Interim Union Budget 2024 – Key Takeaways for Students

By – Prof Shekhar Chaudhuri, Distinguished Professor, IIHMR University, Jaipur , Ex – IIMC Director

Here are my comments on Budget 24:

1. Before making any comments on the Budget for the coming financial year, i.e. 2024-2025 I would like to say that we need to keep in mind that this is only an interim budget as the general elections are only a few months away. The full budget will be presented by the new government at the centre in July 2024  after the elections. Therefore our expectations from this interim budget need to be limited. 
2. I expected the government to continue on the trajectory that had been set in the last few years so that there is greater predictability of the economic policies. This is important for longterm investors. However, given that this is an election year it was expected that there would be a degree of populism to woo the electorate.
3. In keeping with the need to bring about some degree of predictability the current budget maintains status quo in both direct and indirect taxation, including import duties. However, the middle class would not be happy with this. Companies may find this predictability beneficial in their financial planning, thereby encouraging investment. 
4. This budget has continued the focus on infrastructure development, which has been the hallmark of this government. The outlay for the next year is being increased by 11.1 percent to 11.11 lakh crore. This is 3.4 percent of the GDP. This policy of strengthening the infrastructure will pay rich dividends in the years to come. 
5. FM Sitharaman announced that 40,000 normal rail bogies will be converted to Vande Bharat to enhance the safety, convenience, and comfort of passengers. She also announced that key rail infrastructure projects including Metro Rail and Namo Bharat will be expanded to more cities. Also, 3 major railway corridors were also announced – the port connectivity corridor, the energy, mineral, and cement corridor, and the high traffic density corridor. The expected decongestion of the high-traffic corridors will also help in improving the operations of passenger trains. 
6. The FM also did not forget the people at the bottom of the pyramid.  In her speech she announced that eighty-three lakh SHGs (self-help groups) with nine crore women are transforming the rural socio-economic landscape with empowerment and self-reliance. Buoyed by the success of the Lakhpati Didi scheme the target for Lakhpati Didis has been raised from 2 crore to 3 crore. With a financial injection of ₹1 lakh per household for one crore beneficiaries, this initiative is poised to significantly uplift the economic status of rural women. 
7. Through roof-top solarisation, 10 million households will be enabled to obtain up to 300 units of free electricity every month. This will help save up to ₹15,000-18,000 annually for households from free solar electricity and selling the surplus to the distribution companies. This is an important policy from the perspective of sustainable economic development 
8. Development of tourism has been an important policy plank of this government for the last few years. The government has announced that states will be encouraged to take up comprehensive development of iconic tourist centers’ branding and marketing at a global scale. A rating system based on the quality of facilities and services will be established. Long-term interest-free loans will be provided to states for financing these developments. Projects for port connectivity, tourism infrastructure, and amenities will be taken up on our islands, including Lakshadweep. This will help in generating employment as well. The tourism sector has a huge potential especially in areas like the himalayan region, where large scale manufacturing projects may not be easy to develop. Also the natural environment there is very fragile. Therefore stress has to be given on eco-tourism development. Hopefully this will be emphasized by the government. In the recent past the Uttar-Kashi region in Uttarakhand was in the news for large scale subsidence. Care must be taken to ensure that such ecological disasters are avoided in the future. To ensure that, expert advice must be taken in planning infrastructure projects in ecologically vulnerable regions. The cost of environmental assessment can also be included in the project proposals so that there is no excuse for not undertaking such prior investigations.
9. The FM pointed out that new-age technologies and data are changing the lives of people and businesses. There is fear of large-scale unemployment as a result of the proliferation of  new technologies. However, technological change is inevitable. The new technologies are also enabling new economic opportunities and facilitating the provision of high-quality services at affordable prices for all, including those at the ‘bottom of the pyramid’, the FM pointed out. She announced that a corpus of rupees one lakh crore will be established with a fifty-year interest-free loan. The corpus will provide long-term financing or refinancing with long tenors and low or nil interest rates. Hopefully this will encourage the private sector to scale up research and innovation significantly in sunrise sectors.
10. Another important initiative of this budget is the extension of the Ayushman Bharat scheme. Its cover will be extended to all Anganwadi and Asha workers. The FM also added that all maternal and child healthcare schemes will be brought under one comprehensive scheme. This is indeed a good augury as it will improve service delivery  and encourage efficiency.
11. The FM mentioned in her speech that despite the challenges due to COVID, implementation of PM Awas Yojana (PMAY) continued and the centre is close to achieving the target of three crore houses. She announced that two crore more houses will be taken up in the next five years to meet the requirement arising from the increase in the number of families. This continuing focus on PMAY would, hopefully  trigger increased investments in the construction sector.  It would have a positive impact with multiplier effects on Housing Finance, Cement, Steel, and Paints industries. 
12. The MSME sector is extremely important from the point of view of job creation. The government has rightly given priority to provide training for MSMEs to compete globally and facilitate their growth. 

Union Budget 2024: Experts Speak

The Skill India Mission’s initiative to train 1.4 crore young individuals, along with the upskilling and re-skilling of 54 lakh youth, coupled with the establishment of 3,000 new Industrial Training Institutes (ITIs), is a vital step towards bolstering the PLI and Make in India programs. This comprehensive approach is essential in enhancing the manufacturing sector’s contribution to the GDP. The target is to raise the manufacturing sector’s contribution to GDP from 17 percent to 25 percent by 2047. This is indeed a very tall order but it certainly will help to move in that direction if we can implement the Skill India Mission as envisaged. 

Overall, I would like to restate that this is a budget just before the next general election, Given that fact, I believe it is indeed a good budget that blends continuity with some innovation and some inevitable populism. 

BUDGET 2024 : Expectations for HEIs – Experts Speak