Discover
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What are the key highlights of the Union Budget 2024-25?
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What criticisms have been raised against the Union Budget 2024-25?
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How much has the standard deduction for salaried employees increased in the new tax regime?
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What is the new deduction limit for family pensions in the Union Budget 2024-25?
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Which sector has been allocated the highest budget?
On July 23, 2024, Finance Minister Nirmala Sitharaman presented her seventh consecutive budget for the financial year 2024-25. She has now broken the record of former Prime Minister Moraji Desai. This is the first Budget by the BJP-led NDA government since it was re-elected in June. The article highlights the budget’s key features, including significant tax relief measures, an updated tax regime structure, and other notable changes introduced by the government.
Summary of The Union Budget (2024-25)
The Union Budget 2024-25 focuses on nine key areas such as boosting agriculture productivity and resilience, employment and skills development, inclusive human resource development, social justice, manufacturing and service urban development, energy security, infrastructure, innovation, research and development and implementing next-generation reforms.
It also emphasises on employment, skilling, and support for MSMEs and the middle class. Notable allocations include 2 lakh crore for a package of five schemes that target youth employment & skill development and 1.52 lakh crore is allotted for agriculture and allied sectors.
Tax relief in the budget aims to benefit salaried individuals and pensioners. The standard deduction for salaried employees in the new tax regime has been increased from Rs 50,000 to 75,000, while the deduction on family pensions has been raised from Rs 15,000 to 25,000.
Furthermore, the Union Budget also proposes significant changes to corporate and personal tax structures, such as reducing the corporate tax on foreign companies from 40% to 35% abolishing the angel tax for all investors, and enhancing the capital gain exemption limit to ₹1.25 lakh per year.
Also Read: What Happens If You Don’t File An ITR | Income Tax Return
Tax Relief Measures In The Union Budget 2024-25:
New Tax Regime Structure
Sector Wise Allocation of The Union Budget 2024-25
What are the major state-specific announcements included in the Union Budget?
In the recent 2024-25 Union Budget, financial provisions and significant support have been allocated to states such as Bihar and Andhra Pradesh.
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Bihar
The Union Budget has announced several major infrastructure projects to boost the state’s development such as the creation of an industrial node in Gaya and significant road projects such as the Patna-Purnea Expressway and the Buxar-Bhagalpur Expressway, with additional connections to Bodhgaya, Rajgir, Vaishali, and Darbhanga.
A major highlight is the construction of a new two-lane bridge over the Ganga at Buxar, with an impressive budget of INR 260 billion (US$3.1 billion). There will also be the establishment of a 2400 MW power plant at Pirpainti, backed by INR 214 billion (US$2.5 billion), alongside the development of new airports, medical colleges, and sports facilities.
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Andhra Pradesh
The central government will be providing a special financial package of Rs 150 billion (US$ 1.79 billion) through multilateral agencies to beautify the city of Amaravati. The decision aligns with the Andhra Pradesh Reorganisation Act’s goals.
Furthermore, the budget also includes provisions for financing the Polavaram Irrigation Project and supporting industrial growth with grants for infrastructure development in the Kopparthy node on the Vishakhapatnam-Chennai Corridor and the Orvakal node on the Hyderabad-Bengaluru Corridor. The budget also envisions the establishment of over 100 branches of India Post Payment Banks to expand banking services in the northeastern states.
Why is the budget being criticised?
Among the critics of the current budget is P. Chidambaram. He argues that the budget lacks originality and fails to address critical issues such as stagnant wages, emphasising the need for a uniform minimum wage. P. Chidambaram has also condemned the government’s neglect of the sector, particularly criticising the focus on NEET and the reduced spending on education. Additionally, he has criticised the budget’s disregard for the Agnipath Scheme and the insufficient response to farmers’ demands for a legal guarantee on Minimum Support Prices (MSP).
Other leaders such as Rahul Gandhi called it a “Kursi Bachao” budget, while Shashi Tharoor called it an ‘Underwhelming,’ budget because it did not address any key issues. Moreover, Telangana Irrigation and Civil Supplies Minister, N. Uttam Kumar Reddy has also criticised the Finance Minister for ignoring Telangana in the Union Budget 2024. According to him, the Union Budget was highly disappointing for Telangana as it deprived the state of its share in resources and welfare schemes.
The Bottom Line
The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, introduces significant tax relief measures, focuses on boosting agriculture, employment, and infrastructure development, and includes substantial allocations for youth skill development and state-specific projects in Bihar and Andhra Pradesh. However, critics argue it lacks originality and fails to address key issues like stagnant wages and education funding.
Will these measures be enough to stimulate economic growth and meet the diverse needs of the Indian populace?
Frequently Asked Questions
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How much is the total budget of India in 2024?
Effective capital expenditure is estimated at INR 15.01 trillion, an 18.2 increase over the previous year. India’s total expenditure for 2024-25 is estimated at INR 48.2 trillion.
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What is the defence budget of India in 2024?
FM Nirmala Sitharaman retains budget allocation at Rs 6.21 lakh crore.
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Which things have become cheaper after the budget?
Things that have become cheaper after the budget are:
- Cancer Medicines
- Mobile Phones & Chargers
- Precious metals like Gold, Silver and platinum
- Minerals
- Solar cells and panel
- Leather & Textile
- Steel & Copper
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Which things have become costlier after the budget?
Things that have become costlier after the budget are:
- Telecom goods
- Plastic goods
- Ammonium Nitrate
- PVC flex banners
- Printed Circuit Board Assembly (PCBA)
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What is Angel Tax?
Angel tax refers to the income tax that the government imposes on funding raised by unlisted companies, or startups if their valuation exceeds the company’s fair market value. It falls under Section 56 (II) (viib) of the Income Tax Act.
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Who passed the first budget?
James Wilson, the British economist, presented the first-ever budget in India in 1860.
