Interim Union Budget 2024-2025: Tax Stability, Direct Tax Relief, and GST Success – Comprehensive Overview
- INDIA’S REAL GDP PROJECTED TO GROW AT 7.3 PER CENT IN FY 2023-24
- FINANCE AND CORPORATE AFFAIRS MINISTER SMT NIRMALA SITHARAMAN PRESENTS THE INTERIM UNION BUDGET FOR 2024-2025 IN PARLIAMENT
- CAPITAL EXPENDITURE OUTLAY FOR THE NEXT YEAR IS BEING INCREASED BY 11.1 PER CENT TO RS 11,11,111 CRORE, WHICH WOULD BE 3.4 PER CENT OF THE GDP
- FISCAL DEFICIT IN 2024-25 IS ESTIMATED TO BE 5.1 PER CENT OF GDP
- FDI INFLOW DURING 2014-23 WAS USD 596 BILLION, WHICH IS TWICE THE INFLOW DURING 2005-14.
- UPLIFTMENT OF ‘GARIB’ (POOR), ‘MAHILAYEN’ (WOMEN), ‘YUVA’ (YOUTH) AND ‘ANNADATA’(FARMER) IS THE HIGHEST PRIORITY OF GOVERNMENT
- A CORPUS OF RUPEES ONE LAKH CRORE WILL BE ESTABLISHED WITH
- FIFTY-YEAR INTEREST FREE LOAN FOR YOUTH
- SCHEME OF 50 YEAR INTEREST FREE LOAN FOR CAPEX TO STATES WILL BE CONTINUED THIS YEAR WITH TOTAL OUTLAY OF RS 1.3 LAKH CRORE.
- GOVERNMENT IS WORKING WITH AN APPROACH TO DEVELOPMENT THAT IS ALL-ROUND, ALL-PERVASIVE AND ALL-INCLUSIVE (सर्वांगीण, सर्वस्पर्शी और सर्वसमावेशी)
- THE BUDGET CONTAINES A NUMBER OF ANNOUNCEMENTS AND STRATEGIES INDICATING DIRECTIONS AND DEVELOPMENT APPROACH FOR MAKING INDIA VIKSIT BHARAT BY 2047
- GOVERNMENT WILL PAY UTMOST ATTENTION TO MAKE THE EASTERN REGION AND ITS PEOPLE A POWERFUL DRIVER OF INDIA’S GROWTH
- GOVERNMENT WILL FORM A HIGH-POWERED COMMITTEE FOR AN EXTENSIVE CONSIDERATION OF THE CHALLENGES ARISING FROM FAST POPULATION GROWTH AND DEMOGRAPHIC CHANGES
- NO CHANGE PROPOSED IN TAX RATES IN THE INTERIM BUDGET
- ABOUT ONE CRORE TAX PAYERS EXPECTED TO BENEFIT FROM WITHDRAWAL OF CERTAIN PETTY AND DISPUTED DIRECT TAX DEMANDS
- GOVERNMENT TO LAY WHITE PAPER ON INDIAN ECONOMY NOW AND THEN
SUMMARY
Summary of the Interim Union Budget 2024-2025
Capital Expenditure Increase: Finance Minister Smt Nirmala Sitharaman announced an 11.1% increase in the capital expenditure outlay for 2024-2025, totaling Rs 11,11,111 crore, representing 3.4% of GDP. This move aims to build on the significant tripling of capital expenditure in the past four years, enhancing economic growth and employment.
GDP Growth Projections: India’s Real GDP is projected to grow at 7.3% according to the First Advance Estimates of National Income for FY 2023-24. This aligns with RBI’s revised growth projections and demonstrates India’s economic resilience amid global challenges.
Global Confidence in India’s Economy: The IMF’s upward revision of India’s growth projection to 6.3% for FY2023-24 reflects global confidence in India’s economic strength. India is expected to become the third-largest economy by 2027, contributing significantly to global growth.
Revenue and Borrowing Estimates: For 2024-25, total receipts excluding borrowings are estimated at Rs 30.80 lakh crore, with tax receipts estimated at Rs 26.02 lakh crore. Fiscal deficit is estimated at 5.1% of GDP, with a goal to reduce it below 4.5% by 2025-26.
FDI Inflow and Investment Treaties: FDI inflow from 2014-23 reached USD 596 billion, marking a significant increase. The government is negotiating bilateral investment treaties to encourage sustained foreign investment.
Focus on Inclusive Development: The budget emphasizes development for the ‘four major castes’ identified by Prime Minister Modi: the poor, women, youth, and farmers. Initiatives include housing, water, electricity, and financial services for all, aiming for a ‘Viksit Bharat’ by 2047.
Infrastructure and Rural Development: The budget proposes the continuation of the fifty-year interest-free loan scheme for states’ capital expenditure, with an outlay of Rs 1.3 lakh crore. It also highlights the completion of PM Awas Yojana targets and plans for further housing and infrastructure development.
Empowerment and Economic Transformation: The budget reflects a shift towards a humane and inclusive approach to development, targeting individual and household-level benefits through various schemes, including PM Mudra Yojana, which has sanctioned 43 crore loans.
Announcements for Future Growth: The budget outlines plans for the eastern region’s development, renewable energy initiatives, employment generation through Pradhan Mantri Kisan Sampada Yojana, and significant investments in research, aviation, and railways to support economic growth and development.
This interim budget lays the groundwork for India’s journey towards becoming a developed nation by 2047, focusing on inclusive growth, infrastructure development, and fostering innovation and entrepreneurship.
Summary of Part-B of the Interim Union Budget 2024-2025
Taxation Continuity: The Interim Budget 2024-2025 maintains the status quo on taxation, with no changes in the rates for direct or indirect taxes, including import duties. However, tax benefits for Start-Ups and investments by sovereign wealth or pension funds, along with tax exemptions for certain incomes of some IFC units, have been extended until March 31, 2025.
Withdrawal of Outstanding Direct Tax Demands: To enhance taxpayer services and ease of doing business, the Finance Minister announced the withdrawal of petty, outdated, or disputed direct tax demands up to Rs. 25,000 for the period up to FY 2009-10 and up to Rs. 10,000 for FYs 2010-11 to 2014-15, benefiting about a crore taxpayers.
Trebled Direct Tax Collections: The past decade has seen a more than threefold increase in direct tax collections and a 2.4-fold increase in return filers. The government has rationalized tax rates, resulting in no tax liability for taxpayers with income up to Rs. 7 lakh under the new tax regime and decreased corporate tax rates to promote business growth.
GST and Compliance Burden: GST has significantly reduced the compliance burden on trade and industry by unifying India’s fragmented indirect tax system. A survey indicated that 94% of industry leaders view the transition to GST positively. The GST tax base and average monthly gross GST collections have doubled, benefiting both the states and consumers by reducing logistics costs and prices.
Facilitation of International Trade: Steps have been taken to facilitate international trade, with a significant reduction in import release times at various points of entry, demonstrating the government’s commitment to enhancing trade efficiency.
White Paper on Indian Economy: The Finance Minister announced the release of a white paper detailing the economic condition and governance system improvements from 2014 to the present, aiming to draw lessons from past mismanagement and highlight the nation’s progress towards sustainable growth and all-round development.