India Budget 2024

The Union Budget 2024-25 was presented on July 23rd in parliament by Finance Minister Nirmala Sitharaman. According to the Finance Ministry, the budget “outlined a robust plan focusing on jobs, MSMEs (Medium Small and Micro Enterprises), the agriculture sector, startups, and economic growth amid global uncertainties”. Announcements were made for politically significant states such as Andhra Pradesh and Bihar, ruled by major NDA member parties. For instance, Rs 15,000 crore has been allotted for the development of Amaravati, the new capital of AP. This article delves into the Budget 2024 and explains the policies simply.

With 2024 being an election year in India, the Union Budget was not presented on its usual date in February. Instead, an Interim Budget was presented until elections concluded and a new government formed.

According to the Budget 2024-25 [1], elevated asset prices, political uncertainties and shipping disruptions in the global economy continue to pose downside risks for growth and upside risks to inflation. It added that India's inflation remains low and stable, progressing towards the 4 per cent target, with core inflation (excluding food and fuel) at 3.1 percent.

Budget Theme [2]

Focus on employment, skilling, MSMEs (Medium Small and Micro Enterprises), and the middle class.
Announcement of Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 Cr youth over 5 years with a central outlay of INR 2 Lakh Cr.
Provision of INR 1.48 Lakh Cr for education, employment and skilling.

For the 'Viksit Bharat' vision, the budget outlines nine priorities to foster opportunities for all: enhancing productivity and resilience in agriculture, creating employment and skill development opportunities, promoting inclusive human resource development and social justice, boosting manufacturing and services, advancing urban development, ensuring energy security, improving infrastructure, supporting innovation, research, and development and implementing next-generation reforms.

For Businesses and Start-Ups,

Finance Minister Nirmala Sitharaman announced the abolition of the angel tax, bringing cheer among startups and their investors. The idea of angel tax was introduced in the 2012 Union Budget by then Finance Minister Pranab Mukherjee. The primary objective was to check money laundering practices through investments in startups and catch bogus firms after the advent of such cases. According to financial experts, the abolition of this tax might increase the confidence of both domestic and international angel investors in investing in Indian startups. This could lead to an influx of capital, fostering innovation and growth in the startup ecosystem. [3]
According to Budget 2024, “for facilitating term loans to MSMEs for the purchase of machinery and equipment without collateral or third-party guarantee, a credit guarantee scheme will be introduced. The scheme will operate on the pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, a guarantee covering up to Rs 100 crore, while the loan amount may be larger. The borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reduced loan balance.” The move is aimed at boosting India’s 63 million MSMEs. The manufacturing sector contributes approximately 17% to India’s GDP and its growth is essential to the progress of the nation. [4]
The Finance Minister proposed to reduce the tax deducted at source (TDS) for e-commerce operators to 0.1% from 1% earlier. What is tax deducted at source? [5]

For Youth and Jobs,

The government has allocated Rs 1.48 lakh crore for education, employment, and skill education. The Department of School Education and Literacy has received the highest allocation of Rs 73,498 crore. The Department of Higher Education has been allocated Rs 47,619.77 crore. This represents an increase of Rs 3,525.15 crore (7.99%) compared to the previous year.
According to the Budget, as the 5th scheme under the Prime Minister’s package, the government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. They will gain exposure for 12 months to real-life business environments, varied professions and employment opportunities. An internship allowance of Rs 5,000 per month along with a one-time assistance of Rs 6,000 will be provided. Companies will be expected to bear the training cost and 10 percent of the internship cost from their CSR funds.
Expected to benefit 100,000 students every year, the budget has proposed to subsidize loans of up ₹10 lakh at 3% interest for students seeking higher education in domestic institutions. However, only those who have not benefited from any other government scheme can benefit from this scheme.
Sitharaman announced the allocation of Rs 3 trillion for schemes benefiting women and girls specifically. She also said that working women's hostels would be set up in the country to promote women's participation in the workforce.
Announced three employment-linked incentive schemes for employers and employees based on enrollment in the Employees' Provident Fund Organisation (EPFO), as part of the government's efforts to boost hiring. These three schemes, including Scheme A (one month's salary for freshers), Scheme B (job creation in manufacturing), and Scheme C (support to employers), have been proposed to benefit first-time employees as they enroll in the EPFO. [6]

The detailed budget in its entirety can be found here and the key highlights here.