Finance Minister Nirmala Sitharaman, presenting her seventh-consecutive Budget and her first in Modi 3.0, spotlighted nine priority areas for generating ample opportunities for all.

She also said that these nine priorities of Union Budget 2024 will form the foundation for future Budgets of the Modi government.

The nine priority areas include: Productivity and resilience in agriculture; employment and skilling; improved human resources; social justice; manufacturing and services; urban development; energy security; infrastructure; innovation; research and development and next-generation reforms.

Education, job generation, employment, skilling, MSMEs and the middle class are among the key thrust areas of this Budget.

It also presented a road map for accomplishing the Prime Minister’s package of five schemes for employment, skilling and other opportunities for 4.1 crore youth over a five-year period with a central outlay of ₹2 lakh crore.

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

Below are the key focus and thrust of nine priorities, as outlined in FM Sitharaman’s Budget speech:

Priority 1: Productivity and resilience in agriculture. A provision of ₹1.52 lakh crore for agriculture and allied sector; new 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops for cultivation by farmers; one crore farmers to be initiated into natural farming over next two years; 10,000 need-based bio-input resource centres will be established; large scale clusters for vegetable production will be developed closer to major consumption centres; government to facilitate implementation of Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in three years.

Priority 2: Employment & Skilling. The Government will implement schemes for Employment Linked Incentive as part of Prime Minister’s package Scheme A: First Timers.

This scheme will provide one-month’s wage to all persons newly entering the workforce in all formal sectors.

The Direct Benefit Transfer of one-month’s salary in three instalments to first-time employees, as registered in the EPFO, will be up to ₹ 15,000. The eligibility limit will be a salary of ₹1 lakh per month. The scheme is expected to benefit 210 lakh youth.

Scheme B: Job creation in manufacturing. This scheme will incentivise additional employment in the manufacturing sector, linked to the employment of first-time workers.

An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first four years of employment.

The scheme is expected to benefit 30 lakh youth entering the workforce, and their employers.

Scheme C: Support to employers. This employer-focussed scheme will cover additional employment in all sectors. All additional employment within a salary of ₹1 lakh per month will be counted. The government will reimburse to employers up to ₹3,000 per month for two years towards their EPFO contribution for each additional employee.

The scheme is expected to incentivise additional employment of 50 lakh people. Over 20 lakh youth will be skilled over a five-year period. For skilling in collaboration with state governments and industry, 1,000 Industrial Training Institutes will be upgraded in hub-and-spoke arrangements with outcome orientation.

Government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to one crore youth in five years. Interns will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities.

An internship allowance of ₹5,000 per month along with one-time assistance of ₹6,000 will be provided.

Model Skill Loan Scheme will be revised to facilitate loans up to ₹7.5 lakh with a guarantee from a government promoted fund. This measure is expected to help 25,000 students every year. For helping youth who have not benefitted under any government initiatives, financial support for loans upto ₹10 lakh for higher education in domestic institutions is planned. E-vouchers for this purpose will be given directly to one lakh students every year for annual interest subvention of three per cent of the loan amount.

Priority 3: Inclusive Human Resource Development and Social Justice. States in the Eastern part of the country are rich in endowments and have strong cultural traditions. The government will formulate a plan, Purvodaya, for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh. Government will also support development of road connectivity projects, namely (1) Patna-Purnea Expressway, (2) Buxar-Bhagalpur Expressway, (3) Bodh Gaya, Rajgir, Vaishali and Darbhanga spurs, and (4) additional two-lane bridge over Ganga River at Buxar at a total cost of ₹26,000 crore.

Power projects, including setting up of a new 2,400 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.

Recognising Andhra Pradesh’s need for a capital, the government will facilitate special financial support through multilateral development agencies. In the current financial year ₹15,000 crore will be arranged.

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.

For promoting women-led development, the budget carries an allocation of more than ₹3 lakh crore for schemes benefitting women and girls.

For improving the socio-economic condition of tribal communities, the government will launch the PM Janjatiya Unnat Gram Abhiyan by adopting saturation coverage in tribal-majority villages and aspirational districts. This will cover 63,000 villages benefitting five crore tribal people.

More than 100 branches of India Post Payment Bank will be set up in the North East region to expand banking services. This year, a provision of ₹2.66 lakh crore for rural development including rural infrastructure has been made.

Priority 4: Manufacturing & Services. For facilitating term loans to MSMEs for purchase of machinery and equipment without collateral or third-party guarantee, a credit guarantee scheme will be introduced which 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.

The limit of Mudra loans will be enhanced to ₹20 lakh from the current ₹10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.

For facilitating MSMEs to unlock their working capital by converting their trade receivables into cash, the turnover threshold of buyers for mandatory onboarding on the TReDS platform will be reduced from ₹500 crore to ₹250 crore.

The government will facilitate development of investment-ready ‘plug and play’ industrial parks with complete infrastructure in or near 100 cities.

As many as 12 industrial parks under the National Industrial Corridor Development Programme also will be sanctioned.

Priority 5: Urban Development. Government will facilitate development of ‘Cities as Growth Hubs’. This will be achieved through economic and transit planning, and orderly development of peri-urban areas utilising town planning schemes.

Transit Oriented Development plans for 14 large cities with a population above 30 lakh will be formulated.

Under the PM Awas Yojana Urban 2.0, housing needs of one 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 five years.

A provision of interest subsidy to facilitate loans at affordable rates is also envisaged.

Priority 6: Energy Security Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat. Towards that pursuit, the government will partner with the private sector for setting up Bharat Small Reactors; Research & Development (R&D) of Bharat Small Modular Reactor and R&D of newer technologies for nuclear energy.

The R&D funding announced in the interim budget will be made available for this sector.

A joint venture between NTPC and BHEL will set up a full scale 800 MW commercial plant using AUSC technology. The government will provide the required fiscal support.

Priority 7: Infrastructure Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations which have become eligible in view of their population increase.

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.

Priority 8: Innovation, R&D. The government will operationalise the Anusandhan National Research Fund for basic research and prototype development.

Further, the government will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ₹1 lakh crore in line with the announcement in the interim budget.

With our continued emphasis on expanding the space economy by five times in the next 10 years, a venture capital fund of ₹1,000 crore will be set up.

Priority 9: Next Generation Reforms. States will be incentivised for land-related reforms and actions within the next three years through appropriate fiscal support. Land-related reforms and actions in rural areas to cover land administration and planning. In urban areas, it will cover urban planning, usage and building bylaws. Rural land related actions will include ULPIN or Bhu-Aadhaar for all lands, digitisation of cadastral maps, survey of map sub-divisions as per current ownership, establishment of land registry, and linking to the farmers registry.

These actions will facilitate credit flow and other agri services. Land records in urban areas will be digitised with GIS mapping. An IT-based system for property record and tax administration will be established. It will improve the financial position of Urban Local Bodies. AGENCIES

 The Union Budget for 2024-25 has proposed provisions to simplify the provisions for reopening and reassessment.

Finance Minister Nirmala Sitharaman announced that an assessment hereinafter can be reopened beyond three years from the end of the assessment year only if the escaped income is Rs 50 lakh or more, up to a maximum period of five years from the end of the assessment year.

Even in search cases, a time limit of six years before the year of search, as against the existing time limit of ten years, is proposed. This will reduce tax uncertainty and disputes, she said.

“While our concerted efforts to reduce pendency of appeals at various appellate fora are beginning to show good results, it will continue to engage our highest attention,” the Finance Minister said.

She said that to dispose of the backlog of first appeals, I plan to deploy more officers to hear and decide such appeals, especially those with large tax effects.

“For the resolution of certain income tax disputes pending in appeal, I am also proposing Vivad Se Vishwas Scheme, 2024,” the Finance Minister said.

“Further, I propose to increase monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court to Rs 60 lakh, Rs 2 crore and Rs 5 crore respectively,” she said.

“To reduce litigation and provide certainty in international taxation, we will expand the scope of safe harbour rules and make them more attractive. We will also streamline the transfer pricing assessment procedure,” she added. AGENCIES

 In order to take the Indian space sectors to a higher orbit, Union Finance Minister Nirmala Sitharaman on Tuesday said the government will set up a Rs 1,000 crore venture capital (VC) fund.

Presenting her seventh budget for the country, she said the Union government will set up a Rs 1,000 crore venture capital fund to finance the space economy.

Reacting to the announcement, Vishesh Rajaram, Managing Partner, Speciale Invest said: “We strongly believe that an INR1000 crore fund for space startups and space economy will catalyse India’s dominance in the global space market!”

“We believe the trust and focus from the government combined with the FDI policy announced earlier this year will lead to more investment participation in the sector from India and internationally,” Rajaram added.

Speciale Invest is an early investor and has been one of the most active investors in this domain since 2018. Its portfolio includes investments in rocket maker Agnikul Comos, satellite manufacturing & earth observation companies Galaxeye Space, Kawa Space, communication player Astrogate Labs, and in-orbit economy InspeCity.

Welcoming the Union Finance Minister’s announcement, Lt. Gen. (Retd) AK Bhatt, Indian Space Association (ISpA) Director General, said: “The Union Budget’s vision to grow India’s space economy by fivefold in the next decade demonstrates the government’s strong commitment to this sector.”

He also stated that establishing 12 industrial parks across India would substantially boost the space and satellite manufacturing industry, which has long called for creation of space parks. He said these measures are crucial for the growth and development of India’s space ecosystem. AGENCIES

 External Affairs Minister S. Jaishankar on Tuesday congratulated Union Finance Minister Nirmala Sitharaman for presenting a Budget that “advances the goal of a Viksit Bharat” and responds to the aspirations of the people who have given the NDA government a third successive mandate.

“The 9 priorities highlighted by the Finance Minister will contribute to India’s Comprehensive National Power. It will enhance our profile at the international stage,” said EAM Jaishankar.

In her Budget speech, the Finance Minister said that, for pursuit of ‘Viksit Bharat’, the Budget envisages sustained efforts on nine priorities for generating ample opportunities for all.

This included productivity and resilience in agriculture; employment and skilling; inclusive human resource development and social justice; manufacturing and services; urban development; energy security; infrastructure; innovation, research and development; and, next-generation reforms.

“The Budget provides MEA (Ministry of External Affairs) resources to execute key policies including Neighbourhood First, Act East, Global South and facilities for Indians travelling abroad,” he added. AGENCIES

 In a bid to foster a more stable and mature investment environment, the government on Tuesday announced an increase in security transactions tax (STT) on futures and options trading, which is in line with the suggestions made by the Economic Survey 2023-2024.

Presenting the Union Budget 2024-2025, the Finance Minister announced a couple of proposals for deepening the tax base.

“First, Security Transactions Tax on futures and options of securities is proposed to be increased to 0.02 per cent and 0.1 per cent,” said the finance minister while adding that income received on buy back of shares will be taxed in the hands of the recipient.

In the derivatives segment, STT on the sale of options is 0.0625 per cent, which is paid by the seller.

On the sale of options in which the option is exercised, it is 0.125 per cent which is payable by the buyer. On the sale of futures, it is 0.0125 per cent, which is payable by the seller.

However, the new rate will come into effect from October 1 as per the Finance Bill.

“It is proposed to increase the rates of STT on the sale of an option in securities from 0.0625 per cent to 0.1 per cent of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 per cent of the price at which such futures are traded,” the finance minister said.

The Economic Survey said India needs to have an orderly and gradual evolution of the financial market.

“While derivatives are hedging instruments, they are mostly used as speculative instruments by investors worldwide. India is likely no exception,” it warned, adding that derivatives trading holds the potential for outsized gains and caters to “humans’ gambling instincts and can augment income if profitable”.

A significant stock correction could see losses that are more considerable for retail investors participating in capital markets through derivatives.

According to Shripal Shah, MD and CEO, Kotak Securities, the Union Budget sets a clear vision for India’s economic future, prioritizing both growth and fiscal responsibility.

“The increase in STT on futures and options is aimed at moderating currently heightened activity levels and fostering a more sustainable pace of growth in the stock market,” said Shah.

“We anticipate a small period of adjustment as the market adapts to these new tax measures, but this will ultimately contribute to a sustainable investment landscape with balanced and orderly growth of the capital market,” Shah added.

Vaibhav Porwal, Co-founder, Dezerv, said they encourage investors to look beyond immediate market reactions and consider the long-term benefits of a tax structure that promotes patient capital.

The finance minister also increased the long-term capital gains tax from the current 10 per cent to 12.5 per cent while increasing the short-term capital gains tax from the current 15 per cent to 20 per cent. These increased tax rates will be implemented with immediate effect. AGENCIES

 Madhya Pradesh Chief Minister Mohan Yadav hailed Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman for the Budget on Tuesday.

The Chief Minister said the Centre has tried to reduce the burden of inflation, especially from the people belonging to lower income categories and salaried class. He said the control over inflation is the need of the hour and PM Modi’s government has taken this step through its Budget.

“The framework of the annual Budget indicates that steps have been taken to keep the growth of the country and its people from every class. This Budget is the vision of ‘Viksit Bharat’ and I congratulate PM Modi and FM Nirmala Sitharaman for the budget,” the Chief Minister said.

He added that the nine-point schemes of the budget, which includes agriculture, employment, economic growth, social justice etc will take the country into new growth in the coming years.

The Chief Minister expressed hope that the Budget will provide ample opportunity for parallel growth of Madhya Pradesh. “The growth of Madhya Pradesh is part of the growth of the country. I believe that MP will witness growth parallelly,” he added.

Finance Minister Nirmala Sitharaman presented her seventh consecutive Union Budget on Tuesday.

She introduced increased standard deduction and revised tax rates for salaried individuals under the new tax regime and cut on customs duty on gold, silver, mobile phones and other goods were announced.

The Budget has the provision for employment-linked incentives, including one month’s wage support for first-time employees, which has become the need of the hour.

Women-specific skilling programs and increased workforce participation, MSME and manufacturing support and some others are key points of the annual Budget. AGENCIES

 The government on Tuesday announced to reduce the basic customs duty (BCD) on mobile phones, printed circuit board assembly (PCBA) and mobile chargers to 15 per cent from the current 20 per cent.

With a three-fold increase in domestic production and an almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured.

“In the interest of consumers, I now propose to reduce the BCD on mobile phones, mobile PCBA and mobile chargers to 15 per cent,” said Nirmala Sitharaman while presenting the Union Budget 2024-2025.

India’s electronics sector has experienced rapid growth, reaching $155 billion in FY23.

Production nearly doubled from $48 billion in FY17 to $101 billion in FY23, driven primarily by mobile phones, which now constitute 43 per cent of total electronics production.

Pankaj Mohindroo, Chairman, India Cellular Electronics Association (ICEA), congratulated the government for the landmark budget.

“We are impressed with its intent and direction focusing on enhancing manufacturing and export competitiveness. The Finance Minister has also acknowledged the tremendous growth of mobile phone manufacturing and exports,” Mohindroo told IANS.

The industry had recommended reducing BCD on mobile phones, its PCBA and charger/adapter to 15 per cent, which has been accepted.

“The announcements will go a long way to enhance manufacturing, exports and our competitiveness. Our proposal for tariff slab rationalisation, as has also been acknowledged and FM has announced that it will be taken up in the next six months, will further embolden the industry and its competitiveness,” Mohindroo explained.

India has significantly reduced its reliance on smartphone imports, now manufacturing 99 per cent domestically.

According to Siddhesh Mehta, research analyst, Samco Securities, this change will reduce costs and support the Indian manufacturers.

“Dixon Technologies will benefit the most from this move, allowing the company to strengthen its market position and grow further,” said Mehta.

AGENCIES

 The proposals to reduce customs duties will support domestic manufacturing, deepen local value addition, promote export competitiveness, and simplify taxation, while keeping the interest of the general public and consumers surmount, Union Finance Minister Nirmala Sitharaman said on Tuesday.

New customs duty rates are proposed for commodities from life-saving medicines to rare earth minerals and mobiles.

A comprehensive review of the customs duty rate structure will be undertaken over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes.

Customs duties on gold and silver have been reduced from 15 per cent to 6 per cent while that on platinum from 15.4 per cent to 6.4 per cent, to enhance domestic value addition in gold and precious metal jewellery in the country.

Further, basic customs duty (BCD) on ferro nickel and blister copper has been removed to reduce the cost of production of steel and copper.

Ankur Gupta, Practice Leader, Indirect Tax at SW India, said the reduction of customs duties on precious metals, including gold, silver, and platinum, to enhance domestic value addition in jewellery manufacturing is another significant move.

“This measure is expected to support the jewellery industry by making raw materials more affordable, thus encouraging local craftsmanship and export growth,” Gupta added.

The Finance Minister said the last six years have seen a three-fold increase in domestic production of mobile phones and almost a hundred-fold jump in exports of mobile phones.

“In the interest of consumers, I now propose to reduce the BCD on mobile phones, mobile PCBA and mobile chargers to 15 per cent,” said the Minister while presenting the Union Budget 2024-25 in Parliament.

The Finance Minister also announced full exemption of customs duties on 25 critical minerals, while reducing BCD on two of them.

This will benefit sectors like space, defence, telecommunications, high-tech electronics, nuclear energy and renewable energy, where these rare earth minerals are critical.

In a further boost to the renewable energy sector, the minister announced the expansion of the list of exempted capital goods for use in the manufacture of solar cells and panels in the country.

“Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them,” the Finance Minister said.

To enhance the competitiveness of seafood exports from the country, the Minister proposed a reduction of BCD on certain broodstock, polychaete worms, shrimp and fish feed to 5 per cent.

Apart from this, various inputs for the manufacture of shrimp and fish feed are exempted from customs duty to further boost seafood exports.

Similar reductions and exemptions are also announced for various leather raw materials to enhance the competitiveness of exports in the leather and textile sectors. Furthermore, the export duty structure on raw hides, skins and leather is proposed to be simplified and rationalised. AGENCIES

 Presenting the Union Budget 2024-25 in the Parliament on Tuesday, Finance Minister Nirmala Sitharaman fixed the fiscal deficit at 4.9 per cent of GDP despite higher allocations for social welfare schemes due to robust tax collections in a fast-growing economy.

Sticking to the fiscal consolidation path will help ensure a stable growth path for the economy as a lower deficit helps keep inflation in check. 

“The gross and net market borrowings through dated securities during 2024-25 are estimated at Rs 14.01 lakh crore and Rs 11.63 lakh crore, respectively. Both will be less than the 2023-24 figures,” the Finance Minister said.

The reduced borrowings by the government will leave more money in the banking system for companies to borrow for investments, which will in turn help spur growth and create more jobs.

Sitharaman also said that for the 2024-25 fiscal, total receipts other than borrowings and the total expenditure are estimated at Rs 32.07 lakh crore and Rs 48.21 lakh crore, respectively. The net tax receipts are estimated at Rs 25.83 lakh crore.

“The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year,” the Finance Minister said during her 80-minute Budget speech.

She also said the government is committed to staying the course on fiscal consolidation.

“From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central government debt will be on a declining path as a percentage of GDP,” the Finance Minister said.

She also pointed out in her speech that GST has been a “success of vast proportions”.

“To multiply the benefits of GST, we will strive to further simplify and rationalise the tax structure and endeavour to expand it to the remaining sectors.

“GST has decreased tax incidence on the common man; reduced compliance burden and logistics cost for trade and industry; and enhanced revenues of the Central and state governments,” she added. 

The Finance Minister also mentioned that the global economy, while performing better than expected, is still in the grip of policy uncertainties.

Elevated asset prices, political uncertainties, and shipping disruptions continue to pose significant downside risks for growth and upside risks to inflation, she said.

“In this context, India’s economic growth continues to be the shining exception and will remain so in the years ahead. India’s inflation continues to be low, stable and moving towards the 4 per cent target. Core inflation (nonfood, non-fuel) currently is at 3.1 per cent. Steps are being taken to ensure supplies of perishable goods reach the market adequately,” the Finance Minister added.  AGENCIES

 The Centre on Tuesday said Goods and Services Tax (GST) has decreased tax incidence on the common man, reduced compliance burden and logistics cost for trade and industry, and enhanced revenues of the Central and state governments.

The Union Budget 2024-25 indicated that GST will be expanded to the remaining sectors.

“It is a success of vast proportions. To multiply the benefits of GST, we will strive to further simplify and rationalise the tax structure and endeavour to expand it to the remaining sectors,” said Finance Minister Nirmala Sitharaman.

All the major taxpayer services under GST and most services under Customs and Income Tax have been digitised.

India’s gross GST collection rose to Rs 1.74 lakh crore in June this year representing a 7.7 per cent increase over the same month last year, according to sources.

This takes the total GST mop-up for the first three months of the current financial year to Rs 5.57 lakh crore. In April 2023, GST collection had soared to a record high of Rs 1.87 lakh crore.

According to experts, the GST reforms, which have eased compliance and reduced tax burdens, have been instrumental in driving economic growth.

“The proposed rationalization of the tax structure, coupled with the new tax regime changes, including the increased standard deduction, will further benefit the salaried class and boost disposable income, positively impacting housing demand,” said Prashant Sharma, President, NAREDCO, Maharashtra.

The GST regime, which has completed seven years of implementation, has brought happiness and relief to every home through reduced taxes on household appliances and mobile phones.

The GST taxpayer base increased to 1.46 crore in April 2024 from 1.05 crore in April 2018.

The compliance burden was reduced for small taxpayers, and the GST Council has recommended waiving the annual return filing requirement for taxpayers with an aggregate annual turnover of up to Rs 2 crore in fiscal 2023-24. AGENCIES