Detailed Breakdown of Union Budget 2024-25

3. BUDGET SUMMARY & ANALYSIS: 2024-25 Index 02-03 1. KEY WORDS PART A - INTRODUCTON 03-04 2. 05-16 3. PART B: SUMMARY OF THE BUDGET Key-Highlights of the Budget ....................................................................................................6 Income Tax Announcements ......................................................................................................7 Priority 1: Productivity and resilience in Agriculture ..............................................................9 Priority 2: Employment & Skilling ............................................................................................9 Priority 3: Inclusive Human Resource Development ............................................................11 and Social Justice Priority 4: Manufacturing & Services ......................................................................................11 Priority 5: Urban Development Cities as Growth Hubs .........................................................12 Priority 6: Energy Security ........................................................................................................13 Priority 7: Infrastructure ...........................................................................................................13 Priority 8: Innovation, Research & Development ..................................................................14 Priority 9: Next Generation Reforms .......................................................................................15 17-19 4. PART C: ANALYSIS Positicve Analysis .......................................................................................................................17 Critical Analysis ..........................................................................................................................17 21-23 5. PART D: PRACTICE PRACTICE QUESTION .................................................................................................................20 MAINS QUESTIONS ...................................................................................................................22 www.iasscore.in

5. 1 BUDGET SUMMARY & ANALYSIS: 2024-25 KEY-TERMS Agriculture Accelerator Fund: This fund would seek to fast- track agricultural Fiscal Deficit is the difference between total expenditure and the Revenue Receipts (including Non-Debt Capital Receipts). FD is reflective of the total borrowing requirement of Government. 2. Revenue Deficit refers to the excess of revenue expenditure over revenue receipts. 3. Effective Revenue Deficit is the difference between Revenue Deficit and Grant-in-Aid for Creation of Capital Assets. 4. Primary Deficit is measured as Fiscal Deficit less interest payments. 5. Effective Capital Expenditure (Eff-Capex) refers to the sum of Capital Expenditure and Grants-in-Aid for Creation of Capital Assets. 6. Capex (Capital Expenditure) refers to the funds that a company or government entity spends to acquire, upgrade, or maintain physical assets such as property, buildings, equipment, or technology. Capital expenditures are typically investments made by organizations to improve their operational capabilities, expand their business, or replace outdated equipment. 7. Climate Finance refers to large-scale investments required for actions aiming to mitigate or adapt to the consequences of climate change. 8. Critical minerals refer to a group of minerals that are essential for various industrial processes, advanced technologies, and national security, but are also subject to supply chain vulnerabilities due to their scarcity, geopolitical issues, or dependency on a limited number of producing countries. Example: Rare Earth Elements (REEs), Graphite, Cobalt, Tungsten, Titanium, Copper 1. www.iasscore.in

6. 2 BUDGET SUMMARY & ANALYSIS: 2024-25 9. Customs duties are tariffs or taxes imposed by a government on goods imported into or exported out of a country. These duties are levied to control the movement of goods across international borders, regulate trade, and protect domestic industries. 10. Capital gains refer to the profit earned from the sale of assets such as stocks, bonds, real estate, and other investments. 11. Core inflation refers to a measure of inflation that excludes certain items that face volatile price movements, such as food and energy. 12. Digital Public Infrastructure (DPI) refers to a comprehensive framework of digital platforms, systems, and services that are established by the government to facilitate various aspects of governance, service delivery, and economic activities. Key components of DPI: Digital Identity (Aadhaar), Digital Payments, Data Infrastructure, Digital Platforms, Cybersecurity, E-Governance Services, Public Wi-Fi, etc. 13. Special Mention Account (SMA) stageis a classification used by banks and financial institutions in India to monitor and address potential non-performing assets (NPAs) or bad loans. It categorizes loans based on the repayment status of borrowers, helping banks proactively manage credit risks. 14. Tarun category refers to a specific segment of loans provided under the Pradhan Mantri Mudra Yojana (PMMY), a government scheme aimed at providing financial support to micro-enterprises in India. PMMY categorizes loans into three categories based on the funding needs of micro-enterprises: Shishu: Loans up to ₹50,000 for small business or income-generating activities. Kishore: Loans ranging from ₹50,001 to ₹5,00,000 for expanding existing small businesses. Tarun: Loans ranging from ₹5,00,001 to ₹10,00,000 for further growth and expansion of established small businesses. 15. Viability Gap Funding (VGF) is a financial tool used by governments to support infrastructure projects that are economically viable but may not be financially feasible due to the high initial costs or revenue uncertainties. Financial technology (Fintech): It is used to describe new tech that seeks to improve and automate the delivery and use of financial services. www.iasscore.in

7. 3 BUDGET SUMMARY & ANALYSIS: 2024-25 PART-A INTRODUCTION Finance Minister Nirmala Sitharaman presented the Union Budget 2024, focusing Finance Minister Nirmala Sitharaman presented the Union Budget 2024, focusing Finance Minister Nirmala Sitharaman presented the Union Budget 2024, focusing on the poor, women, youth, and farmers. The Budget is focused on middle-class, on the poor, women, youth, and farmers. The Budget is focused on middle-class, on the poor, women, youth, and farmers. The Budget is focused on middle-class, employment, skilling, employment and MSMEs. employment, skilling, employment and MSMEs. In general, the Union Budget the Union Budget (technically called the Annual Financial Statement) lays  (technically called the Annual Financial Statement) lays out an account of the government’s financial health — how much revenue it plans to out an account of the government’s financial health — how much revenue it plans to out an account of the government’s financial health — how much revenue it plans to raise (“total receipts”) through available sources, and how much it will spend (“total raise (“total receipts”) through available sources, and how much it will spend (“total raise (“total receipts”) through available sources, and how much it will spend (“total expenditure”) on various sectors.  expenditure”) on various sectors.  Beneath the jungle of jargon, a Budget is essentially an exercise where the government Beneath the jungle of jargon, a Budget is essentially an exercise where the government Beneath the jungle of jargon, a Budget is essentially an exercise where the government tells the Parliament (and through it, the whole country) about the health of its tells the Parliament (and through it, the whole country) about the health of its tells the Parliament (and through it, the whole country) about the health of its finances. This means coming clean on three main things:  finances. This means coming clean on three main things: income, expenditure and borrowing. income, expenditure and Roadmap for our pursuit of ‘Viksit Bharat’ Focus on 4 major castes ‘Annadata’ ‘Garib’ (Poor) (Farmer) ‘Mahilayen’ (Women) ‘Yuva’ (Youth) Budget Theme 01 02 03 04 Employment Skilling MSMEs Middle Class 1 www.iasscore.in

8. 4 BUDGET SUMMARY & ANALYSIS: 2024-25 Rupee Comes From Rupee Comes From Rupee Comes From Income Tax (19%) Borrowing and Other Liabilities (27%) 19% 27% Union Excise Duties (5%) ₹ 5% 9% 18% Non-Tax Receipts (9%) 1% GST & other taxes (18%) Non-Debt Capital Receipts 4% Customs (4%) 17% Corporation tax (17%) Borrowings and other liabilities account for the largest avenue from where the Borrowings and other liabilities account for the largest avenue from where the Borrowings and other liabilities account for the largest avenue from where the Budget money comes, followed by Budget money comes, followed by income tax, GST & other taxes, and corporation income tax, GST & other taxes, and corporation tax. Rupee Goes To Pensions (4%) Other Expenditure (9%) 4% Interest Payments (19%) 9% 19% Centrally Sponsored Scheme (8%) Pensions (4%) Other Expenditure (9%) 8% 4% Interest Payments (19%) 9% 19% Centrally Sponsored Scheme (8%) Central Sector Scheme (excluding capital outlay on Defence and Subsidy) (16%) Central Sector Scheme (excluding capital outlay on Defence and Subsidy) (16%) Finance Commission and other transfers (9%) 9% 8% 16% ₹ Finance Commission and other transfers (9%) 9% 21% 6% 16% Subsidies (6%) 8% States' share of Taxes and Duties (21%) 14 Defence (8%) 21% 6% Subsidies (6%) 8% States' share of Taxes and Duties (21%) 14 Defence (8%) The highest amount goes towards States’ share of taxes and duties - The highest amount goes towards States’ share of taxes and duties - The highest amount goes towards States’ share of taxes and duties - 21%. In the Interim budget, the major share of expenditure was marked to paying interest Interim budget, the major share of expenditure was marked to paying interest Interim budget, the major share of expenditure was marked to paying interest and the money given to the states, accounting for 20 per cent each of the total and the money given to the states, accounting for 20 per cent each of the total and the money given to the states, accounting for 20 per cent each of the total and the money given to the states, accounting for 20 per cent each of the total expenditure. www.iasscore.in

9. 5 BUDGET SUMMARY & ANALYSIS: 2024-25 PART-B SUMMARY OF THE BUDGET This year, the Union Budget This year, the Union Budget particularly particularly employment, skilling, MSMEs employment, skilling, MSMEs and the middle class. ‘Viksit Bharat’: The government The government is working towards achieving is working towards achieving the goal of  Viksit Bharat Viksit Bharat  by 2047. Viksit Bharat 2047 means 2047. Viksit Bharat 2047 means making India making India entity by 2047 by encompassing entity by 2047 by encompassing various areas of development, various areas of development, such as economy, environment, such as economy, environment, such as economy, environment, such as economy, environment, good governance and social good governance and social progress In line with the strategy set In line with the strategy set out in the interim budget, this out in the interim budget, this budget envisages budget envisages efforts on the following efforts on the following 9 priorities for generating ample priorities for generating ample opportunities for all. Productivity and resilience Productivity and resilience in Agriculture Employment & Skilling Inclusive Human Resource clusive Human Resource Development and Social Development and Social Development and Social Development and Social Justice Manufacturing & Services acturing & Services Manufacturing & Services Manuf Urban Development Energy Security Infrastructure Innovation, Research & Development ovation, Research & Development Next Generation Reforms xt Generation Reforms Expenditure of Major Items focused focused on on in ₹ Crore 4,54,773 Defence Ministry of Road Transport and Highways 2,65,808 Rural Development a a developed developed Agriculture and Allied Activities 1,51,851 Home Affairs 1,50,983 Education 1,25,638 sustained sustained 1,16,342 IT and Telecom 89,287 Health Energy 68,769 56,501 Social Welfare Commerce & Industry 47,559 www.iasscore.in

10. 6 BUDGET SUMMARY & ANALYSIS: 2024-25 Interim Budget The Budget is being presented in the Monsoon session this year as an Interim Budget was presented in February owing to the Lok Sabha elections. Focus of Interim Budget The Interim Budget focused on 4 different castes – Women Farmers Poor Youth It proposed a total expenditure of Rs. 47.65 trillion for FY 2024-25- 6% increase over the revised estimate for FY 2023-24. It projected total receipts at Rs. 30.80 trillion- 12% rise compared to the previous fiscal year. The Interim Budget expected fiscal deficit to be 5.1% of GDP in 2024-25, down from 5.8% in the previous financial year. The Interim Budget also focused on capital expenditure, proposing an 11% increase to Rs. 11.1 trillion, or 3.4% of GDP. Key-Highlights of the Budget In Revised Estimates (RE) 2023-24, the total expenditure was estimated at Rs. 44,90,486 crore. Against this, total expenditure in the Provisional Actuals (PA) for FY 2023-24 was Rs. 44,42,542 crore. The total capital expenditure of Rs. 9,50,246 crore was estimated in RE 2023-24. In PA of FY 2023-24, the total capital expenditure was at Rs. 9,48,506 crore. 6. The total expenditure in Budget Estimates (BE) 2024-25 is estimated at Rs. 48,20,512 crore of which total capital expenditure is Rs. 11,11,111 crore. Of this, a large part went to central sector schemes and other central sector expenditure - 30.07 lakh crore. " Central sector scheme expenditure involves expenditure related to economic services, general services, subsidies, social services and others. Effective capital expenditure, at Rs. 15,01,889 crore in BE 2024-25 shows an increase of 18.2 per cent over RE 2023-24. The government will allocate Rs 2 lakh crore for job creation over the next five year. www.iasscore.in

11. 7 BUDGET SUMMARY & ANALYSIS: 2024-25 India’s inflation continues to be low, stable and moving towards the 4 per cent continues to be low, stable and moving towards the 4 per cent continues to be low, stable and moving towards the 4 per cent target. Core inflation (non-food, non-fuel) currently is 3.1 per cent. (non-food, non-fuel) currently is 3.1 per cent. The government will aim to reach a The government will aim to reach a deficit below 4.5 per cent next year. below 4.5 per cent next year. State-wise allocation of central taxes and duties State-wise allocation of central taxes and duties: The Union Government had ₹1247211.28 crores of Union taxes and duties to distribute to the states. In statement ₹1247211.28 crores of Union taxes and duties to distribute to the states. In statement ₹1247211.28 crores of Union taxes and duties to distribute to the states. In statement ₹1247211.28 crores of Union taxes and duties to distribute to the states. In statement showing the state-wise distribution of net proceeds of Union Taxes and Duties for showing the state-wise distribution of net proceeds of Union Taxes and Duties for showing the state-wise distribution of net proceeds of Union Taxes and Duties for Budget Estimates 2024-25, Uttar Pradesh receives the highest share at around 18% Budget Estimates 2024-25, Uttar Pradesh receives the highest share at around 18% Budget Estimates 2024-25, Uttar Pradesh receives the highest share at around 18% with ₹223737.23 crores. : The Union Government had Income Tax Announcements Budget announces comprehensive review of Budget announces comprehensive review of Income Tax Act 1961 class. Standard Deduction on New Tax Regime Standard Deduction on New Tax Regime Standard Deduction on New Tax Regime Standard Deduction on New Tax Regime raised from Rs 30,000 to Rs 75,000. Rs 17,500 saving. New Tax slabs announced under New Tax Regime New Tax slabs announced under New Tax Regime Up to Rs 3 lakh - no tax Up to Rs 3 lakh - no tax Rs 3 -7 lakh - 5 percent Rs 3 -7 lakh - 5 percent Rs 7-10 lakh- 10 percent Rs 7-10 lakh- 10 percent Rs 10-12 lakh - 15 percent Rs 10-12 lakh - 15 percent Rs 15 lakh - 30 percent Rs 15 lakh - 30 percent Income Tax Act 1961 to help middle- raised from Rs 30,000 to Rs 75,000. Rs raised from Rs 30,000 to Rs 75,000. Rs www.iasscore.in

12. 8 BUDGET SUMMARY & ANALYSIS: 2024-25 Direct Tax Proposals To reduce the compliance burden, promote entrepreneurial spirit and provide tax relief to citizens Rationalisation of capital gains • Short term gains of financial assets to attract 20% tax rate Long term gains on all financial an non-financial assets to attract a tax rate of 12.5% Increase in limit of exemption of capital gains on financial assets to ₹1.25 lakh per year • • • • • Abolish ANGELtax for all classes of investors. Simpler tax regime to operate domestic cruise Provide for safe harbour rates for foreign mining companies (Selling raw diamonds) Corporate tax rate on foreign companies reduced from 40% to 35% Employment Investment and • Simplifying New Tax Regime Savings upto ₹17,500 30% 20% 15% 10% 5% Nil ₹12- ₹15 lakh> ₹15 lakh ₹0- ₹3 lakh ₹7- ₹10 lakh ₹3- ₹7 lakh ₹10- ₹12 lakh Standard Deduction for salaried employees increased from ₹50,000 to ₹75,000 Deduction on family pension for pensioners increased from ₹15,000 to ₹25,000 13 www.iasscore.in

13. 9 BUDGET SUMMARY & ANALYSIS: 2024-25 TDS on e-commerce cut to 0.1 percent from 1 percent Capital gains taxation: There has been a hike in Long Term Capital Gains tax (LTCG) has been announced, from 10% to 12.5%. Short-term capital gains to be 20%. Unlisted bonds, debentures to attract tax on capital gains Angel tax to be abolished for all investor classes Capex outlay for infrastructure retained at interim budget target of Rs 11.1 lakh crore PRIORITY 1 PRODUCTIVITY & RESILIENCE IN AGRICULTURE For farmers, higher Minimum Support Prices has been announced for all major crops delivering on the promise for at least a 50% margin over cost. A digital crop survey will be conducted, covering 6 crore farmers across 400 districts beginning in the ongoing Khareef season. Natural Farming: 1 crore farmers will be initiated into natural farming over the next few years. The government will also look to strengthen production, storage, and marketing for self-reliance in pulses and oilseeds. 6 crore farmers will be brought into the farm and land registry and Kisan credit cards will be provided. New Variety: New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers. Missions for pulses and oilseeds: A strategy is being put in place to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower. Digital Public Infrastructure for Agriculture: The government will facilitate the implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years. PRIORITY 2 EMPLOYMENT & SKILLING The government will implement following 3 schemes for ‘Employment Linked Incentive’: Scheme A: First Timers: This scheme will provide one-month wage to all persons newly entering the workforce in all formal sectors. The direct benefit transfer of one-month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to Rs. 15,000. The eligibility limit will be a salary of Rs. 1 lakh per month. The scheme is expected to benefit 210 lakh youth. www.iasscore.in

14. 10 BUDGET SUMMARY & ANALYSIS: 2024-25 Priorities for Viksit Bharat 01 Productivity and resilience in Agriculture Transforming Agriculture Research Comprehensive review of the agriculture research setup to bring focus on raising productivity and developing climate resilient varieties. National Cooperation Policy For systematic, orderly and all-round development of the cooperative sector Atmanirbharta For oil seeds such as mustard, groundnut, sesame, soyabean and sunflower Vegetable production & supply chain Promotion of FPOs, cooperatives & start-ups for vegetable supply chains for collection, storage, and marketing. Release of new varieties 109 new high-yielding and climate- resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers Natural Farming • 1crore farmers across the country will be initiated into natural farming, supported by certification and branding in next 2 years. • 10,000 need-based bio-input resource centres to be established. Shrimp Production & Export • Financing for Shrimp farming, processing and export will be facilitated through NABARD. Digital Public Infrastructure (DPI) • DPI for coverage of farmers and their lands in 3 years. • Digital crop survey in 400 districts • Issuance of J an Samarth based Kisan Credit Cards 2 2 www.iasscore.in

15. 11 BUDGET SUMMARY & ANALYSIS: 2024-25 Scheme B: Job Creation in manufacturing: This scheme will incentivize additional employment in the manufacturing sector, linked to the employment of first-time employees. Scheme C: Support to employers: This employer-focussed scheme will cover additional employment in all sectors. All additional employment within a salary of Rs. 1 lakh per month will be counted. The government will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches. PRIORITY 3 INCLUSIVE HUMAN RESOURCE DEVELOPMENT AND SOCIAL JUSTICE Implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, schedule tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up. Purvodaya: The government plans to initiate “Purvodaya,” focusing on the holistic development of Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. This initiative aims to enhance human resource development, infrastructure, and economic opportunities, positioning the region as a pivotal engine for achieving national progress. Key highlights include: PRIORITY: 4 MANUFACTURING & SERVICES The government has prioritized the development of the manufacturing and services sectors, particularly focusing on Micro, Small, and Medium Enterprises (MSMEs). Key initiatives include: MSME: Mechanisms will be introduced to facilitate the continuation of credit to Micro, Small and Medium Enterprises (MSMEs) facing stress, in an acknowledgement of the multiple headwinds faced by the sector. MSMEs contribute around 30% of the GDP, 48% of exports, and provide employment to more than 110 million in rural and urban areas. Credit Guarantee Scheme for MSMEs: The government will introduce a credit guarantee scheme for MSMEs in the manufacturing sector to facilitate term loans for machinery and equipment without collateral, supported by a self-financing guarantee fund. New Assessment Model for MSME Credit: Public sector banks will develop in- house capabilities for assessing MSMEs’ creditworthiness based on digital footprints, aiming to improve credit access beyond traditional asset-based criteria. www.iasscore.in

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