Interim Budget 2024: Highlights and Focus on Key Sectors

The Budget Day in India is eagerly awaited by the general public and small and big–scale businesses in order to understand the schemes and initiatives that might bring positive impact to them. This year, due to the impending elections, Budget 2024 has been replaced by an Interim Budget which was announced on 1^st February 2024. Despite this change, the esteemed Finance Minister, Smt. Nirmala Sitharaman has successfully presented schemes and benefits, much to the contentment of the general public.

In this Blog of interim Budget 2024 will clearly state the features, focus sectors, and highlights of the Interim Budget 2024 that will shape the fiscal year ahead. It will also decode the intricacies of the 2024 Budget and comprehend its implications for multiple sectors.

How Interim Budget is different from the Regular Budget?

The Interim Budget is the financial statement presented by the Indian Government in specific situations, like time constraints or impending general elections. Usually, it acts as a temporary measure until a full Budget can be presented especially when upcoming elections might lead to the formation of a new government.

The Regular Budget also called a full or final Budget is the detailed financial plan presented by the Government of India. The Budget states that the Government’s revenue and expenditure proposals, policy initiatives, and specific allocations across sectors. It spans a fiscal year, usually running from April 1 to March 31, functioning as a guiding framework for the government’s financial activities and priorities throughout that timeframe.

Highlights of Interim Budget 2024

1. Taxation

• The Finance Minister declared that there would be no alterations to the tax rates for direct taxes in the fiscal year 2024-25.

Earning	Tax Rate (Expected)
Up to the Rs. 3.5 lakh	Nil
Rs. 3.5 lakhs to 6.5 Lakhs	5%
Rs. 7 lakhs to 9.5 lakh	10%
Rs. 9.5 lakh to 13 lakh	15%
Rs. 13 lakhs to Rs. 16 lakhs	20%
Rs. 16 lakhs and above	30%

• Existing domestic companies will maintain a corporate tax rate of 22%.
• Newly established manufacturing companies will enjoy a reduced corporate tax rate of 15%.
• Direct tax collections have more than tripled over the past ten years.
• The number of return filers has increased by 2.4 times.
• The average processing time for tax returns has decreased from 93 days in 2013-14 to 10 days in 2023-24.
• The Finance Minister proposes an extension in the time limit for certain tax benefits for start-ups and investments by sovereign wealth funds/pension funds.
• Tax exemption for specific IFSC units, initially set to expire on March 31, 2024, has been extended until March 31, 2025.

2. Infrastructure Development

• Increased Infrastructure Spending
• Over the last four years, expenditure on infrastructure development, including roads and bridges, has tripled, contributing to economic growth and job creation.
• The Finance Minister aims to further boost spending by 11.1% in the upcoming year, allocating a total of 11.11 lakh crore, which accounts for 3.4% of the country’s total economic output.
• Railways Enhancement
• Railway improvements involve transforming 40,000 regular train bogies into safer and more comfortable ones known as Vande Bharat.
• Plans for three new railway corridors connecting ports, energy-mineral-cement areas, and busy routes are underway to enhance train travel and stimulate economic growth.
• Electricity Reforms
• The budget introduces a rooftop solarisation scheme, allowing 10 million households to receive up to 300 units of free electricity monthly, aligning with the government’s commitment to renewable energy and cost efficiency.
• Various measures have been outlined to achieve the ‘net zero’ commitment by 2070, including viability gap funding for offshore wind energy, coal gasification capacity expansion, and mandatory blending of compressed biogas.

3. Green Energy

• Funding support will be provided to bridge the viability gap, with an initial focus on tapping into offshore wind energy potential, aiming to achieve a capacity of one gigawatt.
• Plans are in motion to establish a coal gasification and liquefaction capacity of 100 million tonnes by 2030. This initiative seeks to reduce dependence on imports of natural gas, methanol, and ammonia.
• A phased approach will be introduced to make it mandatory to blend compressed biogas (CBG) with compressed natural gas (CNG) for transportation and piped natural gas (PNG) for domestic use.
• Financial assistance will be extended to procure biomass aggregation machinery, facilitating the collection of biomass in line with the government’s sustainability goals.

4. Lakhpati Didi Project

The Finance Minister revealed the effectiveness of the ‘Lakhpati Didi’ initiative in rural regions. With the active involvement of 83 lakh self-help groups (SHGs) comprising nine crore women, the initiative is significantly contributing to reshaping the socio-economic scenario by fostering empowerment and self-reliance. The program’s triumph has resulted in nearly one crore women attaining the designation of ‘Lakhpati Didi.’ Encouraged by this achievement, the government has opted to elevate the target from 2 crore to 3 crore women.

5. Healthcare

• Actively encouraging vaccination for girls aged 9-14 against cervical cancer.
• Upgrading Anganwadi centers through the Saksham Anganwadi and Poshan 2.0 scheme.
• Focus on enhancing nutrition delivery and improving early childhood care and development.
• Introduction of the U-WIN platform to bolster immunization efforts under Mission Indradhanush.
• Inclusion of all ASHA, Anganwadi workers, and helpers in the health coverage of the Ayushman Bharat scheme.
• Establishment of a committee to study challenges and opportunities in expanding the setup of medical colleges in India.

6. Housing

• The Pradhan Mantri Awas Yojana (Grameen) is on the verge of reaching the 3 crore houses target, and there is an additional aim to construct 2 crore houses in the next 5 years.
• A forthcoming initiative is set to be introduced to promote home buying or construction specifically targeting the middle-class housing segment.

7. Promoting Investments and Technological Progress

• The government’s emphasis on Foreign Direct Investment (FDI) and discussions on bilateral investment treaties seeks to draw and retain foreign investments, promoting economic growth and development.
• A fund of ₹1 lakh crore was earmarked for a fifty-year interest-free loan, with the objective of promoting research and innovation in emerging technologies. This endeavor positions India as a key global technology leader.

8. Empowering MSMEs and Supporting Agriculture

• The budget underscored the significance of global competitiveness through training for MSMEs. The government’s dedication to enhancing skills includes the creation of new Industrial Training Institutes (ITIs).
• Initiatives were outlined to enhance farmers’ income and facilitate value addition in the agricultural domain. The objective is to stimulate both private and public investments in post-harvest activities

9. Focus on Inclusive Growth

Finance Minister Sitharaman highlighted the government’s dedication to advancing four major groups – women, youth, the impoverished, and farmers. Various schemes and initiatives were detailed to uplift these demographics, contributing to holistic economic development.

10. Aviation

• The count of airports has now reached 149, marking a doubling in number.
• The extensive implementation of air connectivity to tier-two and tier-three cities through the UDAN 19 scheme has been notable, with 517 new routes catering to 1.3 crore passengers.
•  The proactive steps are being taken by the Indian carriers by placing orders for more than 1000 new aircraft.
• The ongoing rapid expansion of existing airports and the establishment of new airports will persist.

11. Fiscal Deficit and Borrowings

• The fiscal deficit target for FY25 has been established at 5.1 percent of the GDP. Additionally, the fiscal deficit target for FY24 has been adjusted downward to 5.8 percent.
• The government’s gross and net borrowings for 2024-25, amounting to ₹14.13 lakh crore and ₹11.75 lakh crore, respectively, are lower compared to the figures for 2023-24.

Additional Highlights of Interim Budget 2024

• Over the past decade, the government has lifted 25 crore people out of poverty, extending free food support to 80 crore individuals through various schemes.
• Direct Benefit Transfers totaling ₹34 lakh crore, facilitated by the PM Jan Dhan Yojana, have resulted in savings amounting to ₹2.7 lakh crore.
• The PM Vishwakarma Yojana provides assistance to artisans, with credit aid benefiting 78 lakh street vendors under the PM-SVANidhi scheme.
• The Skill India Mission successfully trained over 1.4 crore youth, and the PM Mudra Yojana sanctioned 43 crore loans.
• The India-Middle East-Europe Economic Corridor’s contribution to global trade was emphasized, and there is a focus on developing the East for India’s growth.
• Inflation is within the target band of 2%-6%, and economic growth has risen, with the average real income of people increasing by 50%.
• In rural areas the government is planning to subsidize the construction of 30 million affordable houses.
• ‘Matsya Sampada,’ a new department will be established soon to address the needs of fishermen.