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New Delhi: In the changed political scenario after the results of the Lok Sabha elections, Finance Minister Nirmala Sitharaman presented a record seventh budget in the Lok Sabha on Tuesday. In the last two years, the fiscal deficit has been reducing faster than the government expected due to the government's tax revenue, huge dividend income from the Reserve Bank and other public sector enterprises. The Finance Minister has given tax relief in the budget which can be called minimal. On the other hand, the treasury has been left open for the states of the new allies of the central government, so it can definitely be said that even the politically ideal budget has not lived up to the expectations of the people.
In the financial year 2024-25, the central government has estimated a total expenditure of Rs 48.20 lakh crore, of which Rs 11.11 lakh crore is capital expenditure. The total revenue of the government is estimated to be Rs 31.29 lakh crore. According to the budget document, the fiscal deficit of the Center will be Rs 16.13 lakh crore, which will be slightly less than the revised estimate of Rs 16.53 lakh crore for 2023-24. Due to the deficit, the interest expenditure of the central government is estimated to be Rs 11.62 lakh crore, which is more than the total capital expenditure of the government. Two major issues emerge in the budget announcement and provisions. One is to benefit the allies and the other is to include the announcement, guarantee or package made by Prime Minister Narendra Modi in it.
Proposal for Rs 7000 crore relief from taxation
Finance Minister Nirmala Sitharaman announced that the changes in the tax proposal have given relief of Rs 7000 crore annually to the people of the country. She has made changes in taxation – direct and indirect taxation – in the budget. According to the Finance Minister, the announcement made in direct taxation will give relief of Rs 29,000 crore to the people. However, this relief is available only to those who accept the new tax system, that is, a system in which tax concessions or tax exemptions and exemptions are less, according to the Finance Minister, 33 percent of those who file returns for the year 2023-24. Since they still pay tax under the old tax system, they will not get the benefit of new tax exemptions. At the same time, the increase in indirect taxes is estimated to increase the revenue of the central government by Rs 30,000 crore, which will benefit the people of the country by a total of Rs 7,000 crore.
Bihar, Andhra: No special status but special declarations for sure
After nearly 90 minutes of speech, there was no announcement except flattery of new political allies from Bihar, Andhra Pradesh and efforts to gain political mileage in Uttarakhand, Himachal Pradesh and Bengal. On Monday, the central government said in the Lok Sabha that according to the existing rules, Bihar cannot get the status of a special state, but special allocation has been made for it in the budget announcements. In this election, the NDA government has succeeded in forming the government with the support of Nitish Kumar and Chandrababu. Announcements like tourism, cheap loans, industrial corridor have been made for Bihar in the budget. Construction of Amritsar Kolkata Corridor Special Industrial Estate in Gaya, Bihar, tourist centers in Gaya and Bodhi Gaya, development of Nalanda University as a tourist area like Ujjain and Varanasi have been announced. Three expressways worth Rs 26,000 crore, a new medical college, a new airport have been announced apart from a power project worth Rs 21,400 crore. It also announced a capital of Rs 15,000 crore for building a new capital for Andhra, financial assistance for power projects, creation of two new nodes in the industrial corridor and special assistance for backward areas of Andhra.
Prime Minister's five favorite packages
The Finance Minister has broadly included the Pradhan Mantri Yojana or Guarantee in the budget. Knowledge + poor, youth, earners and women were the central ideas in the February budget but it has been mentioned only once in this speech. According to this, the government will give one month's salary in three installments if the salary is up to Rs 1 lakh per month for employment, if it is the first job and if one joins the Provident Fund. Secondly, the monthly contribution of EPF fund will be paid by the government for four years.
In the second package, it has been announced to train 30 lakh youth of the country for skill development for the next five years. Apart from this, 1000 ITIs in the country will be upgraded to start an industry-based credit guarantee fund for small and medium enterprises, during this time it has been announced to increase the loan limit of the youth to Rs. It has been announced to give one crore youth an opportunity to work as interns in the top 500 companies of the country in the next five years. Under this scheme, the government will pay a one-time stipend of Rs 6000 and Rs 5000 per month for 12 months.
Long-term capital gains, stricter instead of easier: Gift to the city
The Indian stock market has now become the world's highest-returning market. The boom of the last five years is attributed to the enthusiasm of local investors. But, the central government has made huge changes in long-term capital gains in the budget. If immovable property (i.e. house, gold or shares of unlisted companies) is sold, the benefit of indexation (inflation-based increase in the value of the item) has been abolished and long-term capital gains at the rate of 12.5 percent has been imposed directly on it. The biggest impact of these measures will be on those selling inherited property or household jewellery.
Short term capital gains tax has been increased from 15 per cent to 20 per cent. Long term capital gains tax on listed shares, mutual funds and bonds has been increased from 10 per cent to 12.5 per cent. Long term capital gains tax is levied when the investment is held for one year or more from the date of purchase and is sold. However, capital gains tax is not levied on any investment purchase or sale in GIFT City. Not only this, the units registered here are also exempted from income tax for 10 years. It is possible that this provision of the budget can lead to transfer of business to GIFT City.
Some schemes, ministries or matters not mentioned in the speech
During the last 10 years of rule, the central government made announcements like Smart City, Swachh Bharat Mission, raising money by disinvestment in central government companies, metro rail project, but there was no mention of these things in the budget speech of the Finance Minister. In the last five years, huge investments and big announcements were made on National Highway Project, Expressway, Railway Infrastructure. On Tuesday, there was no mention of the word road or railway in Sitharaman's budget speech. Although the railway budget and the Union Budget have been merged, the Finance Minister did not make any announcement regarding railways. After saying that the budget is focused on employment, the MNREGA scheme, which has generated the most rural employment in the last 15 years, was not discussed in the budget speech. Yes, Rs 86,000 crore has been allocated for it in the budget.
GDP growth rate at market prices will be 10.5 percent
According to the budget document, the central government expects the size of the country's economy or gross domestic product (GDP) to grow by 10.5 percent at market prices (ie including inflation). GDP at current prices is estimated to grow by 9.6 percent to Rs 295.36 lakh crore in the year 2023-24. According to the budget estimate, the country's GDP at current prices is likely to increase to Rs 326.37 lakh crore at the end of 2024-25.
Farmers: 1 crore farmers will be helped in natural farming in two years. 32 crops of 109 varieties will be planted. There will be a digital survey of crops. There will be a registry of 6 crore farmers and their lands. Rs 1.52 lakh crore will be allocated for agriculture and allied sectors in 2024-25.
Income Tax: In the new tax system, there will be no tax on income of Rs. 3 lakh. Rs. 3 to 7 lakh will be taxed at 5 percent, Rs. 7 to 10 lakh at 10 percent, Rs. 10 to 12 lakh at 15 percent, Rs. 12 to 15 lakh at 20 percent. Annual income above Rs. 15 lakh will be taxed at 30 percent.
Infrastructure: An industrial hub will be developed in Gaya on the Amritsar-Kolkata Economic Corridor. Roads will be built in 25 thousand rural settlements under the PM Gram Sadak Yojana. Rs. 11,11,111 crore will be spent on infrastructure.
Education: The model skill loan scheme will be revised to make loans up to Rs 7.5 lakh available. Loans up to Rs 10 lakh will be available for higher education in the country. The government will pay 3 per cent interest on the loan. For this, e-vouchers will be given to one lakh students every year.
Apna Ghar: Under the Pradhan Mantri Awas Yojana-Urban 2.0, 1 crore poor and middle class families will get houses. For that, an investment of Rs. 10 lakh crore will be made. Interest subsidy will also be started so that loans can be available at cheaper rates.
Bihar: Patna-Purnia Expressway, Buxar-Bhagalpur Expressway development at a cost of Rs. 26 thousand crores. Power projects worth Rs. 21,400 crores. Rs. 11,500 crores will be given to deal with the problem of floods. New airport, medical and sports projects will be started.
Andhra Pradesh: Andhra Pradesh gets Rs. 15,000 crore special package. Polavaram irrigation project will be completed at the earliest. Funds will be provided for water, power, railways and roads in the Visakhapatnam-Chennai Economic Corridor and Hyderabad-Bangalore Economic Corridor.
Industry: To include buyers in the trade platform, the business limit has been reduced from Rs. 500 crore to Rs. 250 crore. An e-commerce export hub will be set up in PPP mode to enable MSMEs to sell their products in the international market.
Women: Rs. 3 lakh crore allocated for schemes benefiting women and girls. Working women hostels to be built. Provision of hostels and crèches will increase women's participation in the workforce.
Youth: 1 crore youth will get internship opportunities in top 500 companies in the next five years. 12 months internship under the Prime Minister's package with Rs. 5,000 monthly allowance and Rs. 6,000 as one-time assistance.
Employment: Three schemes were launched for jobs. The first job scheme is Rs. 15,000 for first time enrollees in EPFO if their salary is less than 1 lakh. This will benefit 2.10 crore youth.
Tourism: Help will be given to develop the Vishnupad Temple of Guyana and the Mahabodhi Temple of Bodh Gaya as world-class pilgrimage sites. Nalanda will be developed as a tourist centre. Odisha will be helped to develop into a tourist destination.
Health: Three cancer medicines have been made customs duty free. This will make medicines cheaper. Customs duty has also been reduced on X-ray tubes and flat panel detectors used in making X-ray machines.
Benefits to the employer: The government will provide extensive benefits to the employer. The government will provide Rs 3,000 per month as EPFO contribution to the employer if he employs an employee with a salary of less than Rs 1 lakh.
Corporate tax: TDS rate on e-commerce operators reduced from 1% to 0.1%. Corporate tax rate on foreign companies reduced from 40% to 35%.
What became cheaper, what became costlier
Gold, silver, imported mobiles, cancer medicines became cheaper
New Delhi: Finance Minister Nirmala Sitharaman has announced a cut in customs duty in the Union Budget 2024-25. With this, gold, silver, other precious metals, imported mobile phones, some cancer drugs and medical equipment have become cheaper. However, some items like imported garden umbrellas and laboratory chemicals have become more expensive due to the increase in basic customs duty.
Cheap
Gold biscuits and lagdis, Silver biscuits and lagdis
Coins made of precious metals such as platinum, palladium, osmium, ruthenium and iridium
All types of polyethylene for use in the manufacture of orthopedic implants
Platinum and palladium are used in the production of noble metal solutions, noble metal compounds, and catalytic converters
Cancer medications – trastuzumab deruxtacan, osimertinib, durvalumab
Medical devices – all types of polyethylene used in the manufacture of orthopedic implants
X-ray tubes for use in the manufacture of X-ray machines for surgical, dental or veterinary use
Imported cellular mobile phones, chargers, adapters.
Printed circuit board assembly (PCBA) of cellular mobile phones.
Specified capital goods for use in the manufacture of solar cells or solar modules, such capital equipment, parts for the manufacture of such capital goods
Fish lipid oil is used in the production of aquatic feed
All types of natural sand, quartz, important minerals, lithium carbonate, lithium oxide and hydroxide, potassium or nitrate.
Ferro Nickel and Blister Copper in the Metals Sector
Methylene Diphenyl Di-isocyanate is used in the manufacture of 'Spandex Yarn' in the textile and leather sector
It got expensive
Polyvinyl chloride (PVC) flex films (also known as PVC flex banners or PVC flex sheets).
Solar glass for manufacturing solar cells or solar modules
Tinned copper interconnects for manufacturing solar cells or solar modules
Allocation to Thrust Sectors
|
Security |
Rs. 6 , 21 , 940 |
|
rural Development |
Rs. 2, 65, 808 |
|
Agriculture-related fields |
Rs. 1, 51, 851 |
|
Education |
Rs. 1,25,638 |
|
IT Telecom |
Rs. 1,16,342 |
|
Health |
Rs. 89 , 287 |
|
energy |
Rs 89,287 |
|
social welfare |
Rs. 56 , 501 |
