Union Budget 2024-25 I Key tax highlights

Interim Budget 2024 has been a comprehensive mix of reflection and forward-looking ambition. It included going down the memory lane to measure the progress made over the last ten years – be it through structural reforms undertaken towards economic and social development, infrastructure upgradation or fast-tracked digitisation – as well as pinning down the lessons learnt to design the next five-year outlook.

The government outlined its all-round, all-pervasive and all-inclusive approach to make India a ‘Viksit Bharat’ by 2047. This means empowering people with the requisite capabilities and opportunities across social castes, and enabling their active inclusion in the national value chain. A specific focus on four major castes has been voiced out, which includes the ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer). A slew of programs focused on providing educational and financial assistance to these groups is set to expand, with an added focus on entrepreneurial support and supply-chain integration.

For industries, the focus on technology and green-production is as strong as ever. Initiatives include, among others, establishing a corpus of INR 1 lakh crore with fifty-year interest free loans for tech innovation financing, furthering deep tech in defence, strengthening the EV charging ecosystem, up-taking bio-manufacturing, and powering rooftop solarization in pursuit of household savings for the “common man”. The government aims to transform the consumption paradigm in manufacturing and make it more green-oriented.

Capital expenditure has increased by 11.1% to constitute 3.4% of the GDP, as infrastructure upgradation in railways, port connectivity and expansion in aviation continues to build on logistical efficiency.

The government has further broadened its definition of GDP to account for something more than just economic development – i.e., ’Governance, Development and Performance’.

In terms of taxation, while no changes were made to slab rates, mechanisms related to procedural efficiency and transparency continue to take the limelight.

The revised fiscal deficit for FY24 is estimated at 5.8% of the GDP and is pegged at 5.1% for FY25. The government continues on its path of fiscal consolidation, with a target to bring the deficit below 4.5% by FY26.

On the whole, being an interim budget, there was more focus on setting the broader vision than detailing upon the specific schemes and allocations for the new term. Nevertheless, the proposals give a fair idea that a whole-of-society approach that draws upon collective and all-inclusive policies will be critical to address demographic challenges, utilise untapped potential and build India’s self-reliance in a range of new-age sectors. 

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Union Budget 2024-25 I Key tax highlights
Union Budget 2024-25 I Key tax highlights