Overview of Modi Government’s Interim Budget, 2024

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Overview of Modi Government’s Interim Budget, 2024

Indian economy stands at a whopping $3.7 trillion, making it world’s fifth-largest economy, so it is quintessential for the government to carefully assess a masterplan to utilise its funds on infrastructure in the best way possible. This is when an Interim Budget comes into play; it is a detailed financial plan which serves as a roadmap for the government to allocate its funds on infrastructure. At present, the Modi government's spending on infrastructure has grown at a whopping 30% CAGR in the last 4 years.

The Interim Budget, 2024 marks Finance Minister Nirmala Sitharaman’s 6th Budget and is aimed towards ‘Vikshit Bharat’ - a developed India by 2047.

Continue scrolling to know the highlights from the Interim Budget, 2024!

Railways

• In order to improve logistics efficiency, reducing costs and improving passenger trains safety, three major railway corridors will be implemented, namely:
  • Energy, mineral & cement corridor 
  • High-traffic density corridor
  • Port-connectivity corridor
• 40,000 railroad trucks will be converted as per Vande Bharat standards.

Strategy for ‘Amrit Kaal’ – Modi government’s strategy for the next 25 years 

• Maternal and Child healthcare - With the intention of promoting maternal and child healthcare, various schemes will be brought under one complete programme. Enhancement of Anganwadi facilities, under Poshan 2.0 and Saksham Anganwadi, will be accelerated for improved nutrition delivery, early childhood care and growth. In order to manage immunization and intensify efforts of Mission Indradhanush, U-Win – a newly designed platform will be rolled out. 
• Ayushmaan Bharat – Medical benefits will be provided to all Aasha, Anganwaadi workers, and helpers. 
• Agri and Food Processing - So far, PM Sampada Yojana has benefited approximately 38 lakh farmers. Modi government will make all the efforts necessary, in order to boost incomes of farmers. The PM Formalisation of Micro Food Processing Enterprises has assisted 2.4 lakh SHGs till date.
• Rooftop solarization and free electricity – As an effort to promote green energy, one crore houses will be enabled to obtain upto 300 units of free electricity per month through  Pradhanmantri Suryodaya Yojana.
• Housing for middle class - A scheme will be introduced to help deserving sections of middle class living in rented houses or slums or chawls or unauthorized colonies to acquire or construct their own houses.

Technological Changes

• In order to encourage the private sector to boost up Research and Innovation in the sunrise domains, a sum of Rs. 1 lakh crore will be provided with 50 year interest free loans for providing long term financing or refinancing with long tenors and low or nil interest rates.
• A new scheme will be rolled out in order develop deep tech for defense purposes.

Renewable Energy

• Potential coal gassification and liquifaction capacity of 100 metric tons is planned to be set up by 2030. 
• The government has granted approval of Rs 8,500 crore as financial assistance for promoting coal and lignite gasification projects
• Viability gap funding will be provided for harnessing 1 GW offshore wind energy. 
• The government has announced mandatory blending of compressed biogas in compressed natural gas for transport and piped natural gas for domestic purposes. 

E-vehicle ecosystem, and bio-manufacturing

• Through greater manufacturing and charging infrastructure, the government envisions expansion of the e-vehicle sector.
• A new scheme for bio-manufacturing will be rolled out to encourage bio plastics and bio-agri inputs that are biodegradable. This will transform today’s consumption paradigm in manufacturing to one that promotes clean energy.

Domestic tourism

• Since the demand of tourism is increasing day by day, the government has decided to provide Long-term free loans to the states, so they can develop and promote tourism centres.

Improving taxpayer services

• There are a lot of petty or disputed direct tax demands which have been a matter of concern to taxpayers. To enhance taxpayer services, the Finance Minister has proposed to withdraw such outstanding direct tax demands upto Rs. 25,000 pertaining to years upto 2009-10 and Rs. 10,000 for the period from 2010 to 2015. This will benefit 1 crore taxpayers.

Tax proposals

• The Finance Minister has not suggested any changes relating to taxation and has proposed to maintain the same tax rates for direct and indirect taxes, including import duties. However, certain tax exemptions for startups and IFSC units are expiring on March 31, 2023. The Finance Minister has proposed to extend these till March 31, 2025 to ensure continuity in taxation.
• The GST has alleviated the compliance burden on trade and industry by consolidating the tax system.
• Most of the industry leaders have given a thumbs up to the transition to GST.

Tax provisions

• As per the new tax scheme, there is no liability for those earning upto Rs. 7 lakh per annum. The threshold for presumptive taxation for retail businesses has been increased from Rs. 2 crore to Rs. 3 crore.
• For existing companies, corporate tax rate has been reduced from 30% to 22% and for certain new manufacturing industries, it has been reduced to 15%.
• Filing tax returns has become a simpler process. The average processing duration for returns has been reduced from 93 days in 2013-14 to a mere 10 days, resulting in quicker refunds.

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