Budget 2024-25: Key Features

Budget 2024-25: Key Features

Focus on 4 major castes, namely ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer).

Budget Theme: Particularly focus on

• Employment,
• Skilling,
• MSMEs, and
• The middle class- initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of 2 lakh crore. provision of 1.48 lakh crore for education, employment and skilling.

Budget Priorities

1) Productivity and resilience in Agriculture

2) Employment & Skilling

3) Inclusive Human Resource Development and Social Justice

4) Manufacturing & Services

5) Urban Development

6) Energy Security

7) Infrastructure

8) Innovation, Research & Development and

9) Next Generation Reforms

Priority 1: Productivity and resilience in Agriculture

• New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers.
• Natural farming: In the next two years, 1 crore farmers across the country will be initiated into natural farming supported by certification and branding. 10,000 need-based bio-input resource centres will be established.
• Self-sufficiency in pulses and oilseeds by strengthen their production, storage and marketing.
• Promotion of Farmer-Producer Organizations, cooperatives and start-ups for vegetable supply chains including for collection, storage, and marketing.
• Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years and digital crop survey for Kharif using the DPI in 400 districts. The details of 6 crore farmers and their lands will be brought into the farmer and land registries.
• Financing for shrimp farming, processing and export will be facilitated through NABARD.
• National Cooperation Policy for systematic, orderly and all-round development of the cooperative sector.

Priority 2: Employment & Skilling

• ‘Employment Linked Incentive’ based on enrolment in the EPFO including three schemes: Scheme A– First Timers: One-month salary of up to 15,000 to be provided in 3 instalments to first-time employees, as registered in the EPFO. Scheme B- Job Creation in manufacturing: Incentive to be provided at specified scale directly, both employee and employer, concerning their EPFO contribution in the first 4 years of employment. Scheme C- Support to employers: Government to reimburse up to 3,000 per month for 2 years towards EPFO contribution of employers, for each additional employee.
• Higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches. In addition, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.
• Skilling programme in collaboration with state governments and Industry. Further, the Model Skill Loan Scheme will be revised to facilitate loans up to 7.5 lakh with a guarantee from a government promoted Fund.
• Education loan: Financial support for loans up to 10 lakhs for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3% of the loan amount.

Priority 3: Inclusive Human Resource Development and Social Justice

• Saturation approach: For achieving social justice comprehensively, the saturation approach of covering all eligible people through various programmes including those for education and health will be adopted to empower them by improving their capabilities.
• Purvodaya: All-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh.
• Development of an industrial node at Gaya. This corridor will catalyze industrial development of the eastern region.
• Road connectivity projects, namely (1) Patna-Purnea Expressway, (2) Buxar-Bhagalpur Expressway, (3) Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and (4) additional 2-lane bridge over river Ganga at Buxar at a total cost of 26,000 crore. Power projects, including setting up of a new 2400 MW power plant at Pirpainti, will be taken up at a cost of 21,400 crore. New airports, medical colleges and sports infrastructure in Bihar will be constructed.
• PM Awas Yojana: Three crore additional houses under the PM Awas Yojana in rural and urban areas in the country have been announced, for which the necessary allocations are being made.
• Women-led development: For promoting women-led development, the budget carries an allocation of more than 3 lakh crore for schemes benefitting women and girls.
• Pradhan Mantri Janjatiya Unnat Gram Abhiyan: This will cover 63,000 villages benefitting 5 crore tribal people.
• Bank branches in North-Eastern Region: More than 100 branches of India Post Payment Bank will be set up in the North East region to expand the banking services.

Priority 4: Manufacturing & Services

• Promotion of MSMEs: without collateral or third-party guarantee, a credit guarantee scheme will be introduced. The scheme will operate on pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to 100 crore, while the loan amount may be larger. Also Credit Support to MSMEs during Stress Period.
• Reduce the turnover threshold of buyers for mandatory onboarding on the TReDS platform from ` 500 crore to ` 250 crore.
• Measures for promotion of Manufacturing & Services: comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. An internship allowance of Rs.5,000 per month along with a one-time assistance of 6,000 will be provided.
• Development of industrial parks “plug and play”

Priority 5: Urban Development

• Development of ‘Cities as Growth Hubs’ & Creative redevelopment of cities
• Transit Oriented Development plans for 14 large cities with a population above 30 lakhs.
• Under the PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of ₹ 10 lakh crore. This will include the central assistance of ₹ 2.2 lakh crore in the next 5 years.

Priority 6: Energy Security

• Energy transition pathways that balance the imperatives of employment, growth and environmental sustainability.
• Extension of PM Surya Ghar Muft Bijli Yojana: installation of rooftop solar plants.
• Research and development of small and modular nuclear reactors for nuclear energy.
• A roadmap for moving the ‘hard to abate’ industries from ‘energy efficiency’ targets to ‘emission targets’

Priority 7: Infrastructure

• This year, Rs. 11,11,111 crore for capital expenditure (3.4 % of GDP). A provision of 1.5 lakh crore for long-term interest free loans has been made this year also to support the states in their resource allocation.
• Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations.
• Irrigation & flood mitigation in affected states.
• Tourism: development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor at Gaya & Bodhgaya, comprehensive development of Rajgir and Nalanda.

Priority 8: Innovation, Research & Development

• Anusandhan National Research Fund for basic research and prototype development.
• Space Economy: a venture capital fund of 1,000 crore will be set up.

Priority 9: Next Generation Reforms Economic Policy Framework

• Reforms for (1) improving productivity of factors of production, and (2) facilitating markets and sectors to become more efficient.
• Land related reforms
• Labour related reforms
• Shram Suvidha and Samadhan portals will be revamped to enhance ease of compliance for industry and trade.
• Capital and entrepreneurship related reforms
• NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started.
• Use of technology and ease of doing business.

Budget Estimate 2024-25

• Total receipts other than borrowings and the Total expenditure are estimated at 07 lakh crore and 48.21 lakh crore respectively.
• The net tax receipts are estimated at 25.83 lakh crore.
• The fiscal deficit is estimated at 9% of GDP.
• The gross and net market borrowings through dated securities during 2024-25 are estimated at 14.01 lakh crore and 11.63 lakh crore respectively.

Indirect Taxes

Sector-specific customs duty proposals

• Medicines and Medical Equipment: Three cancer drugs namely TrastuzumabDeruxtecan, Osimertinib andDurvalumab fully exempted from customs duty. Changes in Basic Customs Duty (BCD) on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme.
• Mobile Phone and Related Parts: BCD on mobile phones, mobile Printed Circuit Board Assembly (PCBA) and mobile chargers were reduced to 15 per cent.
• Precious Metals: Customs duties on gold and silver were reduced to 6 per cent and that on platinum to 6.4 per cent.
• Other Metals: BCD was removed on ferro nickel and blister copper. BCD was removed on ferrous scrap and nickel cathode. Concessional BCD of 2.5 per cent on copper scrap.
• Electronics: BCD removed, subject to conditions, on oxygen-free copper for manufacture of resistors.
• Chemicals and Petrochemicals: BCD on ammonium nitrate increased from 7.5 to 10 per cent.
• Plastics: BCD on PVC flex banners increased from 10 to 25 per cent.
• Telecommunication Equipment: BCD increased from 10 to 15 per cent on PCBA of specified telecom equipment.
• Trade facilitation: For the promotion of domestic aviation and boat & ship MRO, the period for the export of goods imported for repairs was extended from six months to one year. The limit for re-import of goods for repairs under warranty is extended from three to five years.
• Critical Minerals: 25 critical minerals fully exempted from customs duties. BCD on two critical minerals reduced.
• Solar Energy: Capital goods for use in the manufacture of solar cells and panels are exempted from customs duty.
• Marine products: BCD on certain broodstock, polychaete worms, shrimp and fish feed was reduced to 5 per cent. Various inputs for the manufacture of shrimp and fish feed are exempted from customs duty.
• Leather and Textile: BCD reduced on real down filling material from duck or goose. BCD reduced, subject to conditions, on methylene diphenyl diisocyanate (MDI) for the manufacture of spandex yarn from 7.5 to 5 per cent.

Amendments relating to Direct Taxes

• Standard deduction: For salaried individuals and pensioners is proposed to be increased from ` 50,000 to ` 75,000 under the new tax regime.
• Family pension deduction: Deduction from family pension of ` 15,000 is proposed to be increased to ` 25,000 under the new tax regime.
• Non-government employer contribution to New Pension scheme: referred to in section 80CCD, from the extent of 10% to the extent of 14% of the salary of the employee.
• A non-government employee in the new tax regime shall be allowed deduction of an amount not exceeding 14% of the employee’s salary in place of 10%.

Rationalisation of tax deducted at source (TDS) rates

It is proposed to bring down TDS rates from 5 per cent to 2 per cent in certain sections and omit section 194F where TDS rate is 20 per cent, as given below:

• Credit of TDC and TCS: It is proposed to allow credit of all tax deducted or collected while computing the amount of tax to be deducted on salary income under section 192.
• Alignment of interest rate on delayed payment on TCS with TDS: It is proposed to increase the rate of simple interest from 1 per cent to 1.5 per cent on delayed payments of TCS after collection, as in the case of TDS.
• Increase in limit of remuneration to working partners of a firm allowed as deduction: It is proposed to increase the limit of remuneration to working partners to ` 3,00,000 or 90 per cent of the book-profit, whichever is more, on the first ` 6,00,000 of the book-profit or in case of a loss.
• Income from letting out of house property: It is proposed that income from letting out of a house or part of the house by the owner, shall not be charged under the head ‘profits and gains of business or profession’ and will be chargeable to tax under the head ‘income from house property’ only.
• Transfer of capital asset: It is proposed to provide that the transfer of a capital asset, under a gift or will or an irrevocable trust, by an entity other than an individual or a Hindu undivided family (HUF) only, shall be regarded as transfer for the purpose of calculation of capital gain.
• TDS on payment to a partner: It is proposed that payments made by firm to its partner in the nature of salary, remuneration, commission, bonus and interest, etc shall be subject to TDS at the rate of 10 per cent for aggregate amounts more than ` 20,000 in a financial year.
• TCS on notified luxury goods: it is proposed to levy TCS of 1 per cent on notified goods of value exceeding ten lakh rupees.
• TDS on sale of immovable property: It is proposed to clarify that where there is more than one transferor or transferee in respect of an immovable property, then such consideration for transfer of the immovable property shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property.
• TDS on Floating Rate Savings (Taxable) Bonds (FRSB) 2020: TDS is proposed on interest exceeding ten thousand rupees on Floating Rate Savings (Taxable) Bonds (FRSB) 2020 or any other notified security of the Central or State Governments.
• Tax Administration: Introduction of Vivad se Vishwas Scheme, 2024. A new scheme for settlement of pending appeals.
• Non-reporting of small foreign assets has penal consequences under the Black Money Act. Such non-reporting of movable assets up to ₹ 20 lakh is proposed to be de-penalised.
• It is proposed to decriminalize late payment of tax deducted at source (TDS) , if the payment is made before the time prescribed for filing the TDS statement.
• It is proposed to provide that no order for failure to deduct/ collect tax from any person shall be passed after the expiry of six years from the end of the financial year in which payment is made.
• Donations to National Sports Development Fund: Any sums paid as donations to the National Sports Fund set up by the Central Government are presently eligible for deduction under section 80G. The name of the fund is proposed to be corrected as National Sports Development Fund.
• Removing reference to National Housing Board: As housing finance companies are now under the purview of the Reserve Bank of India as a category of Non-Banking Financial Companies (NBFCs), it is proposed to remove reference to National Housing Board in section 43D of the Act.