Union Budget 2024 unveiled: Ambitious plans for employment, skill development, and economic growth
By Dr. Avi Verma Publisher
On July 23, 202•, Nirmala Sitharaman, the Honorable Finance Minister of India, presented the first Union Budget of the current government. This budget is notably aligned with the goal of realizing a “Viksit Bharat” (Developed India) and emphasizes several key areas including employment, skilling, micro, small, and medium enterprises (MSMEs), and the middle class. The budget outlines nine major priorities aimed at fostering comprehensive growth and prosperity. This essay delves into the significant highlights, key takeaways, and critical points of the Union Budget 202•.
Budget Theme and Key Priorities
The overarching theme of the Union Budget 202• centers around enhancing employment opportunities, advancing skilling initiatives, supporting MSMEs, and uplifting the middle class. Central to this budget is the announcement of the Prime Minister’s package, which includes five schemes designed to facilitate employment, skilling, and other opportunities for •.1 crore youth over a five-year period, with an allocation of INR 2 lakh crore. Additionally, INR 1.•8 lakh crore is provisioned for education, employment, and skilling.
To achieve these goals, the budget emphasizes nine key priorities:
1. Productivity and Resilience in Agriculture
2. Employment and Skilling
3. Inclusive Human Resource Development and Social Justice
4. Manufacturing and Services
5. Urban Development
6. Energy Security
7. Infrastructure
8. Innovation, Research, and Development
9. Next Generation Reforms
Detailed Analysis of Priorities
1. Productivity and Resilience in Agriculture:
The budget proposes a comprehensive overhaul of agricultural research to focus on increasing productivity and developing climate-resilient varieties. A total of 109 new high-yielding and climate-resilient crop varieties will be introduced. The government will support the transition to natural farming for 1 crore farmers and establish 10,000 bio-input resource centers. The budget also envisions enhancing self-sufficiency in pulses and oilseeds, developing vegetable production clusters, and establishing Digital Public Infrastructure for Agriculture to streamline farmer data and improve efficiency.
2. Employment and Skilling:
A significant portion of the budget is dedicated to employment and skilling. Three schemes under the Prime Minister’s package include:
• Scheme A: Providing one-month wage (up to INR 15,000) for first-time job seekers.
• Scheme B: Incentives for job creation in the manufacturing sector.
• Scheme C: Employer support for additional hiring across sectors.
Additionally, the budget allocates resources to establish working women hostels, introduce skilling programs for 20 lakh youth over five years, and enhance educational and skilling loan schemes. A new credit guarantee scheme will facilitate loans up to INR 7.5 lakh for students, and financial support for higher education loans up to INR 10 lakh will be provided.
3. Inclusive Human Resource Development and Social Justice:
The budget aims to adopt a saturation approach to ensure comprehensive social justice. This includes strengthening schemes for artisans, self-help groups, and entrepreneurs, especially in economically disadvantaged regions like the eastern states of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. Special emphasis is placed on women-led development, with an allocation of over INR 3 lakh crore for schemes benefiting women and girls.
4. Manufacturing and Services:
Support for MSMEs is a focal point, with a credit guarantee scheme for term loans, new credit assessment models, and mechanisms to support MSMEs during financial stress. The Mudra loan limit is increased, and new e-commerce export hubs will be set up to facilitate international trade. The budget also proposes the development of industrial parks, rental housing for industrial workers, and reforms to enhance the competitiveness of the shipping industry.
5. Urban Development:
The budget envisions cities as growth hubs through improved economic and transit planning. The PM Awas Yojana Urban 2.0 aims to address the housing needs of 1 crore urban poor and middle-class families with an investment of INR 10 lakh crore. There are also plans for comprehensive urban redevelopment, development of transit-oriented areas, and improvements in water supply and sanitation in large cities.
6. Energy Security:
The energy sector will see significant reforms, including the development of a policy document on energy transition, the promotion of pumped storage projects, and research on small modular nuclear reactors. The budget supports advanced thermal power plants and a roadmap for transitioning ‘hard to abate’ industries to emission targets. There is also a focus on energy audits and supporting cleaner energy for small
industries.
7. Infrastructure:
The budget allocates INR 11.11 lakh crore for infrastructure investment, amounting to 3.4% of the GDP. This includes strong fiscal support for infrastructure development over the next five years, with a focus on roads, tourism, and investment in rural areas. The PMGSY Phase IV aims to provide all-weather connectivity to 25,000 rural habitations.
8. Innovation, Research, and Development:
Anusandhan National Research Fund will be established for basic research and prototype development, with a financing pool of INR 1 lakh crore. The budget also proposes a venture capital fund of INR 1,000 crore to expand the space economy and boost innovation in various sectors.
9. Next Generation Reforms:
The budget outlines an Economic Policy Framework to guide future reforms and improve productivity. Land-related reforms will be incentivized, and efforts will be made to streamline labor services, enhance ease of doing business, and improve financial sector readiness. The government will also develop a taxonomy for climate finance and support foreign direct investment with simplified regulations.
Taxation Reforms
The budget proposes significant changes in both direct and indirect taxes:
• Indirect Taxes:The government plans to simplify customs duty rates and reduce duties on critical minerals, medical equipment, and electronics. The BCD on mobile phones and related parts is reduced to 15%, and customs duties on gold and silver are lowered to promote domestic value addition.
• Direct Taxes:The angel tax is abolished to support the start-up ecosystem. The corporate tax rate for foreign companies is reduced from •0% to 35%, and simpler tax regimes are proposed for foreign shipping companies and diamond cutting sectors.
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