Indian Budget 2024-25

By Palak Srivastava

It is in this Budget of the Government of India for 2024–25, presented by Finance Minister Nirmala Sitharaman, that several goals—ranging from defence and education to taxation reforms and capital gains—are laid down. An overview is presented below:

Defense

The Ministry of Defense is one of the sectors that has enjoyed prime attention with an outlay of ₹5.94 lakh crore. This represents a considerable jump over the previous fiscal. Modernization programs of the armed forces, defence infrastructure development programs, and the industry-friendly policies of the 'Atmanirbhar Bharat' package for promoting indigenous manufacturing are funded. In following this policy of indigenization, there is an increase in expenditure on domestic defense production to further the aim of breaking dependency on imports.

 Education and Skilling

There is a strong allocation for education and skilling, with ₹1.48 lakh crore, augmented spending for strengthening of higher education, vocational training, and research and development. Special attention has been given to the infusion of technology in education and skilling through various initiatives aimed at equipping the youth with skills relevant to the future job market. It also proposes several new educational institutions in the area, largely in unserved areas, as a part of the government's all-inclusive strategy for growth..

Tax Reforms

One of the most discussed aspects of the budget is the restructuring of the tax slabs under the new tax regime. The revised tax rates are as follows:

- 0-3 lakh rupees:Nil

- 3-7 lakh rupees: 5%

- 7-10 lakh rupees:10%

- 10-12 lakh rupees: 15%

- 12-15 lakh rupees:20%

- Above 15 lakh rupees: 30%

These changes are aimed at providing relief to the middle class, with an increased standard deduction of ₹75,000 for salaried employees. However, there were no significant changes in the old tax regime, which has left some taxpayers disappointed.

Capital Gains

There are sweeping changes to capital gains taxation in the budget. For long-term capital gains in all financial and non-financial assets, it has increased to 12.5% from the earlier 10%. Bringing short-term capital gains to a 20% tax. Simplification of tax structure and rationalization across assets would be the reason behind these changes. Further, the exemption in capital gains has been enhanced to ₹1.25 lakh annually, which is bound to provide some sort of relief to small investors.

 Finance and Investment

The Government has not only continued its commitment to capital expenditure—the largest in the history of the country—but has also allocated ₹11.1 lakh crore to the same, working out to 3.4 per cent of GDP. It is expected that this massive investment will spur infrastructure growth all over the country, leading to creation of jobs, etc., and will therefore promote economic growth. In the interest of financial inclusion, it has, inter alia, given priority to more support for Mudra loans and loans for higher education

 Shares and Securities

For the securities market, the budget has introduced a hike in the Securities Transaction Tax (STT) on futures and options (F&O) trading, which will now be doubled. This move is seen as a step to curb speculative trading while generating additional revenue for the government. Additionally, the abolition of Angel Tax for startups is a welcome move aimed at fostering innovation and entrepreneurship in the country.

Social and Rural Development

A considerable allocation of ₹2.66 lakh crore is earmarked for rural development initiatives, including enhancing agricultural productivity and supporting allied sectors. In addition, ₹3 lakh crore has been allocated for women-specific schemes, emphasizing increasing women's participation in the workforce.

Other Highlights

Customs Duty Adjustments: A number of changes in customs duties have been made to further the goal of 'Make in India, including a reduction in duty on parts or components of mobile phones and on precious metals like gold and silver. On the other hand, some custom duty hikes have been made in pre-determined telecom equipment so as to protect domestic industries.

• Work and Skilling: In order to help employees in employment and to increase working hours spent on jobs by workers, the budget has introduced various schemes that involve direct benefit transfers to new employees and incentives for employers who hire more workers.

Conclusion

This budget is an excellent mix of continuity and change. It focuses on capital expenditure, defense, education, tax reforms—new measures for boosting economy—are accommodated within the 2024-25 budget. It is also an expression of the government's commitment to inclusive growth, better infrastructure, and financial stability but partially disappoints with regard to tax relief for the common man.