While presenting the interim budget on February 1, 2024, Finance Minister Nirmala Sitharaman had stated that, “In the full budget in July, our Government will present a detailed roadmap for our pursuit of ‘Viksit Bharat’.” If India does aim to become a developed country by 2047 as per Prime Minister Narendra Modi’s vision of Viksit Bharat, the Union Budget 2024 which will be presented on July 23 must prioritise the education of children, who are the future of the country. Read on to find out what experts from the education sector shared with us at Higher Education Plus about their expectations from the Union Budget 2024.
The Union Budget 2024 presented by Finance Minister Nirmala Sitharaman is a pivotal document aimed at stimulating the Indian economy through various fiscal measures and policy reforms. The budget’s focus on supporting the poor, women, youth, and farmers underscores the government’s commitment to inclusivity and social welfare. However, a critical analysis reveals both commendable aspects and potential areas of concern.
The emphasis on tax reforms, infrastructure development, and support for key sectors like agriculture and MSMEs is commendable. However, the success of these measures will hinge on effective implementation, fiscal discipline, and the ability to navigate global and domestic economic challenges. Overall, the budget reflects a balanced approach with a mix of short-term relief measures and long-term structural reforms.
The introduction of new income tax slabs under the New Tax Regime, along with an increased standard deduction, is a significant step towards easing the tax burden on the middle class. These measures are likely to enhance disposable incomes and stimulate consumer spending, which is crucial for economic growth. The rationalization of capital gains tax rates, with reduced taxes on long-term and short-term capital gains, is expected to encourage investment in financial and non-financial assets.
This move aligns with the government’s objective of fostering a more investor-friendly environment. Retaining the capital expenditure outlay at Rs 11.1 lakh crore for infrastructure development is a strong signal of the government’s commitment to improving the country’s physical and social infrastructure. This is expected to generate employment and spur economic activity.
The allocation of Rs 1.52 lakh crore for agriculture and allied sectors, along with initiatives to promote climate-resilient crop varieties and natural farming, highlights a balanced approach towards sustainable agricultural development and food security. Enhanced support for MSMEs through increased Mudra loan limits, credit guarantee schemes, and measures to unlock working capital are crucial for the sector’s growth.
job creation schemes and skill development programs are well-targeted to address unemployment and enhance workforce capabilities. The focus on women-centric schemes and youth employment initiatives reflects a strategic approach to harnessing the demographic dividend. Programs for working women hostels, internships, and financial support for higher education are aimed at enhancing the employability of certain demographics.
While the fiscal deficit target of 4.9% of GDP is ambitious, achieving it amidst global economic uncertainties and domestic challenges may be difficult. The reduction in planned gross market borrowing by Rs 12,000 crore is positive but maintaining fiscal discipline will require stringent measures. Although the simplification of capital gains tax is generally positive, the hike in the tax rate for short-term capital gains from 15% to 20% could deter short-term investments and affect market sentiment.
The increase in STT on options and futures transactions could impact trading volumes and liquidity in the stock markets. This might be a disincentive for retail investors and traders. While the reduction in customs duties on certain items like gold, silver, and electronic components is beneficial, the increase in duties on telecom equipment and non-biodegradable plastics could raise costs for industries relying on these imports.
The ambitious nature of several initiatives, such as the large-scale infrastructure projects, agricultural reforms, and MSME support programs, poses implementation challenges. Ensuring timely and effective execution will be critical for realizing the intended benefits. The clarification that corporate gifts will be taxed both in the hands of the transferor and recipient could lead to complexities and potential disputes, affecting corporate gifting practices.
Dr Rajat Gera, Professor, Cluster Dean, Management, Economics, Commerce, Liberal studies, Director School of Management, OMBR, CMR University, Bangalore
