Budget 2024-25: Laying the Foundation for 'Viksit Bharat'

The Union Budget 2024-25, presented by the Indian government, outlines the nation's financial roadmap for the upcoming fiscal year. With a strong emphasis on sustained economic growth and citizen empowerment, this budget sets the stage for India's journey towards becoming a 'Viksit Bharat' (Developed India). Let's delve into the key highlights and analyze what this budget holds for the nation.

Key Highlights of the Union Budget 2024-25

• Fiscal Prudence: The government aims to maintain fiscal discipline, targeting a fiscal deficit of 4.9% of GDP in 2024-25, further aiming to reduce it below 4.5% in the coming year. This commitment to fiscal consolidation signals responsible economic management.

• Infrastructure Boost:  A substantial allocation of ₹11,11,111 crore (3.4% of GDP) has been earmarked for infrastructure development. This includes a ₹1.5 lakh crore interest-free loan to states, supporting crucial resource allocation for infrastructure projects.

• Focus on Employment and Skilling: Recognizing the importance of a skilled workforce, the budget prioritizes employment generation and skill development. Key initiatives include:

  • Upskilling 20 lakh youth over the next 5 years.

  • Upgrading 1,000 Industrial Training Institutes to enhance skill training.

  • A scheme to provide internship opportunities for 1 crore youth in top companies, with a monthly allowance and one-time assistance.

• Agriculture and Rural Development:  With ₹2.66 lakh crore allocated for rural development, the budget underscores the significance of the agricultural sector. This includes investments in rural infrastructure and support for farmers.

• Urban Development Push:  The budget includes provisions for urban development, such as:

  • Encouraging states to lower stamp duties on property for women.

  • Developing 100 weekly 'Haats' or Street Food Hubs in select cities.

  • Transit-Oriented Development plans for 14 large cities.

  • PM Awas Yojana Urban 2.0, aiming to address housing needs for urban poor and middle-class families with a massive investment of ₹10 lakh crore.

• Energy Security Focus:  The budget promotes energy security through initiatives like setting up an 800 MW commercial plant by NTPC and BHEL, developing Bharat Small Reactors, and supporting cleaner energy adoption for MSMEs.

• Taxation Changes:  Several tax-related changes have been introduced, including:

  • Increased standard deduction for salaried employees and pensioners under the new tax regime.

  • Rationalization of capital gains tax regime.

  • Simplification of tax procedures for charities and TDS.

  • Abolition of angel tax for all classes of investors to boost the startup ecosystem.

Analysis and Impact

The Union Budget 2024-25 reflects the government's commitment to long-term economic prosperity and inclusive growth. The nine budget priorities, including agriculture, employment, infrastructure, and urban development, align with the vision of a 'Viksit Bharat'.

Experts at PwC India noted that the budget emphasizes empowering youth through skill development, promoting ease of doing business for MSMEs, and boosting infrastructure. The budget's focus on capital expenditure, particularly the significant infrastructure allocation, is expected to have a positive ripple effect across various sectors, including insurance, with potential for increased demand for surety bonds and specialized insurance products. PwC India

The emphasis on fiscal deficit reduction, coupled with increased receipts and controlled expenditure growth, demonstrates a responsible fiscal approach. PRS India's analysis highlights the estimated 10.5% nominal GDP growth rate and the targeted reduction in revenue and fiscal deficits, indicating a positive economic outlook.

Conclusion

The Union Budget 2024-25 is a growth-oriented budget with a strong focus on infrastructure, skilling, and fiscal consolidation. By prioritizing these key areas, the budget aims to create a robust foundation for India's long-term economic development and its aspiration to become a 'Viksit Bharat'. The budget's success will be crucial in shaping India's economic trajectory in the coming years.