Union Budget 2024: A Comprehensive Analysis by Mr Sandeep Bhushetty

The Union Budget 2024 has been met with a mix of anticipation and optimism. This budget has set the stage for significant development and populist measures, aiming to strike a balance between immediate needs and long-term growth. Here’s a detailed look at the key highlights and implications of this reform-oriented budget.

Development and Populism: A Dual Approach

This year’s budget is designed to cater to both development and populist needs. By focusing on short-term and long-term capital gains, the government has managed to keep the impact on investments minimal. The slight increase in capital gains tax is unlikely to deter investors, maintaining a conducive environment for investment growth.

Fiscal Deficit: A Positive Trajectory

One of the most encouraging aspects of the budget is the reduction in the fiscal deficit target. This move is highly positive from an international market perspective, as evidenced by India’s improved ratings. The government's continuous efforts to reduce the fiscal deficit are crucial for the country's long-term growth, attracting more investments into India.

Youth Job Creation and Employment Generation

A significant announcement in the budget is the focus on youth job creation and employment generation. This initiative is a substantial move towards harnessing the demographic dividend, providing a much-needed boost to the economy.

Boosting Consumption and GDP Growth

The budget’s emphasis on increasing consumption across various sectors is expected to give a substantial boost to GDP growth. By stimulating demand, the government aims to create a ripple effect that will benefit multiple industries and the overall economy.

Key Budget Highlights:

1. Gold Custom Duty: Reduced from 15% to 6%, making gold more affordable and boosting the jewellery sector.

2. Standard Tax Deduction: Increased to Rs 75,000, providing relief to taxpayers.

3. LTCG & STCG Tax Rates: Long-term capital gains (LTCG) tax rate increased to 12.5% and short-term capital gains (STCG) to 20%, with LTCG exemption up from Rs 1 lakh to Rs 1.25 lakhs.

4. Youth and Skill Development: An allocation of Rs 2 lakh crore over five years to enhance youth employment and skill development.

5. Power Plant in Bihar: A 2400 MW power plant with a total cost of Rs 21,400 crore, aimed at improving the energy infrastructure.

6. Infrastructure Capex: Rs 11.11 lakh crore allocated for infrastructure, up from Rs 9.5 lakh crore, representing 3.4% of GDP.

7. STT on Options and Futures: Securities Transaction Tax (STT) on options increased from 0.0625% to 0.1% and on futures from 0.0125% to 0.02%.

8. Customs Duty on Electronics: Basic Customs Duty on mobile phones, PCBA, and chargers was reduced to 15%, encouraging the electronics sector.

9. Telecom Equipment: Basic Customs Duty increased from 10% to 15% on specified telecom equipment to support domestic manufacturing.

10. Power Plant Joint Venture: A joint venture between BHEL and NTPC for an 800 MW thermal power plant.

This budget reflects a strategic approach to stimulate growth while maintaining fiscal discipline. The measures announced are expected to drive consumption, create jobs, and attract investments, setting a solid foundation for India's long-term economic prosperity.