The Budget 2024 was unveiled by Finance Minister Nirmala Sitharaman, who announced a number of transformative initiatives. Notable highlights include the doubling of Mudra loan limits from Rs 10 lakh to Rs 20 lakh, the development of investment-ready industrial parks in 100 locations through state and private sector partnerships, and a Rs 10 trillion allocation for urban housing. A new integrated technology infrastructure is also expected to improve the results of the Insolvency and Bankruptcy Code (IBC).

Market Response

The Indian equity market experienced substantial volatility on the day of the announcement. The BSE Sensex was trading at 80,340.45, down 161.63 points or 0.20%, at 12:04 PM, while the NSE Nifty50 was at 24,457.80, down 51.45 points or 0.21%.

Analyst Perspectives on Budget 2024 Proposals

Agriculture: Anand Ramanathan, Partner and Consumer Products and Retail Sector Leader at Deloitte India, emphasized the budget’s emphasis on the promotion of natural farming, the expansion of digital public infrastructure, and the distribution of climate-resistant seed varieties. It is anticipated that these initiatives will increase productivity at the farm level. The budget also promotes the production of crustaceans, supports self-sufficiency in pulses, and emphasizes vegetable production clusters to align with evolving consumption patterns.

Employment and Skilling: Sahil Gupta, Partner at Deloitte India, underscored the budget’s provisions for employment and skilling. The gross enrollment ratio in education will be increased by the allocation of funds to youth through education and skilling loans. The objective of this initiative is to provide young individuals with industry-relevant skills, thereby promoting a more productive future workforce.

E-Commerce: Anand Ramanathan also observed that the budget places a strong emphasis on e-commerce centers, which will have a substantial impact on the Direct-to-Consumer (D2C) ecosystem. These centers are anticipated to enhance the operational efficiency and market accessibility of small vendors and aggregators, including exports.

Budget 2024: Reality vs. Expectations

Economic and Fiscal Objectives:

The fiscal deficit target for FY25 has been established at 5.1%, with the FY24 objective being revised from 5.9% to 5.8%. The projected tax receipts for 2024-25 are Rs 26.02 lakh crore, while the capital expenditure outlay is Rs 11.11 lakh crore. The gross market borrowing objective for FY25 is Rs 14.13 lakh crore, while the divestment target is Rs 50,000 crore. It is anticipated that nominal GDP growth will reach 10.5%.

Sectoral Distributions:

Railways: Rs 2.55 lakh crore, a 5% increase from the previous year’s Rs 2.4 lakh crore.

Production Linked Incentive (PLI) Scheme: Rs 6,200 crore.

Health Sector: Rs 90,170 crore, a 13.8% increase from the revised estimate of the previous year.

Education Budget: Rs 1.25 lakh crore for 2024-25.

Taxation: The tax rates are consistent across both the new and previous tax regimes. The new regime imposes a basic exemption limit of Rs 3 lakh, while the previous regime imposed a limit of Rs 2.5 lakh. No modifications were disclosed regarding the deduction limits under Section 80C or the interest paid on housing loans.

Housing Initiatives: The budget proposed a scheme to aid middle-income groups in the purchase or construction of dwellings, with an increased allocation for the Pradhan Mantri Awas Yojana (PMAY) to Rs 80,671 crore in 2024-25. The objective of this initiative is to increase the demand for residential and commercial real estate in India by constructing an additional 2 crore dwellings over the next five years.

Healthcare Improvements: The budget allocates Rs 7,200 crore for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) and Rs 646 crore for the Ayushman Bharat Health Infrastructure Mission (PM-ABHIM). These initiatives will enhance the healthcare infrastructure and provide comprehensive health coverage throughout the nation.

Solar Energy and Free Electricity: The Finance Minister suggested a rooftop solar program that would provide free electricity to up to 300 units per month to 1 crore households, potentially saving Rs 15,000-18,000 per household annually. This program is designed to assist India in its endeavor to produce 500 GW of renewable energy by 2030, thereby reducing its reliance on fossil fuels and addressing climate change.