Budget 2024: The coming Budget, despite being an interim budget owing to the upcoming national elections, has generated significant interest among economy watchers in view of the government’s new stated ambition of making India the third largest economy by 2030.
Another reason this budget will be keenly watched is the sudden uncertainty in global trade because of the unfolding Red Sea crisis. While the short- to medium-term prospects for the Indian economy continue to be relatively bright as the inflation outlook remains benign and major potential headwinds appear far-off, some impact of the Red Sea crisis on India’s foreign trade is already evident. That brings the coming interim budget into a bit of a sharper focus.
As regards economic policy, Modi govt’s recent path appears to have been quite consistent so far, at least in the past few budgets. Despite the abovementioned unanticipated speed bump, this consistent policy path is likely to be adhered to this time as well, economists say. So, for those who are keen to find out what this budget might bring, it might be instructive to take a relook at what FM Nirmala Sitharaman had announced in the last budget.
Here follows a detailed sector-wise look at last year’s budget announcements:
Income Tax
- No changes in the old regime
- New tax regime to become the default tax regime. However, citizens can opt for the old tax regime.
- No tax on income up to Rs 7.5 lakh a year in new tax regime (with inclusion of standard deduction)
- Proposal to reduce highest surcharge rate from 37% to 25% in new tax regime
- New Income Tax Slabs Under New Tax Regimes:
- Rs 0-3 lakh: Nil
- Rs 3-6 lakhs: 5%
- Rs 6-9 lakhs: 10%
- Rs 9-12 lakhs: 15%
- Rs 12-15 lakhs: 20%
- Rs Over 15 lakhs: 30%
- An individual with annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes
- Those with income of Rs 15 lakh will pay Rs 1.5 lakh tax, down from Rs 1.87 lakh
- A Rs 50,000 standard deduction to taxpayers has been introduced under the new regime
- Payment received from Agniveer Corpus Fund by Agniveers to be exempted
- Tax exemption removed in insurance policies with premium over Rs 5 lakh
- For online games, govt proposes to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of fiscal
- Tax exemption on leave encashment on retirement of non-government salaried employees hiked to Rs 25 lakh from Rs 3 lakh.
- A higher limit of Rs 3 crore for TDS on cash withdrawal to be provided to co-operative societies.
- Next-generation Common IT Return Form to be rolled out for tax payer convenience
- Grievance redressal mechanism to be strengthened.
- TDS rate to be reduced from 30 per cent to 20 per cent on the taxable portion of EPF withdrawal in non-PAN cases.
- Number of basic custom duty rates on goods other than textiles and agriculture reduced from 21 to 13. As a result, there are minor changes in taxes on some items like toys, bicycles, automobiles.
Saving schemes
- Maximum deposit limit for Senior Citizen Savings Scheme to be enhanced to Rs 30 lakh from Rs 15 lakh
- Monthly Income Scheme limit doubled to Rs 9 lakh and Rs 15 lakh for joint accounts
- One-time new saving scheme Mahila Samman Saving Certificate for women to be made available for 2 years up to March 2025.
- It will offer a deposit facility of up to Rs 2 lakh in the name of women or girls for tenure of 2 years at fixed interest rate of 7.5 per cent with partial withdrawal option.
Railways
- An outlay of Rs 2.4 lakh crore provided for railways in FY24.
- It’s the highest ever allocation for Railways and is nearly nine times over FY14 allocations.
- The allocation for track renewal has been increased from Rs 15,388.05 crore in RE 2022-23 to Rs 17,296.84 crore this year.
- The Railways is likely to roll out 75 Vande Bharat trains by August 2023.
- Capex hiked 33%
- Rs 10 lakh crore capital investment, a steep hike of 33 per cent for the third year in a row, to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds.
- More than 39,000 compliances have been reduced and over 3,400 legal provisions decriminalised to enhance ease of doing business
- Jan Vishwas Bill to amend 42 Central Acts have been introduced to further trust-based governance.
- Finance Minister announces multiple measures to enhance business activity in GIFT City
Digital services
- Scope of services in DigiLocker to be expanded
- 100 labs for developing applications to use 5G services to be set up in engineering institutions
- Labs will cover smart classrooms, precision farming, and healthcare applications.
- Phase 3 of E-courts projects to be launched with outlay of Rs 7,000 crore
- Leading industry players will partner to developing, providing scalable options for health, agri and other sectors
Urban Development
- Govt to spend Rs 10,000 crore per year for urban infra development fund
- Cities to be incentivised to improve creditworthiness for municipal bonds
- All cities and towns will be enabled for 100 per cent transition of sewers and septic tanks .
Health
- Health sector has been allocated Rs 89,155 crore in the Union Budget
- Mission to eliminate sickle cell anaemia by 2047
- A new programme for research in pharmaceuticals will be formulated and the industry will be encouraged to invest in research.
- Out of Rs 89,155 crore, Rs 86,175 crore has been allocated to the Department of Health and Family Welfare, while Rs 2,980 crore to the Department of Health Research.
- The budget allocation for the Pradhan Mantri Swasthya Suraksha Yojana for 2023-2024 is Rs 3,365 crore.
- Among these central sector schemes, the budget allocation for the National Health Mission has been increased from Rs 28,974.29 crore.
- Budget allocation for the AYUSH ministry has been increased from Rs 2,845.75 crore.
- The allocation for the National Digital Health Mission – NHM has been increased from Rs 140 crore to Rs 341.02 crore.
- For the National Tele Mental Health Programme, the budget allocation has been increased from Rs 121 crore to Rs 133.73 crore.
- The budget allocation for autonomous bodies goes up from Rs 10,348.17 crore in 2022-23 to Rs 17,322.55 crore in 2023-24.
- The allocation for ICMR has been increased from Rs 2,116.73 crore to Rs 2,359.58 crore.
Housing
- Outlay for PM Awaas Yojana enhanced 66% to over Rs 79,000 crore
- Interest-free loan to states to continue
- Centre to continue 50-year interest-free loan to state governments for one more year
Education
- Digital Library for Children, Adolescents Will Be Set Up
- National Digital library will be set up for children and adolescents
- National Book Trust, Children’s Book Trust to replenish non-curricular titles in regional languages, English to digital libraries.
- States to be encouraged to set up physical libraries for them at panchayat and ward levels and provide infrastructure for accessing the National Digital Library resources
- Three centres of excellence for artificial intelligence to be set up in top educational institutions.
- 157 new nursing colleges will be established in collaboration with the existing 157 medical colleges established since 2014.
- Eklavya Model Residential Schools to be set up in the next 3 years. The Centre will recruit 38,800 teachers and support staff for 740 schools serving 3.5 lakh tribal students.
- National Data Governance Policy to be brought out to unleash innovation and research by start-ups and academia.
- Grant for University Grants Commission (UGC) has been increased by Rs 459 crores (9.37 pc).
- Central Universities have been increased by 17.66%, Deemed University by 27%, support to IITs have been increased by 14%, and to NITs by 10.5% as compared to BE 2022-23.
Agriculture
- An Agriculture Accelerator Fund will be set up to encourage agri-startups by young entrepreneurs
- Digital public infrastructure to be developed for the agriculture sector
- Rs 20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries
- Over the next 3 years, one crore farmers will get assistance to adopt natural farming.
- 10,000 bio input resource centres will be set up
- Fisheries: To launch sub-scheme under PM Mastya Sampada Yojna with outlay of Rs 6,000 crore to further enable activities of fishermen
- To make India a global hub for ‘Shree Anna’, the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
- Rs 2,516 crore for Computerisation of 63,000 credit societies
- In drought-prone central regions of Karnataka, central assistance of Rs 5,300 crore to be given to upper Badra project to provide sustainable micro-irrigation.
- 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme to be established for promoting circular economy at total investment of Rs 10,000 crore.
- 5 per cent compressed biogas mandate to be introduced for all organizations marketing natural and bio gas.
Tribal Welfare
- Pradhan Mantri Primitive Vulnerable Tribal Group (PMPVTGS) mission is been launched to improve socio-economic condition on PMPVTGS
- Tribals to get Rs 15,000 crore over next three years for safe housing, sanitation, drinking water, and electricity.
- Space
- Rs 12,544 crore allocated to the Department of Space.
- IN-Space receives Rs 95 crore allocation against Rs 21 crore in the Revised Estimate. A large portion of the allocation, Rs 53 crore, has been earmarked for capital expenditure for INSPACe.
- The Physical Research Laboratory has received an allocation of Rs 408.69 crore.
Aims of Budget 2023 included:
1. Facilitating ample opportunities for citizens, especially youth
2. Providing strong impetus to growth and job creation
3. Strengthening macro-economic stability
4. To aim for the empowerment of women in Budget 2023
5. To enable women self-help groups to reach next stage of economic empowerment
6. To help self-help groups with raw material supply, branding, marketing of productsTourism
- Promotion of tourism will be taken up on mission mode with active participation of states, the convergence of Govt programs & public-private partnerships.
- 50 tourist destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism
- States will be encouraged to set a ‘Unity Mall’ in the State capital or the most popular tourist destination in the state for the promotion and sale of ‘One District, One product’ and GI products and other handicraft
- The country offers immense attraction for domestic as well as foreign tourists. There is a large potential to be tapped in tourism. The sector holds huge opportunities for jobs and entrepreneurship for youth in particular.
- Tourism infrastructure and amenities to be facilitated in border villages through the Vibrant Villages Programme.
PM Vishwa Karma Kaushal Samman
PM Vishwa Karma Kaushal Samman-package of assistance for traditional artisans and craftspeople has been conceptualised, will enable them to improve quality, scale & reach of their products, integrating with MSME value chainFree food scheme to continue till 2024
- Continuing our commitment to food security, we’re implementing from January 1, 2023, a scheme to supply free food grain to all Antyodaya and priority households for one year under PM Garib Kalyan Ann Yojana
- During the COVID pandemic, we ensured that nobody goes to bed hungry with a scheme to supply free foodgrains to over 80 crore persons for 28 months.
- Our vision for the Amrit Kaal includes a technology-driven and knowledge-based economy, with strong public finances and a robust financial sector. To achieve this ‘janbhagidari’ through ‘sabka saath, sabka prayas’ is essential, FM said.
- India’s rising global profile is because of several accomplishments – Aadhaar, Cowin, UPI have contributed to improving India’s global profile. During the pandemic, the government ensured no one went to bed hungry, ” says Finance Minister
- Govt’s efforts since 2014 have ensured for all citizens, a better quality of life and life of dignity. The per capita income has more than doubled to Rs 1.97 lakh. In these 9 years, the Indian economy has increased in size from being 10th to 5th largest in the world: Sitharaman
- Economy has become a lot more formalised as reflected by doubling of EPFO membership
- This is the first Budget in Amritkall, says Finance Minister Niramala Sitharaman.
- The Indian economy is on the right track, and heading towards a bright future. The Indian economy has increased in size from being 10th to 5th largest in the last nine year.
- The world has recognized India as a bright star, our growth for current year is estimated at 7%, this is the highest among all major economies, in spite of massive global slowdown caused by pandemic and the war
- In these times of global challenges, India’s G20 presidency gives us a unique opportunity to strengthen India’s role in the world economic order: Finance Minister Nirmala Sitharaman
Sports
- Sports gets an allocation of Rs 3,397.32 crore, an increase of Rs 723.97 crore.
- The Rs 3,397.32 crore is the highest sports budget allocation ever in the country.
- ‘Khelo India’ has been allotted Rs 1,045 crore.
- Sports Authority of India gets Rs 785.52 crore for 2023-24.
- National Sports Federations receive a hike of Rs 325 crore.
Seven priorities of the Budget, ‘Saptarishi’:
- Inclusive development.
- Reaching the last mile.
- Infrastructure and investment.
- Unleashing the potential.
- Green growth.
- Youth power.
- Financial sector.
