By Sneha Kundu
Budget Day is a big deal in India. People eagerly wait to see what the government plans to do with money in the upcoming year. This year, because there are elections coming up, we’re getting an “Interim Budget” instead of a full one. But don’t worry, the Finance Minister, Smt. Nirmala Sitharaman still had plenty of good stuff to share.
She said the theme for this year’s budget is “Viksit Bharat Budget 2024.” Basically, it’s all about making India better by 2047. And she’s focusing on helping poor people, women, youth, and farmers.
Here are the main things she talked about in the Interim Budget:
Direct Taxes:
– The same tax rates will stay for the next year.
– If you earn less than Rs. 7 lakh a year, you won’t have to pay taxes under the new rules.
– Companies will have to pay a 22% tax, and new manufacturing companies will pay 15%.
Goods and Services Tax (GST):
– The government is collecting more GST money each month.
– States are also getting more money from taxes.
Roadmap for Viksit Bharat 2047:
– The government wants to make India better by 2047.
– They’re going to focus on building better roads, digital stuff, and helping poor people.
– They want to get more people to pay taxes by making the rules clearer.
– They’re going to make sure banks are doing a good job and helping people save and invest money.
– There will be a special place called GIFT IFSC where people from all over the world can invest money.
Helping Poor People:
– The government has saved a lot of money by giving it directly to people who need it.
– Many people have gotten out of poverty because of government help.
– The government is also giving money to small businesses and training young people to get jobs.
Helping Women:
– Lots of women have gotten loans to start their own businesses.
– More women are going to college and studying things like science and technology.
– Many women’s groups are helping other women become successful.
Helping Farmers:
– Many farmers have gotten money directly from the government.
– Farmers also get insurance to protect their crops from bad weather.
– Farmers can now sell their crops online, which makes it easier for them to find buyers.
Making Things Green:
– The government wants to use more clean energy by 2070.
– They’re going to invest in things like wind and solar power.
– They want to use more natural gas and make things like cars and buses run on electricity.
– They’re also going to help farmers use eco-friendly ways to grow crops.
Building Stuff:
– The government wants to build more trains and connect them to ports.
– They’re going to encourage foreign investors to put money into India.
– They’ll also build more airports and make cities better with things like metros.
Healthcare and Housing:
– The government wants to make sure everyone gets vaccines, especially girls.
– They’re going to improve centers where kids can learn and get healthy food.
– They’ll also help people buy homes, especially those in the middle class.
Tourism and Agriculture:
– States will make cool places for tourists to visit and help businesses grow.
– The government will help farmers make more money by investing in new technology.
– They’ll also make sure there’s enough food for everyone and help fishermen make more money.
Interim Budget vs. Full Budget:
Firstly, let’s understand the difference between Interim Budget vs. Full Budget. Unlike a full-fledged budget covering the entire fiscal year, an interim budget bridges the gap until a new government is formed. Think of it as a temporary financial plan focused on routine expenses and ongoing programs. This explains why major policy changes or tax reforms are usually off the table.
Election Code & Fiscal Prudence:
The Election Commission of India’s code of conduct restricts the ruling party from making populist announcements or introducing significant policy shifts during an election year. So, while the interim budget will present a complete picture of India’s finances, don’t expect fireworks.
Vote on Account: Keeping the Engine Running:
A crucial aspect of the interim budget is the “Vote on Account.” This essentially authorizes the government to withdraw funds from the treasury for essential expenses like salaries, debt servicing, and ongoing programs. It ensures the administration can function smoothly until the new government takes charge.
Budget 2024 expectations:
Finance Minister Nirmala Sitharaman herself has downplayed expectations, stating the February budget will be a bare-bones affair to keep the wheels turning until the elections. This means focusing on essential expenditure with minimal policy tinkering. However, we expect the following from the Budget 2024:
– Relaxation in ESOP taxation: Startups have been rewarding employees with ESOPs to nudge them to join startups. It is expected that a lot of startups will go public this year. Accordingly, it would help startups if government makes ESOP taxation rules employee friendly. Further, this move help generate more employment in startups.
– Increase in limit of home loan interest: As of now, the maximum deduction for interest repayment on a loan taken to acquire a property(self-occupied) is Rs 2,00,000. This, however, limits the prospective buyer’s ability to acquire a property. In most cities, the price of property has gone up significantly, and consequently, interest payments on home loans have also increased. So, the limit of Rs 2,00,000 needs to be looked upon.
– Allowing home loan interest under the new tax regime: Under the new tax regime, the interest paid on a home loan on rented-out property is allowed; however, the same is not allowed for the self-occupied property. To encourage home buyers, the inclusion of home loan
Interim Budget 2024: Allocations for Various Ministries and Schemes
The following allocations have been proposed for various ministries under the Interim Budget 2024:
| Ministry | INR (in lakh crore) |
| Ministry of Defence | 6.2 |
| Ministry of Road Transport and Highways | 2.78 |
| Ministry of Railways | 2.55 |
| Ministry of Consumer Affairs, Food & Public Distribution | 2.13 |
| Ministry of Home Affairs | 2.03 |
| Ministry of Rural Development | 1.77 |
| Ministry of Chemicals and Fertilisers | 1.68 |
| Ministry of Communications | 1.37 |
| Ministry of Agriculture and Farmers’ Welfare | 1.27 |
On the other hand, the following allocations have been proposed for major schemes in force under the Interim Budget 2024:
1. Mahatma Gandhi National Rural Employment Guarantee Scheme – Rs.86,000 crore
2. Ayushman Bharat-PMJAY – Rs.7,500 crore
3. Production Linked Incentive Scheme – Rs.6,200 crore
4. Modified Programme for Development of Semiconductors and display manufacturing ecosystem – Rs.6,903 crore
5. Solar Power (Grid) – Rs.8,500 crore
6. National Green Hydrogen Mission – Rs.600 crore
