The perception of the budget as a document containing information about various taxes and related fear psychosis of exploiting the common man has shifted dramatically over the previous ten years. The budget prioritizes Deendayal Upadhyayji’s social, economic, and nation first objectives, with a focus on “Viksit Bharat” and changing the colonial mindset. The move in budget date and time marked the beginning of the demise of the colonial mindset. The “Swa-bodh” has been reinstated, which would enhance the socioeconomic aspects of the society and nation. This beneficial shift will not only bring pride to the nation, but will also contribute to a better environment and global holistic growth in the long run.
Budget Theme
Dwelling on the Budget topic, Sitharaman stated that, as we look ahead to the full year and beyond, our budget places a special emphasis on employment, skilling, MSMEs, and the middle class. She unveiled the Prime Minister’s package of 5 schemes and initiatives to encourage employment, skilling, and other possibilities for 4.1 crore youngsters during a 5-year period. The central budget is Rs 2 lakh crore. This year, Rs 1.48 lakh crore has been earmarked for education, employment, and skills development.
With 65 percent youth and about 6 lakh villages, developing youths, farmers, laborers, and women’s empowerment is critical to strengthening socioeconomically and developing the last mile person as needed and at the appropriate moment. The new government’s focus and activities are obviously aimed at the growth of all segments of society, which was lacking during Congress’ reign. During Congress’ dominance, foreign economies, particularly China’s, were strengthened. So the shifting gears will shape the nation around “Swa-bodh” through research, innovation, and technology, entrepreneurs, start-ups, unicorns, and sustainable growth.
Budget Priorities
The Finance Minister said, for pursuit of ‘Viksit Bharat’, the budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.
- Productivity and resilience in Agriculture
- Employment & Skilling
- Inclusive Human Resource Development and Social Justice
- Manufacturing & Services
- Urban Development
- Energy Security
- Infrastructure
- Innovation, Research & Development and Next Generation Reforms
Farming and rural sector
In the next two years, 1 crore farmers across the country would be introduced to natural farming, aided by certification and branding. 10,000 need-based bio-input resource centers will be developed. To attain self-sufficiency in pulses and oilseeds, the government will improve production, storage, and marketing, as well as accomplish ‘atmanirbharta’ for oil seeds such mustard, peanut, sesame, soybean, and sunflower. The government, in collaboration with the states, will facilitate the adoption of the Digital Public Infrastructure (DPI) in agriculture in three years to cover farmers and their holdings. Nirmala Sitharaman allocated Rs 1.52 lakh crore for agricultural and related industry this year.
The health of society determines the nation’s growth. Chemicals used in farming are inflicting significant damage to society and farmers, with an increase in severe illnesses hurting overall social health and destroying economic opportunities for families, particularly farmers. The emphasis on this issue in the budget will undoubtedly improve the health characteristics of society. It will also enhance farmers’ socioeconomic conditions and provide more jobs in rural regions as the focus on improving the production of diverse agricultural products increases. As the agricultural sector grows, the rural economy will quickly strengthen the nation.
Innovation, Research & Development
The Finance Minister announced that the government will operationalize the Anusandhan National Research Fund for basic research and prototype development, as well as set up a mechanism to spur private sector-driven research and innovation at commercial scale with a financing pool of Rs 1 lakh crore, as announced in the interim budget. A Rs 1,000 crore venture capital fund will be established to support our goal of increasing the space economy by 5 times in the next decade.
To compete in today’s technologically advanced global market, it is critical to focus on increasing research and innovation capabilities. The Modi government’s concentration on these criteria is already yielding great results and will accelerate our growth tremendously in every sector, with a particular emphasis on education and research. The emphasis on AI will also aid future growth.
Infrastructure
The Finance Minister emphasized that the Central Government’s enormous investment in infrastructure development and improvement over the years has had a strong multiplier effect on the economy. The government will strive to maintain significant fiscal support for infrastructure over the next five years, while also addressing other priorities like fiscal restructuring. This year, Rs 11,11,111 crore was committed for capital expenditure, representing 3.4 per cent of our GDP.
The rapid development of infrastructure throughout the country, notably the northeast, which was previously disregarded by Congress, has been critical to the economy’s growth. From a 1.7 trillion dollar economy in the first 67 years to over 4 trillion dollars now, the increase of 2.3 trillion dollars in just ten years demonstrates the importance of infrastructure development. As infrastructure improves, the economy will strengthen much more.
Support for promotion of MSMEs
Sitharaman stated that this budget prioritises MSMEs and manufacturing, particularly labor-intensive manufacturing. A self-financing guarantee fund will cover each application up to ₹100 crore, while the loan amount can be higher. Similarly, public sector banks will develop in-house capabilities to assess MSMEs for loans, rather than relying on external assessments. She also unveiled a new procedure to help MSMEs continue to receive bank financing during times of crisis.
MSME Units for Food Irradiation, Quality & Safety Testing
Financial assistance for the establishment of 50 multi-product food irradiation facilities in the MSME sector would be offered. The establishment of 100 food quality and safety testing laboratories with NABL accreditation will also be enabled. To assist MSMEs and traditional craftspeople to sell their products in worldwide markets, E-Commerce Export Hubs will be established through public-private partnerships (PPPs).
MSME is the most important sector in terms of employment creation and entrepreneurship. Increased strength in this sector means more job creation, increased output, and a stronger Aatmanirbhar Bharat and Swa-based economy.
Internship in Top Companies
The Finance Minister stated that as the fifth initiative in the Prime Minister’s package, the government will establish a comprehensive scheme to provide internship opportunities to 1 crore youth in 500 leading corporations over a five-year period.
This decision by the government is the most deliberate and young development-oriented, as it will stimulate industries with skilled and technologically savvy people, as well as promote researchers and innovators to support indigenous technology.
Tax framework
To promote investment and jobs, the Budget has boosted the entrepreneurial spirit and start-up ecosystem by eliminating the angel tax for all classes of investors. A simpler tax framework for foreign shipping companies operating domestic cruises is also advocated, given the enormous potential of cruise tourism. Foreign mining businesses selling raw diamonds in the country can now take advantage of safe harbor prices, which benefits the diamond sector. Furthermore, in order to attract foreign capital, the corporation tax rate for foreign enterprises was decreased from 40% to 35%. The unexpected change in income tax bands, as well as the elimination of taxes on salaries up to 12 lakh rupees, is a significant benefit for the middle class.
The budget also streamlined the direct tax regime for charities, the TDS rate structure, and capital gains taxation. The two tax exemption systems for charity will be combined into one. The 5% TDS on numerous payments will be reduced to 2%, and the 20% TDS on mutual fund or UTI unit repurchases has been removed. The TDS rate for e-commerce operators was cut from 1% to 0.1%. TCS credit will now be paid on TDS deducted from salaries. The budget decriminalized TDS payment delays up to the due date for filing the TDS statement. Soon, a standard operating procedure will be developed to simplify and justify compounding guidelines for TDS defaults.
The Union Finance Minister proposed the Vivad se Vishwas Scheme, 2024, to resolve some income tax disputes that are now pending in appeal. The monetary limitations for filing direct tax, excise, and service tax appeals in High Courts, Supreme Courts, and tribunals have been enhanced to ₹60 lakh, ₹2 crore, and ₹5 crore, respectively. Furthermore, to reduce litigation and offer clarity in foreign taxation, the scope of safe harbor regulations will be enlarged, and the transfer pricing assessment system will be simplified.
Despite the fact that Congress’s regulations harmed the economy, many people now compare our tax policies to those of America and China. The two strong economies, with nearly 30 trillion dollars and 19 trillion dollars, respectively, cannot be compared to our economy, which has been on a growth path for the past ten years; however, the income tax relief provided in this budget is far superior to America in terms of economy size. It is time to celebrate the budget, and all citizens should work to build the economy and nation.
