Finance Minister Nirmala Sitharaman on Tuesday presented the first Budget for Modi 3.0, introducing several reforms aimed at paving a growth roadmap for India.
Sitharaman announced on Tuesday in her Budget speech that the Centre will introduce an economic policy framework designed to drive next-generation reforms and accelerate economic growth.
Presenting her seventh budget statement in Parliament, she emphasized that the 2024 Union Budget will pave the way for future budgets, setting a clear path for sustained economic expansion.
“We will formulate an economic policy framework to delineate an overarching approach to economic development and set the scope of next-generation reforms for facilitating employment opportunities and for sustaining high growth,” Sitharaman said.
She said that the government will initiate and incentivize reforms to improve productivity of factors of production and facilitate markets and sectors to become more efficient.
FM Sitharaman listed nine priorities while presenting the Budget 2024-25 aimed at generating ample opportunities for all: Productivity and Resilience in Agriculture; Employment and Skilling; Inclusive Human Resource Development and Social Justice; Manufacturing and Services; Urban Development; Energy Security; Infrastructure; Innovation, Research, and Development; Next Generation Reforms.
Within these nine, she indicated the 2024 Budget will focus on four primary areas – employment, skilling, MSMEs (Micro, Small, and Medium Enterprises), and the middle class.
The budget announced major changes in the income tax regime for the financial year 2024-25, providing relief to taxpayers. The new income tax slabs introduced in Budget 2024 are as follows:
Additionally, the standard deduction limit has been increased to Rs 75,000 from Rs 50,000 under the new tax regime. Family pensioners will benefit from an increased standard deduction limit of Rs 25,000, up from the current Rs 15,000. The deduction available on the employer’s contribution to the National Pension System (NPS) account has also been raised from 10% to 14%. These new income tax slabs will come into effect from April 1, 2024, once the budget is passed by Parliament and receives Presidential assent.
The budget also brings significant changes in customs duties, making several items cheaper while increasing duties on others.
The budget includes significant cuts in customs duties on precious metals, medicines, and various other goods, alongside some duty hikes on specific items.
Here’s what’s cheaper and costlier following the budget announcement:
Finance Minister Nirmala Sitharaman’s Budget 2024 introduces several measures aimed at benefiting the common man, including enhancements to the National Pension Scheme (NPS), increased standard deductions, and a new employment incentive scheme.
Key among these measures is an increase in the employer’s NPS deduction, which has been raised to 14%. This change aims to boost retirement savings for employees, providing greater financial security in the long term.
In an effort to extend pension benefits to a younger demographic, the government has announced the launch of a New National Pension Scheme for Minors, named ‘NPS Vatshalya’. This initiative allows parents and guardians to contribute to a pension plan for their children.
In a bid to encourage employment and support new entrants into the workforce, FM Sitharaman announced an ‘Employment Linked Incentive Scheme’. Under this scheme, the government will provide a direct benefit transfer (DBT) equivalent to the first month’s salary, up to Rs 15,000, for those who are newly entering the workforce. This benefit will be distributed in three instalments, offering a financial cushion to young professionals as they begin their careers.
Despite expectations for major healthcare reforms, only targeted measures were introduced, such as exempting customs duty on three cancer medicines and components for X-ray tubes and digital detectors. The Union Health Ministry’s budget was increased by 12.59% to Rs 90,658.63 crore. In education, the Central government allocated Rs 1.48 lakh crore, with support for loans up to Rs 10 lakh for higher education. A new skilling scheme aims to train 20 lakh youth over five years, and 1,000 ITIs will be upgraded. The government will also provide internships for one crore youth, funded by CSR.
Unexpectedly, UGC funding was cut by 60.99% to Rs 2,500 crore, while grants for central universities rose by over Rs 4,000 crore to Rs 15,928 crore for 2024-25.
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