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Monday, June 24, 2024

Budget 2024 aimed at ‘inclusive development’ for a ‘Viksit Bharat’

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On Thursday, February 1, 2024, the Union Minister for Finance and Corporate Affairs, Nirmala Sitharaman, presented the Interim Union Budget 2024-25 in the Parliament. Based on the motto of ‘Sabka Saath’, ‘Sabka Vikas’, and ‘Sabka Vishwas’, and the holistic and collective action of all, ‘Sabka Prayas’, the key highlights of the budget are noteworthy.

With the announcement of the budget for 2024-25, it was reiterated that the most important focus of the Centre and the Prime Minister, Narendra Modi, will continue to be the four categories of the Indian people- ‘Garib’ (poor), ‘Mahilayein’ (women), ‘Yuva’ (youth), and ‘Annadata’ (farmer); and the upliftment of these sections of the society.

With the thought of ‘Garib Kalyan, Desh Ka Kalyan’ or ‘the poor’s welfare means the country’s welfare’, the Government assisted 25 crore people out of multi-dimensional poverty in the last 10 years of its tenure. Direct Benefit Transfers (DBT) of Rs. 34 lakh crores, using the PM Jan Dhan bank accounts, led to savings worth 2.7 lakh crores for the government. The PM SVANidhi provided credit assistance to 78 lakh street vendors, out of whom 2.3 lakh have received credit for the third time. The PM JANMAN Yojana has been introduced to aid the development of particularly vulnerable tribal groups (PVTGs). Additionally, the PM Vishwakarma Yojana provides end-to-end support to artisans and craftspeople engaged in 18 trades.

Ensuring the welfare of the ‘annadata’, the PM Kisan Samman Yojana has provided financial assistance to 11.8 crore farmers till now; and 4 crore farmers have been given crop insurance under the PM Fasal Bima Yojana. Apart from this, the Electronic National Agriculture Market (e-NAM), has integrated 1361 mandis, providing services to 1.8 crore farmers, with a trading volume of 3 lakh crores.

With the next crucial objective of the government being providing the necessary momentum to the ‘Nari Shakti’, 30 crore Mudra Yojana loans have been given to women entrepreneurs; while the female enrolment in higher education has also gone up by 28 percent. In STEM courses, girls and women constitute 43 percent of the total enrolment, which is one of the highest in the world. Over 70 percent houses under the PM Awas Yojana have been given to women from rural areas.

It is also noteworthy that despite the obstacles created due to the COVID-19 pandemic, the target of making 3 crore houses under the PM Awas Yojana (Grameen) will soon be achieved; and two crore more houses will be taken up during the course of the next 5 years. Apart from this, 1 crore households are to receive 300 units of free electricity every month, through rooftop solarization, and each household is expected to save 15000 to 18000 rupees annually.

The healthcare cover under the Ayushman Bharat Scheme is now to be extended to all ASHA workers, Anganwadi workers, and helpers. And as far as agriculture and food processing sectors are concerned, the Pradhan Mantri Kisan Sampada Yojana has benefited 38 lakh farmers, and has generated an employment for 10 lakh people. The Pradhan Mantri Formalisation of Micro Food Processing Enterprises Yojana has assisted 2.4 lakh SHGs and 60,000 individuals with credit linkages.

For catalysing growth, employment, and development in the country, a corpus of 1 lakh crores is to be established with 50-year interest free loan, to provide long-term financing or refinancing with long tenors and low or nil interest rates. A new scheme will also be launched for strengthening deep-technologies for defence purposes and expediting ‘atmanirbharta’. The capital expenditure outlay for infrastructure development and employment generation is to be increased by 11.1 percent to 11,11,111 crores, which will be 3.4 percent of the GDP.

For the development of the transport sector, firstly, three major economic railway corridor programmes identified under the PM Gati Shakti Yojana, will be implemented to improve logistics efficiency and reduce costs. These will be the Energy, mineral, and cement corridors; Port connectivity corridors; and High traffic density corridors. Other than this, 40 thousand normal rail bogies will be converted to Vande Bharat standards.

If we look at the aviation sector, the number of airports in the country has doubled to 149; 517 new routes are carrying 1.3 crore passengers; and Indian carriers have placed orders for over 1000 new aircraft.

In the tourism sector, states are to be encouraged to take up comprehensive development of iconic tourist centres, including their branding and marketing at a global scale. A framework will also be established for rating the tourist centres, based on quality and facilities and services. States will also be provided with long-term interest free loans to finance such development on matching basis.

Keeping in mind the importance of green energy development, a 100 MT coal gasification and liquefication capacity will be set up by 2030; and the phased blending of compressed biogas (CBG) in compressed natural gas (CNG), for transport and piped natural gas (PNG) for domestic purposes, will now be mandated.

A crucial highlight is that the FDI inflow during 2014-23, which was USD 596 billion, was twice of the inflow during 2005-14.

Treading towards a ‘Viksit Bharat’, a provision of 75,000 crore rupees as 50-year interest free loans has also been proposed to support milestone-linked reforms by the state governments.

Looking at 2023-24, the Revised Estimate (RE) of the total receipts, other than borrowings is 27.56 lakh crores, of which the tax receipts are 23.24 lakh crores. The RE of the total expenditure is 44.90 lakh crores. Revenue receipts at 30.03 lakh crores are expected to be higher than the budget estimates, reflecting strong growth momentum and formalisation in the economy. Lastly, RE of the fiscal deficit is 5.8 percent of the GDP for 2023-24.

On the other hand, if we look at the budget estimates for 2024-25, total receipts other than borrowings and the total expenditure are estimated at 30.80 and 47.66 lakh crores, respectively. The tax receipts are estimated at 26.02 lakh crores. The scheme of 50-year interest free loans for capital expenditure to the states will be continued this year, with a total outlay of 1.3 lakh crore rupees. Fiscal deficit in 2024-25 is estimated to be 5.1 percent of the GDP. And the gross and net market borrowings through dated securities during 2024-25 are estimated at 14.13 and 11.75 lakh crores, respectively.

With the Union Budget 2024-25, the finance minister has proposed to retain the same tax rates for direct taxes, and in the last 10 years, direct tax collection tripled and return filers increased 2.4 times. The government aims to improve tax payer services, for which, outstanding direct tax demands up to 25,000 rupees, pertaining to the period up to FY 2009-10 have been withdrawn; and outstanding direct tax demands up to 10,000 rupees, for FYs 2010-11 to 2014-15 have been withdrawn. This will benefit 1 crore tax payers.

The tax benefits to startups, investments made by sovereign wealth funds, or pension funds have been extended to 31.3.2025; and tax exemptions on certain income of IFSC units have been extended by a year to 31.3.25 from 31.3.24.

Further, the finance minister has also proposed to retain the same tax rates for indirect taxes and import duties. It was the GST that unified the highly fragmented indirect tax regime in India. This year, the average monthly gross GST collection doubled to 1.66 lakh crores; and the GST tax base has doubled as well. The State SGST revenue buoyancy (including compensation released to states) has 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). 94 percent of industry leaders view the transition to GST as ‘largely positive’.

GST has led to supply chain optimisation; reduced the compliance burden on trade and industry; and the lower logistics costs and taxes helped in reducing prices of goods and services, benefiting the consumers.

With the tax rationalisation efforts, there is now no tax liability for income up to 7 lakh rupees, up from 2.2 lakhs in FY 2013-14; the presumptive taxation threshold for retail businesses has been increased to 3 crores from 2 crores; and the presumptive taxation threshold for professionals has been increased to 75 lakhs from 50 lakhs. The corporate income tax has been decreased to 22 percent from 30 percent for the existing domestic companies; and the corporate income tax rate for new manufacturing companies is at 15 percent.

If we touch upon the achievements in the tax-payer services, the average processing time of tax returns has reduced to 10 days from 93 days in 2013-14. Faceless assessment and appeal have been introduced for greater efficiency. Updated income tax returns, new form 26AS, and prefilled tax returns for simplified return filing have been put in place. Finally, reforms in customs have led to reduced import release time. There has been a reduction by 47 percent to 71 hours at inland container depots; by 28 percent to 44 hours at air cargo complexes; and by 27 percent to 85 hours at sea ports.

If we are to compare, back in 2014, there was a responsibility to mend the economy and put the governance systems in order, and the need of the hour was to attract investments, build support to the much-needed reforms, and give hope to the people. And since then, the government has succeeded with a strong belief of ‘nation first’.

‘It is now appropriate to look at where we were till 2014, and where we are now.’, said Finance Minister Nirmala Sitharaman. For this, the government will lay a white paper on the table of the house.

Sonakshi Datta
Sonakshi Datta
Journalist who wants to cover the truth which others look the other way from.

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