Union Budget 2024: It's An Employment-Focused Budget

Finance Minister Nirmala Sitharaman's budget for the fiscal year 2024-25 focuses on job creation across various sectors to tackle unemployment and promote inclusive economic growth. Key initiatives include significant investments in infrastructure, digital economy advancements and vocational training programmes. These measures are designed to enhance workforce skills, stimulate job opportunities, and address sector-specific employment challenges, writes ETV Bharat's Saurabh Shukla.

New Delhi:Finance Minister Nirmala Sitharaman's budget for the year 2024-25 prioritises employment generation with a focus on creating job opportunities across all sectors. Specific economic packages have been allocated to states based on their economic conditions. Additionally, a new tax scheme has been introduced to appear more beneficial. The Finance Minister has emphasised that upcoming tax reforms aim to address tax-related challenges for the public.

In her first budget presentation following the general elections, Finance Minister Nirmala Sitharaman unveiled multiple initiatives aimed at easing the burden on the middle class and stimulating job creation.

The Finance Minister affirmed that India's inflation continues to be low and stable and is moving towards the targeted four per cent. Additionally, she unveiled the Prime Minister's package, which includes five schemes and initiatives amounting to Rs 2 lakh crore. These initiatives aim to enhance employment, skill development and other opportunities for 4.1 crore youth over the next five years.

Support for Bihar, Andhra Pradesh

Significant funds were earmarked in the budget for infrastructure projects in Bihar and Andhra Pradesh, including Rs 60,000 crore for expressways, power plants, heritage corridors, and new airports in Bihar, which faces upcoming Assembly elections. Andhra Pradesh, whose ruling TDP recently joined the BJP-led NDA, received Rs 15,000 crore in financial assistance from multilateral agencies.

The Finance Minister stated, "We will support the development of road connectivity projects, namely Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, Bodhgaya, Rajgir, Vaishali, and Darbhanga spurs, and an additional two-lane bridge over river Ganga at Buxar at a total cost of Rs 26,000 crore. Power projects, including the setting up of a new 2400 MW power plant at Pirpainti, will be undertaken for Rs 21,400 crore. New airports, medical colleges and sports infrastructure in Bihar will also be constructed," said the FM.

In the Name of Tax Reforms

Nirmala Sitharaman also introduced tax reforms, such as abolishing 'angel tax' for all startup investors, reducing customs duties on mobile phones and gold, and simplifying capital gains tax. However, the increase in securities transaction tax (STT) on futures and options of securities resulted in a downturn in the stock markets but later it recovered.

In this budget, short-term capital gains on specified financial assets now incur a tax rate of 20%, up from the current 15%, and long-term gains on both financial and non-financial assets carry a tax rate of 12.5%, increased from the current 10%. The exemption limit on capital gains has been raised to Rs 1.25 lakh.

Regarding the new tax regime, the standard deduction for salaried employees has been increased to Rs 75,000 under the new tax regime, up from Rs 50,000. It was expected that the Finance Minister would raise the standard deduction to Rs 1 lakh in the new tax regime, but it remains unchanged at Rs 50,000 under the old tax regime. For family pensioners, the deduction has been raised from Rs 15,000 to Rs 25,000 under the new regime.

For Farmers

The Finance Minister has introduced new steps to support farmers, including plans to release 109 new high-yielding and climate-resilient varieties of 32 field and horticulture crops for cultivation. Over the next two years, one crore farmers across the country will be encouraged to adopt natural farming methods. The government has also allocated Rs 1.52 lakh crore for the agriculture and allied sectors this year.

Support to Industry and Women

The government is set to increase the limit for Mudra loans from the current Rs 10 lakhs to Rs 20 lakhs. A budget allocation of Rs 2.66 lakhs crore has been earmarked for rural development, including rural infrastructure, this year, which is expected to benefit various industries linked to infrastructure, thereby boosting their sales. Additionally, 1,000 industrial training institutes will undergo upgrades.

Moreover, the government aims to expand the space economy fivefold over the next decade with a Rs 1,000 crore venture capital fund. It also plans to introduce a comprehensive scheme offering internship opportunities in 500 leading companies to one crore youth over five years, thereby enhancing skilled manpower in the industry.

In a move to promote women-led development, the budget allocates more than Rs 3 lakh crore for initiatives benefiting women and girls.

Budget estimates

According to the Finance Minister, the fiscal year 2024-25 indicates estimated total receipts, excluding borrowings, of Rs 32.07 lakh crore, with total expenditure projected at Rs 48.21 lakh crore. Net tax receipts are anticipated to reach Rs 25.83 lakh crore and the fiscal deficit is expected to be 4.9 per cent of GDP.

The Finance Minister emphasised that gross and net market borrowings through dated securities in 2024-25 are estimated at Rs 14.01 lakh crore and Rs 11.63 lakh crore respectively. Nirmala Sitharaman underscored that the fiscal consolidation path announced in 2021 has greatly benefited the economy and the government aims to lower the deficit to below 4.5 per cent next year.