Key budget announcements in Modi 2.0’s last financial document you can’t miss


The interim budget for 2024-25 is being seen as an economic manifesto for Prime Minister Narendra Modi’s ruling Bharatiya Janata Party (BJP) and will give cues to the market on its plans for fiscal consolidation, borrowings and future taxation policy.


What India’s common man gets in Budget


Finance Minister Sitharaman outlined initiatives for the next five years, including increased housing, expanded access to free electricity, and enhanced medical care, especially for women. Sitharaman pledged support for key sectors targeted by Modi, such as farmers, youth, women, and the impoverished, as the country looks towards ‘unprecedented development’ in the next five years.


The government has this time decided to widen the horizon of housing scheme. It will be launching the ‘Housing for Middle Class’ scheme to encourage middle-class individuals to purchase or construct their own homes. Over two crore additional houses have been added to the existing target of three crore under PM Awas Yojana.


The government has also decided to accelerate Saksham Anganwadi and Poshan 2.0 programs to enhance nutrition delivery, early childhood care, and development, said Sitharaman.


Sitharaman said that the government has enabling one crore households for rooftop solarization, providing up to 300 units of free electricity per month.


What Indian industries received


Sitharaman’s interim budget unfolded a series of impactful measures set to provide a robust impetus to various sectors, fostering economic growth and development across the nation.


Giving a thrust to the Production-Linked Incentive (PLI) scheme, the government allocated Rs 6,200 crore to incentivize manufacturing and boost industrial output. To stimulate the tourism sector, projects for port connectivity, infrastructure, and amenities on India’s islands, including Lakshadweep, are in the pipeline. Budget 2024 also focused on expanding railway corridors and increasing the number of Vande Bharat trains in India.


A comprehensive program for supporting dairy farmers is on the horizon, building on the success of existing schemes. Efforts to control foot and mouth disease and increase the productivity of milch-animals align with the goal of fortifying India’s position as the world’s largest milk producer.


The agriculture sector witnessed a strategy for self-reliance in oilseeds production. The adoption and expansion of Nano Urea and Nano DAP applications on crops was also announced.


In the defence sector, a new scheme will be launched for strengthening deep-tech technology. Allocation for defence in the interim budget has been increased to Rs 6.21 lakh crores for the financial year 2024-25 from Rs 5.94 lakh crores allocated for the last year. The increase is over 4.5 per cent from last year.


Expanding healthcare coverage under the Ayushman Bharat scheme to ASHA workers, Anganwadi Workers, and Helpers is a significant step towards ensuring a more inclusive and comprehensive healthcare system. The vaccination initiative for cervical cancer has also been announced.


The extension of the RoSCTL scheme for the apparel industry until March 31, 2026, provides stability and incentive for long-term planning.


With a remarkable increase in the capital expenditure outlay, the focus on infrastructure development is evident. The capex allocation stood at Rs 11.11 lakh crore for the next year.


Taxes and more


The interim budget had no significant announcements regarding the income tax slabs for the upcoming financial year, 2024-25.


Under the income tax laws, an individual (not having any business income) is required to choose between the new and old tax regimes every year. Hence, an individual can choose the new tax regime one year and the old tax regime the next.


Contrary to this year, a large number of changes were made in Budget 2023 in the new tax regime. The income tax slab changes announced in Budget 2023 are effective for the financial year between April 1, 2023, and March 31, 2024, and are set to remain unchanged for FY 2024-25 (April 1, 2024 and March 31, 2025).


The budget has provided insights into the party’s strategies for fiscal consolidation, borrowing, and forthcoming taxation policies, offering valuable clues to the market.


However, the Sitharaman has announced an income tax amnesty for taxpayers having outstanding direct tax demand disputes with the income tax department. As per the announcement, outstanding direct tax demands up to Rs 25,000 till financial year (FY) 2009-10 and up to Rs 10,000 between FY 2010-11 and FY 2014-15 will be withdrawn.


In layman terms, this means that taxpayers having pending tax demand disputes up to the limit announced for the specified financial years would be eligible for this benefit.


Allocations to major schemes



  • Mahatma Gandhi National Rural Employment Guarantee Scheme (MNREGA): Allocation hiked to Rs 86,000 crore for FY25 from Rs 60,000 in FY24, a 43.33 per cent increase.


  • Ayushman Bharat-PMJAY: Allocation hiked to Rs 7,500 crore for FY25 from Rs 7,200 crore in FY24, a 4.2 per cent increase.


  • Production Linked Incentive Scheme (PLI): Allocation hiked to Rs 6,200 crore for FY25 from Rs 4,645 crore in FY24, a 33.48 per cent increase.


  • Modified Programme for Development of Semiconductors and Display Manufacturing Ecosystem: FY25 allocation hiked to Rs 6,903 crore from Rs 3,000 crore in FY24, a 130 per cent hike.


  • Solar power (GRID): FY25 budget estimate hiked to Rs 8,500 crore from Rs 4,970 crore in FY24, a 71 per cent increase.


  • National Green Hydrogen Mission: Allocation for FY25 hiked to Rs 600 crore from Rs 297 crore in FY24, an increase of 102 per cent increase


Source- Economictimes

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