India’s Union Budget 2024-25: Key Announcements

Finance Minister Nirmala Sitharaman’s seventh budget announced a series of boosters for several sectors emphasising support for the underprivileged, women, youth, and farmers through increased spending, job creation, and middle-class tax relief with key tax changes including a higher Securities Transaction Tax (STT), lower capital gains taxes, and the removal of the angel tax. The budget revised income tax slabs to increase Mudra loan limits and allocate a record amount for railway funding. In her budget speech, Sitharaman said India’s economic growth continues to be the shining exception and will remain so in the years ahead. 

Key Announcements 

Tax

Finance Minister Nirmala Sitharaman reviewed the Income Tax Act of 1961 to benefit the middle class, which is expected to be completed in six months. Monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court increased to Rs 60 lakh, Rs 2 crore and Rs 5 crore respectively.

No tax up to Rs 3 lakh income

Rs 3 -7 lakh 5 per cent

Rs 7-10 lakh 10 per cent

Rs 10-12 lakh 15 per cent

Rs 12-15 lakh 20 per cent

Above Rs 15 lakh 30 per cent

Stock markets

The long-term capital gains on all financial and non-financial assets will attract a tax rate of 12.5%. Furthermore, the exemption limit for capital gains will be set at Rs 1.25 lakh per year. The Finance Minister announced an increase in the Securities Transaction Tax (STT) on Futures and Options. The STT in the future will rise from 0.0125% to 0.02%, while the STT in options will increase from 0.0625% to 0.10%.

Economy

The fiscal deficit for the year is estimated at 4.9% of GDP, Sitharaman’s Budget revealed. The government will try and maintain strong fiscal support for infrastructure, it was announced. This year, Rs 11.11 lakh crore has been allocated for capital expenditure, which amounts to 3.4% of India’s GDP. Due to an increase in tax revenue, the government reduced its projected borrowings for the current fiscal year to 14.01 lakh crore. To achieve its desired budget deficit, the government must issue dated securities to borrow money.

Agriculture

A big boost to the agriculture sector, the Finance minister said that the government will undertake a comprehensive review of the agricultural research setup to increase productivity and develop climate-resilient varieties. Domain experts will conduct this research to ensure its effectiveness and relevance.

Jobs

The Increasing participation of women in the workforce will be on the prior list. This will be facilitated by setting up hostels and creating partnerships to organise women-specific skilling programs. Job creation in the manufacturing sector will be incentivised through a scheme linked to the employment of first-time employees. This scheme will incentivise employees and employers concerning EPFO contributions for the first four years of employment.

It will benefit over 30 lakh youth covering additional employment in all sectors. The government will reimburse employers up to Rs 3,000 monthly for two years towards EPFO contributions for each additional employee. This initiative aims to incentivise the additional employment of 50 lakh people.

Education

The Budget announced financial support for loans up to Rs 10 lakh for higher education.

This year, a provision of Rs 1.48 lakh crore has been made for education, employment, and skilling.

Customs duties

India is the second-largest consumer of bullion in the world, cutting import levies on gold and silver from 15% to 6%. Industry officials say this could increase retail demand and assist reduce smuggling, increased Indian demand for gold could drive up world prices, which broke records this year, but it could also increase India’s trade deficit and weaken the rupee. And providing significant relief to cancer patients, Nirmala Sitharaman waived customs duties on three cancer medications. Osimertinib, Durvalumab, and Trastuzumab Deruxtecan are the three medications.

Customs duties on 25 critical minerals for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics will be made fully exempt and reduce BCD on two of them. Providing a major fillip to the processing and refining of such minerals and helping secure their availability for these strategic and important sectors.

Infrastructure

Budget 2024 proposed to provide Rs 2.66 lakh crore for rural development. Road connectivity projects will get a Rs 26,000-crore boost. 12 industrial parks will be sanctioned, it was announced. The government has announced the launch of Phase IV of Pradhan Mantri Gram Sadak Yojana to provide all-weather connectivity to 25,000 rural habitations which have become eligible given their population increase, the FM said.

Defence

The defence outlay has been set at Rs 4.56 lakh crore, compared to Rs 4.55 lakh crore previously.

Small businesses

On credit guarantee schemes for MSMEs in manufacturing, FM said, “To facilitate term loans for MSMEs for the purchase of machinery and equipment without collateral and guarantee, a new scheme will be introduced. This guarantee fund will provide guarantees of up to Rs 100 crore.”

Big Announcements for Andhra Pradesh and Bihar 

For Andhra Pradesh, backward region grants will be provided to three districts of Andhra Pradesh. package announced for the Vizag-Chennai Industrial corridor. The government to provide Rs 15,000 crore financial assistance for Andhra Pradesh for the development of Amaravati with additional amounts are promised for future years. Centre to finance and early completion of Polavaram Irrigation project, considered as a lifeline for Andhra Pradesh and its farmers.

Road and expressways bonanza announced for Bihar. The industrial node at Gaya on the Amritsar Kolkata Industrial Corridor is to be developed. Funds to develop temples in Bihar and Odisha

Road connectivity projects to be developed at the cost of Rs 26,000 crore:

1. Patna-Purnia Expressway
2. Buxar-Bhagalpur Expressway
3. Bodhgaya, Rajgir, Vaishali and Darbhanga Spur
4. Additional 2-lane bridge over river Ganga at Buzar

Here’s what will be cheaper:

1. Mobile phones, mobile parts, batteries, mobile chargers basic customs duty is reduced on mobile phones, chargers, and accessories to 15 per cent. 

2. For Gold, silver & platinum the customs duty on gold, and silver is reduced to 6 per cent, and platinum to 6.4 per cent

3. Cancer medicines, X-ray equipment
Three major cancer treatment medicines and X-ray equipment are exempted from basic customs duty

4. Fish and fish products
The customs duty on fish, broodstock, shrimp, polychaete worms, and fish feed is reduced to 5 per cent

5. Essential metals & minerals
The basic customs duty on ferro nickel, blister copper and 25 critical minerals is removed. The duty for manufacturing resistors (oxygen-free copper) has also been removed.

6. Solar panels, leather goods
The list of exempted items to manufacture solar panels has been expanded, and the customs duty on leather goods has been reduced.

Here’s what will be costlier:

1. Plastic and related-goods
The government has increased customs duty on plastic products and related goods.

2. Ammonium nitrate
The customs duty on ammonium nitrate has increased to 10 per cent from 7.5 per cent

3. Telecom equipment
The government has hiked customs duty hiked from 10 per cent to 15 per cent

4. Imported garden umbrellas and laboratory chemicals.

Budget 2024 reflects India’s steadfast commitment to inclusive and sustainable growth with prioritising advanced skilling, robust employment initiatives, green energy transformation, and comprehensive support to MSMEs it lays the foundation for a resilient and innovative future and these decisive measures will not only address current challenges but also create employment opportunities, driving the nation towards unparalleled prosperity. India is set to emerge stronger, more self-reliant, and ready to lead globally.