Introduction
The Indian budget for 2024-2025, unveiled in July 2024, outlines a roadmap aimed at achieving the vision of ‘Viksit Bharat’ or Developed India. This budget focuses on key sectors such as agriculture, employment, skilling, MSMEs, middle-class welfare, and infrastructure development. It also emphasizes women’s empowerment, youth development, and the upliftment of the poor and farmers.
Key Features and Themes
The budget revolves around the theme of ‘Viksit Bharat’ and focuses on four main groups: The Hindu Business Line
- Women
- Poor
- Youth
- Farmers
Agriculture and Natural Farming
Agriculture continues to be the backbone of India’s economy, providing livelihoods for a significant portion of the population. The 2024-2025 budget emphasizes natural farming, aiming to shift 1 crore farmers to this sustainable method over the next two years. The government’s strategy includes: SEBI – Securities and Exchange Board of India
- Establishing 10,000 bio-input resource centers to support natural farming.
- Certification and branding assistance to help farmers market their products.
- Financial support for shrimp farming through NABARD.
- Release of 109 new high-yielding and climate-resilient crop varieties.
Pros:
- Increased Agricultural Productivity: New crop varieties and improved farming methods are expected to enhance yields.
- Promotion of Sustainable Farming Practices: Natural farming reduces dependence on chemical inputs, promoting environmental sustainability.
- Financial Support for Shrimp Farming: This helps diversify income sources for farmers and boosts exports. ET Wealth
Cons:
- Implementation Challenges: Transitioning to natural farming requires extensive training and support.
- Dependence on New Varieties: The success of new crop varieties is contingent on favorable conditions and proper management. National Stock Exchange of India (NSE)
Employment and Skilling
Employment and skilling are pivotal to India’s economic growth. The budget introduces several schemes aimed at boosting job creation and enhancing skills: Invest India
- Working Women Hostels and Creches: These facilities aim to increase female workforce participation by providing safe housing and childcare.
- Wage Incentives for New Entrants: Financial incentives to employers for hiring new employees in the formal sector.
- EPFO Contributions: Government reimbursement of EPFO contributions for new hires, reducing the financial burden on employers.
- Loans and Financial Support: Scholarships and loans for higher education to make it more accessible. Business Standard
Pros:
- Job Creation: The schemes are expected to create new employment opportunities.
- Increased Female Workforce Participation: Support facilities for women can help balance work and family responsibilities.
- Educational Support: Financial assistance for education can lead to a more skilled workforce. IndiaFilings
Cons:
- Implementation Efficiency: The success of these schemes relies on effective implementation.
- Monitoring Impact: Continuous monitoring is required to assess the actual impact on employment rates.
Inclusive Human Resource Development and Social Justice
The budget includes initiatives aimed at promoting social justice and inclusive development: Personal Finance – Moneycontrol
- Purvodaya Scheme: Focuses on the economic development of eastern states, which have lagged in growth.
- Pradhan Mantri Janjatiya Unnat Gram Abhiyan: Aims to improve the socio-economic conditions of tribal communities through infrastructure development and financial support.
Pros:
- Regional Development: Targeted initiatives can help balance regional disparities in development.
- Improved Socio-economic Conditions: Enhanced infrastructure and financial support can uplift marginalized communities.
Cons:
- Project Delays: Infrastructure projects often face delays, which can hinder development.
- Resource Allocation: Ensuring equitable distribution of resources and benefits can be challenging.
Manufacturing and Services
The budget’s focus on manufacturing and services includes several key initiatives: NITI Aayog
- Industrial Parks Development: Setting up industrial parks to promote manufacturing.
- Internship Opportunities: Providing internships for youth to gain practical experience.
- Rental Housing: Developing rental housing for industrial workers to improve living conditions.
- Critical Minerals Mission: Promoting domestic production and recycling of critical minerals to reduce import dependence.
Pros:
- Strengthening Manufacturing: Industrial parks can boost production and create jobs.
- Youth Employment: Internships provide valuable work experience for young people.
- Sustainable Practices: Focusing on critical minerals supports sustainable energy and technology sectors.
Cons:
- High Initial Investment: Significant capital is required to develop industrial parks and other infrastructure.
- Project Execution: Ensuring timely execution of projects is crucial for their success. Reserve Bank of India (RBI)
Urban Development and Infrastructure
Urban development and infrastructure projects are critical for improving living standards and economic growth. The budget includes:
- Stamp Duty Reduction for Women: Lowering stamp duties for women to encourage property ownership.
- Street Food Hubs: Developing weekly street food hubs to promote local businesses.
- Transit-oriented Development: Focusing on development around transit hubs in large cities.
- Water Supply and Sewage Treatment: Investing in water supply and sewage treatment projects to improve urban services. Income Tax Department, India
Pros:
- Women’s Empowerment: Lower stamp duties can increase women’s property ownership.
- Local Business Promotion: Street food hubs can boost local economies and tourism.
- Improved Urban Infrastructure: Investments in water and sewage projects enhance urban living conditions. Cleartax
Cons:
- Coordination Challenges: Effective coordination with state governments is required for project success.
- High Costs: Urban development projects are often expensive and require substantial investment.Ministry of Finance, India
Energy Security and Sustainability
The budget places a strong emphasis on energy security and sustainability: IIFL Securities
- Small Modular Reactors: Developing small modular reactors to diversify energy sources.
- Renewable Energy Integration: Promoting the integration of renewable energy into the grid.
- Clean Energy for Small Industries: Financial support for small industries to transition to clean energy.
Pros:
- Diversified Energy Sources: Small modular reactors add to the diversity of India’s energy mix.
- Sustainable Energy: Promoting renewable energy reduces dependence on fossil fuels.
- Support for Small Industries: Financial assistance helps small industries adopt clean energy technologies. HDFC Securities
Cons:
- High Initial Costs: Setting up new energy projects requires significant investment.
- Long-term Benefits: The benefits of sustainable energy initiatives may take time to materialize. Taxguru
Fiscal and Tax Proposals
The budget proposes several fiscal and tax reforms aimed at simplifying the tax structure and providing relief: Kotak Securities
- Tax Structure Simplification: Simplifying the tax regime to reduce compliance burdens.
- Customs Duties Reduction: Lowering customs duties on certain goods to promote trade.
- Income Tax Slabs: Adjusting income tax slabs to provide relief to taxpayers. BankBazaar
Pros:
- Simplified Tax Regime: Easier compliance for businesses and individuals.
- Reduced Tax Burden: Lower customs duties and revised income tax slabs reduce the financial burden on taxpayers.
Cons:
- Short-term Revenue Impact: Reduced tax rates may initially lead to lower government revenue.
- Ensuring Compliance: Effective implementation of new tax regulations is crucial. Investopedia – India
FAQs
Q: What is the main theme of the 2024-2025 budget?
A: The main theme is ‘Viksit Bharat’ or Developed India, focusing on women’s empowerment, poverty alleviation, youth development, and agricultural productivity. ICICI Direct
Q: How does the budget support employment?
A: The budget introduces wage incentives, skilling programs, financial support for higher education, and reimbursement of EPFO contributions for new hires. Angel Broking
Q: What measures are taken for agricultural development?
A: Initiatives include promoting natural farming, releasing new crop varieties, and providing financial support for shrimp farming and export. Bombay Stock Exchange (BSE)
Q: How does the budget address urban development?
A: The budget focuses on reducing stamp duties for women, developing street food hubs, transit-oriented development, and promoting water supply and sewage treatment projects. Scripbox
Q: What are the key fiscal and tax proposals?
A: The budget proposes simplifying the tax structure, reducing customs duties, and adjusting income tax slabs to reduce the compliance burden and provide tax relief. Policybazaar
Before and After Analysis
| Aspect | Before 2024 Budget | After 2024 Budget |
|---|---|---|
| Agricultural Practices | Predominantly conventional farming | Increased adoption of natural farming |
| Employment Rate | Moderate | Expected increase due to new schemes |
| Female Workforce | Lower participation | Higher participation due to support |
| Urban Development | Limited infrastructure projects | Enhanced urban infrastructure |
| Energy Security | Reliance on traditional energy sources | Increased focus on renewable energy |
| Tax Regime | Complex and burdensome | Simplified and reduced burden |
| Social Justice | Limited targeted schemes | Increased focus on inclusive growth |
IMPORTANT POINTS 2024 -2025 Budget India
- Employment Generation Initiatives: The budget outlines plans to generate employment through skilling programs, including upgrading 1,000 Industrial Training Institutes and providing internships in 500 top companies to 1 crore youth over five years【25:0†source】【25:3†source】. Kuvera
- Support for MSMEs: Significant support is being extended to MSMEs through credit guarantees, enhanced limits for Mudra Loans, and new models for MSME credit assessment. The limit for Mudra Loans under the ‘Tarun’ category is enhanced to ₹20 lakh from the current ₹10 lakh【25:0†source】. Upstox
- Urban Development Initiatives: The budget emphasizes urban development with initiatives like transit-oriented development plans for large cities, development of weekly street food hubs, and support for rental housing markets【25:0†source】. Financial Express
- Infrastructure Investment: A provision of ₹11,11,111 crore for infrastructure, which is 3.4% of GDP, is made to support resource allocation and development projects including all-weather connectivity to rural habitations and major irrigation projects【25:0†source】. Livemint
- Energy Security: Initiatives include the development of Bharat Small Modular Reactors, financial support for cleaner energy in micro and small industries, and a joint venture between NTPC and BHEL for a full-scale 800 MW commercial plant【25:0†source】. Paytm Money
- Tourism Development: Significant investments are planned for developing tourism infrastructure, including the Vishnupad and Mahabodhi Temple Corridors, and promoting Odisha as a premier tourism destination【25:0†source】. CAclubindia
- Land Reforms: Introduction of the Unique Land Parcel Identification Number (Bhu-Aadhaar) for all lands, digitization of cadastral maps, and establishment of land registries to improve land governance【25:2†source】. Zerodha Varsity
- Financial Support for States: ₹1.5 lakh crore will be provided to states as long-term interest-free loans to support resource allocation and boost economic activities at the state level【25:1†source】. Economic Times
- Tax Reforms and Reliefs: Changes include an increase in the standard deduction for salaried employees, the abolition of the ANGEL tax for all classes of investors, and a reduction in the corporate tax rate for foreign companies【25:5†source】. Moneycontrol
- Focus on Women and Youth: The budget allocates significant resources for schemes benefiting women and youth, including skilling programs, support for working women hostels, and financial incentives for first-time employees in formal sectors【25:4†source】. Groww
Conclusion
The 2024-2025 Indian budget presents a comprehensive plan to drive economic growth and development across various sectors. While the ambitious initiatives hold significant promise, their successful implementation will be key to achieving the envisioned ‘Viksit Bharat’. The budget’s focus on sustainability, employment, and inclusive growth marks a positive step towards a developed India.