Budget 2024: A Roadmap for India's Aspirations

July 23, 2024

The Union Budget of India is not just an annual financial statement; it's a compass that steers the nation's economic course for the coming year. Budget 2024, presented against the backdrop of a post-pandemic recovery and ambitious goals for a "Viksit Bharat" by 2047, demands a nuanced exploration. Let's delve beyond the headlines and dissect the budget's key themes, potential impacts, and underlying challenges.


Employment Generation: Bridging the Skill Gap

One of the most pressing concerns for India's youth bulge is unemployment. Budget 2024 prioritizes employment generation with a ₹2 lakh crore allocation for five schemes targeting 4.1 crore youth. This multi-pronged approach aims to bridge the skill gap and enhance employability. Here's a closer look:



  • Comprehensive Internship Scheme: A game-changer could be the internship program offering placements in top companies for 1 crore youth over five years. This initiative provides invaluable practical experience and industry exposure, potentially smoothing the transition from education to employment. However, the success hinges on effective collaboration between educational institutions and participating companies.

  • Skill Development Programs: Recognizing the crucial link between skills and employability, the budget proposes various skill development programs. The focus should be on industry-relevant training that caters to the evolving needs of the job market. Regular program evaluation and skill gap analysis are essential to ensure these programs remain effective.

  • Empowering Women: Women's workforce participation is crucial for India's economic growth. Budget 2024 acknowledges this by emphasizing women-specific skilling programs. Initiatives like setting up working women's hostels and creches can further address childcare and workplace accessibility concerns, encouraging women to join the workforce.

The effectiveness of these employment-focused measures will depend on their implementation. Ensuring transparency in program selection, monitoring training quality, and providing job placement assistance are crucial for maximizing their impact.

MSMEs: The Backbone of Indian Industry

Micro, Small, and Medium Enterprises (MSMEs) form the backbone of India's manufacturing sector. The budget recognizes their significance with a slew of supportive measures:

  • Credit Guarantee Scheme: Easing access to credit is a persistent challenge for MSMEs. The budget proposes a new mechanism to facilitate the continuation of bank credit during their stress period. This lifeline could be instrumental in preventing business closures and fostering growth.

  • Technology Support Package: Technological adoption is key for MSMEs to remain competitive. Budget 2024 includes a technology support package, which could involve providing access to affordable technology solutions or training programs on digital marketing and e-commerce.

  • Mudra Loan Boost: The increase in Mudra loan limits from ₹10 lakh to ₹20 lakh provides much-needed financial support for smaller businesses. However, ensuring timely loan disbursement and streamlining the application process are crucial for maximizing the scheme's impact.

  • Onboarding MSMEs on TReDS: Expanding the buyer base for MSMEs is essential. The budget proposes reducing the turnover threshold for mandatory onboarding on the Trade Receivables Discounting System (TReDS) platform. This could provide MSMEs with faster access to working capital by enabling them to sell their invoices at a discounted rate.

The success of these measures hinges on effective collaboration between central and state governments, banks, and financial institutions. Streamlining bureaucratic processes and providing handholding support to MSMEs would further enhance the impact of these initiatives.

Transforming Agriculture: A Balancing Act


Agriculture remains a crucial sector for India's economy and food security. Budget 2024 focuses on boosting agricultural productivity, promoting climate resilience, and supporting sustainable practices:

  • Comprehensive Review of Research: A comprehensive review of the existing agriculture research setup aims to identify gaps and prioritize research efforts on developing climate-resilient crop varieties. Enhancing collaboration between research institutions and farmers is crucial for ensuring the adoption of new technologies and practices.

  • Atmanirbharta in Oilseeds: India's dependence on imported edible oils is a concern. The budget promotes "Atmanirbharta" (self-reliance) in oilseeds by encouraging the production of domestically produced varieties like mustard, groundnut, and sesame. Success depends on providing adequate price incentives and ensuring access to quality seeds and fertilizers for farmers.

  • Natural Farming Initiative: The government aims to initiate 1 crore farmers into natural farming practices over the next two years. While this initiative promotes sustainability, challenges remain. Extensive training programs and robust certification systems are essential to ensure the successful adoption of natural farming methods.

  • Digital Public Infrastructure (DPI) for Farmers: The budget emphasizes the creation of a DPI to facilitate coverage of farmers and their lands within three years. This initiative, if implemented effectively,could revolutionize the agricultural sector by providing farmers with access to real-time information on weather patterns, market prices, and best practices. However, bridging the digital divide in rural areas and ensuring farmer literacy in using digital tools present significant challenges.

    Navigating the Fiscal Tightrope

    The budget walks a tightrope between maintaining fiscal prudence and stimulating economic growth. The target of a 5.1% GDP deficit for FY25 indicates a continued focus on fiscal consolidation initiated in previous years. This approach aims to control inflation and national debt, fostering long-term economic stability. However, critics argue that a more expansionary fiscal policy might be necessary to accelerate growth and job creation in the short term.

    The government projects a ₹11.11 lakh crore capital expenditure (capex) outlay, maintaining the level announced in the Interim Budget. This investment in infrastructure development, including roads, railways, and digital infrastructure, is intended to create jobs, improve connectivity, and propel regional development. However, the success of this strategy hinges on efficient project execution, addressing issues like land acquisition delays and ensuring transparency in tendering processes.

    A Budget for Some, Not All?

    While Budget 2024 offers a mix of positive measures, some areas warrant further scrutiny:

    • Impact on Social Welfare Programs: The extension of PMGKAY (Pradhan Mantri Garib Kalyan Anna Yojana) for five years provides much-needed food security for vulnerable populations. However, the long-term sustainability of such programs requires careful consideration. Policymakers must explore avenues for skills development and job creation alongside providing food assistance, empowering beneficiaries to break the cycle of dependence.

    • Boost for Some Sectors, Silence on Others: The budget prioritizes certain sectors like infrastructure, MSMEs, and agriculture. However, the impact on other crucial sectors like healthcare and education is less clear. A more holistic approach that considers the interdependencies between various sectors might be needed.


Budget 2024-2025: Key Highlights at a Glance

Focus Areas:

  • Employment and Skilling: 5 schemes targeting 4.1 crore youth over 5 years with a ₹2 lakh crore outlay. Initiatives include internships, skill development programs, and women-specific initiatives.
  • MSMEs and Manufacturing Support: Special focus on MSMEs with credit guarantee schemes, technology support packages, and increased Mudra loan limits.
  • Agriculture and Allied Activities: Focus on productivity, climate resilience, natural farming, and digitalization.
  • Infrastructure Development: ₹11.11 lakh crore for infrastructure spending, including special allocations for Andhra Pradesh and Bihar.

Taxation:

  • Revised Tax Rate Structure: New income tax regime offers lower tax rates for various income brackets. Standard deduction amount increased.
  • Capital Gains Tax: Short-term capital gains tax revised to 20%, while long-term capital gains tax raised to 12.5% on financial assets.
  • Simplifying Tax Regime: Measures taken to simplify tax compliance and widen the tax net.

Other Key Announcements:

  • Reduction in Customs Duties: Lower customs duties on mobile phones, gold, silver, and certain critical minerals.
  • Boost for Tourism: Development initiatives for religious and cultural sites.
  • Fiscal Deficit: Projected at 4.9% of GDP, aiming to reach below 4.5% next year.
  • Social Welfare Schemes: Extension of PMGKAY, increased allocation for women and girls' schemes.

Sector-Specific Highlights:

  • Defense: Highest ever allocation of ₹4.54 lakh crore.
  • Education: ₹1.25 lakh crore allocated.
  • Health: ₹89,287 crore allocated.
  • Information Technology and Telecom: ₹1.16 lakh crore allocated.

Additional Resources:

  • You can find more details about the budget on various government websites.
  • News articles and analyses can provide deeper insights into the budget's implications.