On February 1, 2024, Union Minister of Finance, Nirmala Sitharaman presented her sixth consecutive Union Budget. Sitharaman, the first full-time woman Finance Minister of the country, has presented the five full Budgets since July 2019 and now has presented an Interim Budget, also called as Vote-On-Account Budget), as the Lok Sabha polls are right around the corner. An Interim Budget or the Vote-On-Account, once approved by the Parliament will authorise the Government to withdraw money from the Consolidated Fund of India, on a pro-rata basis, to meet the expenditure for the period of April-July.
The Finance Minister kicked off her Budget speech by highlighting the economic triumphs of the Modi Government over the last decade. The Interim Budget also expanded the scope of several social welfare schemes for the benefit of four groups that the FM said were the “highest priority” of the government i.e. the poor, women, youth and farmers. Highlighting themes of Sabka Saath, Sabka Vikaas and Aatmanirbhar Bharat, Sitharaman sketched out the achievements of the current administration towards inclusive development, before laying out the measures that will tide Bharat over for the first four fiscal months of 2024.
Key Highlights of the Budget
Direct Tax Proposals (Income Tax): The FM announced that being an Interim Budget, there would be no change in the rates of taxes. However, to maintain continuity in taxation, certain tax benefits to start-ups and investments made by sovereign wealth/pension funds and tax exemption of some IFSC units are to be extended up to 31.03.2025.
Further, in line with the Government’s vision to improve ease of living and ease of doing business, it was announced to withdraw outstanding Income Tax demand of up to Rs 25,000 pertaining for the period up to Financial Year (FY) 2009-10; and up to Rs 10,000 pertaining for the period FY 2010-11 to FY 2014-15. The move will benefit over one crore taxpayers.
Indirect Tax Proposals (GST): The FM announced that there would be an amendment to the CGST Act so as to raise the minimum threshold of tax amount for launching prosecution under GST to Rs two crore, except for the offence of issuance of invoices without supply of goods and services or both. The compounding amount will also be reduced to the range of 25 per cent from 100 per cent. It will also decriminalise certain clauses of the Act like obstruction and preventing any officer from discharge of his duties, deliberate tampering of evidence or failure to supply the information.
Garib Kalyan, Desh ka Kalyan (Welfare of Poor, Welfare of Country): The FM highlighted that the Government has assisted 25 crore people to get freedom from multi-dimensional poverty. The Direct Benefit Transfer (DBT) has led to a savings of Rs 2.7 lakh crore to the administration that helped in providing more funds for Garib Kalyan.
So far, PM-SVANidhi scheme has provided credit assistance to 78 lakh street vendors. Pradhan Mantri Janman Yojana reaches out to particularly vulnerable tribal groups. Pradhan Mantri Vishwakarma Yojana provides end-to-end support to artisans and craftspeople engaged in 18 trades. The schemes for empowerment of Divyangs and transgender persons are also there to make sure that no one is left behind.
Welfare of Annadata (the Farmers): Under Pradhan Mantri Kisan Samman Nidhi, direct financial assistance is provided to 11.8 crore farmers. Also, crop insurance is given to four crore farmers in the country under the PM Fasal Bima Yojana. To support 1.8 crore farmers, 1,361 Mandis have been integrated under the Electronic National Agriculture Market (e-NAM) with an aggregate trading volume of Rs 3 lakh crore.
Empowering Amrit Peedhi, the Yuva (the “Youth”): The prosperity of a nation depends on adequately equipping and empowering the youth. The National Education Policy 2020 (NEP) is ushering in transformational reforms.
The Skill India Mission has trained 1.4 crore youth, upskilled and reskilled 54 lakh youth, and established 3,000 new ITIs. Pradhan Mantri Mudra Yojana has sanctioned 43 crore loans aggregating to Rs 22.5 lakh crore for entrepreneurial aspirations of our youth. Besides that, Fund of Funds, Start Up India, and Start Up Credit Guarantee schemes are assisting our youth.
A vision of self-reliant and developed Bharat
The Interim Budget of the Government is a Budget for the vision of self-reliant and developed Bharat. It outlines plans for economic progress through agriculture, animal husbandry, and fisheries. It has been mentioned in the budget to create new schemes for animal husbandry. Encouraging animal husbandry will alleviate the problem of spurious milk caused due to continuous reduction in milk production and increasing demand of milk in India.
— Mohini Mohan Mishra, All India General Secretary, Bharatiya Kisan Sangh
Momentum for Nari Shakti: To empower Indian women, 30 crore Mudra Yojana loans have been disbursed to women entrepreneurs in India. So far, 83 lakh self-help groups are transforming the rural socio-economic landscape with empowerment and self-reliance. Their success has assisted nearly one crore women to become Lakhpati Didi already. The FM announced to enhance the target for Lakhpati Didi from two crore to three crore.
Infrastructure and Railways
- To build new Energy, Minerals & cement Corridor, Port Connectivity Corridor & High Traffic Density
- Medical colleges, Airports and Metros to be built
- Vaccination plan for Cervical Cancer
- Maternal child healthcare schemes are being launched under the Ayushman Bharat Scheme
- Ayushman Bharat Scheme also to be extended for all Asha and Anganwadi workers
- One crore people to get 300 units of free electricity through Rooftop Solarisation
- Funding to be provided to harness offshore Wind Energy for initial capacity of one GW
- Blending of compressed Biogas in compressed natural Gas for domestic use will be mandated and Coal Gasification & Liquefaction capacity of 100 MT by 2030
Agriculture and Aquaculture
- Focus on Oil Seeds like Soya bean & Mustard
- 5 Integrated Aqua Parks to encourage Aquaculture
- Fishers scheme to help reach Rs 1 lakh cr. export target
- New housing schemes are for the middle class
- Two crore rural houses to be built in the next five years
The Interim Budget 2024-25 reflects the Government’s overarching vision towards a developed India/ Viksit Bharat by the year 2047. The budget outlines a multi-pronged economic management strategy, including infrastructure development, digital public infrastructure, and tax reforms.