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Union Budget 2024-25 Live Updates, Highlights & Announcements

PWOnlyIAS July 23, 2024 04:00 4399 0

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Union Budget 2024-25 is set to be presented by Finance Minister Nirmala Sitharaman on July 23, 2024 (Today). Check out the Union Budget 2024-25 Live updates, expectations & key features.

Union Budget 2024-25 Live Updates, Highlights & Announcements

Union Budget 2024-25: The Union Budget has been presented by Finance Minister Nirmala Sitharaman on July 23, 2024 (Today). It addresses the needs and expectations of a diverse range of stakeholders. As per the budget, the fiscal Deficit Target has been reduced to 4.5% for FY25. The budget includes common taxpayers, investors, women, industries, farmers, and major industry sectors such as FMCG, real estate, and technology. The budget increased the standard deduction and revised tax rates for salaried individuals under the new tax regime.

Stay tuned for more detailed analysis and insights once the Union Budget 2024 is officially presented.

Union Budget 2024-25 Highlights

Finance Minister Sitharaman announced an increase in the standard deduction and updated tax rates for salaried employees under the new regime, in addition to reductions in customs duties on gold, silver, mobile phones, and other items. Here is the overall Union Budget 2024-25 Highlights:

  • Presented by: Finance Minister Nirmala Sitharaman.
  • Significance: First budget of Prime Minister Narendra Modi’s third term.
  • Fiscal Deficit Target: Reduced to 4.5% for FY25.
  • Focus on Nine Priorities: Productivity, job creation, social justice, urban development, energy security, infrastructure, innovation, and reforms

Economic Overview

The Central Government’s FY25 capital expenditure is projected at ₹11.1 lakh crore, consistent with the Interim Budget, with infrastructure spending targeted at 3.4% of GDP. Check out the Economic Overview here:

  • Fiscal Deficit: Targeted at 4.5% for FY25.
  • Capital Expenditure: Allocated ₹11.11 lakh crore, maintaining 3.4% of GDP.
  • Economic Growth: Projected at 6.5-7% for FY25.
  • Tax Revenue: Increased through higher long-term capital gains tax and securities transaction tax.

Income Tax and Capital Gains

In the 2024 Budget, the exemption limit for capital gains has been raised to Rs 1.25 lakh. Additionally, the tax rate on short-term capital gains (STCG) has been increased to 20%, and the rate on long-term capital gains (LTCG) has been raised to 12.5% for specific assets. Here is the overview:

Category Details
Standard Deduction Increased from ₹50,000 to ₹75,000
Family Pension Deduction Raised from ₹15,000 to ₹25,000
Tax Slabs ₹0-3 lakh: NIL
₹3-7 lakh: 5%
₹7-10 lakh: 10%
₹10-12 lakh: 15%
₹12-15 lakh: 20%
Above ₹15 lakh: 30%
Capital Gains Tax STCG: Increased to 20% on certain assets
LTCG: Raised to 12.5%
Angel Tax Abolished
Foreign Companies Tax Rate Reduced from 40% to 35%

Custom Duties

  • Reduction on Precious Metals:
    • Gold and Silver: Reduced to 6%.
    • Platinum: Reduced to 6.4%.

Exemptions: On lithium, copper, cobalt, and specific manufacturing inputs for solar cells and spandex yarn.

Economic and Political Implications

  • Political Focus: Special packages for Andhra Pradesh and Bihar.
    • Bihar: Major infrastructure developments and support for industrial and tourism projects.Development of Vishnupad and Mahabodhi Temple Corridors, Rajgir, and Nalanda as major tourist destinations.
    • Andhra Pradesh: ₹15,000 crore for Amravati’s development.
  • Revenue Generation:
    • Securities Transaction Tax: Increased on F&O transactions.
    • Customs Duty Changes: Aimed to enhance domestic value addition in precious metals.
    • Income Tax Act Review: Comprehensive review to simplify and reduce litigation.

Sector-Specific Initiatives

Custom Duties and Industrial Development:

  • Basic customs duty (BCD) on mobile phones and chargers reduced to 15%.
  • Exemptions for three cancer medicines from customs duty.
  • Reduction of the number of customs duty rates and review of the GST rate structure.
  • Twelve industrial parks sanctioned under the National Industrial Corridor Development Programme.

MSMEs

  • Support Mechanisms: To facilitate credit continuation for stressed MSMEs.
  • Mudra Loan Limit: Increased to ₹20 lakh from ₹10 lakh.
  • Credit Guarantee Scheme: For MSMEs in manufacturing with a guarantee cover of up to ₹100 crore.

Agriculture

  • Allocation of ₹1.52 lakh crore for agriculture and allied sectors.
  • Digital Public Infrastructure: Digital crop survey to cover 6 crore farmers in 400 districts.
  • Natural Farming: Promotion initiatives.
  • Self-Reliance: In pulses and oilseeds.

Employment and Skilling

  • Allocation: ₹2 lakh crore for skilling 4.1 crore youth.
  • Employment Schemes: Five schemes launched with an outlay of ₹2 lakh crore over five years.
  • E-vouchers for 1 lakh students each year.
  • Comprehensive internship scheme for 1 crore youth in 500 top companies over five years.
  • Education Loans: Financial support for higher education loans up to ₹10 lakh.
  • Upgradation of 1,000 Industrial Training Institutes (ITIs) and internships for 1 crore youth in top companies.
  • Three New Schemes:
    • Scheme A: Direct benefit transfer of 1-month salary in 3 installments up to ₹15,000 for first-time employees registered in EPFO.
    • Scheme B: Incentives for job creation in manufacturing, directly benefiting both employee and employer.
    • Scheme C: Reimbursement to employers up to ₹3,000 per month for 2 years for each additional employee.

Infrastructure and Housing

  • Urban Housing: ₹10 lakh crore for 1 crore urban houses.
  • Pradhan Mantri Gram Sadak Yojana: Fourth phase to connect 25,000 habitations with all-weather roads.
  • Investment in Infrastructure: Promoted through viability gap funding and enabling policies.
  • Capital expenditure of ₹11.11 lakh crore.
  • ₹1.5 lakh crore for long-term interest-free loans to state governments for infrastructure investment.

Energy and Environment

  • R&D Collaboration: For small modular nuclear reactors.
  • Policy Development: For pumped hydro storage.
  • Climate Finance Taxonomy: Development to enhance capital availability for climate adaptation and mitigation.
  • Energy:
    • PM Surya Ghar Muft Bijli Yojana for free electricity registrations.
    • Joint venture between NTPC & BHEL for a thermal plant using AUSC technology.

Additional Highlights

  • Land Records Digitization: GIS mapping and IT-based system for urban property records management.
  • Fiscal Deficit: Projected at 4.9% of GDP for FY24-25.
  • Economic Growth: Chief Economic Advisor projects growth at 6.5-7% for FY25.
  • Flood Control Measures: ₹11.5k crore for flood control in Bihar, Assam, Himachal Pradesh, Uttarakhand, and Sikkim.
  • Incentives for Job Market: Government to incentivize 30 lakh youth entering the job market by providing one month PF contribution.
  • Women-Led Development: Over ₹3 lakh crore allocated for schemes benefiting women and girls.
  • Incentives for International Financial Services Centre (IFSC):
    • Tax exemptions for retail schemes and Exchange Traded Funds in IFSC.
    • Various tax exemptions and adjustments for finance companies and funds in IFSC.
    • Revised Model Skill Loan Scheme to help 25,000 students annually.
  • Multiple schemes and measures to support inclusive growth, innovation, energy security, and urban development.

The Union Budget 2024 aims to balance political needs with economic stability, focusing on long-term infrastructure, social development, and fiscal prudence while addressing market and sector-specific challenges.

What is the Union Budget?

The Union budget, also known as the Annual Financial Statement, is the annual budget of the Government of India set by the Ministry of Finance. The body responsible for presenting the budget is the budget division of the Department of Economic Affairs (DEA) in the Finance Ministry. The budget comprises two parts: the Annual Financial Statement and the Demand for Grants. 

The Annual Financial Statement outlines government revenue while Demand for Grants highlights estimated expenditures, and seeks funds from the Consolidated Fund of India.

Union Budget Components: The Union budget comprises two components:

  • Revenue Budget: It consists of the government’s financial statements regarding revenue receipts and revenue expenses for the upcoming fiscal year.
  • Revenue Receipts: It estimates the amount of revenue the government expects to receive from the citizens in the upcoming financial year. 
  • Revenue Expenditure: It is the expenses the government has to bear for the daily functioning of the economy and to provide citizens with essential public services, facilities, and amenities.

Capital Budget: It is made up of the government’s capital receipts and capital expenditures during a financial year.

  • Capital Receipts: Capital receipts refer to the loans raised by the government from various sources to fund long-term developmental needs. 
  • Capital Expenditure: It is the expenses the government has to bear to create long-term assets and provide welfare facilities to the citizens.

Key Features of a Budget

  • Revenue and Expenditure: A full-year budget will provide details on the government’s estimated revenue sources, including taxes, duties, and other income streams, along with planned expenditures spanning across sectors such as education, healthcare, infrastructure, and defense.
  • Policy and Plans: A budget will usually introduce new policies, schemes, and reforms that help in economic growth, social development, and overall progress. 
  • Parliamentary Approval: A budget needs to undergo rigorous examination, discussion, and approval by both houses of Parliament. Before being adopted.

Difference Between Full Budget and Interim Budget

Check out the key differences between a Full Budget and an Interim Budget. Understanding these differences is essential for grasping how the government plans and allocates resources in different economic and political contexts. Union Budget is set to be presented on July 23, 2024, however, Interim Budget was presented on February 1, 2024.

Full Budget Interim Budget
  • A full-length budget is a comprehensive financial plan that covers all aspects of government spending, revenue generation, and policy reforms for an entire fiscal year.
  • An interim budget is a temporary plan that authorizes the government to withdraw money from the Consolidated Fund of India to meet expenditures for the April-July period.
  • The full budget is presented by the government that is going to continue into the next fiscal year.
  • An interim budget is presented by the outgoing government before general elections or a new government is set to come to power.
  • There is scope for major policy changes and new schemes.
  • It does not introduce major policy changes or new schemes.
  • A full union budget is presented annually.
  • An interim budget is presented during an election year.
  • It involves a detailed discussion on schemes, policies, and allocations.
  • An interim budget is devoid of the usual scrutiny and debate in Parliament.
  • A full-length budget provides a long-term vision for economic growth, capital investment, and social welfare initiatives.
  • An interim budget ensures continuity and prevents financial disruption during political transitions.

Union Budget 2024-25 (Interim) Highlights

  • The budget this year was interim, as the government has faced a general election in April-May 2024. The full budget has been presented on 23rd July 2024 by the new government.

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Interim Budget

  • An interim budget is a type of temporary financial plan for the government, which will replace a full budget in case Parliament is short on time or general elections are approaching.
  • The interim budget ensures that the government keeps essential services running and covers expenditures for the first few months of the fiscal year.

Key Highlights of the Union Budget (Interim) 2024

  • Interim Budget: The finance minister presented an interim budget and said that the full-length budget in July will present a detailed roadmap to make India a developed country.
  • Indian Economic Growth: The FM has said that the Indian economy is likely to grow at over 7 percent in the coming years and will become the third-largest economy in the world in the next three years, with an estimated GDP of $5 trillion.
  • Next-generational Reforms: The government will follow the principle of ‘reform, perform, and transform’ to take up next-generation reforms, and build consensus with the states and other stakeholders for effective implementation.
  • Revenue Receipts: The FM has announced that the revenue receipts for the current fiscal at ₹30.03 lakh crore higher than the Budget Estimate.
  • Income Tax Processing Time: The government has been successful in reducing the processing time of tax returns from 93 days in FY14 to 10 days.
  • Tax Collection: The number of tax filers increased by 2.4 times and direct tax collection has trebled since 2014. The tax receipts are projected at ₹26.02 lakh crore.

Union Budget 2024

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Performance of Key Schemes

  • PM Awas Yojana (Gramin): The scheme has achieved the target of close to 3 crore houses and now is aiming for 2 crore more houses in the next five years.
  • Lakhpati Didi Scheme: The promotion of SHGs has helped transform the rural socio-economic landscape, helping nearly one crore of women to become ‘Lakhpati Didi’.
    • Buoyed by the success, the government has decided to enhance the target for ‘Lakhpati Didi’ from 2 crore to 3 crore. 

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Constitutional Provision for Union Budget

Articles

Provisions
Article 112
  • Under Article 112 of the constitution, the President shall cause to lay an annual financial statement of estimated receipts and expenditures before both Houses of Parliament.
Article 113
  • Without prior approval of the President, no demand for grants can be presented in the Lok Sabha. 
Article 114
  • No money shall be withdrawn from the Consolidated Fund of India except authorization by the Parliament.
Article 266
  • All revenue receipts generated by the Government of India shall be credited to the Consolidated Fund of India.
  • Revenue raised through provident fund, Postal insurance, etc, shall be credited to the Public Account of India.
Article 267
  • A Contingency Fund of India has to be set up by the Parliament to meet unexpected or unforeseen expenditures.

Date of Presentation of Union Budget 2024-25 (Interim)

  • As per convention, the Union Budget used to be presented at 5 pm on the last working day of February until 1999, when then finance minister Yashwant Sinha changed the timing to 11 am.
  • This was a colonial tradition and the logic behind this tradition was that it gave British residents the time of 11:30 am. 
  • Until 2016, the budget was presented on the last working day of February. Currently, it is presented on the first working day of February.
    • It was argued that changing the date would allow the government more time to prepare for new policies and changes for the coming financial year.

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History and Evolution of Budget in India

  • Pre-independence: The first-ever budget in India was presented on April 7, 1860, by Scottish economist James Wilson from the East India Company.
    • It was in this budget that ‘income tax’ was introduced.
  • Post-independence: Independent India’s first budget was presented on November 26, 1947, by R K Shanmugam Chetty, the finance minister at the time.
    • The first budget was supposed to last for seven and a half months, following which the next budget was to be implemented from April 1, 1948. 
    • John Mathai, who became the finance minister after the resignation of Mr Chetty, presented the Union Budgets of 1949-50 and 1950-51. This was the first time a budget was prepared for a United India, including all princely states.
    • Until 2017, the Railway Budget of the country was separately introduced in the parliament. Currently, it has been merged with the Union Budget.

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Process of Union Budget

  • Announcement of Date: The government will announce the budget presentation day beforehand. It will also announce whether it will be a full-length budget or interim budget.
  • The Halwa Ceremony: The Halwa ceremony marks the beginning of budget document printing. It usually takes place five days before the presentation of the budget.
  • Printing the Budget Document: The officials and staff of the Finance Ministry, involved in budget printing, will have to follow a lock-in period.
  • During the lock-in period, they are not allowed to have contact with the outside world.
  • Meeting the President: The finance minister has to get the President’s approval before presenting the budget in the Parliament.
  • The Cabinet Meeting: A Union Cabinet meeting is held at 10a.m on the budget day. After getting the approval from the cabinet, the Finance Minister presents the Union Budget in the Parliament of India.
  • The Finance Minister’s Speech: The Union Finance Minister will give a speech in the Lok Sabha to provide the direction in which the government wishes to move in the coming financial year, the growth targets, and the major thrust areas. 
    • The speech also contains a financial statement that gives estimated receipts and expenditures of the central government for the forthcoming fiscal year and a review of the current fiscal year.
  • Discussion on the Budget: After the speech by the finance minister, a general discussion is held to discuss the budget document.
  • Departmental Scrutiny: After general discussions, the departmental standing committee of the Parliament examines the demands for grants.

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  • Voting on Demand for Grants: Every member of the Lok Sabha has to vote on each demand for grants. Voting is allowed on only demand for grants, and no voting is allowed on the expenditure charged on the consolidated fund of India. 
  • Passing an Appropriation Bill: Since no money can be withdrawn from the Consolidated Fund of India without an appropriation made by law, a bill in this regard is introduced to provide for the appropriation of the Consolidated Fund of India.
  • Passing of Finance Bill: Finally, a Finance Bill is introduced in the house to give effect to the financial proposals of the Government of India for the following year.

Events Associated With Union Budget

Halwa Ceremony

  • The Halwa ceremony is a traditional pre-budget ritual followed by the Finance Ministry when officials involved in budget preparation will be ‘locked in’ to maintain confidentiality until the document is tabled in the Lok Sabha.
  • The ceremony is traditionally held five days before the union budget is presented in the Parliament. It involves the preparation and serving of “halwa”, a traditional Indian sweet, to officials and staff involved in the budget’s preparation.
  • Apart from marking the beginning of the “lock-in” period preceding the budget presentation, it also serves as a gesture of appreciation for the individuals involved.

Lock-in Period

  • After the Halwa ceremony, the lock-in period starts for the finance ministry staff in the Budget Press located in the ministry’s headquarters in the North Block. 
  • The lock-in period is followed to maintain the secrecy of the Budget. Since the budget has been digitized, the lock-in period has been reduced to about five days from the earlier practice of up to two weeks.

 

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Union Budget Facts: Historical Historical Insights

  • The budget of 1973-74 is dubbed as the “Black Budget” as the nation had a deficit of Rs 550cr.
  • The budget of 1997-98 was described as the “Dream Budget” because it provided the road map for economic reforms in India including the dropping of income tax rates, removal of the surcharge on corporate taxes, and reduced corporate tax rates.
  • The budget of 2000-2001 is touted as the ‘millennium budget’ for transforming the Indian economy into a tech-hub. 
  • The highest number of budgets have been presented by Morarji Desai. He presented the budget ten times under various governments.
  • Only Jawaharlal Nehru, Indira Gandhi and Rajiv Gandhi have presented the Union budget as Prime Ministers.
  • Dr Manmohan Singh gave the longest budget speech (in terms of number of words) in 1991 during his tenure as the finance minister.
  • Nirmala Sitharaman gave the longest budget speech, in terms of time, for 2.42 hours while presenting the Union Budget in 2020.
  • Nirmala Sitharaman is the only woman full-time Finance Minister of India. Indira Gandhi was the Prime Minister, who held the Finance Minister portfolio.
  • Briefcases have been used to carry budget documents since the presentations of the very first budget in 1860.  In 2019, Nirmala Sitharaman replaced the briefcase with a ‘bahi khata’.
  • The budget of 2021-22 was called a ‘paperless budget’ as the finance minister presented the Budget on a made-in-India tablet.

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The Railway Budget

  • Railway Budget was the annual financial statement of the Indian railways presented every year in the Parliament by the Minister of Railways.
  • The Railway budget was introduced for the first time itech hub5 based on the recommendations of the Acworth Committee.
  • The first Railway Budget for independent India was presented by John Mathai on 20th November 1947. The highest ,number of railway budget was presented by Jagjivan Ram (7 times).
  • Mamata Banerjee became the only female minister to present the railway budget during her tenure as Railway Minister in 2000.
  • In 2016, the Indian government approved merger of the Rail and General budgets from 2017, ending a 92-year-old practice of a separate budget. 
  • The last Railway Budget was presented by Suresh Prabhu on 25 February 2016. It was merged based on the recommendations of the Bibek Debroy committee.
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Union Budget 2024-25 FAQs

The full Union Budget 2024-25 will be presented on July 23, 2024.

The Union Budget 2024 will be presented by the Finance Minister of India, Nirmala Sitharaman.

An interim budget is a type of temporary financial plan for the government, which will replace a full budget in case Parliament is short on time or general elections are approaching.

While the exact theme of the Union Budget 2024 will be revealed on the day of its presentation, it is expected to focus on economic recovery post-pandemic, infrastructure development, and digital transformation.

The first Union Budget of independent India was presented by R. K. Shanmukham Chetty on November 26, 1947. This budget was primarily an interim budget as it was presented just a few months after India gained independence.

Former Prime Minister Indira Gandhi was the first woman who presented the Union Budget.

The Union Budget is presented by the Finance Minister of India. It is presented in the Lok Sabha (House of the People).

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