23 July 2024

• Economy: Finance Minister Nirmala Sitharaman presented Union Budget 2024-25. Fiscal deficit: 4.9 per cent of GDP. Nine priority areas. PM Employment Package for 4.1 crore youth.
• Economy: Economic Survey 2023-24 showed 8.2 per cent GDP growth in FY24. Mental health treatment gap at 70 to 92 per cent.
• Agriculture: Budget allocated 1.52 lakh crore rupees for agriculture. One crore farmers to adopt natural farming.
• Tax: Standard deduction for salaried employees raised from 50,000 to 75,000 rupees.

GS area: Economy, Governance

Finance Minister Nirmala Sitharaman presented Union Budget 2024-25 on 23 July 2024, her seventh consecutive budget presentation.

• Total expenditure: 48.21 lakh crore rupees.
• Net tax receipt: 25.83 lakh crore rupees.
• Fiscal deficit: 4.9 per cent of GDP. Target to bring it below 4.5 per cent next year.
• Capital expenditure: 11,11,111 crore rupees (3.4 per cent of GDP). Continues the capex push from previous budgets.
• Nine priority areas: Agriculture, employment and skilling, inclusive human resource development, manufacturing and services, urban development, energy security, infrastructure, innovation and R&D, next-generation reforms.
• Allocation for agriculture: 1.52 lakh crore rupees for agriculture and allied sectors.

Static linkage: Union Budget (Economy/Governance), fiscal policy.

GS area: Economy, Governance

The budget announced a Prime Minister's Employment Package of five schemes targeting 4.1 crore young people over five years.

• Scheme A (First-Time Employees): One month's wage (up to 15,000 rupees) paid directly to EPFO-registered first-time employees in three instalments. Applicable to those earning up to 1 lakh rupees per month.
• Scheme B (Manufacturing Incentive): EPFO contributions for both employer and employee subsidised for the first four years for manufacturing sector workers.
• Scheme C (Employer Support): Reimburse employers 3,000 rupees per month per additional employee for 2 years.
• Scheme D (Skilling): 20 lakh youth to be skilled over 5 years. 1,000 Industrial Training Institutes to be upgraded with hub-and-spoke arrangements.
• Scheme E (Internships): 1 crore youth to be placed in internships at top 500 companies over 5 years. Monthly allowance of 5,000 rupees from government plus 10 per cent of CSR funds from companies.
• EPFO link: All schemes are anchored to EPFO registration, incentivising formal employment creation.

Static linkage: Employment policy (Economy), EPFO (Governance).

GS area: Economy

Key income tax changes in Budget 2024-25:

• New tax regime slabs:
  • 0 to 3 lakh: Nil
  • 3 to 7 lakh: 5 per cent
  • 7 to 10 lakh: 10 per cent
  • 10 to 12 lakh: 15 per cent
  • 12 to 15 lakh: 20 per cent
  • Above 15 lakh: 30 per cent
• Standard deduction: Raised from 50,000 rupees to 75,000 rupees for salaried employees. Potential savings up to 17,500 rupees per year.
• Capital gains: Long-term capital gains tax raised to 12.5 per cent from 10 per cent. Short-term capital gains tax raised to 20 per cent from 15 per cent. STT on futures and options doubled.
• Angel tax abolished: The 30 per cent tax on start-up investments above fair market value was abolished, providing relief to the start-up ecosystem.

Static linkage: Direct taxes (Economy), personal income tax.

GS area: Economy, Science and Technology

The budget made targeted changes to import duties to promote domestic manufacturing and strategic sectors.

• Gold and silver: Customs duty cut from 15 per cent to 6 per cent. This is expected to reduce smuggling and channel demand to formal markets.
• Mobile phones: Basic customs duty cut to 15 per cent from higher rates. Supports India's position as the world's second-largest mobile phone manufacturer.
• Critical minerals: 25 critical minerals fully exempted from customs duty. These include lithium, cobalt, nickel, and rare earths used in EV batteries and clean energy equipment.
• Solar equipment: Capital goods for solar panel manufacturing exempted.
• Cancer drugs: Three specific cancer medicines (osimertinib, durvalumab, and trastuzumab deruxtecan) fully exempted from customs duty.

Static linkage: Customs and tariff policy (Economy), Atmanirbhar Bharat.

GS area: Economy

The Economic Survey presented on 22 July provided the macroeconomic backdrop for the budget.

• GDP growth: 8.2 per cent in FY2023-24, one of the fastest among major economies.
• Inflation: 5.4 per cent in FY24, the lowest post-pandemic. Target is 4 per cent.
• Current account deficit: 0.7 per cent of GDP, very low.
• Agriculture: 4.18 per cent average growth over 5 years. Record 329.7 million tonnes foodgrain production in 2022-23. Fish production at 17.54 million tonnes (3rd globally).
• Mental health: 10.6 per cent of Indian adults suffer from mental disorders. Treatment gap of 70 to 92 per cent across disorders. Tele-MANAS has 53 cells and over 1,600 counsellors.

Static linkage: India's economy (Economy), social indicators (Society).

• Apophis asteroid: The 375-metre wide near-Earth asteroid Apophis will approach Earth to within 32,000 km in 2029, the closest any known asteroid of this size has come in recorded history. No impact risk. ESA's Ramses and NASA's OSIRIS-APEX spacecraft are planned to study it.
• UAPA bail by Supreme Court: The Supreme Court granted bail to a UAPA detainee held for over 9 years without trial, reinforcing the constitutional right to speedy trial under Article 21 even for cases under stringent special laws.
• Pralay missile: India's indigenously developed short-range ballistic missile with a range of 150 to 500 km and quasi-ballistic trajectory. Armenia expressed interest in acquiring Pralay. The missile has a higher indigenous content than BrahMos.