The Finance Minister's presentation of the Union Budget 2024 has attracted much attention because it sets out the framework for India's economic growth in the next financial year. It is the final comprehensive budget before the general elections, so much is extremely important politically and economically.
To establish sustainable growth during the pandemic, this budget aims to find a balance between saving money and meeting the nation's demographic requirements.
Principal Components of the Union Budget 2024
1. Concentration on Infrastructure Development:
The government's focus on infrastructure as an engine for economic growth is maintained in the Union Budget 2024. A budget of ₹10 lakh crore has been set aside for infrastructure projects, which are expected to increase connectivity, create jobs, and improve the overall quality of life.
The construction of new airports, the modernization of railroads, and the expansion of national highways are important campaigns.
2. Benefit to the Manufacturing Sector:
The budget has included many benefits for the manufacturing sector to support the 'Make in India' drive. This includes tax exemptions, lower import taxes on necessary raw materials, and higher costs for the Production Linked Incentive (PLI) program.
The objective of these initiatives is to establish India as a worldwide center for manufacturing and decrease reliance on imports, particularly in essential sectors such as medicines and electronics.
3. Green Energy and Sustainability:
The Union Budget 2024 includes significant funding for green energy projects, in keeping with India's goal of reaching net-zero greenhouse gas emissions by 2070. With ₹20,000 crore put aside to fund infrastructure development, production, and research, the Green Hydrogen Mission has seen considerable progress.
Discounts for renewable energy projects and electric vehicles (EVs) are also available, supporting the shift to a greener economy.
4. Improving Digital and Technological Infrastructure:
A large portion of the budget has been set aside for digital infrastructure because it acknowledges the contribution of technology to economic growth. This includes developing machine learning (ML) and artificial intelligence (AI) skills, providing incentives for businesses, and extending internet connectivity to rural areas.
The government wants to build a strong digital environment that encourages creativity and increases everyone's access to technology.
5. Agriculture and Rural Development:
The agriculture sector, which is the foundation of the Indian economy, is given a lot of attention in the Union Budget 2024. The Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) project, which offers farmers direct income support, has received more funding in the budget.
Enhancing the infrastructure of the agricultural product supply system, encouraging organic farming, and improving irrigation facilities are other goals. The goal is to double the income of farmers and guarantee national food security.
6. Social Welfare and Health:
Following the COVID-19 epidemic, social welfare and health have taken center stage. To improve healthcare access for less fortunate and more disadvantaged segments of society, the budget has increased funding for the National Health Mission (NHM) and the Ayushman Bharat program.
There are also plans to increase funding for medical research and development and to upgrade the mental health infrastructure.
7. Education and Skill Development:
To boost India's economic progress, the budget highlights the necessity of a trained labor force. The education sector has received a significant increase in funding, with a focus on raising the standard of basic and secondary education.
Additionally, the government has launched new skill development initiatives aimed at providing youth with the expertise required for the manufacturing and technology sectors, as well as other developing businesses.
8. Tax measures and exemptions:
The Union Budget 2024 included many tax measures aimed at reducing the tax code and giving citizens relief. With the revision of the income tax slabs, middle-class taxpayers now enjoy larger exemptions. Incentives for small and medium-sized businesses (SMEs) also include lowered corporation tax rates and simplified registration processes.
Additionally, the government has put out plans to reduce tax avoidance and improve tax system visibility.
Effects on Key Sectors
1. Real Estate:
The increased focus on affordable housing and infrastructure development is expected to be beneficial to the real estate industry. First-time homebuyer tax breaks have been extended by the budget, while incentives for developers to fund affordable housing developments have been added. This is probably going to boost demand in the housing market and give the building sector a lift.
2. Automotive Industry:
The budget's dedication to sustainability and renewable energy will benefit the automotive sector. Innovation in the industry is expected to be encouraged by the incentives for electric vehicles and the promotion of green hydrogen as an alternative fuel.
Also, it will be simpler for automakers to create automobiles at reasonable prices thanks to the removal of import duties on necessary components.
3. Healthcare and Medicines:
Both the healthcare and medicinal products sectors will benefit from the increased funding for health infrastructure and research. The budget's focus on encouraging homegrown manufacturing of drugs and medical supplies will lower dependency on imports and improve the industry's competitiveness internationally.
4. Information Technology and Startups:
The budget's focus on innovation and digital infrastructure is expected to promote growth in both the IT industry and startups. The government's encouragement of AI, ML, and other innovative technologies will open up fresh opportunities for tech entrepreneurs. Increasing broadband connectivity in rural areas will create new opportunities for digital service providers.
5. Agriculture:
Because of the increasing focus on irrigation, organic farming, and supply chain enhancements, the agriculture industry will probably continue to grow. Increasing rural infrastructure and giving farmers direct income support are two of the budget's measures that will raise agricultural income and production.
Challenges and Remarks
Although the Union Budget 2024 received positive reviews for the most part, there are still issues and concerns that need to be discussed.
1) Concerns about the Financial imbalance:
The budget's large expenditure commitments have caused doubts about the fiscal imbalance. With the government's commitment to fiscal responsibility, the increased spending on welfare programs, infrastructure, and subsidies might put pressure on the fiscal deficit raise borrowing costs, and increase inflation.
2) Implementation Challenges:
One of the main issues is how to put the budget's recommendations into practice. To achieve the goals that were set, social welfare programs, tax reforms, and infrastructure projects must be carried out effectively. Implementation delays may reduce the impact and efficacy of the budget.
3) Balancing Growth and Inclusivity:
Although the budget aims to encourage economic growth, questions have been raised over how broad this growth would be. One of the biggest challenges will be making sure that everyone in society benefits from growth, particularly those who are poor and excluded.
To achieve balanced growth, the government must prioritize the fair allocation of opportunities and resources.
Conclusion
The goal of the Union Budget 2024 is to solve the short-term issues confronting the Indian economy while establishing a foundation for future expansion. The budget aims to establish an efficient and sustainable economy by placing extreme value on social welfare, green energy, digital innovation, and infrastructure development.
The budget's success, however, depends on how well it is implemented and how well the government handles the difficulties of inclusion and budgetary management. With India's economy on track to reach $5 trillion, the Union Budget 2024 plays an important role in shaping the country's economic future.
0 Comments