The Union Budget for 2024, presented by Union Finance Minister Nirmala Sitharaman, has sparked discussions and analyses across the nation. This comprehensive account of the government’s finances outlines the fiscal strategy, with notable measures aiming to balance macroeconomic stability and political considerations. This blog provides real-time updates and expert explanations of the key announcements and their implications.
What is the Union Budget?
The Union Budget, also known as the Annual Financial Statement, details the government’s financial health, projecting revenue and expenditure for the upcoming fiscal year. Key metrics include total receipts (revenue) and total expenditure, with the fiscal deficit representing the gap between these figures, bridged through market borrowing. Understanding the budget is crucial as it directly affects citizens by determining tax policies and spending priorities.
Why it Matters
The budget outlines the government’s plans for using taxpayers’ money, influencing economic conditions, employment, and public services. Key policy changes, like tax adjustments and spending initiatives, can have widespread impacts on individuals and businesses.
12:54 (IST), 23 JUL 2024
Big Picture: Macroeconomic Stability and Political Strategy
The Budget speech highlighted the Modi government’s dual focus on ensuring macroeconomic stability and garnering political support. Special packages for Andhra Pradesh and Bihar are aimed at securing the backing of key allies JD(U) and TDP, vital for the NDA’s longevity.
The budget adheres to the fiscal glide path, targeting a fiscal deficit reduction to 4.5% by 2025-26. Tax hikes on capital gains and securities transactions are measures to temper a potentially overheated market, reflecting insights from the Economic Survey.
12:51 (IST), 23 JUL 2024
Land Records Digitisation: Enhancing Urban Finances
Digitisation of urban land records, a BJP manifesto promise, aims to boost property tax collections through improved record management. This reform aligns with recommendations from the 15th Finance Commission and is necessary for cities to access certain central funds.
12:48 (IST), 23 JUL 2024
Income Tax Adjustments: Relief for Taxpayers
The Finance Minister proposed increasing the standard deduction from ₹50,000 to ₹75,000 and the deduction on family pensions from ₹15,000 to ₹25,000. Changes to the income tax slabs under the new regime could result in a net annual gain of approximately ₹17,500 for taxpayers.
12:45 (IST), 23 JUL 2024
Climate Finance Taxonomy: Supporting Green Transitions
A new climate finance taxonomy will classify economic activities based on environmental sustainability, facilitating investment in climate adaptation and mitigation. This aligns with international practices and supports India’s climate commitments.
12:42 (IST), 23 JUL 2024
Boost to Space Economy
A ₹1,000 crore venture capital fund for the space economy aims to quintuple the sector’s size over the next decade. This initiative supports private sector involvement in space activities, complementing ISRO’s scientific missions.
12:40 (IST), 23 JUL 2024
LTCG Tax Hike: Revenue Generation and Market Stability
To enhance revenue, the Long Term Capital Gains (LTCG) tax has been increased from 10% to 12.5%. The surge in equity investments and profit booking by investors underpins this move, aiming to stabilize market exuberance.
12:22 (IST), 23 JUL 2024
Customs Duty Reduction on Precious Metals
Customs duty on gold and silver has been reduced to 6%, and on platinum to 6.4%, to boost domestic value addition in jewellery making. Additionally, the Income Tax Act will undergo a comprehensive review to simplify and reduce litigation.
12:18 (IST), 23 JUL 2024
Pradhan Mantri Awas Yojana-Urban 2.0
An investment of ₹10 lakh crore for constructing 1 crore urban houses, with ₹2.2 lakh crore in central assistance over five years, marks the continuation of PMAY-U. Interest subvention for affordable housing also gets a boost.
12:16 (IST), 23 JUL 2024
Financial Sector Vision and Strategy Document
To meet the economy’s financing needs, a new vision and strategy document will guide the financial sector’s development over the next five years, involving government, regulators, financial institutions, and market participants.
12:15 (IST), 23 JUL 2024
Tourism Development in Bihar
Significant funds are allocated for developing key tourism sites in Bihar, including Vishnupad temple, Mahabodhi temple, and Rajgir, transforming them into world-class destinations. This strategy aims to boost regional tourism and economic development.
12:14 (IST), 23 JUL 2024
Research in Nuclear and Thermal Power
Funds are allocated for R&D in small modular nuclear reactors and Advanced Ultra Supercritical thermal power plants, promoting higher efficiency and lower emissions. Policy support for pumped hydro storage, a critical energy storage technology, is also considered.
12:07 (IST), 23 JUL 2024
4th Phase of Pradhan Mantri Gram Sadak Yojana
The fourth phase of PMGSY will connect 25,000 habitations with all-weather roads, continuing efforts from previous phases to improve rural connectivity and infrastructure.
12:03 (IST), 23 JUL 2024
Tribal Welfare Initiatives
The Pradhan Mantri Janjati Unnat Gram Abhiyan scheme aims to improve conditions for tribal communities, covering 63,000 villages and benefiting 5 crore tribals. This follows last year’s PM-JANMAN scheme, focusing on socio-economic upliftment.
11:59 (IST), 23 JUL 2024
Political Strategy for Bihar
Announcements for Bihar include infrastructure development and industrial corridors, supporting JD(U)’s demand for special status. These measures aim to bolster BJP-JDU’s standing ahead of the upcoming state elections.
11:57 (IST), 23 JUL 2024
National Cooperation Policy
A new National Cooperation Policy will guide the systematic development of the cooperative sector, updating the existing policy from 2002. This move aligns with the government’s focus on enhancing cooperative structures.
11:54 (IST), 23 JUL 2024
Support for Andhra Pradesh and Bihar
The budget provides substantial support for Andhra Pradesh and Bihar, reflecting coalition dynamics. Efforts include financial aid for developing Amravati and various infrastructure projects in Bihar.
11:47 (IST), 23 JUL 2024
MSME Support and Youth Internships
A new scheme will offer internship opportunities in top companies to 1 crore youth, alongside measures to support MSMEs facing stress. MSMEs are crucial, contributing 30% to GDP, 48% to exports, and employing over 110 million people.
11:35 (IST), 23 JUL 2024
Digital Public Infrastructure in Agriculture
A digital crop survey covering 6 crore farmers across 400 districts will be conducted, enhancing crop area and production estimation. This initiative aims to streamline agricultural processes and improve data accuracy.
11:32 (IST), 23 JUL 2024
Provisions for Andhra Pradesh
₹15,000 crore is allocated for developing Amravati as Andhra Pradesh’s capital. This financial support, sourced from multilateral funding, aims to fulfill commitments from the Andhra Pradesh Reorganisation Act.
11:17 (IST), 23 JUL 2024
Agriculture Sector Push
The budget emphasizes natural farming and self-reliance in pulses and oilseeds. Digital public infrastructure for farmers will be developed in partnership with states, including a comprehensive crop survey.
11:13 (IST), 23 JUL 2024
Inflation and Employment Focus
India’s inflation remains low and stable, with a target of 4% and core inflation at 3.1%. The budget allocates ₹1.48 lakh crore for education, employment, and skilling, aiming to generate employment and support the middle class.
11:05 (IST), 23 JUL 2024
FM Nirmala Sitharaman’s Speech
Finance Minister Nirmala Sitharaman begins her budget speech, highlighting the results of the general elections and the global economic scenario.
11:04 (IST), 23 JUL 2024
Economic Survey Recommendations
The Economic Survey emphasizes reducing government intervention in the economy and fostering private sector growth to create jobs. It also highlights the importance of state capacity in sustaining economic progress.
11:01 (IST), 23 JUL 2024
Economic Survey Concerns
Challenges highlighted include a less favorable environment for FDI, high interest rates in developed countries, dependence on Chinese imports, and the need to generate 78.5 lakh jobs annually in the non-farm sector to meet workforce demands.
10:48 (IST), 23 JUL 2024
Union Budget Size Perspective
While the Union Budget is a significant economic event, its size is now smaller compared to the combined budgets of all Indian states. For instance, in 2022-23, the Union government’s expenditure was ₹39.5 lakh crore, while states collectively spent ₹47.6 lakh crore.
10:31 (IST), 23 JUL 2024
Job Creation Priority
Job creation is crucial for leveraging India’s demographic dividend, providing employment opportunities to the young population to mitigate economic and social distress