Finance Minister Nirmala Sitharaman introduced the Indian budget for 2024 on July 23. This was the first entire Indian budget from the Modi 3.0 government, and it showed changes in how the government wanted to spend money after the elections.
The budget included more money for people who pay taxes using the new system by raising the standard deduction and changing the tax levels. However, the budget also increased taxes on people's investment profits, which could have been better news for investors.
The Indian budget got a big help from the RBI, which gave the government Rs 2.11 lakh crore. This money helped the government fund projects in Andhra Pradesh and Bihar, which are important for their political partners, TDP and JD(U). With better money coming in from taxes, the government lowered the fiscal deficit target for this year to 4.9%, down from 5.1% earlier in the year. However, the plan for 2025-26 stays the same, with a fiscal deficit of 4.5%. Also, the total money the government plans to borrow was slightly reduced.
Here are the five main points from the Indian budget 2024:
1. Jobs: The budget focuses on creating jobs by supporting direct-benefit transfers, paid internships, and training programs. This should help fill 7.8 million job openings in the non-farming sector over the next seven years.
2. Support for Rural and Agricultural Areas: The government is spending more on farming and rural areas - Rs 1.52 lakh crore and Rs 2.66 lakh crore, respectively. This is to win back support from rural voters, which is key for the BJP's future elections.
3. Help for Specific Regions: There's extra money for Andhra Pradesh and Bihar. This includes funds for building infrastructure and helping the economy in these areas, aiming to keep political support strong there.
4. Continued Spending on Infrastructure: The government is still spending a lot on infrastructure, Rs 11.11 lakh crore, to help grow the economy while also aiming to lower the fiscal deficit to 4.9%.
5. Removal of Angel Tax: While the budget raised taxes on some investment gains, it removed the angel tax to encourage more startup companies and help the economy grow.
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