India budget 2024: Jobs, infrastructure, taxes - highlights from FM Nirmala Sitharaman's interim budget in election year

Target to narrow fiscal deficit

India has set a target to narrow its fiscal deficit to 5.1% in the fiscal year 2024/25, after lowering the current year's deficit to 5.8% of gross domestic product (GDP), Finance Minister Nirmala Sitharaman said.

Tourism

States will be given long-term financing to develop this sector, including spiritual tourism.

No change in taxes

"As for tax proposals, I do not propose to make any changes relating to taxation and propose to retain the same tax rates for direct taxes and indirect taxes including import duties," said Nirmala Sitharaman.

Rapid boost in aviation sector

Expansion of airports and development of new ones will continue. Indian carriers have proactively placed orders for over 1,000 aircraft, she said. Number of airports in the country has increased to 114.

“The aviation sector has been galvanised in the last 10 years and the number of airports have doubled to 114,” she said.

“A total of 517 new routes are carrying 1.3 crore passengers. Indian carriers have proactively placed orders for over 1,000 new aircraft. Expansion of existing airports and development of new airports will continue expeditiously,” she said.

“We have a fast expanding middle class and rapid urbanisation is taking place, metro rail and Namo Bharat can be the catalyst for the required urban transformation. Expansion of these systems will be supported in large cities focusing on transit-oriented development," added the minister.

Railway 'corridor' programmes to be implemented as India gives emphasis on a full-scale makeover of its transportation and logistics infrastructures. According to market watchers, this makes sense given the renewed focus on creating manufacturing hubs in India, as well as 'Make in India'.

Tech startup support

A corpus of Rs100,000 crore (Rs100 billion) to be set up in tech sector with 50-year interest free loan to provide long term financing with long tenure for start ups to harness the spirit of entrepreneurship of the youth.

"As innovation is the foundation of development, for our tech-savvy youth, this will be a golden era. A corpus of Rs 1 lakh crore with 50-year interest free loans will provide long term financing at low or nil interest rates for the private sector to scale up research in sunrise sectors," she said.

The priority for the government is to provide ample training and empower the Indian MSMEs to compete globally and to meet their needs, the government will help the MSMEs innovate and grow at scale, she added.

Aqua parks

Seafood exports have doubled, as NDA makes its pitch for bigger and better outcomes in the industry. Five aqua parks are to be set up.

Private, public participation in agriculture

Government will encourage private and public investment activities in post-harvest operations in agricultural sector.

Push for homes

In what could be a big break for India's housing sector, the budget is making a push for more of growing middle-class populace to build their homes.

In an election year, any major boost for the housing sector will ripple through the entire economy, according to senior real estate industry sources

India, Middle East, Europe strategic corridor

FM hailed the recently signed treaty on India, Middle East, Europe trade corridor. 

The recently announced India-Middle East-Europe Economic Corridor (IMEC) would be a strategic and economic 'game changer' for India and reiterated PM Modi's statement that the corridor would become the basis of world trade for centuries.

"The recent India Middle East Europe economic corridor is a strategic and economic game changer for India and others. In the words of the Prime Minister, the corridor and I quote, the corridor will become the basis of world trade for hundreds of years to come and history will remember that this corridor was initiated on Indian soil," the minister said.

People are living better

Investments are robust. Economy is doing well. People are doing better and living better. With better aspirations, “ says Nirmala Sitharaman.

Cervical cancer vaccination for girls

"Our government will encourage vaccination for girls from the age group of 9 to 14 years for prevention of cervical cancer. Various schemes for maternal child care will be brought under one comprehensive programme for synergy in implementation, upgrades of anganwadi centres under saksham anganwadi and Poshan 2.0 will be expedited for improved nutrition delivery, early childhood care, and development," she said.

“Several youths are ambitious to get qualified as doctors. Our government plans to set up more medical colleges by utilising the existing hospital infrastructures under various departments. A committee for this purpose will be set up to examine the issues and make relevant recommendations," Sitharaman added.

Startup focus

The government's focus on the startup scene continues. "Startup India and startup guarantee schemes are assisting our youth", says FM. Inflation is moderate, and there's timely delivery of projects, she said.

Focus on rooftop solarisation, free electricity

The central government will focus on popularising rooftop solarisation and free electricity.

“One crore households will be able to obtain up to 300 units of free electricity per month,” Nirmala Sitharaman said.

She said that households will save up to Rs 15,000- Rs 18,000 from free solar power and selling to power distribution companies.

She said the scheme follows Prime Minister Narendra Modi’s announcement that the government will launch Pradhanmantri Surydaya Yojana with the target of installing rooftop solar on 10 million houses.

“This will not only reduce the electricity bill of the poor and middle class but will also make India self-reliant in the field of energy,” the Finance Minister said.

'Developed India by 2047'

We are working on making India a ‘Vikasit Bharat’ (developed India) by 2047, FM said.

"We are addressing systemic inequalities that plagued our society,” she added.

The saturation approach we are adopting for covering all eligible people is the true and comprehensive achievement of social justice. This is secularism in action. Prevents corruption. We focus on outcomes so that the socio economic transition is achieved, Nirmala Sitharaman said.

India ‘Economy has got a new vigour’, says FM Nirmala in her opening remarks. The country has laid solid foundations for 'Amirt kaal', she added.

'A budget for elections': opposition

Opposition MPs have attacked the government ahead of the budget presentation saying they have very little hope from the Finance Minister.

Attacking the BJP-led Central government, Marumalarchi Dravida Munnetra Kazhagam (MDMK) MP Vaiko said on Wednesday that the interim budget presentation will be an exercise of "hoodwinking" the people of India.

He also alleged that the Union government has not provided enough funds for rehabilitation and reconstruction in the aftermath of the recent floods in Tamil Nadu.

"They will try to hoodwink the people of India." Vaiko said this when asked about his expectations for the interim budget.

Narrowing fiscal deficit

The FM Nirmala Sitharaman can call on some upbeat news on India’s economy and its near-term chances. The IMF this week upgraded the GDP to grow 6.7 per cent in the new financial year starting April as against the earlier projected 6.3 per cent

Also, India’s fiscal deficit ‘narrowed slightly’ to Rs9.82 trillion during April-December 2023 from Rs.9.93 trillion same period the previous year. “It represents 55 per cent of the government’s projection for the current financial year, compared to 59.8 per cent recorded during the same period last year,” says a note issued by Reliance Securities.

FM calls on President Murmu

Keeping with tradition, Finance Minister Nirmala Sitharaman first called on President Droupadi Murmu at Rashtrapati Bhawan together with her collegaues Ministers of State Bhagwat Karad and Pankaj Chaudhary ahead of the Budget presentation in Parliament on Thursday morning.

Sitharaman earlier arrived at the Finance Ministry ahead of her big speech in Parliament today.

She was seen carrying a red-coloured 'bahi khata' which contains Budget document, in paperless form.

Over the past past three years, a new tradition has been set, where the finance minister carries budget documents in electronic form in a bahi khata.

What is an interim budget?

At 11 am, Union Finance Minister Sitharaman will table the interim budget as the Lok Sabha polls are due to be held this year. This will be her sixth Budget as the Finance Minister and last in the second term of the the Modi government.

The interim budget will take care of the financial needs of the intervening period until a government is formed after the Lok Sabha polls after which a full budget will be presented by the new government. Consequently, it undergoes less scrutiny and debate in Parliament.

In contrast, the annual Union Budget is a much more thorough financial blueprint, encompassing all facets of expenditure, fund distribution, and revenue generation for the entire fiscal year.

With this Budget Presentation Sitharaman will equal the record set by former Prime Minister Morarji Desai, who as finance minister, presented five annual budgets and one interim budget between 1959 and 1964.

The Budget Session of Parliament commenced on Wednesday with President Droupadi Murmu addressing a joint sitting of Lok Sabha and Rajya Sabha.

Highlighting growth

2024 being an election year, today’s budget announcement will skew heavily in putting out a strong message of economic growth. There could also be multiple incentives for individuals and businesses, especially the micro and small ventures, analysts say.

'Wait and watch budget'

“This is going to be a ‘Vote on Account’ budget – and thus generally no ‘big bang’ announcements are made,” said Krishnan Ramachandran, CEO of Dubai-based Barjeel Geojit Financial Services.

“It will typically be a review of the government finances and progress made on various initiatives. We can also expect some amendments to tax laws. Essentially, it will be a ‘wait and watch’ one.”