Indian Union Budget 2024-2025

On July 23, 2024, India’s Honorable Finance Minister Nirmala Sitharaman displayed the primary budget of the current organization, putting a solid accentuation on middle-class success, MSMEs, work, and ability improvement. The budget lays out nine priorities that are implied to supply everybody with a bounty of chances. It too subtle elements of the steps and changes that must be taken in arrange to realize the vision of Viksit Bharat.

The budget ventures add up to receipts (barring borrowings) of Rs. 32.07 lakh crore and add up to consumptions of Rs. 48.21 lakh crore for the monetary year 2024–25. It is expected that net assess receipts will be Rs. 25.83 lakh crore, with a 4.9% GDP monetary shortage. Next year, the administration needs to bring the fiscal shortfall down to less than 4.5%. Center inflation, which does not incorporate fuel and food, is 3.1%. Inflation is still low and steady, heading towards the 4% target. A balanced approach to economic growth, stability, and inclusive development is reflected in this budget.

The Theme of the Indian Union Budget

• Focus on –

1. Employment.
2. Skilling.
3. MSMEs.
4. The middle class.

• Presentation of the Prime Minister’s package of five programs and initiatives, with a total budget of INR two lakh crore, to help 4.1 crore youngsters have access to work, skill development, and other opportunities during a five-year period.
• INR 1.48 Lakh Cr is made available for employment, skill development, and education.

Priorities the Indian Union Budget

According to the interim budget’s Viksit Bharat plan, the following nine areas will be the focus of ongoing efforts to create plenty of possibilities for everyone.

1. Productivity and Resilience in Agriculture.
2. Employment & Skilling.
3. Inclusive Human Resource Development and Social Justice.
4. Manufacturing & Services.
5. Urban Development.
6. Energy Security.
7. Infrastructure.
8. Innovation, Research & Development.
9. Next Generation Reforms.

Priority 1: Productivity and Resilience in Agriculture

Transforming Agriculture Research

• The agriculture research setup will be thoroughly reviewed in order to shift the emphasis to cultivating climate-resilient cultivars and increasing productivity. Challenge mode funding will be made available, including to the private sector. Such research will be overseen by subject matter experts from both the government and the private sector.
• 1.52 lakh crore would be allocated to the agricultural and related sectors.

Release of New Varieties

• Farmers will be able to cultivate 32 field and horticultural crops from 109 new, high-yielding, climate-resilient varieties.

Natural Farming

• Over the course of the next two years, 1 Cr farmers will be introduced to natural farming with the help of branding and certification. Scientific institutes and gram panchayats that are willing shall carry out the implementation.
• There will be 10,000 bio-input resource centers built based on need.

Missions for Pulses and Oilseeds

• To attain self-sufficiency, production, storage, and marketing shall be reinforced.
  To attain “atmanirbharta” for oil seeds like mustard, peanut, sesame, soybean, and sunflower, a plan is being created.

Vegetable Production & Supply Chains

• Vegetable cultivation will establish large-scale clusters in proximity to important centers of consumption.
• Promotion will be given to Farmer-Producer Organizations, cooperatives, and new ventures for vegetable supply chains, encompassing collecting, storage, and marketing.

Digital Public Infrastructure for Agriculture

• In three years, the government will work with the states to support the agricultural sector in implementing the Digital Public Infrastructure (DPI), which will cover farmers and their fields.
• In 400 districts this year, a digital crop survey for Kharif using the DPI will be conducted. The farmer and land records will be updated with the information of 6 Cr farmers and their holdings. Additionally, five states would be eligible to issue Kisan Credit Cards based on Jan Samarth.

Shrimp Production & Export

• Monetary assistance for the establishment of a network of Nucleus Breeding Centers to supply shrimp broodstocks. Through NABARD, financing for the production, processing, and export of shrimp would be made easier.

National Cooperation Policy

• To accelerate the expansion of the rural economy and create jobs, a National Cooperation Policy for the methodical, orderly, and comprehensive development of the cooperative sector will be drafted.
• Amounts allocated to agriculture and related sectors total INR 1.52 lakh crore.

Priority 2: Employment & Skilling

Employment Linked Incentive

Three programs will be put into effect as part of the Prime Minister’s proposal for the “Employment Linked Incentive”:

Scheme A: First Timers

To pay everyone starting a new job in all official sectors a month’s salary, up to INR 15,000. The monthly salary cap of INR 1 Lakh will be the eligibility criterion.

Scheme B: Job Creation in Manufacturing

To provide incentives for new hires in the manufacturing sector who are employed as first-time employees.

Scheme C: Support to employers

To cover the growth in employment across all industries. For a period of two years, the government will repay employers for their EPFO contribution up to INR 3,000 per month for each additional employee.

 

Participation of Women in the Workforce

• In partnership with the sector, working women’s hostels are to be built. Along with promoting market access for women-owned SHG businesses, the alliance will also aim to provide skill-building programs specifically for women.

Skilling Programme

• A brand-new, government-funded program for skill development in partnership with state and corporate governments will train 20 lakh young people over the course of five years.
• With an outcome-oriented design, 1,000 Industrial Training Institutes will be updated in hub-and-spoke configurations.
• New courses will be introduced for newly developing demands, and course design and content will be in line with industry need.

Skilling Loans

• The Model Skill Loan Scheme will be updated to allow loans up to INR 7.5 Lakh with a government-sponsored fund guarantee, benefiting 25,000 students annually.

Education Loans

• Financial support for loans up to INR 10 Lakh for higher education in domestic institutions will be offered to assist youth who are not covered under any benefit under government initiatives and policies.

Priority 3: Inclusive Human Resource Development and Social Justice

Saturation Approach

• The saturation strategy, which covers all eligible individuals through a variety of programs, including those for health and education, will be used to achieve social justice completely.
• Programs that assist self-help organizations, scheduled caste, scheduled tribe, women entrepreneurs, and street vendors in their economic efforts will be fortified.

Purvodaya

• The eastern area, which includes Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh, will have a comprehensive development plan developed. The strategy will address the creation of economic possibilities, infrastructure, and human resource development.
• An industrial node in Gaya will be created on the Amritsar Kolkata Industrial Corridor, which will accelerate the industrial growth of the eastern region.
• New airports, medical institutes, and sports facilities will be built in Bihar, along with the expansion of road connectivity and power projects.
• The Amritsar-Kolkata Industrial Corridor would see the development of an industrial hub in Gaya.
• Power projects of 21,400 crore would be undertaken, including the construction of a new 2400 MW power plant at Pirpainti.

Pradhan Mantri Janjatiya Unnat Gram Abhiyan

• Social-economic advancement of tribal households in villages with a majority of tribal residents and aspirational districts, encompassing 63,000 villages and benefiting 5 crore tribal individuals.

Women-led Development

• Over INR 3 Lakh Cr is allocated in the budget for programs that help women and girls to support women-led development.

Andhra Pradesh Reorganization Act

• Within the current financial year, multilateral development organizations will give extraordinary financial support of around Rs. 15,000 crore.
• There are industrial hubs at Orvakal along the Hyderabad-Bengaluru Industrial Corridor and at Kopparthy along the Vishakhapatnam-Chennai Industrial Corridor.

Bank branches in North-Eastern Region

• In the Northeast, India Post Payment Bank will open 100 branches.

Priority 4: Manufacturing & Services

Support for the Promotion of MSMEs

MSMEs and manufacturing, in especially labor-intensive manufacturing, deserve special attention. For MSMEs, the government has developed a package that includes funding, revisions to regulations, and technological help. The precise actions listed below were declared:

Credit Guarantee Scheme for MSMEs in the Manufacturing Sector

• A credit guarantee framework will be executed to empower MSMEs to get term loans for the purchase of apparatus and gear without the require for collateral or a third-party guarantee. These MSMEs’ credit risks would be shared to execute the scheme. Each applicant will receive a guarantee covering up to INR 100 Cr from a separately established self-financing guarantee fund, though the loan amount may be greater.

New Assessment Model for MSME Credit

• Public sector banks will increase their internal capacity to evaluate MSMEs for credit rather than depending on outside evaluation. They will also take the lead in creating or arranging for the creation of a new credit assessment model that is based on the evaluation of MSMEs’ digital footprints in the economy. Compared to the conventional method of determining credit eligibility by looking just at asset or turnover requirements, this is anticipated to be a major improvement. MSMEs without a formal accounting system will also be covered by that.

Credit Support to MSMEs During Stress Period

• An announcement was made regarding a new procedure that will help MSMEs continue to receive bank credit during their stressful time. MSMEs will have access to finance while they are in the Special Mention Account (SMA) stage for uncontrollable reasons so they may keep up their operations and stay out of the non-performing asset (NPA) stage. Credit availability will be backed by a guarantee from a fund that is supported by the government.

Mudra Loans

• Mudra loan limits will be increased to INR 20 Lakh for business owners who have taken out and successfully repaid prior Tarun category loans.

Enhanced Scope for Mandatory Onboarding in TReDS

• The obligatory onboarding level for purchasers on the TReDS platform would be lowered to INR 250 Cr. Through the transformation of their trade receivables into cash, this will assist MSMEs in freeing up working capital. By taking this action, the platform will have 7000 more enterprises and 22 more CPSEs. The suppliers’ coverage will also encompass medium-sized businesses.

SIDBI Branches in MSME Clusters

• Within three years, SIDBI plans to open more branches to extend its reach and offer direct loans to all key MSME clusters. The service coverage will increase to 168 out of 242 large clusters with the opening of 24 such branches this year.

MSME Units for Food Irradiation, Quality & Safety Testing

• There will be financial assistance for the establishment of 50 multi-product food irradiation units in the MSME sector. Facilitation will be provided for the establishment of 100 NABL-accredited food safety and quality testing laboratories.

E-Commerce Export Hubs

• E-Commerce Export Hubs will be built up in PPP manner to allow MSMEs and traditional craftspeople to sell their products in foreign markets. These centers will enable trade and export-related services under one roof, all within a smooth regulatory and logistical framework.

Measures for Promotion of Manufacturing & Services

Industrial Parks

• Town planning plans should be better utilized to develop industrial parks that are ready for investment and have all the necessary infrastructure, in or close to 100 cities. This will be done in collaboration with the governments and the private sector.
• The National Industrial Corridor Development Program requires the approval of twelve industrial parks.

Rental Housing

• Industrial workers will be able to rent dormitory-style housing through PPP mode with the cooperation and commitment of anchor industries and the VGF.

Shipping Industry

• Reforms pertaining to flagging, ownership, and leasing will be put in effect to increase employment and the maritime sector’s participation in India.

Critical Mineral Mission

• For use in local production, essential mineral recycling, and the purchase of vital mineral assets abroad. Technology development, a trained labor force, an enlarged producer responsibility framework, and an appropriate funding source will all be part of its mandate.

Offshore Mining of Minerals

• First round of offshore mining blocks will be auctioned off, expanding on previous exploration work.

Digital Public Infrastructure Applications

• Creation of population-scale DPI applications for increased productivity, commercial prospects, and private sector innovation. Credit, e-commerce, education, health, law and justice, logistics, MSME, service delivery, and urban governance are among the sectors in which these are planned.

Integrated Technology Platform for IBC Eco-system

• To improve the results under the Insolvency and Bankruptcy Code (IBC) and achieve consistency, transparency, speedy processing, and improved oversight for all stakeholders, an Integrated Technology Platform will be established.

Voluntary Closure of LLPs

• To shorten the closing period, the Center for Processing Accelerated Corporate Exit’s (C-PACE) services will be offered to LLPs that choose to voluntarily close.

National Company Law Tribunals

• To expedite the resolution of insolvency, reforms, strengthening of the tribunal, and appellate tribunals, as well as appropriate modifications to the IBC, will be started. More tribunals are going to be created. Among these, a few would be informed to make decisions solely based on the Companies Act.

Debt Recovery

• There will be actions done to enhance and restructure debt recovery tribunals. There will be more tribunals created to expedite healing.

Priority 5: Urban Development

Cities as Growth Hubs

• The government will assist in the establishment of cities as Growth Hubs by collaborating with the states. This will be accomplished by using town planning plans to facilitate the orderly development of peri-urban areas and by implementing economic and transit planning.

Creative Redevelopment of Cities

• The government will build a framework for enabling policies, market-based procedures, and legislation to facilitate innovative brownfield redevelopment of existing cities that has the potential to bring about revolutionary effects.

Transit Oriented Development

• Plans for 14 sizable cities with a population of more than 30 lakh will be developed, including an implementation and funding strategy for transit-oriented development.

Urban Housing

• A total of INR 10 Lakh Cr will be invested under the PM Awas Yojana Urban 2.0 to meet the housing needs of 1 Cr urban poor and middle-class families. In the upcoming five years, this will comprise INR 2.2 Lakh Cr in central aid.
• Additionally, laws and policies that facilitate more accessible, transparent, and efficient rental housing markets will be implemented.

Water Supply and Sanitation

• Water supply, sewage treatment, and solid waste management projects and services for 100 major cities will be promoted through bankable projects in collaboration with State Governments and Multilateral Development Banks. Additionally, purified water will be used for adjacent tank filling and irrigation as part of these projects.

Priority 6: Energy Security

Energy Transition

• There will be a draft policy statement on suitable energy transition pathways that strikes a balance between the demands of growth, employment, and environmental sustainability.

PM Surya Ghar Muft Bijli Yojana

• With over 1.28 Cr registrations and 14 Lakh applications, the PM Surya Ghar Muft Bijli Yojana has received a fantastic response, and the government will continue to support it.

Pumped Storage Policy

• A policy will be established to support pumping storage projects for the storage of electricity and to enable the seamless integration of renewable energy, despite its variable and inconsistent character, into the total energy mix.

Research and Development of Small and Modular Nuclear Reactors

• It is anticipated that a sizable portion of Viksit Bharat’s energy mix will come from nuclear sources.
• To establish Bharat Small Reactors, research and develop Bharat Small Modular Reactors, and explore and develop innovative nuclear energy technologies, the government will collaborate with the business sector.

Advanced Ultra Super Critical Thermal Power Plants

• Native technology has finished developing Advanced Ultra Super Critical (AUSC) thermal power plants with significantly improved efficiency. Using AUSC technology, NTPC and BHEL will collaborate to establish a fully operational 800 MW commercial facility. The necessary financial help will come from the government. As time goes on, the economy will gain significantly from the growth of its capacity for producing high-grade steel and other advanced metallurgical materials for these plants.

Roadmap for ‘Hard to Abate’ Industries

• There will be a plan developed for transferring the “hard to abate” businesses from “energy efficiency” standards to “emission targets.” There will be appropriate rules in place to help these industries move from the existing “Perform, Achieve and Trade” mode to the “Indian Carbon Market” mode.

Support to Traditional Micro and Small Industries

• It will be possible to conduct an investment-grade energy audit of conventional micro and small companies in 60 clusters, which includes the ceramic and brass industries. They will receive financial assistance for implementing energy-saving techniques and switching to greener energy sources. In the following phase, the plan will be repeated in an additional 100 clusters.

Priority 7: Infrastructure

Infrastructure Investment by Central Government

• Over the next five years, infrastructure will continue to receive strong budgetary assistance, in addition to the demands of other objectives and fiscal reduction. INR 11,11,111 Cr has been set aside for capital expenses this year. This amounts to 3.4% of GDP.

Infrastructure Investment by State Governments

• States are urged to fund infrastructure on a comparable scale, depending upon their development priorities. To help the states with their resource allocation, 1.5 lakh crores has been set aside for long-term, interest-free loans.

Private Investment in Infrastructure

• Private sector infrastructure investment will be encouraged by viability gap funding as well as supportive laws and regulations. There will be the release of a framework for market-based finance.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

• To give 25,000 rural habitations access to all-weather connectivity, PMGSY’s Phase IV will be implemented.

Tourism

• The government’s initiatives to promote India as a top travel destination will help boost investments, generate jobs, and open up business prospects for other industries. The following actions were suggested in addition to those listed in the interim budget:

1. Support would be provided for the thorough development of the Vishnupad Temple Corridor and the Mahabodhi Temple Corridor, enabling them to become premier pilgrimage and tourism destinations.

2. Rajgir’s complete development.

3. The growth of Nalanda as a tourism hub in addition to the restoration of Nalanda University.

4. Odisha’s natural landscapes, clean beaches, animal sanctuaries, craftsmanship, temples, monuments, and scenic beauty are being developed to make it the best tourist destination.

Priority 8: Innovation, Research & Development

• Anusandhan National Research Fund for operationalizing basic research and developing prototypes.
• A one lakh crore funding source to support commercially scaled research and innovation led by the private sector.

Space Economy

• The establishment of a venture capital fund with a 1,000 Cr INR goal is in line with the government’s ongoing focus on tripling the size of the space economy within the next ten years.

Priority 9: Next Generation Reforms

Economic Policy Framework

• A framework for economic policy will be developed to outline the general strategy for economic growth and define the parameters of the upcoming wave of reforms aimed at creating jobs and maintaining rapid expansion.
• The government intends to implement and provide incentives for changes aimed at enhancing the productivity of production elements and promoting greater efficiency in markets and sectors. To increase total factor productivity and reduce inequality, these reforms will address all aspects of production, including land, labor, capital, entrepreneurship, and technology.
• A sizeable portion of the 50-year interest-free loan will be designated for the purpose of encouraging competitive federalism and providing incentives to states for implementing reforms more quickly. The following reforms will be implemented in collaboration with the states:

Land-related Reforms by State Governments

• Land administration, planning, and management, as well as urban planning, usage, and building regulations, will all be covered by land-related reforms and activities in both rural and urban areas. These will receive the necessary financial support to incentivize completion within the next three years.
• The following will be done in relation to rural land:

1. Assigning each land a Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar.

2. Cadastral map digitization, mapping subdivisions according to present ownership.

3. Creating a land registration.

4. Connecting to the farmers’ registry.

These steps will also help with other agricultural services and finance flow.

• Urban land records will be digitalized through GIS mapping. The administration, updating, and management of property records as well as tax administration will be handled via an IT-based system. These will also make it easier for local urban entities to better their financial situation.

Reforms

• The government will make it easier for workers to access a variety of services, such as job and skill development. Such a one-stop shop will be made possible by the e-shram portal’s thorough connection with other portals. These services will include open architectural databases for the quickly evolving labor market, skill needs and accessible job roles, as well as a way to link job seekers with potential employers and skill providers.
• The Samadhan and Shram Suvidha portals will be redesigned to make commerce and industry compliance easier.
• The government will release a financial sector vision and strategy paper to get the industry ready in terms of scale, capacity, and skills to meet the finance needs of the economy. This will direct the efforts of the government, regulators, financial institutions, and market participants and establish the agenda for the following five years.

Taxonomy for Climate Finance

• To extend the amount of cash accessible for climate adaptation and relief, a taxonomy for climate fund ought to be made. This will offer assistance the nation fulfill its climate vows and make the move to a greener economy.

Structure of Variable Capital Companies

• The government will look for the necessary legal approval to offer a productive and adaptable way to finance the lease of ships and airplanes as well as shared private equity funds via a “variable company structure.”

Foreign Direct Investment and Overseas Investment

• To ease the method of foreign direct investment or FDI, energize the utilize of the Indian Rupee as a currency for abroad investments, and empower need, the laws and regulations relating to foreign direct investment and abroad investments will be streamlined.

Use of Technology

• Technology adoption to improve the digitalization of the economy.

Ease of Doing Business

• To improve the “Ease of Doing Business,” the Jan Vishwas Bill 2.0 is now under development by the government. States will also get incentives for digitization and the execution of their Business Reforms Action Plans.

Data and Statistics

• Several sectoral data bases, including those created under the Digital India program, will be used with active use of technology tools to improve data governance, gathering, processing, and administration of data and statistics.

Taxation: Sector-specific Customs Duty Proposals in Indian Union Budget 2024-2025

Medicines and Medical Equipment

• Three cancer medications—Trastuzumab, Durvalumab, and Osimertinib—are completely free from customs charges.
• Modifications to the BCD of flat panel detectors and x-ray tubes used in medical x-ray equipment as part of the Phased Manufacturing Program to align them with the expansion of domestic capacity.

Mobile Phone and Related Parts

• 15% BCD reduction for mobile phones, mobile PCBAs, and mobile chargers.

Critical Minerals

• The administration suggested lowering BCD on two essential minerals and completely excluding customs charges on 25 other minerals. This will give such minerals a significant boost in processing and refining and help ensure their availability for critical and strategic industries including high-tech electronics, nuclear energy, renewable energy, space exploration, defense, and telecommunications.

Solar Energy

• The list of exempt capital items to be used in the nation’s production of solar cells and panels is to be increased to facilitate the energy transition. Furthermore, the government suggested against extending the exemption from customs taxes granted to them due to the adequate domestic manufacturing capacity of solar glass and tinned copper connector.

Marine Products

• BCD on some broodstock, polychaete worms, shrimp, and fish feed should be lowered to 5% in to increase competition.
• Exemption from customs taxes on a number of inputs used in the production of fish and shrimp feed.

Leather and Textile

• Reducing BCD on real down filler material from duck or goose was the government’s proposed solution to increase export competitiveness.
• The list of items exempt from duty in the production of footwear, clothing made of leather and textiles, and other leather goods intended for export will be increased.
  The government suggested lowering the BCD on methylene diphenyl diisocyanate (MDI) for the production of spandex yarn from 7.5 to 5%, subject to certain restrictions, to correct the duty inversion.
• A simplification and rationalization of the export duty structure on raw hides, skins, and leather is suggested.

Precious Metals

• Customs taxes on gold, silver, and platinum have been decreased to 6% and 6.4%, individually, in an exertion to promote domestic value expansion in gold and precious metal jewelry inside the country.

Other Metals

• The government suggested removing the BCD on ferro nickel and blister copper to lower the cost of producing steel and copper. The concessional BCD of 2.5% on copper scrap and the zero BCD on ferrous and nickel cathode scrap remain in place.

Electronics

• Removal of the BCD on oxygen-free copper for resistor manufacturing, subject to certain criteria, will boost value addition in the home electronics industry. Additionally, some parts used in the production of connectors are exempt.

Chemicals and Petrochemicals

• An increase in the BCD on ammonium nitrate from 7.5 to 10% is necessary to support the pipeline’s upcoming new and existing capabilities.

Plastics

• The BCD on PVC flex banner imports will rise from 10% to 25% in an effort to reduce imports.

Telecommunication Equipment

• BCD on PCBA of specific telecom equipment is to be raised from 10% to 15% to promote local manufacturing.

Trade Facilitation

• The period for exporting products imported for repairs will be extended to one year to support domestic aviation as well as boat and ship maintenance and repair.
• The period of time that products may be reimported for warranty repairs is going to be extended from three to five years.

New Tax Regime of Budget 2024-2025

• 58% of corporation tax was paid under the simplified tax system in FY23, while in FY24, over two-thirds of taxpayers took use of the personal income tax simplified tax regime.
• The standard deduction for salaried staff members was raised to ₹75,000 from ₹50,000.
• Pensioners’ family pension deduction went from ₹15,000 to ₹25,000.
• The combination of two tax exemption programs for charitable organizations.
• On numerous payments, the 5% TDS rate was combined into the 2% TDS rate.
• 20% TDS rate on mutual fund or withdrew UTI purchases of units.
• E-commerce businesses’ TDS rate dropped from 1% to 0.1%.
• Delays in paying TDS until the filing statement deadline are no longer considered crimes.
• If there is ₹ 50 lakh or more in unreported income, the assessment may be reviewed after three or even up to five years from the end of the assessment year.
• Gains on short-term investments in specific financial assets will be subject to a 20% tax rate.
• Gains on all assets, whether financial and non-financial, over the long term will be subject to a 12.5% tax rate.
• The annual limitation on capital gains exemption for specific financial assets has been raised to ₹ 1.25 lakh.
• In Tax Tribunals, High Courts, and the Supreme Court, the monetary thresholds for filing appeals pertaining to direct taxes, excise, and service tax have been raised to ₹60 lakh, ₹2 crore, and ₹5 crore, respectively.
• To support the startup ecosystem, the angel tax was eliminated for all investor classes.
• less complicated tax laws for international shipping firms that conduct domestic cruises in order to boost cruise travel in India.
• safe harbor prices for international mining firms that export the nation’s raw diamonds. The safe harbor regulations were enlarged to lower litigation and give certainty to international taxation.
• Foreign corporations now only pay a 35 percent corporate tax rate instead of 40 percent.
• Transactions involving Security The tax rate on securities futures and options was raised to 0.02 percent and 0.1%, respectively.
• Employers will deduct more money from employees’ salaries—from 10% to 14% of their salary—for NPS.
• Small moveable foreign asset non-reporting up to ₹20 lakh is no longer penalized.
  A two percent equalization levy was taken out.
• Under the new tax structure, salary employees might save as much as ₹ 17,500 on income tax.

Tax Slab for FY 2023-24		Tax Slab for FY 2024-25
Income	Tax Rate	Income	Tax Rate
Upto ₹ 3 lakh	Nil	Upto ₹ 3 lakh	Nil
₹ 3 lakh – ₹ 6 lakh	5%	₹ 3 lakh – ₹ 7 lakh	5%
₹ 6 lakh – ₹ 9 lakh	10%	₹ 7 lakh – ₹ 10 lakh	10%
₹ 9 lakh – ₹ 12 lakh	15%	₹ 10 lakh – ₹ 12 lakh	15%
₹ 12 lakh – ₹ 15 lakh	20%	₹ 12 lakh – ₹ 15 lakh	20%
More than 15 lakh	30%	More than 15 lakh	30%

Tax Slab for 2023-24 & 2024-25

Finance of Government

Revenue Source of Government

The breakdown of the sources of government income is appeared by the insights from the Indian Union Budget 2024–2025. The government’s dependence on advances and other money related disobedient to realize its budgetary needs is obvious from the most prominent sum (27%), which is credited to borrowing and other liabilities. Income tax makes up 19% of the total, which indicates high individual taxpayer engagement.

The fact that GST and Other Taxes come in right behind at 18% shows how crucial indirect taxes are to the income stream. The contribution from corporate organizations is highlighted by the 17% share of Corporation Tax. Nine percent comes from non-tax receipts, which come from sources other than direct taxes. Union Excise levies and Customs contribute 5% and 4% of the total, respectively, illustrating the impact of levies on imports and manufactured goods.

Last but not least, the 1% non-debt capital receipts show little income from asset sales and disinvestment. This arrangement strikes a balance between direct taxes, indirect taxes, and borrowings through a variety of revenue sources.

Government Spending

The distribution of government expenditure among the diverse segments is laid out within the Indian Union Budget 2024–2025. The States’ Share of Charges and Obligations gets the greatest assignment of uses (21%), highlighting the financing given to state governments. Intrigued installments make up 19% of the whole, which speaks to the fetching of debt overhauling for the country. 16% of all plans are within the Central Segment, showing a substantial investment in national programs and exercises.

With 8% of GDP going on defense, it is obvious how critical national security is. Appropriations make up 6% of the full and are expected to back the population’s needs for fundamental products and administrations. Retired government workers are guaranteed financial support under the 4% pension allocation. A variety of financial transfers and other expenses are covered by the 9% each for Finance Commission, Other Transfers, and Other Expenditure.

Additionally, Centrally Sponsored Schemes receive 8%, demonstrating the emphasis on particular sector-specific developmental programs. This spending pattern demonstrates a well-rounded strategy for developmental initiatives, governmental assistance, and debt service.

Ministry-wise Expenditure

The Indian Union Budget 2024–2025 lists expenditures by the ministry and emphasizes major investment areas. With the largest budget of Rs. 454,773 crores, the defense sector highlights the importance of national security. With Rs. 265,808 crore, rural development comes next, indicating the emphasis on improving livelihoods and infrastructure in rural areas. With the goal of bolstering the agricultural economy and assisting related sectors, the Agriculture and Allied Activities sector has been allotted Rs. 151,851 crore.

Home Affairs, which prioritizes internal security and administration, is given Rs. 150,983 crore. A commitment to enhancing the standard and infrastructure of education is shown by the allocation of Rs. 125,638 crore for education. With a budget of Rs. 116,342 crore, IT & Telecom emphasizes the value of technological innovation and digital connection. The amount spent on healthcare, which is 89,287 crore, is primarily allocated to infrastructure and services. In order to guarantee a sustainable energy supply, the energy sector is given Rs. 68,769 crore. Rs. 47,559 crore is given to Commerce & Industry to encourage trade and industrial expansion, while Rs. 56,501 crore is granted to Social Welfare to support various welfare initiatives.

This spending trend shows how defense, rural development, agriculture, education, and other important areas are all handled in a balanced manner.

Explore India’s 2024-2025 budget insights to understand key economic reforms, infrastructure investments, and sector-specific tax changes shaping India’s future by visiting Genfosight. Stay informed about advancements in urban development, energy security, and innovation. Join us for regular updates and in-depth analysis on our social media platforms.

References

• Invest India. India’s Union Budget 2024-25: Key Highlights.
• KPMG. India Union Budget 2024-25.
• Ministry of Finance Budget Division. Key Features of Budget 2024-2025.
• Ministry of Finance. Annual Financial Statement of the Central Government for 2024-2025.
• Ministry of Finance. Budget 2024-2025 – Speech of Nirmala Sitharaman, Ministry of Finance.
• Ministry of Finance. Budget at a Glance 2024-2025.
• Ministry of Finance. Highlights of the Union Budget 2024-25.

Special Thanks

Content – Members of Genfosight.

Photographs – Members of Genfosight.

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