 
Resource Development and Social Justice’. With 
a Budgetary provision of Rs. 13,000 crore for five 
years aimed at benefitting 30 lakh artisans and 
craftspeople, who work with their hands, using tools, 
the PM Vishwakarma Scheme was launched on 17 
September 2023. The Scheme envisages a holistic 
support to the beneficiaries through the three-fold 
objective of Samman, Samarthya and Samriddhi by 
providing them recognition; skill upgradation; loans 
up to Rs. 3 lakh; toolkits up to Rs. 15,000; incentives 
for digital transactions; and marketing support. 
Within 10 months since the launch, there have been 
more than 2.3 crore enrolments in the Scheme, with 
15 lakh having successfully registered, after the 
three-stage verification process of the applicants. 
The overlap between priorities three and four is 
explained by the fact that artisans and craftpeople 
in 18 trades are eligible under PM Vishwakarma to 
avail of the benefits. These 18 trades which span 
across manufacturing and services are armourers, 
barbers, basket/mat/broom makers/coir weavers, 
blacksmiths, boat makers, carpenters, cobblers, doll 
and toy makers, fishing net makers, garland-makers, 
goldsmiths, hammer and toolkit makers, locksmiths, 
masons, potters, sculptors/stone breakers, 
washermen and tailors.   
22 Kurukshetra       September 2024
Manufacturing and Services
The contribution of industry and services sectors 
at 27.6 percent and 54.7 percent, respectively, to Gross 
Value Added (GVA) at current prices in 2023-24, justify 
the focus of the Budget on manufacturing and services. 
Manufacturing is a sub-sector within industry. Economic 
Survey 2023-24 analyses that the high output share of 
manufacturing indicates its tremendous backward and 
forward linkages. The average annual growth rate of the 
manufacturing sector over the past decade has been 5.2 
percent, despite the adverse impact of the pandemic. 
The services sector recorded a real growth rate of more 
than 6 percent in most years of the past decade, i.e. 
except 2020-21. In 2023-24, estimates indicate a growth 
of 7.6 percent for the services sector. 
Entrepreneurship
Entrepreneurship development, bolstered by 
facilitating access to finance, technology and marketing, 
along with easing out doing business, have been 
at the forefront of GoI’s policies and programmes. 
Entrepreneurs are known to grab opportunities, even in 
the worst adverse situations, the case in point being the 
challenges posed by the recent global COVID pandemic 
of 2020 to 2022, which debilitated a substantial part 
of the world. But the enterprising ones were quick 
to seize the chance and transformed challenges into 
opportunities viz. developing and distributing vaccines; 
reaching the unreached through contactless home 
deliveries, devising innovative ways of working from 
home, and encouraging online services at workplaces to 
help reducing overall consumers’ and producers’ costs.
Irrefutably, the factor of production in a business 
venture, which deals with the vagaries of risk and 
uncertainty, is entrepreneurship. Besides nurturing the 
other three factors of production, viz. land, labour and 
capital, for an enterprise to flourish, it is imperative to 
hone entrepreneurial skills. Schumpeter’s competitive 
strategy advocated ‘creative destruction’, resting on 
the principle of continuous replacement through 
new innovation and invention, entailing new product 
performance, new processes, new markets, new 
technologies and new forms of organisations. 
Two necessary conditions for entrepreneurship 
are ensuring flexibility in establishing business venture, 
creativity and innovation; and enabling economic 
conditions that give enterprises an opportunity to 
gain and grow. Recent surveys have observed that 
the level of entrepreneurial activity varies across all 
regions and income groups, with the highest levels 
of entrepreneurial activities being found in the Latin 
American and Caribbean region, as illustrated in 
‘Global Entrepreneurship Monitor, 2024’. Further, 
an environment encouraging entrepreneurship 
development may exist despite the level of income 
of the economy and the examples of India and China 
illuminate the point.
Economic Survey 2023-24 prescribed “greater 
formalisation of smaller manufacturers, alleviating their 
supply chain bottlenecks, facilitating market access 
and improving access to finance”. Recent Government 
initiatives, through the Budget announcements or 
otherwise, have focussed on exactly this prescription. 
Since the adoption of twin criteria of investment in 
plant and machinery and turnover for categorizing 
enterprises as micro, small and medium in 2020, as 
many as 4.81 crore enterprises have registered on 
Government of India’s Udyam Registration Portal and 
Udyam Assist Platform. This has been a result of special 
formalisation drives taken up by the Government along 
with other stakeholders. While 30 percent of these 
enterprises are into manufacturing, the remaining 
provide services. The registered MSMEs together 
provide employment to 21 crore people. As expected, 
on an average, registered MSMEs involved in the 
manufacturing provide employment to 7 people per 
enterprise and registered MSMEs rendering services, 
excluding traders, provide employment to 4 people 
per enterprise. In this backdrop, Budget 2024 rightly 
23 Kurukshetra       September 2024
provides special attention to MSMEs, especially the 
labour-intensive ones which are into manufacturing. 
The comprehensive package for MSMEs consists of 
financing, regulatory changes and technology support, 
with the objective of making them globally competitive. 
Financing 
The objective of loan guarantees is to protect 
the lender against default by the borrower, who 
typically has a low credit rating and may not have any 
collateral. Based on this principle, the Ministry of MSME 
implements the Credit Guarantee Scheme for Micro 
and Small Enterprises with the objective of providing 
guarantee coverage of 75-85 percent on loans up to 
Rs. 5 crore. Since the roll out of the Scheme in 2000, 
more than 93 lakh guarantees worth Rs. 7 lakh crore 
have been provided to Micro and Small Enterprises. 
Complementing this Scheme, is the announcement 
of Budget 2024 regarding the introduction of another 
Credit Guarantee Scheme, which would be for 
strengthening the manufacturing sector by facilitating 
term loans to MSMEs for the purchase of machinery and 
equipment, without collateral or third-part guarantee. 
The guarantee coverage to each MSME 
applicant will be up to Rs. 100 crore, although 
the loan amount may be larger. For this 
purpose, there will be separately constituted 
self-financing guarantee fund. 
Traditional assessments of credit 
eligibility do not always capture the potential 
of MSMEs. In this context, the Budget 
announcement regarding an alternate system 
of public sector banks to assess MSMEs for 
their credit eligibility based on their digital 
footprints is a welcome step. Further, to 
prevent MSMEs from slipping into a non-
performing asset, a new mechanism has been 
proposed so that they can continue receiving 
bank credit even when they are under stress. 
This will ease their financial duress. The 
ceiling on small-sized loans, i.e. Mudra, has 
been enhanced from Rs. 10 lakh to Rs. 20 
lakh to accommodate the growing demand, 
which is encouraging. To ensure timely payments to 
MSMEs, the Budget has reduced the turnover threshold 
of buyers on Trade Receivables Discounting System 
(TReDS) from Rs. 500 crore to Rs. 250 crore. Since the 
ceiling on turnover for the MSME sector is Rs. 250 crore, 
this announcement will bring all enterprises larger than 
MSMEs into the ambit of TReDS.
The concept of enabling enterprises to use 
common facilities at relatively lower cost rests on the 
economic principle of reaping benefits of economies 
of scale.The announcement regarding SIDBI opening 
new branches to serve all major MSME clusters within 
3 years to provide direct credit to them will have a 
multiplier effect on a large number of MSMEs. Further, 
the Budget focusses on ensuring quality of MSME 
products, especially in the food sector, and promotion 
of e-commerce export hubs.  
Holistic Approach 
The budget announcements range from incentivizing 
additional employment to setting up working women’s 
hostels; from designing content of courses as per skilling 
needs of the industry to Government guaranteed loans; 
Table: Expenditure of Government of India (Rs. crore)
2022-23 Actuals 2023-24 Budget Estimates 2023-24 Revised Estimates 2024-25 Budget Estimates
41,93,157 45,03,097 44,90,486 48,20,512
24 Kurukshetra       September 2024
from development of infrastructure to enhanced spread 
of banking network; from developing Digital Public 
Infrastructure applications to setting up an Integrated 
Technology Platform for improving outcomes under the 
Insolvency and Bankruptcy Code; from land reforms to 
labour reforms; from developing cities as growth hubs 
to redeveloping existing cities;from investing for housing 
needs of the urban poor to rental housing for industrial 
workers; and from internship of 1 crore youth in top 
500 companies in 5 years to developing ‘plug and play’ 
industrial parks. Further, the announcements include 
improving the share of Indian shipping industry and 
generating more employment;promoting water supply, 
sewage treatment and solid waste management; setting 
up Critical Mineral Mission; development of weekly 
haats, etc. In line with the global demands, the Budget 
entails announcements for energy efficient growth. 
Budget Provisions
The financial outlays have been commensurate 
with the targets set by the Budget announcements. 
Budget provisions of Government of India have 
grown consistently from 2022-23 to 2024-25 (Table). 
Compared to the Budget Estimates of 2023-24 and 
Revised Estimates of 2023-24, there has been a growth 
of 7.0 percent and 7.3 percent, respectively, of Budget 
Estimates of 2024-25.
Within the total outlay, some Central Ministries/
Departments which are directly involved in 
manufacturing and services have proportionately large 
outlays, e.g. Ministry of Road Transport and Highways 
(Rs. 278,000 crore), Ministry of Railways (Rs. 255,393 
crore), Ministry of Communications (Rs. 137,294 
crore), Ministry of MSME (Rs. 22,138 crore), Ministry 
of Electronics and Information Technology (Rs. 21,937 
crore), Ministry of Heavy Industries (Rs. 7,242 crore), 
Department of Promotion of Industry and Internal 
Trade (Rs. 6,455 crore), Ministry of Textiles (Rs. 4,417 
crore), Ministry of Food Processing Industries (Rs. 3,290 
crore), Ministry of Tourism (Rs. 2,480 crore), Ministry 
of Ports, Shipping and Waterways (Rs. 2,377 crore) and 
Ministry of Steel (Rs. 326 crore).
Conclusion
The above exposition elucidates the ‘Whole 
of Government’ approach adopted in the Budget 
priorities and the action points contained therein. 
It also provides examples of linkage of on-going 
schemes and the new initiatives which underscore 
the Government’s commitment to Viksit Bharat. 
The Budget announcements instill renewed vigour 
in recent initiatives taken by the Government of 
India. The Budget has announced a holistic approach 
to ensure employment, skilling, welfare of MSMEs 
and the middle class. The approach spans across a 
myriad of methods which strengthen accessibility 
to affordable credit, state-of-the-art technology 
and strengthened market linkage. As evident from  
the Budget announcements, a concerted effort by 
various stakeholders is desirable to achieve the goal of 
Viksit Bharat. ?