Budget 2024 Highlights | General Test Preparation for CUET - CUET Commerce PDF Download

Budget Day is a highly anticipated occasion in India, eagerly awaited by businesses and the public alike to grasp the potential benefits from the announced schemes and initiatives. Due to the impending elections, Budget 2024 has been replaced by an Interim Budget this year. Nonetheless, Finance Minister Smt. Nirmala Sitharaman has successfully presented schemes and benefits, much to the delight of the general public.

On February 1st, 2024, the Finance Minister announced that the central theme for this year's budget would be "Developed India Budget 2024". She emphasized the nation's ongoing commitment to Atmanirbhar Bharat (self-reliant India). Simultaneously, the Interim Budget 2024 would prioritize the welfare and aspirations of the underprivileged, women, youth, and farmers. Here are the main points from the Interim Budget 2024.

Interim Budget 2024: Direct Tax Proposals

• The FM announced that the same tax rates will be retained in FY 2024-25 for direct taxes. There will be no tax liability for taxpayers with an income of up to Rs.7 lakh, under the new tax regime. 
• The 22% tax rate for corporate taxes will apply for existing domestic companies and 15% for certain new manufacturing companies.
• The FM announced that direct tax collections have more than tripled over the last ten years, with the number of return filers at 2.4 times.
• On the other hand, the average processing time of tax returns has reduced from 93 days in 2013-14 to 10 days in 2023-24.
• The FM has proposed an extension in the time limit for certain tax benefits for start-ups and investments made by sovereign wealth funds/pension funds, and a tax exemption for specific IFSC units that expires on 31st March 2024. The same has been extended up to 31st March 2025.

Interim Budget 2024: Goods and Services Tax

• The FM announced that the average monthly gross GST collection has doubled to Rs.1.66 lakh crore in FY24.
• There has been an increase in the tax buoyancy of state revenue from 0.72 in 2012-16 to 1.22 in the post-GST period of 2017-23.
• The FM announced that the same customs rates, including import duties, will be retained in FY 2024-25.

Interim Budget 2024: Roadmap for Viksit Bharat 2047

This year’s Budget took on the Viksit Bharat theme, with the government visualising a developed India by 2047. ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmers) are the four-pillars of the Viksit Bharat Budget 2024. In light of the people-centric inclusive development plan, the Finance Minister announced-

• There will be substantive development of all forms of infrastructure - physical, digital and social.
• Digital Public Infrastructure (DPI) will promote formalisation and financial inclusion.
• The government plans to deepen and widen the tax base via GST.
• Strengthened financial sector brought savings, credit and investment back on track.
• A robust gateway will be set up called GIFT IFSC will be set up for global capital and financial services for the economy.
• There will be proactive inflation management.

Garib Kalyan, Desh ka Kalyan

• Direct Benefit Transfer (DBT) has led to savings of Rs. 2.7 lakh crore.
• 25 crore people have moved out of multidimensional poverty.
• Credit assistance has been given to 78 lakh street vendors under PM-SVANidhi.

Empowering the Youth

• 1.4 crore youth have been trained under the Skill India Mission.
• Fostering entrepreneurial aspirations of youth - 43 crore loans have been sanctioned under the PM Mudra Yojana.
• A corpus of Rs.1 lakh crore to fund tech-savvy youth with a 50-year, interest-free loan at low or nil interest rates charge to provide financing/re-financing.

Welfare of Farmers (Annadata)

• There has been direct financial assistance provided to 11.8 crore farmers under PM-KISAN.
• Crop Insurance has been given to 4 crore farmers under PM Fasal Bima Yojana.
• There has been an integration of 1,361 mandis under eNAM, supporting trading volume of Rs.3 lakh crore.

Nari Shakti

• 30 crore Mudra Yojana loans have been disbursed to women entrepreneurs.
• There has been an increase in female enrollment in higher education by 28 per cent in the past 10 years.
• There is 43% of female enrolment in STEM courses
• One crore women are assisted by 83 lakh SHGs to become Lakhpati Didis.

Interim Budget 2024: Strategy Shift for Amrit Kaal as Kartavya Kaal

Sustainable Development/Green Energy

The Finance Minister highlighted the need for sustainable development by committing to meet ‘Net Zero’ by 2070 under Amrit Kaal. In this regard, the FM proposed:

• Viability gap funding for harnessing offshore wind energy for an initial capacity of one giga-watt.
• Setting up of coal gasification and liquefaction capacity of 100 MT by 2030
• Phased mandatory blending of CNG, PNG, and compressed biogas for domestic purposes
• Financial assistance for the procurement of biomass aggregation machinery
• Further, there will be rooftop solarisation with one crore households enabled to obtain up to 300 units of free electricity per month.
• The government also plans to adopt e-buses for public transport and strengthen the e-vehicle ecosystem by supporting the manufacturing and charging of electric vehicles.
• A new scheme of biomanufacturing and bio-foundry will be launched to support environment-friendly alternatives.
• 1.3 crore LED street lights will be installed under the SNLP scheme. 
• The Blue Economy 2.0 scheme will be launched to restore and adapt coastal aquaculture and mariculture.

Infrastructure and Investment

• The government plans to implement three major railway corridor programmes, being energy, minerals, and cement corridor, port connectivity corridor, and high traffic density corridor under the PM Gati Shakti. It will improve logistics efficiency and reduce costs.
• Foreign investment will be promoted via bilateral investment treaties to be negotiated.
• Expansion of existing airports and comprehensive development of new airports under the UDAN scheme.
• Urban transformation will occur under the Metro rail and NaMo Bharat projects.

Inclusive Development

The FM highlighted the need for inclusive development under Amrit Kaal, with an aspirational District Programme to assist states in faster development, including employment generation. In this regard,

Healthcare

• The government is actively encouraging cervical cancer vaccination for girls aged between 9-14 years.
• The Saksham Anganwadi and Poshan 2.0 scheme would expedite the upgradation of Anganwadi centres to improve nutrition delivery, early childhood care and development.
• A U-WIN platform is to be rolled out for the immunisation efforts of Mission Indradhanush.
• Health coverage under the Ayushman Bharat scheme will be extended for all ASHA, Anganwadi workers, and helpers.
• A committee will be formed to study the issues faced in setting up more medical colleges in India.

Housing

• The Pradhan Mantri Awas Yojana (Grameen) is close to achieving the target of 3 crore houses, with an additional 2 crore targeted for the next 5 years.
• Housing for the middle class scheme to be launched to encourage the middle class to buy or build their own houses.

Tourism

• States will be encouraged to undertake the development of iconic tourist centres to attract business and promote opportunities for local entrepreneurship.
• Long-term interest-free loans are to be provided to states to encourage development.
• Projects for port connectivity, tourism infrastructure, and amenities will be taken up in islands, including Lakshadweep.

Agriculture and Food Processing

• The government is set to promote private and public investment in post-harvest activities.
• The application of Nano-DAP is to be expanded in all agro-climatic zones.
• Atmanirbhar Oilseeds Abhiyan strategy to be formulated to achieve atma nirbharta for oilseeds.
• A comprehensive programme for dairy development is to be formulated.
• The implementation of Pradhan Mantri Matsya Sampada Yojana will be stepped up to enhance aquaculture productivity, double exports, and generate more employment opportunities.

Further, five integrated aquaparks will be set up.

Interim Budget 2024: Allocations for Various Ministries and Schemes

The following allocations have been proposed for various ministries under the Interim Budget 2024:

On the other hand, the following allocations have been proposed for major schemes in force under the Interim Budget 2024:

• Mahatma Gandhi National Rural Employment Guarantee Scheme - Rs.86,000 crore
• Ayushman Bharat-PMJAY - Rs.7,500 crore
• Production Linked Incentive Scheme - Rs.6,200 crore
• Modified Programme for Development of Semiconductors and display manufacturing ecosystem - Rs.6,903 crore
• Solar Power (Grid) - Rs.8,500 crore
• National Green Hydrogen Mission - Rs.600 crore

Interim Budget vs. Full Budget

To begin with, it's important to grasp the disparity between an Interim Budget and a Full Budget. Unlike a comprehensive budget that spans the entire fiscal year, an interim budget serves as a stopgap measure until a new government is established. Consider it a provisional financial strategy primarily addressing regular expenditures and existing initiatives. Consequently, significant policy shifts or tax reforms are typically excluded from consideration.

Election Code & Fiscal Prudence

The Election Commission of India's code of conduct restricts the ruling party from making populist announcements or introducing significant policy shifts during an election year. So, while the interim budget will present a complete picture of India's finances, don't expect fireworks.

Vote on Account: Keeping the Engine Running

A crucial aspect of the interim budget is the "Vote on Account." This essentially authorizes the government to withdraw funds from the treasury for essential expenses like salaries, debt servicing, and ongoing programs. It ensures the administration can function smoothly until the new government takes charge.

Budget 2024 expectations

Finance Minister Nirmala Sitharaman herself has downplayed expectations, stating the February budget will be a bare-bones affair to keep the wheels turning until the elections. This means focusing on essential expenditure with minimal policy tinkering.
However, we expect the following from the Budget 2024:

• Relaxation in ESOP taxation: Startups have been rewarding employees with ESOPs to nudge them to join startups. It is expected that a lot of startups will go public this year. Accordingly, it would help startups if government makes ESOP taxation rules employee friendly. Further, this move help generate more employment in startups.
• Increase in limit of home loan interest: As of now, the maximum deduction for interest repayment on a loan taken to acquire a property(self-occupied) is Rs 2,00,000. This, however, limits the prospective buyer’s ability to acquire a property. In most cities, the price of property has gone up significantly, and consequently, interest payments on home loans have also increased. So, the limit of Rs 2,00,000 needs to be looked upon.
• Allowing home loan interest under the new tax regime: Under the new tax regime, the interest paid on a home loan on rented-out property is allowed; however, the same is not allowed for the self-occupied property. To encourage home buyers, the inclusion of home loan interest repayment in the new tax regime is expected. Further, it may improve the acceptability of the new tax regime.
• Increase the limit of 80D deduction: Increase the limit of Sec 80D from 25,000 to 50,000 for normal persons and 50,000 to 75,000 for senior citizens as the premium amount periodically increases.
• Inclusion of 80D in the new tax regime: Since medical insurance is the need of the hour, allowing medical insurance premiums paid as a deduction under the new tax regime shall increase the coverage and improve the acceptability of the new tax regime.
• Bengaluru’s listing as a metro city for HRA Exemption: Despite Bengaluru’s recognition as a metro city constitutionally, its classification as a non-metro for income tax purposes restricts HRA deductions to 40%, unlike other metro cities. There is a demand to increase it to 50%.

On the Indirect tax front:

• Option to revise GST returns: Errors in filed returns can only be rectified in subsequent return periods. We expect a revision of returns to be allowed; that’ll be a win-win for taxpayers and the department, as this will help reduce the number of notices and intimations manifold. GSTN is working towards this, and we can know its dynamics once the government releases APIs.
• e-Invoicing for B2C transactions: Extending this requirement to B2C transactions would further reduce tax evasion and ensure better compliance. However, this would also mean increased compliance burdens for businesses, especially smaller ones, which may require technological upgrades to adhere to these requirements.

Interim Budget 2024 Highlights

While the 2024 interim budget might not be a game-changer, it provides valuable insights into the country's financial health and future priorities. For businesses and individuals, understanding the budget's focus and direction can help in strategic planning and decision-making.