Union Finance Minister Nirmala Sitharaman presented the Interim Union Budget for the financial year 2024-25 today. The Finance Minister expressed the government’s commitment to steering India towards becoming a developed nation (Viksit Bharat) by 2047. The budget speech was short as the detailed roadmap for the pursuit of Viksit Bharat would be presented along with the full budget in July after the general elections.
While delivering the budget speech, The Finance Minister said, “The Indian economy has witnessed a positive transformation in the last 10 years. People are looking towards the future with hope. In 2014, the country was facing enormous challenges. With Sabka Saath, Sabka Vikaas, the Narendra Modi-led government overcame those challenges,”
Fiscal consolidation, alongside investments in infrastructure, agriculture, green initiatives, and railways were the key highlights of the budget. Let us have a look at some of the announcements related to startups, sustainability, research, and innovation:
To transform India’s EV landscape, the government will offer support for manufacturing and charging infrastructure. This will not only boost EV production but will also position EVs as a viable solution by reducing range anxiety. Greater adoption of electric buses for public transport will also be encouraged.
Easy Funding for Sunrise Sectors
A ₹1 trillion fund aimed to incentivize innovation and research, especially among the private sector, in sunrise sectors was announced in the interim budget. The fund will offer 50-year interest-free loans and provide long-term financing and refinancing with long tenor at minimal or zero interest rates.
The Government will also announce a new scheme to aid research in deep tech technologies for defense purposes and promote Atma Nirbharta. Overall, a focus will be deepened on leveraging the combined tech and youth potential in India. This ₹1 trillion corpus will serve as an enabler to position our nation as a global tech leader in the coming decade.
The Finance Minister announced a slew of green measures to meet the commitment for ‘net zero’ by 2070-
- Support in the form of viability gap funding will be offered for harnessing offshore wind energy potential for an initial capacity of one giga-watt.
- To reduce India’s import dependency on natural gas, methanol, and ammonia, coal gasification and liquefaction projects of capacity 100 MT are proposed to be set up by 2030.
- The phased blending of compressed biogas in compressed natural gas (CNG) for transport, as well as piped natural gas (PNG) for households has also been proposed.
- The government also plans to provide financial assistance for the procurement of biomass aggregation machinery.
Extension of Tax Benefits for Startups
In a relief for the startup community, the extension of tax benefits for startups was announced in the interim budget. To provide continuity, certain tax benefits available for startups that were expiring on 31.03.2024 have been extended to 31.03.2025.
In addition, our Finance Minister also shared how the PM Mudra Yojana has so far sanctioned loans worth ₹ 22.5 lakh crore for entrepreneurial aspirations of the youth of the country.
Investments and related announcements around the railways sector was a key highlight of the intern union budget 2024. The port connectivity corridor, the energy, mineral, and cement corridor, and the high traffic density corridor, were announced as the 3 major railway corridors, with an aim to improve GDP and reduce logistics costs from 12% of the GDP and increase competitiveness.
The budget includes provision for long-term financing to states for the development of tourism sector, including spiritual tourism. This move indicates a focus on diversifying and strengthening the tourism infrastructure across the country. Another decision that will further support this vision is UDAN scheme, under which ₹ 502 crore have been allocated to revive 22 airports, start 124 new air routes and finance viability gap funding for north-east connectivity.
Other than these major highlights, strong commitments were also shared during the interim budget announcement. As India eyes its goal of a $5 trillion economy, skilling for MSMEs became a major agenda in the union budget 2024, to ensure that MSMEs are globally competitive. Subsequently, investments and financial arrangements to support the same will be made. From an agricultural lens, efforts to boost farmer income will be stepped up as well as a growth in investments for post-harvest activities including aggregation, modern storage, efficient supply chains, primary and secondary processing, and marketing and branding, are likely to see an upward trend. Interest free loans will be provided to accelerate and enhance tourism in the country, with a special focus on development of tourism in Lakshadweep.
Finally, some positive announcements for those at the bottom of the pyramid, including the implementation of the PM Awas Yojana (Grameen), the Ayushman Bharat cover, Lakhpati Didi Scheme, etc. were made. A focus on negotiating bilateral investment treaties with foreign partners to facilitate foreign investments was also voiced.
While the interim budget, in principle, steers away from making any bold proclamations and far-reaching implications, the interim union budget 2024 seeks to advance India’s position as a global influence in the next 5 years. Focus on solar power for electrification, increase in women participation in education, higher support for youth in entrepreneurship, and a focus on the poor, women, youth and farmers, are likely to lead the way for a more progressive, inclusive and sustainable India.
The interim budget clearly outlines a road-map for long-term planning linked to Vision 2047, which aims for comprehensive development and modern infrastructure, potentially influencing GDP growth in the long run.