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Monday, June 24, 2024

No change in tax rates proposed in Budget, capex raised to boost growth and jobs

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New Delhi: Resisting temptation for populist measures ahead of Lok Sabha polls, Finance Minister Nirmala Sitharaman on Thursday continued government focus on capex to boost economic growth and retained prevailing rates for direct taxes and indirect taxes.

“…in keeping with the convention, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties,” Sitharaman said.

While presenting the interim Budget for 2024-25, the Minister proposed to raise capex for the coming fiscal 2024-25 to Rs 11.11 lakh crore, up 11.1% year-on-year.

She noted that massive increase in capex over the last four years had resulted in a huge multiplier impact on growth and employment.

Sitharaman presented a report card of the Modi government on the economy in the last 10 years and exuded confidence about winning the upcoming polls. Prime Minister Narendra Modi hopes to return to power for the third term in the coming general election.

“We expect that our government, based on its stupendous work, will be blessed again by the people with a resounding mandate,” she said.

The Minister highlighted revenue buoyancy and said that direct tax collections have more than trebled and the return filers swelled to 2.4 times in the last 10 years.

Sitharaman said that the revenue receipts at Rs 30.03 lakh crore in the current fiscal are expected to be higher than the Budget Estimate reflecting strong growth momentum and formalization in the economy.

In 2024-25, the total receipts other than borrowings and the total expenditure are estimated at Rs 30.80 and 47.66 lakh crore respectively. The tax receipts are estimated at Rs 26.02 lakh crore.

Sitharaman proposed to increase the allocation for various schemes such as Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNRES), Ayushman Bharat and National Green Hydrogen Mission.

She also announced that the government will launch a scheme to help deserving sections of the middle class “living in rented houses, or slums, or chawls and unauthorized colonies” to buy or build their own houses.

Among new major infra projects, the Minister announced three major economic railway corridor programmes. They include energy, mineral and cement corridors, port connectivity corridors, and high traffic density corridors.

In order to promote research and innovation, Sitharaman announced to set up a corpus of Rs 1 lakh crore with 50-year interest free loan.

“The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. This will encourage the private sector to scale up research and innovation significantly in sunrise domains,” she said.

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