Highlights of Interim Union Budget 2024-25 - Analysis & Important points for APSC Exam

Highlights of Interim Union Budget 2024-25 – Analysis & Important points for APSC Exam

On February 01, 2024, Union Finance Minister Nirmala Sitharaman presented the Interim Union Budget for the financial year 2024-25 in the Parliament, with the ‘mantra’ of ‘Sabka Saath, Sabka Vikas, and Sabka Vishwas’ and the whole of nation approach of “Sabka Prayas”. This was the sixth budget presented by the current FM and the last one of Prime Minister Narendra Modi-led government’s second term. The full budget will be presented in July 2024, after the new government is formed post the Lok Sabha Elections.

Finance Minister confirmed the continuation of existing rates for direct taxes, indirect taxes, and export duties. She also disclosed an 11% surge in the upcoming year’s capex outlay, reaching ₹11.1 lakh crore. During the fiscal year’s federal budget announcement, the fiscal gap revised to 5.8% of the gross domestic product. Nominal GDP growth for FY25 is projected at 10.5%.

Download Union Budget 2023-24 Highlights PDF

Highlights & Important Point of Interim Union Budget 2024-25

~ PART- A ~

Social Justice

To focus on upliftment of four major castes, that is, ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’(Farmer).
Govt to form high-powered panel to address population growth challenges and demographic changes.

‘Garib Kalyan, Desh ka Kalyan’

Government assisted 25 crore people out of multi-dimensional poverty in last 10 years.
DBT of Rs. 34 lakh crore using PM-Jan Dhan accounts led to savings of Rs. 2.7 lakh crore for the Government.
PM-SVANidhi provided credit assistance to 78 lakh street vendors. 2.3 lakh have received credit for the third time.
PM-JANMAN Yojana to aid the development of particularly vulnerable tribal groups (PVTG).
PM-Vishwakarma Yojana provides end-to-end support to artisans and crafts people engaged in 18 trades.

Welfare of ‘Annadata’

PM-KISAN SAMMAN Yojana provided financial assistance to 11.8 crore farmers.
Under PM Fasal BimaYojana, crop insurance is given to 4 crore farmers
Electronic National Agriculture Market (e-NAM) integrated 1361 mandis, providing services to 1.8 crore farmers with trading volume of Rs. 3 lakh crore.

Momentum for Nari Shakti

30 crore Mudra Yojana loans given to women entrepreneurs.
Female enrolment in higher education gone up by 28%.
In STEM courses, girls and women constitute 43% of enrolment, one of the highest in the world.
Over 70% houses under PM Awas Yojana given to women from rural areas.

PM Awas Yojana (Grameen)

Despite COVID challenges, the target of three crore houses under PM Awas Yojana (Grameen) will be achieved soon.
Two crore more houses to be taken up in the next five years.
A scheme to help middle class living in rented houses to buy or build their own houses will be launched

Rooftop solarization and muft bijli

1 crore households to obtain 300 units free electricity every month through rooftop solarization. Each household is expected to save Rs.15000 to Rs.18000 annually.

Ayushman Bharat

Healthcare cover under Ayushman Bharat scheme to be extended to all ASHA workers, Anganwadi Workers and Helpers.

Agriculture and food processing

Pradhan Mantri Kisan Sampada Yojana has benefitted 38 lakh farmers and generated 10 lakh employment.
Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 lakh SHGs and 60000 individuals with credit linkages.

Research and Innovation for catalyzing growth, employment and development

A corpus of Rs.1 lakh crore to be established with fifty-year interest free loan to provide long-term financing or refinancing with long tenors and low or nil interest rates.
A new scheme to be launched for strengthening deep-tech technologies for defence purposes and expediting ‘atmanirbharta’.

Infrastructure

Capital expenditure outlay for Infrastructure development and employment generation to be increased by 11.1 per cent to Rs.11,11,111 crore, that will be 3.4 per cent of the GDP.

Railways

3 major economic railway corridor programmes identified under the PM Gati Shakti to be implemented to improve logistics efficiency and reduce cost
- Energy, mineral and cement corridors
- Port connectivity corridors
- High traffic density corridors
Forty thousand normal rail bogies to be converted to Vande Bharat standards.

Aviation Sector

Number of airports in the country doubled to 149.
Five hundred and seventeen new routes are carrying 1.3 crore passengers.
Indian carriers have placed orders for over 1000 new aircrafts.

Green Energy

Coal gasification and liquefaction capacity of 100 MT to be set up by 2030.
Phased mandatory blending of compressed biogas (CBG) in compressed natural gas (CNG) for transport and piped natural gas (PNG) for domestic purposes to be mandated.

Tourism sector

States to be encouraged to take up comprehensive development of iconic tourist centres including their branding and marketing at global scale.
Framework for rating of the tourist centres based on quality of facilities and services to be established.
Long-term interest free loans to be provided to States for financing such development on matching basis.

Investments

FDI inflow during 2014-23 of USD 596 billion was twice of the inflow during 2005-14.

Reforms in the States for ‘Viksit Bharat’

A provision of Rs.75,000 crore rupees as fifty-year interest free loan is proposed to support milestone-linked reforms by the State Governments.

Budget Estimates 2024-25

Total receipts other than borrowings and the total expenditure are estimated at Rs.30.80 and Rs.47.66 lakh crore respectively.
Tax receipts are estimated at Rs.26.02 lakh crore.
Scheme of fifty-year interest free loan for capital expenditure to states to be continued this year with total outlay of Rs.1.3 lakh crore.
Fiscal deficit in 2024-25 is estimated to be 5.1 per cent of GDP

Revised Estimates (RE) 2023-24

RE of the total receipts other than borrowings is Rs.27.56 lakh crore, of which the tax receipts are Rs.23.24 lakh crore.
RE of the total expenditure is Rs.44.90 lakh crore.
Revenue receipts at Rs.30.03 lakh crore are expected to be higher than the Budget Estimate, reflecting strong growth momentum and formalization in the economy.
RE of the fiscal deficit is 5.8 per cent of GDP for 2023-24.

~ PART- B ~

Direct taxes

FM proposes to retain same tax rates for direct taxes
Direct tax collection tripled, return filers increased to 2.4 times, in the last 10 years
Government to improve tax payer services
- Outstanding direct tax demands upto Rs 25000 pertaining to the period upto FY 2009-10 withdrawn
- Outstanding direct tax demands upto Rs 10000 for financial years 2010-11 to 2014-15 withdrawn
- This will benefit one crore tax payers
Tax exemption on certain income of IFSC units extended by a year to 31.03.2025 from 31.03.2024
Direct tax collection target set at ₹21.99-lakh crore, while that of indirect tax is at ₹16.22-lakh crore.

Indirect taxes

FM proposes to retain same tax rates for indirect taxes and import duties
GST unified the highly fragmented indirect tax regime in India
Average monthly gross GST collection doubled to Rs 1.66 lakh crore this year, while GST tax base has doubled
State SGST revenue buoyancy (including compensation released to states) increased to 1.22 in post-GST period(2017-18 to 2022-23) from 0.72 in the pre-GST period (2012-13 to 2015-16)
GST led to supply chain optimization and reduced the compliance burden on trade and industry. Lower logistics cost and taxes helped reduce prices of goods and services, benefiting the consumers

Tax rationalization efforts over the years

No tax liability for income upto Rs 7 lakh, up from Rs 2.2 lakh in FY 2013-14
Presumptive taxation threshold for retail businesses increased to Rs 3 crore from Rs 2 crore
Presumptive taxation threshold for professionals increased to Rs 75 lakh from Rs 50 lakh
Corporate income tax decreased to 22% from 30% for existing domestic companies
Corporate income tax rate at 15% for new manufacturing companies
Tax benefits to start-ups and investments made by sovereign wealth or pension funds extended by 1 year till March 31, 2025