↑ New Tax Regime Revised

• The tax rate structure under new tax regime is revised as follows:

• 0-3L Zero
• 3-7L 5%
• 7-10L 10%
• 10-12L 15%
• 12-15L 20%
• 15 & above, 30%
• Salaried employees in the new tax regime will save up to Rs 17,500 in income tax

↑ Standard deduction increased to Rs 75,000  (new tax regime)

• The standard deduction for salaried employees will increase from Rs 50,000 to Rs 75,000. The deduction on family pensions for pensioners will also rise from Rs 15,000. These changes will benefit approximately four crore salaried individuals under the new tax regime.

↑ Fiscal Deficit at 4.9% of GDP

• Net tax receipts are estimated at ₹25.83 lakh crore, with the fiscal deficit at 4.9% of GDP. Gross and net market borrowings are projected at ₹14.01 lakh crore and ₹11.63 lakh crore, respectively, both lower than last year. The government aims to reduce the deficit to below 4.5% of GDP by 2025-26 and continue decreasing it thereafter, according to the Finance Minister.

↑ Angel Tax to be Abolished

• To bolster the Indian startup ecosystem, Finance Minister Nirmala Sitharaman proposed abolishing the Angel Tax for all classes of investors.

↑ Review of Income Tax Act

• Finance Minister Sitharaman announced a six-month review of the Income Tax Act 1961 to make it concise and user-friendly. The move aims to simplify taxation, reduce disputes, and provide tax certainty. Simplified tax regimes have already seen significant uptake, with 58% of corporate tax and over two-thirds of personal income tax in FY 2022-23 coming from these regimes. 

↑ Rs 1,000 Crore Fund to Boost Space Economy

• Finance Minister Sitharaman outlined plans to expand the space economy fivefold over the next decade. A venture capital fund of Rs 1,000 crore will be established to support this initiative.

↑ Push for Private-Driven Research

• Finance Minister Sitharaman announced that a new mechanism will be set up to encourage private-driven research at a commercial scale. This initiative will be backed by a financial pool of Rs 1 lakh crore, as previously outlined in February.

↑ Internships Initiative for Youth

• Under the Prime Minister's package, the government will launch a scheme to provide internships for one crore youth across 500 companies over the next five years. Interns will receive ₹5,000 per month and a one-time assistance of ₹6,000. Companies will cover training costs and 10% of the internship expenses through their CSR funds.

↑ Job Creation in Manufacturing Sector

• Finance Minister Sitharaman introduced a scheme to boost job creation in manufacturing by incentivising the hiring of first-time employees. The scheme offers EPFO contribution benefits for the first four years, with employers receiving up to ₹3,000 per month for two years for each additional employee. This initiative aims to benefit 30 lakh youth and create 50 lakh new jobs.

↑ Credit Guarantee Scheme for MSMEs

• Finance Minister Sitharaman announced a new credit guarantee scheme for MSMEs in manufacturing, designed to facilitate term loans for machinery and equipment purchases without collateral. The scheme will provide guarantees of up to ₹100 crore.

↑ Women’s Workforce Initiative

• Finance Minister Sitharaman has announced boosting women’s workforce participation will be a priority. This will be achieved by setting up working women’s hostels in partnership with industry, organising women-specific skilling programs, and enhancing market access for women-led SHG enterprises.

↑ 9 Key Priorities: Employment, Innovation, More

• Productivity and Resilience in Agriculture
• Employment and skilling
• Inclusive HRD and social justice
• Mfg & services
• Urban development
• Energy security
• Infra
• Innovation, R&D
• Next generation reforms  

↑ Push on Employment-Linked Skilling

• The government will implement three schemes under the Prime Minister's package to boost employment and skilling. Scheme A: First Timers will provide one month's wage, up to ₹15,000, to new employees in the formal sector, with eligibility based on a ₹1 lakh monthly salary. Scheme B: Job Creation in Manufacturing will offer incentives to manufacturing sector employers for hiring first-time employees, covering EPFO contributions for the first four years. Scheme C: Support to Employees will reimburse employers up to ₹3,000 per month for two years for additional employees earning up to ₹1 lakh per month, aiming to create 50 lakh new jobs.

↑ PM Package for Employment and Skilling 

• Finance Minister Sitharaman announced a PM Package consisting of five schemes designed to enhance employment and skilling, with an allocation of ₹2 lakh crore. This year, ₹1.48 lakh crore has been earmarked for education, employment, and skilling.

Union Budget 2024 Live Updates: 

Expectations soar as Finance Minister Nirmala Sitharaman prepares to present the Modi government's first full-term budget of its third term. This budget, the first full budget of Prime Minister Narendra Modi's third term, is expected to lay the foundation for a developed India or 'Viksit Bharat'.

The Economic Survey for 2023-24, which was released yesterday, depicted a picture of resilience and growth in the face of global challenges. It predicts India's GDP to grow at a rate of 6.6-7% for FY25.  Nonetheless, the survey also emphasised specific areas that need attention, particularly in terms of job creation and workforce development.

The survey highlighted the urgent need to generate approximately 80 lakh new jobs annually to accommodate India's expanding workforce. The focus is on creating high-quality employment opportunities in the manufacturing and services sectors, moving beyond agriculture-dependent jobs.

A significant bright spot in the survey is the 13.7% increase in female labour participation over the past six years. Rural India led this positive trend, with the female Labour Force Participation Rate (LFPR) reaching 37% in 2022-23. Government initiatives like the Pradhan Mantri Jan Dhan Yojana (PMJDY) and Pradhan Mantri Mudra Yojana (PMMY) have played crucial roles in empowering women financially and fostering entrepreneurship.

As global dynamics shift, with the USA and EU seeking to reduce dependence on China, India aims to position itself as a manufacturing powerhouse. The budget may introduce more Production-Linked Incentive (PLI) schemes, especially in labour-intensive sectors. This move could address two critical needs: providing employment to India's youth and boosting economic growth.

Unemployment remains a significant concern, and the budget is expected to unveil measures to address this potential future crisis. Key focus areas may include policies for skilling and reskilling India's employable youth and facilitating easy credit access for aspiring entrepreneurs, among other initiatives.

As the day unfolds, we will continue to update this story with key announcements and analyses from Finance Minister Sitharaman's budget presentation. Stay tuned for comprehensive coverage of Union Budget 2024-25 and its implications for India's economic future.