Union Budget 2024 LIVE: FM Nirmala Sitharaman Speech, Income Tax Slab Relief with Key Announcements and Updates

Nilesh Shah, MD of Kotak AMC, has praised the budget for achieving the "trinity of impossible". The three key aspects of the budget that he highlighted are:

- Fiscal Prudence: The budget has achieved a fiscal prudence of 4.9% for FY 25, which will pave the way for a rating upgrade.
- Investment: The budget has allocated 3.4% of GDP for infrastructure investment, which is elevated but not crowding out other sectors.
- Growth Momentum: The budget has provided support for employment generation, which will boost growth.

Shah believes that these three aspects will have a positive impact on the economy and will help in achieving sustainable growth

- Simplification of FDI Rules: Finance Minister Nirmala Sitharaman announced that rules for Foreign Direct Investment (FDI) will be simplified to attract more funds into the country.
- Five-Year Vision Document: The government will bring out a five-year vision document to meet the financial needs of the economy.
- Easing of Norms: The easing of norms for FDI assumes significance as FDI inflows into India shrank 3.49% on-year in FY24 to $44.42 billion from $46.03 billion in FY23.
- Promotion of Indian Rupee: The government will also promote the use of the Indian Rupee as a currency for overseas investment.
- Liberalization of FDI: The government has been looking at further liberalizing FDI, with internal discussions ongoing, and has already allowed 100% FDI in the space sector earlier this year.

In her 2024 Budget speech, Finance Minister Nirmala Sitharaman announced a simplified tax regime for corporate industries, including a reduced corporate tax rate of 35% for foreign companies, down from 40%. She also proposed revised tax structures for charities and cruise operations, as well as rationalized capital gains. The minister highlighted the success of the simplified tax regime, citing that 58% of corporate tax revenue came from it in 2022-23, and over two-thirds of taxpayers used the new personal tax regime last year.

Employment and Skilling

- 5 schemes to empower 4.1 crore youth over 5 years with a ₹2 lakh crore allocation
- Comprehensive internship program for 1 crore youth in top companies
- Employment-linked incentives, including 1-month wage support for first-time employees
- Women-specific skilling initiatives to boost workforce participation

MSME and Manufacturing Support

- Special focus on MSMEs and the manufacturing sector with credit guarantee scheme and term loans
- Technology support package for MSMEs
- SIDBI to open 24 new branches for MSME clusters

Financial Initiatives

- Mudra loan limit increased to ₹20 lakh for previous borrowers
- Financial support for higher education loans up to ₹10 lakhs
- Integrated tech system for Insolvency and Bankruptcy Code (IBC)

Agriculture and Rural Development

- ₹2.66 lakh crore allocated for rural development
- Agricultural research transformation for productivity and climate-resilient crop varieties
- Initiative to introduce 1 crore farmers to natural farming

Infrastructure and Regional Development

- Rental housing in PPP mode for industrial workers
- Special financial support of ₹15,000 crore for Andhra Pradesh
- New airports, medical facilities, and sports infrastructure for Bihar

Economic Outlook

- Inflation moving towards 4% target
- India's economic growth described as a "shining exception"
- Focus on job creation and boosting consumption

Nine Priority Areas

- Agriculture, Employment, Inclusive Development, Manufacturing and Services, Urban Development, Energy, Infrastructure, Innovation and R&D, and Next Generation Reforms

Women-Led Development

- Over ₹3 lakh crore allocated for schemes benefiting women and girls

Social Welfare

- Extension of PMGKAY for five years, benefiting over 80 crore people

Digital and Technological Advancements

- Development of Digital Public Infrastructure (DPI) applications for credit, e-commerce, law and justice, and corporate governance

- Reduced Customs Duty: Finance Minister Nirmala Sitharaman announced a significant reduction in customs duty on various items, including cancer medicines and mobile phones ¹.
- Cheaper Goods: Imported gold, silver, leather goods, and seafood will also get cheaper ¹.
- Mobile Phone Manufacturing: The reduction of customs duty on mobile phones and related parts will help smartphone makers reduce the prices of their made-in-India devices ².
- Cancer Medicines: Three specific medicines for cancer patients will be fully exempt from customs duty, making these essential drugs more accessible ².
- Tax Regime: Sitharaman introduced significant changes to the New Tax Regime, including a reduced tax rate compared to the Old Regime

Union Budget 2024-25: Mobile Phones to get cheaper, as FM Nirmala Sitharaman reduces basic customs duty to 15%

Read @ANI Story | https://t.co/vYoHdoMqsq#UnionBudget2024 #UnionBudget24 #NirmalaSitharaman #BudgetSession #BudgetSession2024 pic.twitter.com/5cqjHL8xeY

— ANI Digital (@ani_digital) July 23, 2024

Congress veteran P Chidambaram took a dig at Finance Minister Nirmala Sitharaman, accusing her of borrowing from the Congress playbook by effectively implementing the Employment-Linked Incentive scheme, a key proposal from the Congress manifesto.

The Sensex index plummeted by 400 points as investors reacted negatively to the Budget's announcement of increased taxes on capital gains and derivatives trading, leading to a significant decline in the market.

The government has increased short-term capital gains tax from 15% to 20% and long-term capital gains tax from 10% to 12.5%. Additionally, the Securities Transaction Tax (STT) on futures and options has been raised, and income from share buybacks will now be subject to taxation. Although these changes may have a short-term negative impact, they are unlikely to significantly alter the overall market direction in the long run.

Finance Minister Nirmala Sitharaman has announced an increase in the standard tax deduction from ₹50,000 to ₹75,000. Additionally, the new income tax regime has introduced revised tax slabs as follows:

- Income up to ₹3 lakh: Tax-free
- Income between ₹3-7 lakh: 5% tax rate
- Income between ₹7-10 lakh: 10% tax rate
- Income between ₹10-12 lakh: 15% tax rate
- Income between ₹12-15 lakh: 20% tax rate
- Income above ₹15 lakh: 30% tax rate

#WATCH | On personal income tax rates in new tax regime, FM Sitharaman says, "Under new tax regime, tax rate structure to be revised as follows - Rs 0-Rs 3 lakh -Nil; Rs 3-7 lakh -5% ; Rs 7-10 lakh-10% ; Rs 10-12 lakh-15%; 12-15 lakh- 20% and above Rs 15 lakh-30%." pic.twitter.com/zQd7A4OsnT

— ANI (@ANI) July 23, 2024

To further strengthen the Indian startup ecosystem, the Finance Minister has announced plans to eliminate the Angel Tax for all investor categories. Additionally, the simplified tax regime has yielded significant results, with 58% of corporate tax revenue coming from this system in 2022-23, and over two-thirds of taxpayers utilizing the new personal tax regime last year. To reduce litigation, a comprehensive review of the Income Tax Act of 1961 will be conducted within the next six months. Moreover, the Finance Bill aims to simplify the tax regime for charitable organizations by consolidating two existing tax exemption regimes into a single, more streamlined framework.

Finance Minister announces customs duty exemption on three crucial medicines for cancer treatment, providing relief to patients. Additionally, the government plans to:

- Review and rationalize customs duty rates over the next six months
- Reduce basic customs duty on X-ray tubes and flat panel detectors to boost domestic production of X-ray machines

These changes aim to make healthcare more accessible and affordable for those in need.

The Finance Minister announced financial support for flood-affected states:

- Bihar: ₹11,500 crore to address flood control structure delays in Nepal
- Assam: Aid for flood management and related projects
- Himachal Pradesh: Multilateral assistance for reconstruction after extensive flood damage
- Uttarakhand: Necessary aid for landslide and cloudburst damage

These allocations aim to mitigate the impact of recurring natural disasters in these regions."

Finance Minister Nirmala Sitharaman announced a ₹15,000 crore allocation for Andhra Pradesh's capital, Amravathi, in the current financial year. The government is committed to financing the Polavaram project, crucial for food security. Funds will be provided for essential infrastructure like water, power, and roads. Additional allocations will be made for the Visakhapatnam-Chennai and Hyderabad-Chennai Industrial Corridors. Grants will also be provided for backward regions in the state, as per the Andhra Pradesh Reorganisation Act.

Budget 2024: Finance Minister announces special financial support to Andhra Pradesh, Rs 15000 cr allocated for Capital

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— ANI Digital (@ani_digital) July 23, 2024

The government has maintained its infrastructure expenditure at ₹11.1 trillion, consistent with the interim budget, representing 3.4% of the country's GDP. Additionally, the allocation of interest-free loans to states for infrastructure development has been increased to ₹1.5 trillion, encouraging states to ramp up their infrastructure spending.

Finance Minister Nirmala Sitharaman says, "The government endeavours to maintain strong fiscal support for infrastructure over the next 5 years. Capital expenditure to be Rs 11,11 lakh crore at 3.4% of our GDP." pic.twitter.com/vGtLo8ZapQ

— ANI (@ANI) July 23, 2024

To support the recovery and growth of Micro, Small, and Medium Enterprises (MSMEs), the government has announced a comprehensive package of measures:

1. Credit Guarantee Scheme: A state-backed credit guarantee program to enhance access to finance for MSMEs.
2. Enhanced Mudra Loans: Increased loan limits for borrowers who have successfully repaid previous Mudra loans, encouraging continued entrepreneurship and expansion.
3. Digital Footprint Assessment: Encouraging banks to consider a borrower's digital footprint, in addition to traditional creditworthiness criteria, to assess eligibility for loans. This move aims to increase lending to MSMEs, who were severely impacted by the COVID-19 pandemic.

These initiatives aim to address the challenges faced by MSMEs, who are critical to the country's economic growth and employment generation. By providing state-backed loans and encouraging banks to adopt innovative assessment criteria, the government seeks to increase lending to this vital sector, fostering its development and resilience.

The Finance Minister revealed plans to double the MUDRA loan limit from ₹10 lakh to ₹20 lakh for borrowers who have previously availed and successfully repaid loans under the TARUN category. This enhancement aims to empower entrepreneurs who have demonstrated creditworthiness and support their continued growth and expansion.

ALSO READ| Economic Survey 2024: Summary for UPSC and Other Competitive Exams

Finance Minister Nirmala Sitharaman unveiled a groundbreaking initiative to revolutionise the Insolvency and Bankruptcy Code (IBC) process. A cutting-edge, integrated tech platform will be established to streamline outcomes, ensuring greater consistency, transparency, and robust oversight for all stakeholders, including the National Company Law Tribunal (NCLT).

This innovative platform builds on the IBC's impressive track record, which has already:

- Successfully resolved over 1,000 companies
- Facilitated a direct recovery of ₹3.3 lakh crore for creditors
- Resolved 28,000 cases involving over ₹10 lakh crore before admission to the NCLT

This technological advancement is poised to further enhance the efficiency and effectiveness of the IBC process, benefiting all parties involved.

Finance Minister Nirmala Sitharaman announced a new initiative during the Union Budget presentation, aimed at providing valuable work experience to young individuals. The government will launch a comprehensive internship program, offering opportunities to 1 crore (10 million) youth in India's top 500 companies.

Key features of the scheme include:

- A monthly internship allowance of ₹5,000 to support living expenses during the internship period
- A one-time assistance of ₹6,000 to cover additional costs associated with the internship

#WATCH | Presenting Union Budget, Finance Minister Nirmala Sitharaman says, "The Government will launch a scheme to provide internship opportunities to 1 crore youth in 500 top companies with Rs 5000 per month as internship allowance and one-time assistance of Rs 6000." pic.twitter.com/v95f2PKTwV

— ANI (@ANI) July 23, 2024

Finance Minister Nirmala Sitharaman has announced a new initiative to support young employees. Under this scheme, first-time workers in formal sectors will receive a direct benefit transfer of up to ₹15,000, equivalent to one month's salary, paid in three installments. To be eligible, employees must have a monthly salary of ₹1 lakh or less and be registered with the EPFO. This initiative is expected to benefit 21 million (210 lakh) young people, providing them with a financial boost as they enter the workforce.

The Finance Minister has announced an allocation of ₹1.52 lakh crore to the agriculture sector, which could positively impact rural demand for automobiles, particularly entry-level two-wheelers and tractors.

To stimulate job creation in the manufacturing sector, the Finance Minister unveiled a novel scheme tied to the hiring of new entrants in the workforce. This initiative offers a four-year incentive program for Employee Provident Fund Organization (EPFO) contributions, benefiting both employees and employers. The scheme is anticipated to positively impact 3 million young individuals and encompass additional employment opportunities across various sectors. Furthermore, the government will provide a reimbursement of up to ₹3,000 per month for two years to employers for each new employee's EPFO contributions, to incentivize the creation of 5 million additional jobs.

#Budget2024 | Finance Minister Nirmala Sitharaman says, "Our govt will implement three schemes for employment-linked incentives as part of the Prime Minister's package. These will be based on enrollment in the EPFO and focus on recognition of the first time employees and support… pic.twitter.com/UiBOrcfNPY

— ANI (@ANI) July 23, 2024

Finance Minister Nirmala Sitharaman has announced an allocation of ₹1.52 lakh crore for the agriculture sector and related industries. 

Finance Minister Nirmala Sitharaman says, "New 109 high-yielding and climate resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers. In the next 2 years, 1 crore farmers will be initiated into natural farming supported by certification and branding..."

Budget theme this year on 4 factors — Employment, skilling, MSMEs and middle class, says Sitharaman. India's inflation continues to be low, stable, moving towards 4% target, says Nirmala Sitharaman

Today, July 23, marks the commencement of the Budget Session of Parliament at 11 a.m., during which Finance Minister Nirmala Sitharaman is scheduled to present her seventh budget to the Lok Sabha.

Union Finance Minister Nirmala Sitharaman presents the first Budget of the third consecutive Modi government

FM says, "The people of India have reposed their faith in the govt led by PM Modi and re-elected it for the historic third term..." pic.twitter.com/kgCcvEMECx

— ANI (@ANI) July 23, 2024

FM announces  5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over 5 years with a central outlay of Rs 2 lakh crores. Provisions of Rs 1.48 lakh crores for education, employment and skilling have been made.

The following goals were set in the 2024 Union Budget by FM Nirmala Sitharaman:

• productivity and resilience in agriculture, 
• employment and skilling, 
• inclusive human resource and development, and social justice, 
• manufacturing services, 
• urban development, 
• energy security, 
• infrastructure, 
• innovation research and development, 
• next generation reforms

The stage is set for Finance Minister Nirmala Sitharaman's Budget 2024 speech, as copies of the document have been delivered to Parliament, with the address set to begin at 11 am today.

#WATCH | Delhi | Copies of the Union Budget 2024 brought to the Parliament, ahead of presentation of first budget of Modi government in its third term pic.twitter.com/hWM1Jh2Wub

— ANI (@ANI) July 23, 2024