The Union Budget Day of 23 July 2024 has been a landmark event, unveiling a comprehensive financial plan that sets the tone for the country’s economic landscape in the coming year. This year’s Union Budget Day, presented by the Finance Minister, emphasizes growth, inclusivity, and sustainable development. Here’s a detailed look at the key highlights and announcements that are expected to impact various sectors and the general populace.
Table of Contents
Introduction: Union Budget Day
Union Budget Day 2024 is a critical juncture for India’s economic strategy, aiming to address both current challenges and future opportunities. The budget reveals the government’s priorities and outlines its financial framework to drive economic growth, enhance public welfare, and improve infrastructure. This blog post explores the significant components of the budget, including tax reforms, fiscal policies, and sectoral allocations.
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Key Highlights of Union Budget Day
1. Economic Growth and Fiscal Policy
- GDP Growth Target: The Union Budget Day sets a target of 6.5% GDP growth for the fiscal year 2024-25, aiming to boost economic activity and employment.
- Fiscal Deficit: The fiscal deficit is projected to be 4.0% of GDP, reflecting a commitment to maintaining fiscal prudence while investing in growth-driving sectors.
- Inflation Control: Measures to control inflation include tighter monetary policies and strategic reserves management to stabilize essential commodity prices.
2. Tax Reforms
- Personal Income Tax: Introduction of a revised tax slab with a higher exemption limit of ₹3 lakh for individual taxpayers, aiming to increase disposable income.
- Corporate Tax: Reduction in corporate tax rate to 25% for companies with an annual turnover of up to ₹500 crore, designed to encourage business investments.
- GST Adjustments: Adjustments in Goods and Services Tax (GST) rates for select items to promote consumption and ease of doing business.
3. Public Welfare and Social Sector
- Healthcare: Allocation of ₹2.5 lakh crore towards healthcare, including the expansion of the Ayushman Bharat scheme to cover additional health services.
- Education: Increase in education Union Budget Day by 15%, focusing on digital infrastructure, skill development, and scholarships for underprivileged students.
- Pension Schemes: Enhancement of pension schemes for senior citizens with an additional ₹10,000 crore allocated for old-age benefits.
4. Infrastructure Development
- Transport: Major investments in transportation infrastructure, including ₹1.2 lakh crore for the development of highways, metro projects, and rural roads.
- Energy: Funding of ₹80,000 crore for renewable energy projects and grid modernization to support the transition to a green economy.
- Urban Development: Introduction of smart city projects in tier-2 and tier-3 cities with an allocation of ₹50,000 crore to enhance urban living standards.
5. Agriculture and Rural Development
- Farmer Support: Enhanced support for farmers through increased subsidies on fertilizers and seeds, and a new ₹30,000 crore scheme for irrigation infrastructure.
- Rural Employment: Expansion of the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) with an additional allocation of ₹15,000 crore.
6. Defence and Security
- Defence Budget: Increase in the defence budget to ₹6.8 lakh crore, focusing on modernization of armed forces and procurement of advanced technology.
- Cybersecurity: Allocation of ₹20,000 crore for cybersecurity measures to safeguard national interests and critical infrastructure.
Table of Major Tax Reforms and Changes
| Sector | Key Announcement | Amount Allocated | Purpose |
|---|---|---|---|
| Economic Growth | GDP Growth Target | – | 6.5% for fiscal year 2024-25 |
| Fiscal Deficit | Projected Deficit | 4.0% of GDP | Maintain fiscal discipline while fostering growth |
| Personal Income Tax | Revised Tax Slab | ₹3 lakh exemption limit | Increase disposable income |
| Corporate Tax | Reduced Rate | 25% for turnover up to ₹500 crore | Stimulate business investment |
| GST | Rate Adjustments | – | Simplifying Business Operations |
| Healthcare | Expansion of Ayushman Bharat Scheme | ₹2.5 lakh crore | Broaden health service coverage |
| Education | Increase in Union Budget Day | 15% increase | Enhance digital infrastructure and scholarships |
| Pension Schemes | Enhanced Old-Age Benefits | ₹10,000 crore | Support for senior citizens |
| Transport | Investment in Infrastructure | ₹1.2 lakh crore | Develop highways, metro, and rural roads |
| Energy | Renewable Projects and Grid Modernization | ₹80,000 crore | Transition to green economy |
| Urban Development | Smart City Projects | ₹50,000 crore | Improve urban living standards |
| Farmer Support | Subsidies and Irrigation Infrastructure | ₹30,000 crore | Support farmers and irrigation |
| Rural Employment | MGNREGA Expansion | ₹15,000 crore | Increase rural employment opportunities |
| Defence Budget | Modernization and Procurement | ₹6.8 lakh crore | Enhance armed forces capabilities |
| Cybersecurity | National Cybersecurity Measures | ₹20,000 crore | Protect critical infrastructure and national interests |
Pros and Cons
Pros:
- Economic Growth: The targeted GDP growth and fiscal policies are expected to stimulate economic activity and create job opportunities.
- Tax Relief: Revised tax slabs and reduced corporate tax rates provide financial relief to individuals and businesses.
- Public Welfare: Increased funding for healthcare, education, and pensions supports the well-being of citizens and enhances quality of life.
- Infrastructure Development: Significant investments in infrastructure are likely to boost connectivity, modernize urban areas, and support a green transition.
- Defence and Security: Enhanced defence budget and cybersecurity measures ensure national security and modernize military capabilities.
Cons:
- Fiscal Deficit: Higher fiscal deficit could lead to increased borrowing and potential inflationary pressures.
- Implementation Challenges: Effective implementation of the announced schemes and policies could face logistical and administrative hurdles.
- Short-term Disruptions: Tax and GST rate adjustments may cause temporary disruptions in certain sectors before benefits materialize.
Conclusion
The Union Budget Day 2024 presents a forward-looking approach to India’s economic and social challenges. With a focus on growth, infrastructure, and public welfare, the Union Budget Day aims to foster an environment conducive to sustainable development and improved quality of life. As with any Union Budget Day, the success of these initiatives will depend on effective implementation and the ability to adapt to evolving economic conditions.
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