In a nutshell, budget FY24 focuses on seven priorities, or Saptarishi. These are inclusive development, reaching the last mile, agriculture, and investment, unleashing potential, green growth, youth power, and financial sector.
1) Big relief under the new tax regime:
First things first. The finance minister provided the much-awaited relief to taxpayers by raising slabs. If you opt for the new tax regime, the tax slab is as follows:
Rs 0-3 lakhs will attract nil tax.
Rs 3-6 lakhs to be taxed at 5%
Rs 6-9 lakhs to be taxed at 10%
Rs 9-12 lakhs to be taxed at 15%
Rs 12-15 lakhs to be taxed at 20%
Above Rs 15 lakhs to be taxed at 30%
Income limit for rebate of income tax increased from Rs 5 lakh to Rs 7 lakh in the new regime.
The surcharge on those earning above Rs 5 crore is now reduced to 25% from 37%.
The new tax regime will be the default choice, but citizens can still opt for old tax regime.
2) Increasing focus on Capex:
The finance minister increased the capital investment outlay by 33% to Rs 10 lakh crore in FY24, representing 3.3% of GDP.
- Capital outlay for railways stands at Rs 2.4 lakh crore.
- The government will continue to provide 50-year interest free loans to states for one more year.
- 100 transport infrastructure projects identified for end-to-end connectivity for ports, coal, steel, and fertilizer sector.
3) Fiscal consolidation continues:
The finance minister remained on the fiscal consolidation path and pegged the FY24 fiscal deficit at 5.9% of the GDP. Also, she said that the government is likely to meet the budget estimate of 6.4% in FY23.
- She also said that the government will adhere to the fiscal deficit glide to below 4.5% by 2025-26.
- The government is estimated to borrow Rs 15.45 lakh crore via bonds in FY24.
4) Focus on agriculture and farm credit target raised:
The government’s agriculture credit target for FY24 has been set at Rs 20 lakh crore, up from Rs 18.5 lakh crore budgeted estimate for FY23.
- Aatmanirbhar clean plant programme to improve availability of disease-free quality planting material for high value horticultural crops at an outlay of Rs 2200 crore.
- A sub-scheme under PM Matsya Sampada Yojna with an outlay of Rs 6000 crore will be launched to further enable activities of fishermen.
5) The National Hydrogen mission:
The finance minister allocated Rs 19,700 crore to the National Hydrogen Mission. She also highlighted the government’s objective to attain green hydrogen production capacity of 5 metric million tonnes by 2030.
6) Transition to green energy:
The budget for FY24 allocated Rs 35,000 crore for priority capital investment towards energy transition and net zero objectives and energy security.
Interstate transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh to be constructed with an outlay of Rs 20,700 crore.
7) The credit guarantee scheme:
The credit guarantee scheme for MSMEs has been revamped with infusion of Rs 9000 crore. The revamped structure will take effect from April 1.
8) Increased allocation to PM Awas Yojana:
The finance minister increased the outlay for PM Awas Yojana or the mission for ‘housing for all’ by 66% to Rs 79,000 crore in FY24.
9) Subsidies and MNREGA outlay take a beating:
In FY24, the government aims to reduce welfare spends under subsidies and rural jobs guarantee scheme.
- Food subsidies have been budgeted at Rs 1.97 lakh crore, a decline of 31% from the revised estimate for FY23.
- Fertilizer subsidy has been pegged at Rs 1.75 lakh crore, a drop of 22% from the revised estimate for FY23.
- Fuel subsidies have been budgeted at Rs 2257 crore, a fall of 75% from the revised estimate for FY23.
10) New funds for urban infrastructure:
The finance minister proposed to set up an Urban Infra Development Fund with an outlay of Rs 10,000 crore. The fund will be established to mitigate priority sector lending shortfall to the housing sector.
11) Some other key announcements:
- Mahila Samman Bachat Patra: One-time new small savings scheme for a 2-year period with a deposit facility of up to Rs 2 lakh for women.
- Maximum deposit limit for senior citizens savings scheme increased from Rs 15 lakh to Rs 30 lakh.
- Allocation for specific ministries:
- Ministry of Defence: Rs 5.94 lakh crore
- Ministry of Road Transport and Highways: Rs 2.70 lakh crore
- Ministry of Railways: Rs 2.41 lakh crore
- Ministry of Consumer Affairs, Food and Public Distribution: Rs 2.06 lakh crore
- Ministry of Home Affairs: Rs 1.96 lakh crore
- Ministry of Chemicals and Fertilizers: Rs 1.78 lakh crore
- Ministry of Rural Development: Rs 1.60 lakh crore
- Ministry of Agriculture and Farmer’s welfare: Rs 1.25 lakh crore
- Ministry of Communication: Rs 1.23 lakh crore
- Allocation to major schemes:
- Development of Pharmaceutical Industry: Rs 1250 crore
- Jal Jeevan Mission: Rs 70,000 crore
- Eklavya Model Residential Schools: Rs 5943 crores
- Pradhan Mantri Awas Yojna: Rs 79,590 crores
- Scheme for Faster Adoption and Manufacturing of EV’s: Rs 5172 crore
- North East Special Infrastructure Development Scheme: Rs 2491 crore
- Cigarettes to get costlier due to 16% hike in duty.
- Customs duty on parts of TV panels & certain mobile parts to be reduced.
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