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

 In a move to bring in the private sector in the nuclear power sector, the Indian government will partner with private players in setting up small reactors, for research and development of small modular reactors, and newer nuclear energy technologies. 

Presenting her seventh Union budget on Tuesday in the Parliament, Finance Minister Nirmala Sitharaman said: “Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat.”

“Towards that pursuit, our government will partner with the private sector for setting up Bharat Small Reactors, research & development of Bharat Small Modular Reactors, and research & development of newer technologies for nuclear energy. The R&D funding announced in the interim budget will be made available for this sector,” she said.

The US and Russia have shown interest in developing small modular reactors in India. Small modular reactors are the ones which are factory-made compact with less than 300 MW capacity.

India and the US are working together to develop next-generation small modular reactor technologies for domestic and export markets.

According to a joint statement issued by the White House, President Joe Biden and Indian Prime Minister Narendra Modi, during the latter’s visit to the US last year, noted “the ongoing discussion on developing next-generation small modular reactor technologies in a collaborative mode for the domestic market as well as for export”. AGENCIES

 Indonesia is planning to broaden its mineral and coal online tracking system, known as Simbara, to include several commodities, including copper, gold and bauxite, said the country’s Minister for Energy and Mineral Resources Arifin Tasrif.

He mentioned the plan after the government officially broadened its Simbara to encompass nickel and tin commodities on Monday, Xinhua news agency reported.

“Next, we will finish several other commodities, including copper, gold, bauxite, manganese, and others,” said the minister.

According to the Finance Ministry, Simbara, which started its operation in 2022, has contributed up to 7.1 trillion Indonesian rupiahs ($ 437 million) in state revenues through the prevention of illegal mining, risk profiling, and an automatic blocking system. AGENCIES

 Finance Minister Nirmala Sitharaman on Tuesday announced that a New Pension Scheme (NPS) ‘Vatsalya’, a plan for contribution by parents and guardians for minors, will soon be launched by the government.

The plan can be seamlessly converted into a normal NPS account on minors becoming an adult, the Finance Minister stated during her budget speech.

“The launch of NPS-Vatsalya, allowing parents and guardians to contribute towards minors’ future, is a transformative step. This plan seamlessly converts into a regular NPS account once the minor becomes an adult. Thank you, PM Modi, for your visionary approach in securing the financial future of our young citizens, paving the way for a Viksit Bharat,” said Arunachal Pradesh Chief Minister Pema Khandu.

The Finance Minister also announced that the committee to review the NPS has made considerable progress in its work.

She expressed satisfaction that the staff side of the National Council of the Joint Consultative Machinery for Central government employees have taken a constructive approach.

“A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens,” said FM Sitharaman. AGENCIES

 Finance Minister Nirmala Sitharaman announced a review of the Income Tax Act 1961 in Budget proposals for 2024-25.

“I am now announcing a comprehensive review of the Income-tax Act, 1961. The purpose is to make the Act concise, lucid and easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the taxpayers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months,” she said in her Budget speech.

“A beginning is being made in the Finance Bill by simplifying the tax regime for charities, TDS rate structure, provisions for reassessment and search provisions and capital gains taxation,” she said.

As per the proposal, the two tax exemption regimes for charities are proposed to be merged into one. The 5 per cent TDS rate on many payments is being merged into the 2 per cent TDS rate and the 20 per cent TDS rate on repurchase of units by mutual funds or UTI is being withdrawn. The TDS rate on e-commerce operators is proposed to be reduced from one to 0.1 per cent.

“Moreover, credit of TCS is proposed to be given in the TDS to be deducted from salary. Further, I propose to decriminalize delay for payment of TDS up to the due date of filing statement for the same. I also plan to provide a standard operating procedure for TDS defaults and simplify and rationalise the compounding guidelines for such defaults,” the Finance Minister said. AGENCIES

 Union Finance Minister Nirmala Sitharaman’s announcement of tax exemption only for those opting for the new tax regime will encourage more taxpayers to shift from the old to the new system in days to come, say economists and investment consultants.

According to Kolkata-based investment consultant Nilanjan Dey, the proposal is a revolutionary decision.

“This will force those currently in the old regime to shift to the new one and also encourage more individuals to be part of the Income Tax filing system,” Dey said.

According to him, since in the new regime standard deduction has been increased from Rs 50,000 to Rs 75,000, it will enable any individual in the new system to save more.

Professor of Economics, Probir Kumar Mukhopadhya said, “There might be apprehensions that many people will be discouraged from investing in tax saving instruments. I think such apprehensions are immaterial. Till now, the tax concession was an added rider. The purpose of investment is more for accumulating wealth rather than getting tax concessions.”

As regards bringing new individuals within the tax system, Mukhopadhyay said that it will be possible only if there is a focus on employment generation.

“Although the Union Finance Minister spoke extensively about employment generation it is to be seen how far such promises become fruitful,” he said. AGENCIES

 Rashtriya Janata Dal (RJD) on Tuesday criticised the Central government over the Budget, saying allocating Rs 26, 000 crore to Bihar is not for the common people but for the corporate sector.

“This budget is only for the corporate sector. The Finance Minister has not provided any idea of how the Centre would create jobs for unemployed youth. She has not addressed the issues of youth, farmers, women, and labourers in her budget speech,” said Bhai Virendra, the four-time RJD MLA from the Maner assembly constituency.

Earlier, Finance Minister Nirmala Sitharaman allocated Rs 26,000 crore for various infrastructural projects for the state.

Bhai Virendra said that similar projects have also been announced by previous governments as well. “Bihar needs special category status, which the Central government has denied,” he said.

Former Bihar Chief Minister Rabri Devi said the Central government has given Jhunjhuna (toy) to Bihar. “This budget has nothing for the common people of Bihar,” the former Chief Minister said.

However, defending the Central government, BJP MLA Pramod Kumar said that this budget will boost the economy of Bihar through infrastructural projects.

“The Central government has given three expressway projects, a two-lane bridge at Buxar, a power station in Pirpainti, and an industrial hub in Gaya. These projects will develop Bihar, create jobs, and help stop migration,” Pramod Kumar said. AGENCIES

 With Finance Minister Nirmala Sitharaman announcing a major reduction in customs duty on cancer drugs and mobile phones, it is set to considerably bring down their prices in the market. The three cancer drugs are Trastuzumab deruxtecan, Osimertinib and Durvalumab.

The Finance Minister also announced a reduction of customs duty on mobile phones and mobile chargers to 15 per cent.

“The government will exempt three cancer treatment drugs from customs duty. I will also reduce basic customs duty on mobile phones, chargers and other mobile parts,” FM Sitharaman said presenting the Budget 2024.

Other products that are set to become cheaper include mobile phones, imported gold, silver, leather goods and seafood.

The reduction in duties on gold and silver by 6 per cent will significantly give a fillip to the retail demand.

FM Sitharaman also proposed a reduction in customs duties on platinum by 6.5 per cent and 5 per cent cut on seafood which includes shrimps and fish feed.

For the salaried class, the Finance Minister announced tax sops for over 4 crore salaried individuals.

Those under the new tax regime, have been given relaxation in the standard deduction limit from Rs 50,000 to Rs 75,000 while the deduction on family pension for pensioners has been enhanced from Rs 15,000 to Rs 25,000.

This will provide relief to about four crore salaried individuals and pensioners, the Finance Minister said. AGENCIES

 In a big relief to cancer patients, Union Finance Minister Nirmala Sitharaman, while presenting the Union Budget 2024, exempted customs duty on three cancer drugs.

The three drugs are Trastuzumab deruxtecan, Osimertinib and Durvalumab. The reduction in customs duty may help reduce the financial burden on those battling the deadly disease.

In her seventh budget speech, the Union Minister also called for exemptions in custom duties on X-ray tubes and flat panel detectors.

“I also propose changes in the BCD (Basic Customs Duty), X-ray tubes, and flat panel detectors for use in medical X-ray machines under the phased manufacturing programme to synchronise them with domestic capacity addition,” said FM Sitharaman.

According to the recent 4th edition of Apollo Hospitals’ Health of Nation Report, cancer cases are skyrocketing across the country.

The report dubbed India the “cancer capital of the world”.

In 2019, India registered about 12 lakh new cancer cases and 9.3 lakh deaths in 2019, becoming the second highest contributor to the disease burden in Asia, as per a Lancet study.

The number increased to 13.9 lakh in 2020, which then rose to 14.2 lakh and 14.6 lakh in 2021 and 2022, respectively. AGENCIES