Image Source : REUTERS Finance Minister Nirmala Sitharaman with the Union Budget.
Budget 2024: Finance Minister Nirmala Sitharaman on Tuesday announced the Union Budget 2024-25, with nine outlined priorities in agriculture, employment and skilling, manufacturing and services, human resource development, urban development, energy security and more. The main focus of this year’s budget was on job creation and boosting rural spending.
Sitharaman announced Prime Minister Narendra Modi’s package of five schemes for employment, skilling and other opportunities for employment, skilling and other opportunities for 4.1 crore youth with a central outlay of Rs 2 lakh crore. The government has allocated Rs 1.48 lakh crore for education, employment and skilling.
A provision of Rs 2.66 lakh crore has been made for rural development, including rural infrastructure, has also been made. Sitharaman also announced efforts to simplify taxes, improve taxpayer services and provide tax certainty by announcing a new tax regime that hiked the standard deduction for salaried employees from Rs 50,000 to Rs 75,000. Let’s have a look at how this would impact the common people and consumers.
Education and employment
The government’s main focus was on four ‘castes’ – the poor, women, youth and farmers. With regard to job-spurring efforts, Sitharaman announced a scheme to provide a one-month wage to all newcomers entering the workforce in all formal sectors. The direct benefit transfer of one month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to Rs 15,000.
A scheme to provide incentives to employees and employers with respect to their EPFO contribution in the first four years of their employment was also announced, which is expected to benefit 30 lakh youth entering the workforce. The government will also reimburse employers up to Rs 3,000 per month for two years towards their EPFO contribution for each additional employee.
The Centre also announced a comprehensive scheme to provide internship opportunities in 500 top companies to 1 crore youth in five years, giving exposure to interns to 12 months of real-life business environment, varied professions and employment opportunities. An internship allowance of Rs 5,000 per month along with one-time assistance of Rs 6,000 will be provided.
The government also promised to provide financial support for loans up to Rs 10 lakhs for higher education in domestic institutions. Additionally, the government will provide e-vouchers directly to 1 lakh students every year with an interest subvention of 3 per cent of the loan amount. Up to 1,000 ITIs will be upgraded in a hub and spoke model, and the government will also revise the Model Skilling Loan scheme to facilitate loans up to Rs 7.5 lakh. Furthermore, a new centrally-sponsored scheme for skill development in collaboration with states and industry, aiming to skill 20 lakh youth over 5 years, will be provided, as announced by the FM.
Housing and other amenities
The Union Finance Minister announced that three crore additional houses in rural and urban areas under the Pradhan Mantri Awas Yojana. True to its word on women-centric development, she announced the allocation of over Rs 3 lakh crore for schemes that would benefit women and girls.
The government will also launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage in tribal-majority villages and aspirational districts. This step will cover 63,000 villages benefitting 5 crore tribal people. The government also formulated a plan ‘Purvodaya’ for the all-round development of the eastern region of India – covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh.
The most significant development is the allocation of Rs 2.66 lakh crore for rural development while unveiling new schemes in Bihar and Andhra Pradesh, which are governed by key allies of the Centre. The government also provided a big boost for farmers by allocating Rs 1.52 lakh crore in the agriculture and allied sectors. It announced that one crore farmers will be initiated into natural farming in the next
“Under PM Awas Yojana Urban 2.0, the housing needs of one crore urban poor and middle-class families will be addressed with an investment of Rs 10 lakh crore. This will include the central assistance of Rs 2.2 lakh crore in the next five years. A provision of interest subsidy to facilitate loans at affordable rates is also envisaged,” Sitharaman said during the budget presentation.
Infrastructure and land reforms
The government announced Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY), which will provide all-weather connectivity to 25,000 rural habitations which have become eligible in view of their population increase. It also allocated Rs 1.5 lakh crore for long-term interest-free loans.
Furthermore, states would be incentivised for land-related reforms and actions within the next three years through appropriate fiscal support. These reforms will cover administration and planning in rural areas, and urban planning, usage and building by-laws in urban areas.
Sitharaman said rural land-related actions will include ULPIN or Bhu-Aadhaar for all lands, digitization of cadastral maps, the survey of map sub-divisions as per current ownership, the establishment of land registry, and linking to the farmers’ registry to facilitate credit flow and agricultural services.
How will taxes impact consumers?
In a major boost for consumers, the government reduced customs duties on gold and silver to 6 per cent and on platinum to 6.4 per cent. The custom duties of medicines for cancer patients, X-ray medicines, mobile phones and mobile phone chargers have also been reduced. The government has also included solar cells and panels in the exempted list for customs duties. Leather and textile garments, footwear and other leather articles would also become cheaper. However, plastic products and telecom equipment will become more expensive.
Sitharaman announced a comprehensive review of the Income Tax Act, 1961. In a significant move, the government increased the standard deduction for salaried employees to be increased from Rs 50,000 to Rs 75,000, while that for pensioners was hiked from Rs 15,000 to Rs 25,000. This change was widely anticipated and will allow salaried employees to save an additional Rs 17,500 in income tax.
The standard deduction will be increased from Rs 50,000 to Rs 75,000 for those who opted for the new tax regime.
0-3 lakh: Nil
3-7 lakh: 5%
7-10 lakh: 10%
1-12 lakh 15%
12-15 lakh 20%
Above 15 lakh: 30%
The delays in filing TDS will also be decriminalised. All the major tax payer services under GST and most services under Customs and Income Tax have been digitalised, Sitharaman said. For resolution of certain income tax disputes pending in appeal, Vivad Se Vishwas Scheme, 2024 has been announced.
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