Union Budget 2024-25
Towards Strong Development and All-round Prospertity
Presented by Union Finance Minister Smt. Nirmala Sitharaman, the Union Budget 2024-25 sets a bold agenda aimed at bolstering India’s economic growth amidst global uncertainties. The Union Budget 2024-25 outlines a comprehensive roadmap to propel India towards sustainable growth, focusing on employment generation, infrastructure development, tax reforms, and inclusive development. With strategic investments and policy reforms, the government aims to strengthen economic fundamentals and enhance global competitiveness.
Key Themes and Priorities: Pursuit of ‘Viksit Bharat’
The Union Budget 2024-25 emphasises sustained efforts across 9 key priorities to generate ample opportunities for all segments of society.
1. Productivity and Resilience in Agriculture
2. Employment & Skilling
3. Inclusive Human Resource Development and Social Justice
4. Manufacturing & Services
5. Urban Development
6. Energy Security
7. Infrastructure
8. Innovation, Research & Development
9. Next Generation Reforms
Rural Economy and Agriculture
Rural Development: Rs. 2.66 lakh crore allocated, focusing on rural infrastructure and socio-economic upliftment.
Agriculture and Allied Activities: Rs. 1.52 lakh crore provisioned to enhance productivity, resilience, and infrastructure.
Rural Development
Pradhan Mantri Janjatiya Unnat Gram Abhiyan (PMJUGA)
• Launched to uplift tribal communities.
• Saturation coverage for tribal families in 63,000 villages and aspirational districts.
• Benefits 5 crore tribal people.
Pradhan Mantri Gram Sadak Yojana (PMGSY)
• Phase IV to provide all-weather connectivity to 25,000 rural habitations.
• Focus on newly eligible rural areas due to population growth.
Irrigation and Flood Mitigation
• Rs. 11,500 crore allocated for projects like Kosi-Mechi link in Bihar and 20 other schemes.
• Assistance to Assam, Himachal Pradesh, Uttarakhand, and Sikkim for flood and landslide management.
Agricultural Reforms and Development
Productivity and Resilience in Agriculture
• Rs. 1.52 lakh crore allocated.
• Focus on digital infrastructure, self-sufficiency in oil seeds, and large-scale vegetable clusters.
Digital Public Infrastructure for Agriculture
• DPI to cover 6 crore farmers and their lands in 3 years.
• Digital crop surveys and issuance of Jan Samarth based Kisan Credit Cards in 5 states.
Missions for Pulses and Oilseeds
• Strategy for self-sufficiency in mustard, groundnut, sesame, soybean, and sunflower.
Vegetable Production & Supply Chains
• Development of large-scale clusters near consumption centres.
• Promotion of Farmer-Producer Organizations and start-ups.
Shrimp Production & Export
• Establishment of Nucleus Breeding Centres.
• Financing through NABARD for farming, processing, and export.
Transforming Agriculture Research
• Review of research setup for productivity and climate-resilient varieties.
• Funding for high-yielding crop varieties.
Natural Farming
• Initiation of 1 crore farmers into natural farming.
• Establishment of bio-input resource centres.
National Cooperation Policy
• Policy for systematic development of the cooperative sector.
• Focus on rural economy growth and employment.
Beyond Agriculture and Rural Development
• Land-related Reforms: Incentives for completion within 3 years.
• Urban Land Records: Digitisation and GIS mapping.
• Property Record Administration: IT-based system for urban local bodies.
Tourism Development Initiatives
• Vishnupad and Mahabodhi Temple Corridors in Bihar.
• Comprehensive development to transform into world-class pilgrim and tourist destinations.
• Initiative for holistic development including religious sites and hot springs.
• Support for tourism and revival of Nalanda University.
• Promotion of scenic beauty, temples, monuments, wildlife sanctuaries, and beaches.
DPI Thrust for Agri Sector
Agri Stack DPI: A Digital Public Infrastructure (DPI) project akin to Aadhar and UPI, aimed at transforming India's agriculture sector. Aims to bring over 6 crore farmers into a formal land registry system over three years.
Impact on Agritech Startups
• Cost Reduction: Formalisation and easier availability of farmer data can reduce high expenses for agritech startups acquiring farmers.
• Onboarding Efficiency: Faster onboarding process for farmers onto digital platforms.
• Access to Data: Allows startups to scale quickly by accessing crucial farmer data without extensive fieldwork.
Fintech Opportunities
• Loan and Insurance Services: Improved data access encourages fintech startups to offer tailored financial products like loans and insurance.
• Kisan Credit Cards: Streamlined issuance underpins fintech growth in agriculture sector.
Sector Challenges and Opportunities
• Sector Value: Agritech sector valued at $24 billion, yet faces scaling challenges and low investment.
• Digitalisation Barriers: Challenges include high costs of modern equipment and farmer reluctance to adopt digital tools.
Future Outlook
• Investment Potential: Government initiatives expected to attract funding and foster sector awareness.
• Innovation Catalyst: Agri-DPI rollout likely to spur innovation and attract venture capital, potentially lifting sector growth.
Defence Modernisation and Indigenisation
Total Allocation: Rs. 6.22 lakh crore, highest among all ministries, emphasising Aatmanirbharta.
ADITI Scheme: Rs. 400 crore additional allocation for defence innovation.
Modernisation of Forces: Rs. 1.72 lakh crore allocated. Supports acquisition of advanced technology, weapons, aircraft, ships, drones, and specialised vehicles.
Strengthening Domestic Capacity: Rs. 1,05,518.43 crore allotted. Aims to boost GDP, generate employment, and foster capital formation.
Sustenance & Operational Readiness: Rs. 92,088 crore allocated. Ensures efficient maintenance of aircraft, ships, and procurement of ammunition for strategic deployments.
Border Infrastructure Development: Rs. 6,500 crore allocated for strategic border roads. Includes projects like Nyoma Airfield, Andaman-Nicobar bridge connectivity, and tunnels in Himachal Pradesh and Arunachal Pradesh.
Enhanced Indian Coast Guard Capabilities: Rs. 7,651 crore allocated. Rs. 3,500 crore for capital expenditure to enhance arsenal including patrol vehicles, surveillance systems, and advanced weapons.
Promoting Self-Reliance through Research & Innovation: DRDO: Rs. 23,855 crore for research and development. Rs. 13,208 crore for capital expenditure to enhance technological capabilities and foster private sector partnerships.
iDEX: Funding increased to Rs. 518 crore to promote innovation among startups, MSMEs, and youth.
Defence Pension and Healthcare: Pension: Rs. 1,41,205 crore allocated for defence pensions. Covers around 32 lakh pensioners via the System for Pension Administration (Raksha) and others.
ECHS: Allocation increased to Rs. 6,968 crore for top-tier healthcare services to Ex-Servicemen and dependents.
Boosting Startups and Innovation
• Angel Tax Abolishment: Removal of the Angel Tax to attract more investments in startups.
• Paid Internships: Introduction of paid internships to support skill development.
• Mudra Loan Limit Increase: Raised the limit from Rs. 10 lakh to Rs. 20 lakh under the Tarun category for those who have successfully repaid previous loans.
• Rs. 1,000 Crore Venture Fund for Space Startups: Financial boost to expand the space economy fivefold in the next ten years.
• Rs. 1 Lakh Crore for Anusandhan National Research Foundation: Massive funding to bolster research and innovation, with a fivefold increase projected in the next decade.
• Bharat Small Reactors: Partnership with the private sector for research and development of Bharat Small Modular Reactors.
• Rs. 1 Lakh Crore Venture Capital Fund: Expanding the space economy significantly in the next decade.
Healthcare Sector
Total Allocation: Rs. 90,958.63 crore earmarked for the healthcare sector.
Health and Family Welfare Department: Rs. 87,656.90 crore allocated.
Health Research Department: Rs. 3,301.73 crore allocated.
Flagship Schemes
• Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB PM-JAY): Allocation increased to Rs. 7,300 crore from Rs. 6,800 crore.
• Ayushman Bharat Digital Mission (ABDM): Budget allocation remains unchanged at Rs. 200 crore.
• National Health Mission (NHM): Allocation: Rs. 36,000 crore.
Indian Council of Medical Research (ICMR)
Allocation increased to Rs. 2,732.13 crore from Rs. 2,295.12 crore.
National Tele Mental Health Programme
Allocation increased to Rs. 90 crore from Rs. 65 crore.
Autonomous Bodies: Allocation: Rs. 18,013.62 crore.
All India Institute of Medical Sciences (AIIMS), Delhi: Allocation increased to
Rs. 4,523 crore from Rs. 4,278 crore.
Customs Duty Exemptions
• Full exemption on three key cancer drugs to aid cancer patients.
• Reduction in customs duty on components of Xray tubes and digital detectors.
Pradhan Mantri Janjatiya Unnat Gram Abhiyan
• Primary Goal: Improve the socio-economic condition of tribal communities in India.
• Scope: Adoption of a saturation coverage approach.
• Target Areas: Tribal-majority villages and aspirational districts.
• Total Villages: 63,000 villages to be covered.
• Beneficiaries: Aims to benefit 5 crore tribal people.
• Method: Inclusive human resource development and social justice.
• Strategy: Saturation approach for comprehensive coverage and development.
• Expected Impact: Significant improvement in socio-economic conditions of the targeted tribal populations. Enhanced access to resources and opportunities for tribal families in specified regions.
Enhanced Role of Women in Economic Development
• Total Allocation: More than Rs. 3 lakh crore
• Working Women Hostels: To be set up in collaboration with industry.
• Creches: Establishment of creches to support working women.
• Skilling Programmes: Women-specific skill development programmes.
• Market Access: Promotion of market access for women Self-Help Group (SHG) enterprises.
• Workforce Participation: Facilitating higher participation of women in the workforce.
• Economic Empowerment: Empowering women through targeted schemes and support structures.
Make in India Boost
Manufacturing Sector
• Customs Duty Adjustments: Increased customs duty on Printed Circuit Boards Assembly (PCBA) for telecom equipment from 10% to 15% expected to boost local manufacturing.
• Impact: Enhance competitiveness, create jobs, and lower mobile phone costs, promoting digital penetration.
Electric Vehicles (EVs) and Critical Minerals
• Critical Minerals Mission: Aimed at local production of lithium-ion cells and EV electronics by scrapping import duties on critical minerals.
• Objective: Reduce import dependency, bolster e-waste recycling economy, and position India as a global EV manufacturing leader.
Solar Energy Sector
• PM Surya Ghar Muft Bijli Yojana: Subsidies for rooftop solar installations for 10 million households, mandates use of locally made solar cells and modules.
• Impact: Demand generation for domestic manufacturers, although discontinuation of zero customs duty on solar glass and copper interconnects might temporarily increase input costs.
Venture Capital for Space Sector
• Allocation: Rs. 1,000 crore for VC in private space sector.
• Purpose: Boost R&D, attract international investments, and position India as a significant player in the global space industry.
• Expected Impact: Multiplier effect on industry growth and investor confidence.
Infrastructure Focus
Capital Expenditure
• Allocation: Rs. 11.11 lakh crore allocated for capital expenditure, accounting for 3.4% of GDP.
• Objective: Strengthen infrastructure across sectors to spur economic growth and development.
Pradhan Mantri Gram Sadak Yojana (PMGSY)
• Phase IV Launch: Introducing Phase IV to ensure all-weather connectivity to 25,000 rural habitations.
• Benefit: Enhance rural connectivity, facilitating socio-economic development in remote areas.
Government Commitment and Viability Gap Funding
• Commitment to invest in the sector and promote viability gap funding.
• Policies and regulations to encourage increased private participation.
Industrial Parks Initiative
• Development of investment-ready 'plug and play' industrial parks in or near 100 cities.
• Partnership with states and private sector, utilizing town planning schemes.
• Proposal to sanction 12 new parks under the National Industrial Corridor Development Programme.
Reforms in Shipping Industry
• Planned reforms in ownership, lease, and flag of ships to boost the Indian shipping industry and create employment.
Development Plans for Eastern India (Purvodaya)
• Formulation of comprehensive infrastructure development plan for Bihar, Jharkhand, West Bengal, Odisha, etc.
Infrastructure Developments in Bihar
• Support for industrial node development at Gaya to catalyze industrial growth.
• Development of major road connectivity projects including Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, and others.
• Construction of new airports, medical colleges, and sports infrastructure.
Capital Investments and External Assistance
• Additional allocation for supporting capital investments.
• Expedited requests for external assistance from multilateral development banks.
Infrastructure Development in Andhra Pradesh
• Funding for essential infrastructure development in Kopparthy node (Vishakhapatnam-Chennai Industrial Corridor) and Orvakal node (Hyderabad-Bengaluru Industrial Corridor) to fulfill commitments under the Andhra Pradesh Reorganization Act.
Legislative Approval for Funding Flexibility
• Seeking legislative approval to enhance efficiency and flexibility in funding leases of aircraft, ships, and pooled funds through a 'variable company structure'.
Irrigation and Flood Mitigation
• Financial Support: Rs. 11,500 crore allocated for projects under Accelerated Irrigation Benefit Programme.
• Focus Areas: Includes Kosi-Mechi intra-state link and other schemes for barrages, river pollution abatement, and irrigation.
• Regional Assistance: Support extended to Bihar for flood management, and assistance to Assam, Himachal Pradesh, Uttarakhand, and Sikkim for landslides and related projects.
Giving Wings to Civil Aviation
Total Allocation for Civil Aviation Ministry: Rs. 2,357.14 crore
Allocation Breakdown
• Regional Air Connectivity Scheme: Rs. 502 crore
• Medical Benefits for Retired Air India Employees: Rs. 85 crore (up from Rs. 51 crore in 2023-24)
• DGCA (Directorate General of Civil Aviation): Rs. 302.64 crore
• BCAS (Bureau of Civil Aviation Security): Rs. 89 crore
• Hotel Corporation of India Ltd: Rs. 57.14 crore (for statutory obligations)
Production Linked Incentive (PLI) Scheme for Drones
• Rs. 57 crore (up from Rs. 33 crore in 2023-24)
Key Highlights
• Focus on enhancing air connectivity in the northeast.
• Increased investment in drone technology through PLI scheme.
• Significant allocation for medical benefits to retired Air India employees.
Sector Expectations
• Anticipated infrastructure boost and regulatory improvements to stimulate growth in the aviation industry.
Compiled by EN Team