The Hindu Editorial Analysis- 24th July 2024 | Current Affairs & Hindu Analysis: Daily, Weekly & Monthly - UPSC PDF Download

Union Budget 2024-25 No Signs of Learning

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The Union Budget for the financial year 2024-25 was tabled in the Parliament by Finance Minister Nirmala Sitharaman earlier yesterday. This was the seventh budget presented by the current FM and the first one of Prime Minister Narendra Modi-led government's third term.

• "India's economic growth stands out and will continue to do so in the future," stated the Finance Minister during her budget speech.
• The world economy is doing better than anticipated but faces uncertainties in policies.
• There are notable risks to growth and inflation may rise, according to her.
• The Finance Minister outlined nine key areas of focus for the current and upcoming years: 
  • Improving productivity and resilience in farming
  • Enhancing employment opportunities and skill development
  • Promoting inclusive human resource development and social justice
  • Boosting manufacturing and services
  • Advancing urban development
  • Ensuring energy security
  • Developing infrastructure
  • Fostering innovation and research
  • Implementing next-generation reforms
• This strategy aims at creating jobs and increasing consumer spending, which could benefit industries like consumer goods, real estate, and automobiles.
• Despite this, there were no significant alterations in personal income tax, disappointing many employed individuals.
• "This budget emphasizes job creation, skill development, support for micro, small, and medium enterprises (MSMEs), and the middle class," mentioned the Finance Minister.

From income tax to employment benefits, let's take a look at the 14 key highlights of the 2024 Budget:

Capex 

For the financial year 2025, the government has set aside ₹11.11 lakh crore for capital spending, which is 3.4% of India's GDP. This amount was planned in February and is higher than last year's revised estimate of ₹9.5 lakh crore.

Tax

• Income Tax: The Finance Minister has proposed changes in the new tax system - the standard deduction is set to increase to ₹75,000 from ₹50,000.
• In the new tax structure, tax rates will be adjusted as follows: 
  • (in ₹) 0-3L - Zero
  • 3-7L - 5%
  • 7-10L - 10%
  • 10-12L - 15%
  • 12-15L - 20%
  • 15L & above - 30%
• Under the new tax system, salaried employees can save up to ₹17,500 in income tax, according to the Finance Minister.
• Capital gains tax: Long-term capital gains on all assets will now face a 12.5% tax, up from the previous 10%. Short-term capital gains tax has been raised to 20% from 15%. The exemption limit for capital gains will be ₹1.25 lakh per year.
• For Futures and Options (F&O), the STT rate has been doubled from 0.01% to 0.02%, impacting traders who deal in equity and index.
• The government has announced the elimination of Angel Tax.

Customs Duty

• The Finance Minister proposed reducing Basic Customs Duty (BCD) on mobile phones, mobile PCDA, and mobile charges to 15% due to the maturity of the Indian mobile industry.
• Customs duty on gold and silver will be lowered to 6%, and on platinum to 6.4%.
• BCD will increase from 10% to 15% on printed circuit board assemblies for specific telecom equipment.
• Customs duties have been exempted on 25 crucial minerals, with reduced BCD on two of them.

Employment and Skilling

• The Finance Minister introduced a PM Package with five schemes worth ₹2 lakh crore to enhance employment and skill development, with ₹1.48 lakh crore allocated for education, employment, and skilling.
• Job Creation: 
  • Three schemes will be implemented to provide employment-linked incentives, focusing on EPFO enrollment and support for first-time employees.
  • New hires can receive up to ₹15,000 in direct benefit transfers in three installments, with a salary cap of ₹1 lakh per month.
  • Employers will be reimbursed up to ₹3,000 per month for two years for each new employee, aiming to create 50 lakh new jobs.
  • A program will also offer internships to one crore youths over five years, and rental housing for industrial workers will be facilitated in PPP mode.

 Women Empowerment

• Increasing women's workforce participation is a top priority.
• Over \u20b93 lakh crore is allocated for programs benefiting women and girls.
• This involves establishing hostels and developing specialized skilling programs for women.

• Fiscal deficit estimate reduced to 4.9% of GDP from 5.1% in the temporary Budget.
• Finance Minister aims to achieve a fiscal deficit below 4.5% by FY26.
• Market borrowing has been cut to ₹14.01 lakh crore from ₹15.43 lakh crore for FY24.
• Projected receipts for FY25 amount to ₹32.07 lakh crore.
• Expected expenditure for FY25 stands at ₹48.21 lakh crore.