Highlights of the Interim Budget 2024-25

The 2024 interim budget has arrived, brimming with exciting initiatives and investments across various sectors. While keeping tax slabs unchanged, Finance Minister Nirmala Sitharaman unveiled a vision for inclusive growth and sustainable development.

India’s Finance Minister, Nirmala Sitharaman, presented the Interim Union Budget 2024-25 today, emphasizing themes of collective progress, inclusive development, and mutual trust.

While the 2024 interim budget does not offer radical changes, it unveils valuable clues about India’s financial well-being and upcoming priorities. This information empowers businesses and individuals to make informed decisions and plan strategically for the future.

Crucial Information from Finance Minister’s Speech

In her budget speech, Finance Minister Nirmala Sitharaman highlighted upskilling success and focused on key demographics:

• Minister Sitharaman announced that the Skill India Mission has successfully trained and upskilled a staggering 1.4 crore young people.
• This achievement underscores the mission’s core focus: providing short-term and long-term training programs for skills development, reskilling, and upskilling.
• Through over 20 central ministries, the government actively implements various national skill development schemes under the mission’s umbrella.
• Minister Sitharaman emphasized the country’s strong macroeconomic stability and positive economic performance.
• She specifically identified four demographic groups crucial to the government’s focus: poor, women, youth, and farmers.
• Addressing systemic inequalities in these groups is a key priority, she stated, with emphasis on achieving impactful outcomes and driving real socio-economic transformation.
• To reinforce this point, the minister declared, “We are outcome-driven, not outlay-driven.”

Social Progress, Economic Growth: Key Highlights of the Budget

The Interim Budget 2024-25 aims to strike a balance between social progress and economic growth. It focuses on all-around development along with holistic inclusivity. Here are the highlights of the budget:

Empowering Key Groups

• Poor: 25 crore people lifted out of poverty; ₹34 lakh crore transferred directly to beneficiaries through PM-Jan Dhan accounts; various schemes support street vendors, artisans, and tribal communities.
• Women: 30 crore Mudra loans to women entrepreneurs; increased female enrollment in higher education and STEM fields; over 70% houses under PM Awas Yojana given to rural women.
• Youth: Focus on skill development and entrepreneurship; initiatives like PM-KISAN SAMMAN and Fasal Bima Yojana support farmers.
• Farmers: PM-KISAN SAMMAN Yojana and Pradhan Mantri Kisan Sampada Yojana for reaching 11.8 crore farmers with financial support and employment opportunities.

Infrastructure & Development

• Capital expenditure increased by 11.1%: Investments in railways, ports, and aviation to boost logistics and connectivity.
• Green initiatives: Coal gasification, compressed biogas blending, and tourism development.
• State reforms: ₹75,000 crore interest-free loans to support reforms for “Viksit Bharat.”
• Rooftop solarization: Free electricity for up to 300 units through rooftop solarization for 1 crore households.

Fiscal Consolidation

• Revised Estimates 2023-24: Strong revenue growth leads to a lower fiscal deficit than expected (5.8%).
• Budget Estimates 2024-25: Continued focus on fiscal prudence with a projected 5.1% deficit.
• Tax rates remain unchanged: Targeted benefits extended for startups and IFSC units.

Beyond these highlights, Budget 2024 redefined GDP (Gross Domestic Product) as Governance, Development, and Performance. This underscores the government’s commitment to effective leadership, impactful development, and measurable progress.

What is there for the Taxpayers in Budget 2024-25?

In the Interim Budget 2024-2025, there are no changes in tax rates but relief and expansion in other areas. Let us have a quick look:

Direct Taxes

• No Rate Hike: The good news for taxpayers is that the Finance Minister retains existing tax rates for direct taxes.
• Collection Up, Services Improved: Direct tax collection tripled, and return files increased 2.4 times in the last decade. The government focuses on improving taxpayer services.
• Tax Demand Relief: Outstanding demands up to ₹25,000 (pre-2010) and up to ₹10,000 (2010-2014) were withdrawn, benefiting 1 crore taxpayers.
• Startup Benefits Extended: Existing tax benefits for startups and investments by Sovereign Wealth Funds/pension funds are extended till March 2025.
• IFSC Tax Exemption Extended: Tax exemption on specific income of IFSC units extended by a year till March 2025.

Indirect Taxes & Import Duties

• Stable Rates: Indirect tax and import duty rates remain unchanged.
• GST Success: GST unified the tax system, doubling the average monthly gross GST collection and tax base.
• State Revenue Up: State SGST revenue buoyancy increased significantly post-GST.
• Industry Positive: 94% of industry leaders see GST transition as positive, optimizing supply chains and reducing compliance burden.
• Consumer Benefits: Lower logistics costs and taxes reduced prices of goods and services.

Tax System Reforms

• Increased Tax Thresholds: No tax liability for income up to ₹7 lakh (up from ₹2.2 lakh in 2013-14).
• Presumptive Taxation Hike: Thresholds for retail businesses and professionals increased to ₹3 crore and ₹75 lakh, respectively.
• Lower Corporate Tax: Corporate tax for existing domestic companies reduced to 22% (from 30%). New manufacturing companies enjoy a 15% rate.

Improved Taxpayer Services

• Faster Processing: Average tax return processing time reduced to 10 days (from 93 days in 2013-14).
• Faceless System: Faceless Assessment and Appeal introduced for greater efficiency.
• Simplified Filing: Updated income tax returns, new form 26AS, and pre-filled tax returns simplify filing.
• Faster Customs Clearance: Import release time reduced by up to 47% at various locations.

Is this the Final Budget for 2024-2025?

No, this is not the final budget for the years 2024-2025. This budget is the Interim Budget, also known as the Vote on Account, presented on February 1, 2024. This is a temporary budgetary measure for the first few months of the fiscal year 2024-2025.

The final budget for the entire fiscal year 2024-2025 will be presented after the General Elections, which are expected to be held in April-May 2024. The newly elected government will then present its vision and plans for the year through the full budget.

Way Forward

Our Prime Minister defined this budget as an inclusive and innovative budget. He called it a budget carrying the confidence of continuity, relying on the four pillars of the society: poor, youth, women, and farmers. While the Interim Budget gives some insights into the government’s current priorities and financial situation, it is not the final word on the matter. We will have to wait for the final budget after the elections for a complete picture of the government’s economic roadmap for the year.

Key Takeaways

• The interim Budget focuses on the upliftment of four major groups, that is, ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’(Farmer).
• Over 30 crore Mudra Yojana loans are given to women entrepreneurs, with female enrolment in higher education up by 28%.
• Capital expenditure outlay for infrastructure development and employment generation increased by 11.1% to ₹11,11,111 crore.
• 1 crore households will receive 300 units of free electricity monthly through rooftop solarization.
• Plans for coal gasification and liquefaction capacity of 100 MT by 2030 and phased mandatory blending of compressed biogas (CBG) in CNG and PNG.
• ₹75,000 crore as a fifty-year interest-free loan proposed to support milestone-linked reforms by State Governments.