Finance Minister Nirmala Sitharaman, in her concise Budget speech articulated the crucial focal areas for the fiscal year beginning April 1, 2024. Although the Budget emphasizes strengthening tourism, housing and promoting adoption of renewable energy, it comes somewhat below elevated hopes for accelerated investments in infrastructure notably roads, ports and airports in world’s fastest growing major economy. Here’s a detailed breakdown of the significant takeaways:
- Capital Expenditure Boost
- The government has tactfully increased the capital expenditure target by 11.1%, with an impressive spend of Rs 11.11 Lakh Cr This represents 3.4% of the GDP which means a strong commitment to strengthening vital areas.
- Fiscal Discipline
- To show fiscal responsibility, the fiscal gap for FY24 has been trimmed to 5.8% from the estimated earlier 5.9%. Addtionally, 5.1% is set as a goal for fiscal deficit in 2024-25 indicating strong determination to attain a fiscal deficit of less than 4.5%.
- Divestment Targets
- FY25 divestment target is strategically set at Rs 50,000 Crore which represents a measured reduction from the previous target of Rs 51,000 Cr This recalibration seeks to put government finances back on track following the series of missed divestment targets in recent fiscal years.
- Taxation Status Quo
- To ensure that stability is maintained, no significant changes in the tax rates are proposed for FY25. Besides, the move to withdraw outstanding direct tax demands benefiting up to One Crore people, that is Rs 25,000 for amounts less than FY10 and Rs 10,000 for amounts between FY11-FY15, is a major relief.
- Healthcare and Social Initiatives
- The budget spreads a broad canvas for Ayushman Bharat, which encompasses all Aasha and Aanganwadi workers.
- The noticeable action includes vaccination efforts for cervical cancer targeting girls in the age range of 9 to 14 years.
- Allocations for Key Sectors
- The MNREGA budget, on the other hand, enjoys a remarkable 43.3% increase, reaching Rs 86,000 C
- Ayushman Bharat-PMJAY is allotted an important 4.2% hike of Rs 7,500 Cr
- The schemes under PLI see a marked increase of 33.5%; the allocation for this program stands at Rs 6,200 Cr
- The Railways achieve an impressive budgetary allotment of Rs 2.55 Lakh Crore in the fiscal year 2024-25.
- With a positive development, the Defence sector sees an increase of 4% in its expenditure, making it Rs 6.25 Lakh Cr
- Agriculture Focus
- The Budget highlights the strategic focus on the investment in post-harvest activities, dairy farmers empowerment and Foot and Mouth disease management. Moreover, the scope of crop insurance under PM Fasal Bima Yojana has been widened to cover 4 crore farmers with an aim to set up five integrated Aqua Parks.
- Rail Announcements
- The budget presents grandiose programs such as dedicated corridors for Energy, Mineral, and Cement Industry.
- A remarkable change is the conversion of 40,000 normal train bogies into high-speed Vande Bharat ones.
- Fiscal Moves
- The total capex outlay stands at an impressive Rs 11.11 Lakh Crore (3.4% of the GDP).
- The fiscal outreach for FY25 is set at 5.1 percent, a long-term objective being to bring it down to 4.5 % by the end of 2025-26.
- Gross market borrowing target for FY25 is fixed at an enormous Rs 14.13 Lakh Crore, with net market borrowing estimated at Rs 11.75 Lakh Cr
- The amount of Food Subsidy is Rs 2.12 Lakh Cr
- The divestment target for FY24 is adjusted to Rs 30,000 Crore and for FY25 there is a bullish ambition of over Rs 50,000 Cr
- Aviation Boost
- The Udan Scheme gathers pace as it is proposed to introduce 517 new routes.
- Defence share in the aviation sector records an impressive nearly 20% hike to touch a level of Rs 6.22 Lakh Cr
- Tax Reforms and Simplification
- The Budget keeps the direct and indirect tax rates, including import taxes, unchanged.
- The tax breaks for startups are due through March 31st, 2025.
- The government reaffirms its promise to enhance taxpayer services and simplify the processing of tax returns.
- Remarkable proposals involve tax incentives for pension funds.
- Tourism Initiatives
- The Budget presents interest-free loans to the states on tourism promotion.
- For tourism development in Lakshadweep, a special team is created to tackle issues that result from high population.
To Conclude, Budget 2024 successfully strikes a balance between fiscal discipline, strategic sector allocations, and social support policies by laying a solid foundation for continued economic growth in the upcoming fiscal year.
