Finance Minister Nirmala Sitharaman presented the interim budget 2024 on Wednesday. While the full budget for the next fiscal 2024-25 will be presented after the general election, Sitharaman made some key announcements and offered a glimpse of the government's road map for FY25, even if proposals may come during the year. Infrastructure spending and ease of doing business remain among the key focus areas.
The Finance Minister began by recounting the achievements of the Modi government.
Here are the key takeaways from Sitharaman's budget speech:
Top Five Highlights From Sitharaman's Budget Speech
Fiscal Consolidation On Track
The Finance Minister said that FY24 fiscal deficit is estimated at 5.8% of GDP, below the budgeted 5.9%. She pegged the FY25 target at 5.1%, with an aim to reduce it to 4.5% by FY26.
Positive Surprise On Borrowings
FY25 gross market borrowings have been pegged at Rs 14.13 lakh crore, lower than a number of Rs 15 lakh crore that economists had expected. Net borrowings seen at Rs 11.75 lakh crore.
Infra Focus Continues
The outlay for infrastructure has been increased by 17% to Rs 11.11 lakh crore, or 3.4% of GDP, over the revised estimate of Rs 9.5 lakh crore in FY24. That's largely in line with expectations.
New Innovation Fund
The government plans to set up a Rs 1 lakh crore corpus to back innovation. This includes 50-year interest-free loan, long-term financing or refinancing with long tenures with low or nil interest rates. The move is aimed at encouraging the private sector to scale up research and innovations "significantly in sunrise domains", Sitharaman said.
Tax Relief Ends For New Manufacturers
The concessional corporate tax rate of 15% for new manufacturing companies incorporated in India before March 31, 2024 has not been extended, according to the Finance Bill. The provision was introduced in Budget 2019 to boost domestic manufacturing. Several manufacturers had incorporated new units to avail this benefit.
Other Key Highlights
Housing Stays In Spotlight
The government plans to launch a scheme for deserving sections of middle class living in rented houses or slums to build their own houses. Details are awaited.
The government also aims to make 2 crore houses in the next five years under the PM Awas Yojana-Grameen and is close to achieving the 3 crore target.
Taxes
No changes in tax slabs in keeping with convention; FY25 tax receipts seen at Rs 26.02 lakh crore.
To withdraw direct tax demands of up to Rs 25,000 pending till FY10.
Extends tax benefits for startups till March 31, 2025.
Help For States
Provision of Rs 75,000 crore as 50-year interest-free loan proposed for milestone-linked reforms by state governments.
Railways
40,000 rail bogeys to be converted to Vande Bharat standards.
Energy
Rooftop solar project to give 1 crore households 300 units of free electricity per month.
Coal gasification and liquefaction of 100 million tonne to be set up by 2030.
New scheme of bio manufacturing, biofoundry to be launched.
Blending of CNG and biogas will be mandated in a phased manner.
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