Navigating the Financial Landscape: Unpacking the 2024 Budget's 11 Key Highlights

Posted by Watchdoq Newsportal on February 01, 2024     

In a momentous session at the Parliament, Finance Minister Nirmala Sitharaman unveiled the Interim Union Budget for the fiscal year 2024-25. This marks her sixth budget and the final one for the second term of Prime Minister Narendra Modi's government.

In her comprehensive speech, Sitharaman delved into pivotal aspects that define the nation's economic trajectory. From taxation to green initiatives and tourism, the 14 key highlights pave the way for a transformative year ahead.

A Visionary Outlook:

"The Indian economy has witnessed a positive transformation in the last 10 years. With Sabka Saath, Sabka Vikaas, the Narendra Modi-led government overcame challenges," Sitharaman declared, setting the stage for a hopeful future. The budget underscores the trinity of democracy, demography, and diversity, aiming to fulfill the aspirations of every Indian.

Expert Insights:

Experts laud the budget's focus on strengthening domestic macro factors. Pradeep Gupta, Co-founder & Vice-chairman of Anand Rathi Group, highlights the potential benefits for foreign investors, projecting a positive impact on yields and potential ratings upgrades.

Key Features:

The budget prominently addresses infrastructure, tourism, logistics, and research innovation. These measures align with the government's commitment to achieving a fiscal deficit of 4.5 percent of GDP by FY26, emphasizing sustainable economic growth.

Income Tax Dynamics:

Sitharaman chose stability, announcing no changes in tax rates for both direct and indirect taxes. The budget boasts a doubling of tax collections over the last decade, providing predictability for companies navigating financial planning.

Infrastructure Boost:

A substantial increase in capital expenditure, reaching ?11.1 lakh crore (3.4 percent of GDP), marks a pivotal step in economic growth. Infrastructure development extends to railways, with 40,000 rail bogies set to be transformed into Vande Bharat coaches.

Lakhpati Didi Scheme:

Empowering rural women through the Lakhpati Didi Scheme has achieved remarkable success. The initiative, aiming to uplift two crore women in villages, is set to benefit 83 lakh self-help groups and nine crore women.

Green Energy Initiatives:

In a move towards 'net zero' by 2070, the budget introduces measures like offshore wind energy funding, coal gasification, and mandatory blending of compressed biogas. The focus on electric vehicles and renewable energy reflects a commitment to a sustainable future.

Tourism Impetus:

States will be encouraged to comprehensively develop iconic tourist centers, enhancing amenities and services. The rating system based on quality will establish India as a global tourist destination, fostering employment and economic growth.

Technology and Innovation:

A corpus of ?1 lakh crore with a 50-year interest-free loan aims to boost private sector research and innovation. This strategic move positions India as a global technology leader, fostering advancements in sunrise domains.

Healthcare Initiatives:

Ayushman Bharat's extension to Anganwadi and Asha workers and the integration of maternal and child healthcare schemes under one comprehensive scheme are key strides in healthcare.

Housing for All:

The successful implementation of PM Awas Yojana (Grameen) and the commitment to building two crore more houses over the next five years signify a sustained focus on affordable housing.

Empowering MSMEs:

Policy priorities include training MSMEs for global competition, fostering growth, and preparing the financial sector to meet investment needs.

Agricultural and Food Processing Focus:

Efforts for value addition in the agricultural sector aim to boost farmers' income. Various schemes, including Pradhan Mantri Kisan Sampada Yojana, contribute to reducing postharvest losses and improving productivity.

Fiscal Numbers:

The fiscal deficit target for FY25 stands at 5.1 percent of GDP, with a robust capital expenditure of ?11.1 lakh crore. Gross market borrowing, gross tax receipts, and total expenditure for FY25 reflect the government's commitment to a resilient and dynamic economy.

The 2024 budget encapsulates a vision for progress, sustainability, and inclusivity, providing a roadmap for India's economic journey in the coming year.