Analysis of India’s 2024 Budget: Lofty Announcements and Ground Realities

Examining the Discrepancies Between Government Announcements and Implementation Strategies Across Key Sectors

The 2024 Indian Budget, presented with much fanfare, has been met with a mixture of enthusiasm and skepticism. While the government has announced significant allocations and ambitious plans, a closer inspection reveals several discrepancies and challenges in the proposed measures. This report delves into the critical aspects of the budget, highlighting the initial trends, key announcements, skill development issues, market reactions, and political implications.

Initial Budget Trends: 

At first glance, the 2024 budget appears to have allocated substantial resources to Bihar and Andhra Pradesh, with notable benefits for leaders Nitish Kumar and N. Chandrababu Naidu. Bihar is set to receive ₹26,000 crore for infrastructure, including expressways and a new bridge over the Ganges in Buxar. Andhra Pradesh has been allocated ₹15,000 crore. However, a deeper analysis suggests that the true beneficiaries are industrial giants, whose gains are celebrated by pro-government media, raising concerns about the budget’s real intent.

Key Announcements and Their Implications: 

The budget includes several measures aimed at youth welfare, agricultural development, and infrastructural enhancements. Some of the main announcements are:

1. Support for Farmers:
   • Assistance for one crore farmers for natural farming.
   • Establishment of 10,000 bio-input centers in five states.
   • Distribution of farmer credit cards.
2. Youth Employment and Internship:
   • Monthly stipend for first-time job seekers through Direct Bank Transfer (DBT).
   • Support for the Employees’ Provident Fund (EPF) for the first four years for the manufacturing sector.
3. Infrastructure Development:
   • ₹26,000 crore for Bihar’s infrastructure.
   • ₹15,000 crore for Andhra Pradesh.
4. Financial Initiatives:
   • Increased loan limits under the Mudra Bank Scheme.
   • New loan guarantee scheme for the manufacturing sector.
   • Subsidized interest rates for urban housing loans under PM Awas Yojana 2.0.
5. Senior Citizens and Pensions:
   • Launch of the NPS Vatsalya scheme allowing senior citizens to open NPS accounts for their grandchildren.

Despite these promising announcements, the budget has been criticized for lacking concrete plans for execution. The emphasis on figures and large allocations seems to overshadow the absence of a clear roadmap for practical implementation.

Skill Development and Budget Discrepancies: 

The budget has allocated only ₹9500 crore for skill development, a figure that has been deemed insufficient by many experts. The skill development program, initiated by Rajiv Pratap Rudy and continued under Prime Minister Modi, has faced significant criticism over the years. Reports of mismanagement and inefficacy, such as equipment being found at Rudy’s residence under the guise of skill development, highlight broader issues of accountability and effectiveness.

Market Reaction to Increased Capital Gains Tax: 

The budget’s changes to the capital gains tax have led to a noticeable dip in the stock market. The long-term capital gains tax rate has been increased from 10% to 12.5%, and the short-term capital gains tax has been increased to 20%. These changes particularly affect small investors who rely on short-term investments for extra income. The government’s educational loan scheme, covering only 3% of the interest, has also faced criticism for being ineffective.

Additional Tax Reforms and Deductions:

• The Standard Deduction has been increased from ₹50,000 to ₹75,000.
• The deduction of family pension has been raised from ₹15,000 to ₹25,000.
• The New Tax Regime slabs are:
  • 0-3 Lakh: Nil
  • 3-7 Lakh: 5%
  • 7-10 Lakh: 10%
  • 10-12 Lakh: 15%
  • 12-15 Lakh: 20%
  • More than 15 Lakh: 30%
• Angel Tax has been abolished for all categories of investors.
• Securities Transaction Tax (STT) on Futures and Options (F&O) increased to 0.2%.

Capital Expenditure and Fiscal Management:

• The budget keeps capital expenditure at ₹11.11 lakh crore, or 3.4% of GDP.
• Capital Expenditure trends over the years:
  • 2019: ₹3.1 Lakh Crore
  • 2021: ₹4.4 Lakh Crore
  • 2022: ₹5.5 Lakh Crore
  • 2023: ₹7.5 Lakh Crore
  • 2024: ₹10 Lakh Crore
  • 2025: ₹11.1 Lakh Crore
• Fiscal deficit has been lowered to 4.9% of GDP, with market borrowing unchanged at ₹14.13 lakh crore.
• The government aims to reach a fiscal deficit of below 4.5% by FY26.

Sector-Specific Announcements:

• Basic Customs Duty (BCD) on mobile phones and chargers reduced to 15%.
• A substantial sum of ₹2.66 lakh crore earmarked for rural development, including enhancing rural infrastructure.
• Over ₹3 lakh crore allocated for schemes benefiting women and girls.
• The limit of Mudra loans extended to ₹20 lakh from ₹10 lakh for previous loan repayers.
• A focus on employment, skilling, MSMEs, and the middle class, with a detailed roadmap for nine priorities: Agri, Employment, Inclusive Development, Manufacturing and Services, Urban Development, Energy, Infrastructure, Innovation, R&D, and NextGen reforms.
• The PM Garib Kalyan Ann Yojna extended for 5 years, benefiting 80 crore people.

Youth and Skill Development Initiatives:

• ₹2 lakh crore will be spent on youth and skill development over the next five years.
• Digital coverage of farmland to help farmers receive their dues.
• Govt to provide incentives to 30 lakh youth entering the job market by providing 1 month PF contribution.
• Working women hostels to be set up to promote women’s participation in the workforce.
• The PM Vishwakarma Scheme launched to support artisans and craftspeople.
• A model skilling loan scheme will be revised to facilitate loans up to ₹7.5 lakh.
• A new centrally-sponsored scheme for skilling in collaboration with states and industry aims to skill 20 lakh youth over 5 years.

Infrastructure and Urban Development:

• 14 large cities with a population above 30 lakh will have Transit Oriented Development plans.
• 1 crore urban poor and middle-class families to be covered under PM Awas Yojana Urban 2.0.
• 100 weekly ‘haats’ or street food hubs in select cities.
• Investment-ready “plug and play” industrial parks to be developed in or near 100 cities.
• More than 1.28 crore registrations and 14 lakh applications received under PM Surya Ghar Muft Bijli Yojana.
• A pumped storage policy to support electricity storage and the integration of renewable energy.

Agricultural and Environmental Initiatives:

• New 109 high-yielding, climate-resilient seeds for 32 field and horticulture crops.
• ₹1.52 lakh crore allotted for agriculture and allied sectors.
• Funds for developing climate-resilient seeds provided to the private sector and domain experts.
• A policy to support pump storage projects will ensure round-the-clock energy supply.

Miscellaneous Announcements:

• 100 branches of India Post Payments Bank to be set up in the North East region.
• Voluntary closure of LLPs to save late fees and fines.
• SIDBI to open 24 new branches to serve MSME clusters.
• Female Labour Force Participation Rate (LFPR) rose to 37% in 2022-2023 from 23.3% in 2017-2018.
• Women hold 55.6% of PM Jan Dhan Yojana accounts.
• With 8.3 million SHGs created, 89 million women are covered under Deendayal Antyodaya Yojana-NRLM.
• 68% of loans sanctioned to women under PM Mudra Yojana, and 77.7% women beneficiaries under Stand Up India.
• Nuclear energy to be an important part of India’s energy requirements.
• An integrated technology platform to be set up for improving outcomes under the Insolvency & Bankruptcy Code.

Conclusion: 

The 2024 Indian Budget, while adorned with grand announcements and lofty figures, appears to lack the necessary groundwork for effective implementation. The government’s approach has raised eyebrows, with accusations of building a façade on unsubstantiated claims and diverting attention from critical issues. For the budget to truly benefit the targeted sectors, the focus must shift from mere announcements to effective execution and real-world impact. The challenge lies not in the vision but in translating promises into tangible benefits for the people.