Union Budget 2024-25:
Finance Minister (Nirmala Sitharaman) presented the first budget of BJP led NDA government’s third term and as per expectation continued the sustainable economic development goals in pursuit of ‘Viksit Bharat’. It focused on nine priorities:
- Agriculture: The government will undertake a comprehensive review of the agriculture research setup to bring the focus on raising productivity.
- Employment & Skilling: Implementation of 3 schemes for ‘Employment Linked Incentive’, based on first-time employment incentive, creation of jobs in manufacturing sector, employer support and skilling programmes.
- Human Resource Development: Schemes for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, schedule tribe, street vendors and women entrepreneurs.
- Manufacturing: Budge supports entrepreneurship with credit guarantee schemes, credit support to MSMEs and promotion of women entrepreneurship.
Fiscal Deficit:
The budget estimates fiscal deficit for FY25 at 4.9% of GDP, which is lower than current fiscal deficit of 5.1% and expects to reduce it further to 4.5% of GDP in FY26 which is a welcome move. However the budget hopes that fiscal deficit will go down based on strong tax collections and expenditure rationalization.
Taxation:
The Union Budget 2024-25 brought significant changes to the taxation of capital gains, aimed at simplifying the tax structure and providing relief to taxpayers. Earlier, budget removed the indexation benefit which could have been adverse to tax holders, however later on it was revised to give an option to tax payers to select more beneficial option.
The budget also introduced new tax rates for both short-term and long-term capital gains, impacting a wide range of financial and non-financial assets and on the other hand removing angel taxes for all classes of investors.
Overall, FM delivered a balanced budget by maintaining focus on critical areas and long term vision of India’s grand plan of Developed India.
Acknowledgements:
RBI Bulletin (www.bulletin.rbi.org.in), SEBI (www.sebi.gov.in), NSE (www.nseindia.com), BSE (www.bseindia.com)
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