Union Budget 2024: Major Tax Reforms and Deduction Hikes Pave the Way for ‘Viksit Bharat 2047’
The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, lays down a comprehensive roadmap for India’s development with a focus on inclusive growth and economic stability. By increasing the standard deduction and revising income tax rates, alongside substantial investments in infrastructure, social welfare, and environmental sustainability, the budget aims to foster a more prosperous and equitable society.
As India continues to navigate post-pandemic challenges, the Union Budget 2024 provides a strategic framework for economic recovery and sustainable development. The measures outlined are expected to stimulate growth, create jobs, and improve the living standards of millions of Indians, paving the way for a ‘Viksit Bharat’ by 2047.
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Union Budget 2024: Major Tax Reforms and Deduction Hikes Pave the Way for ‘Viksit Bharat 2047’
New Delhi, July 2024 – In a landmark move aimed at fostering economic growth and supporting taxpayers, Finance Minister Nirmala Sitharaman unveiled the Union Budget 2024, her seventh consecutive budget. With a clear vision towards achieving ‘Viksit Bharat’ by 2047, this budget introduces significant changes in standard deduction and income tax slabs, alongside a host of other measures to bolster various sectors of the economy.
Key Announcements: Standard Deduction and Income Tax Rates
Among the most impactful announcements was the hike in the standard deduction, providing relief to millions of salaried individuals and pensioners. The standard deduction has been increased from ₹50,000 to ₹75,000, addressing the rising cost of living and inflation pressures on household budgets.
The revised income tax rates are structured to offer more relief to middle-income earners, making the tax system more progressive and equitable. The new tax slabs are as follows:
| Income (₹) | Tax Rate (%) |
|---|---|
| Up to 3 lakh | Nil |
| 3 lakh – 7 lakh | 5 |
| 7 lakh – 10 lakh | 10 |
| 10 lakh – 12 lakh | 15 |
| 12 lakh – 15 lakh | 20 |
| Above 15 lakh | 30 |
These changes aim to increase disposable income for the middle class, stimulating consumption and economic activity.
Live Budget Updates
The budget presentation included several other key announcements and updates, detailed in the following timeline:
| Time | Update |
|---|---|
| 9:30 am | Nirmala Sitharaman heads to Rashtrapati Bhavan with budget documents |
| 10:30 am | Nirmala Sitharaman reaches Parliament |
| 11:00 am | Finance minister tables budget |
| 11:15 am | Focus on employment, poor, women, youth, and farmers |
| 11:20 am | Agriculture and allied sectors allocated ₹1.52 lakh crore |
| 11:30 am | ₹1.48 lakh crore allocated for education, employment, and skill development |
| 11:35 am | New centrally-sponsored scheme to skill 20 lakh youth over 5 years |
| 11:45 am | Govt to set up working women hostels |
| 12:00 pm | ₹2.66 lakh crore allocated for rural development |
| 12:30 pm | Standard deduction hiked |
Press Conference Insights
Following the budget presentation, Finance Minister Sitharaman addressed a press conference accompanied by Minister of State for Finance Pankaj Chaudhary, Finance Secretary T.V. Somanathan, Secretaries of the Ministry of Finance, and Chief Economic Adviser V. Anantha Nageswaran. They elaborated on the rationale behind the budgetary decisions and the anticipated impact on the economy.
“The Union Budget 2024 is designed to support India’s rapid development while ensuring that the benefits of growth are inclusive,” Sitharaman stated. “By increasing the standard deduction and adjusting income tax rates, we aim to provide significant relief to taxpayers and stimulate economic activity across sectors.”
Infrastructure and Economic Growth
A significant focus of the Union Budget 2024 is on infrastructure development, with an allocation of ₹10 lakh crore dedicated to this sector. This funding is intended for extensive projects including road and highway construction, railway expansion, and the development of smart cities. Such investments are expected to create millions of jobs, spurring growth in ancillary industries and contributing to the overall economic landscape.
The Digital India initiative also received a substantial boost, with funds earmarked for expanding internet connectivity in rural areas, promoting digital literacy, and supporting the growth of digital services and startups. This is seen as a critical step towards bridging the digital divide and fostering innovation.
Social Welfare and Healthcare
The Union Budget 2024 places a strong emphasis on social welfare, with increased funding for healthcare and education. The National Health Mission received a significant boost to enhance healthcare infrastructure and services, especially in underserved regions. New medical colleges and hospitals will be established, improving access to medical education and healthcare facilities.
In education, the Sarva Shiksha Abhiyan received increased funding, with plans to establish new schools and colleges to ensure quality education for all. These measures aim to drive long-term economic growth by fostering a more educated and skilled workforce.
Agriculture and Rural Development
Agriculture, a critical sector of the Indian economy, saw substantial support in the budget. The Pradhan Mantri Fasal Bima Yojana received increased funding to provide better crop insurance and risk coverage for farmers. Additionally, the budget includes allocations for improving irrigation infrastructure, promoting sustainable farming practices, and enhancing agricultural productivity.
Rural development is further supported through significant investments in infrastructure projects, including road construction, electrification, and clean drinking water initiatives. These projects are designed to improve the quality of life in rural areas and create new economic opportunities.
Support for MSMEs and Industry
Micro, Small, and Medium Enterprises (MSMEs) are vital to India’s economic fabric, and the budget introduced several measures to support their growth. A new credit guarantee scheme was announced to provide easier access to financing for MSMEs, encouraging investment and business creation.
The budget also includes incentives for key industries such as manufacturing, technology, and renewable energy. Tax breaks and subsidies are intended to promote investment in these sectors, driving innovation, job creation, and sustainable development.
Fiscal Discipline and Sustainability
Despite the increased spending in various sectors, the Union Budget 2024 emphasizes fiscal discipline. The government aims to reduce the fiscal deficit to 4.5% of GDP, down from 6.4% the previous year. This will be achieved through revenue enhancement measures and rationalization of expenditure.
Efforts to improve tax compliance and broaden the tax base include the introduction of a simplified tax filing process and enhanced enforcement against tax evasion. These measures are expected to boost revenue and support fiscal stability.
Environmental Initiatives
The budget aligns with global commitments to combat climate change, including increased funding for renewable energy projects like solar and wind power. Incentives for electric vehicle adoption and the development of green infrastructure are also part of the budget, aiming to reduce India’s carbon footprint and support a low-carbon economy.
Public Reactions and Expert Opinions
The budget has elicited varied responses from different stakeholders. Industry leaders have welcomed the focus on infrastructure and support for MSMEs, viewing these measures as essential for economic growth and job creation. Economists have praised the balance between fiscal discipline and sectoral support, though some express concerns about achieving the fiscal deficit targets.
Taxpayers, particularly middle-income earners, have responded positively to the increased standard deduction and revised tax rates, anticipating increased disposable incomes and enhanced purchasing power.
Social activists and healthcare professionals have applauded the increased funding for social welfare and healthcare, emphasizing the potential for these investments to improve the quality of life for citizens.
The Union Budget 2024, presented by Finance Minister Nirmala Sitharaman, lays down a comprehensive roadmap for India’s development with a focus on inclusive growth and economic stability. By increasing the standard deduction and revising income tax rates, alongside substantial investments in infrastructure, social welfare, and environmental sustainability, the budget aims to foster a more prosperous and equitable society.
As India continues to navigate post-pandemic challenges, the Union Budget 2024 provides a strategic framework for economic recovery and sustainable development. The measures outlined are expected to stimulate growth, create jobs, and improve the living standards of millions of Indians, paving the way for a ‘Viksit Bharat’ by 2047.
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