Union Budget 2024: What changed and what stayed the same? Key highlights
Finance Minister Nirmala Sitharaman presented the Union Budget 2024 on Tuesday, July 23. Hoping to both tame inflation and provide tax relief to the middle-class while spurring job creation and skilling among youth, the budget announced some uniquely 'Indian' solutions to the unemployment and sluggish demand that is slowing down the economy.
What Has Changed?
Here are some of the things that have changed with the new budget:
New Tax Regime
To encourage shifting to the new tax regime over the old one and also to encourage spending, Sitharaman announced new tax rates that will impact tax payers falling in the ₹6-7 lakh, who will now have to pay 5 per cent tax instead of 10 per cent. Similarly, those earning between ₹9-10 lakh will now pay 10 per cent tax instead of 15 per cent.
Additionally, the standard deduction for salaried taxpayers in the new tax regime has been increased from ₹ 50,000 to ₹ 75,000.
Incentive to hire freshers, women
The focus has shifted from job creators to job seekers in this budget when it comes to sops. In a bid to narrow the skill gap that has resulted in both unemployability and a shortage of skilled labour, the government will launch an internship scheme to provide opportunities to one crore youth in top 500 companies over the next five years. Interns, who will get exposure to real life environment and real-time training, will be provided of ₹5,000 per month.
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In another revolutionary move that will provide support to entrepreneurs hiring freshers and channel the energy and zeitgeist of the youth towards productive pathways, rather than anti-social ones, is the proposal to provide wage support for first-time employees for at least a month.
The e-shram portal to connect job seekers and employers could, at least in some sectors, digitise the hiring process if the government puts in the required checks and balances.
The proposal to create working women's hostels, creches, women-specific skilling programs and rental home hubs near industrial and manufacturing nodes could provide the safety net that women leaving home to join labour force need. Again, a uniquely Indian solution to the realities of the job market in the country.
Start-up ecosystem and Indian innovation
Previous budgets have not really paid attention to the start-up ecosystem in India. Indian entrepreneurs have in fact had to struggle to prop up their businesses and are often left with no money for critical R&D that can provide them with the critical edge to compete in global markets.
This budget's major SOP - of doing away with the angel tax - and of supporting R&D in the private sector firms, and the space sector in particular, with focused funds and incentives, may well be the push that India needs to create Indian-origin IP and patents. This budget, unlike the ones before it, acknowledges the impact of disruptive technology, climate change and also the need to be ready with Indian innovations to compete on the global stage.
Taming inflation
Over and above central bank interventions, there is not much that has been done to tame inflation in the past. But this budget has allocated ₹10,000 crore to set up a ‘price stabilization fund’ to keep food inflation under check.
Allocations to the Ministry of Consumer Affairs, Food and Public Distribution increased from ₹258 crore in the revised estimates for 2023-24, to ₹10,237 crore for 2024-25. This is because of the price stabilization fund.
Bihar and Andhra: Special focus
In a nod to coalition pressures, the NDA-government has been generous with funds for both Bihar and Andhra Pradesh, even though the 'special status' remain elusive. This singular focus on two states in particular in a Union Budget is something new.
What Stayed The Same?
Here are some of the things that stayed the same:
The budget, like previous years, has focused on capex spending, building key infrastructure and reducing the fiscal deficit while increasing fiscal balances. The 'Vikisit Bharat' vision has remained key to the present budget and past ones.
Union Budget 2024 LIVE | Making a record for any Finance Minister, Nirmala Sitharaman presented her 7th consecutive Union Budget on July 23, 2024 under the Modi 3.0 government. This Budget brought tax relief for the middle class, while focusing on jobs through skilling, incentivising employers. Track the latest coverage, live news, in-depth opinions, and analysis only on Deccan Herald. Also follow us on WhatsApp, LinkedIn, X, Facebook, YouTube, and Instagram.