Breaking Down the New Budget for FY24-25
Have you heard about the new budget for 2024-25? It is packed with some interesting changes, especially in the tax department, and there's a lot to talk about. Let's dive into it and see what it means for us.
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More Money in Our Pockets
First up, the new tax regime. The government has revised the tax slabs, which means we can save an extra ₹17,500 compared to last year. Here's the lowdown:
- If you earn up to ₹3 lakh, you pay nothing. Zero. Zilch.
- For income between ₹3 lakh to ₹7 lakh, it's 5%.
- Between ₹7 lakh to ₹10 lakh, it's 10%.
- From ₹10 lakh to ₹12 lakh, it's 15%.
- From ₹12 lakh to ₹15 lakh, it's 20%.
- Anything over ₹15 lakh is taxed at 30%.
Sounds like a good deal, right? More savings mean more money to spend or invest.
Focus on Jobs and Skills
The budget also puts a lot of focus on jobs and skills. There's ₹1.48 lakh crore set aside for education, employment, and skill development. That's a big number! They're also planning to skill 20 lakh youths over the next five years. If you're just entering the workforce, you even get one month's wages upfront. That's a nice little welcome gift!
Support for Specific Groups
The government is focusing on four main groups: the poor, women, youth, and farmers. They've approved ₹1.52 lakh crore for agriculture and related sectors. Plus, there's financial support for loans up to ₹10 lakhs for higher education in India. That's a big help for students looking to study without breaking the bank.
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Building and Developing
There's a lot of money going into infrastructure too. ₹26,000 crore is set aside for highways in Bihar, and ₹15,000 crore for developing Andhra Pradesh's capital, Amravati. Plus, they're planning to build 3 crore additional houses under the Pradhan Mantri Awas Yojana. That's a huge boost for housing.
New and Exciting Initiatives
They've also launched the Suryaghar Muft Bijli Yojana. This plan aims to install rooftop solar panels on 1 crore households, giving them up to 300 units of free electricity each month. It's a great step towards sustainable energy.
And there's more! A ₹1,000 crore boost for the space economy, doubling Mudra loans to ₹20 lakh, reducing customs duty on gold and silver to 6%, and cutting TDS on e-commerce transactions from 1% to 0.1%. These moves are set to boost various sectors, especially the internet stocks.
but...
Loopholes in the New Budget for FY24-25
The new budget for FY24-25 has certainly introduced some promising changes, but like every budget, it has its share of loopholes and potential issues. Let's take a closer look at where this budget might fall short, especially considering India's previous budgetary challenges and ongoing problems.
Insufficient Tax Base Expansion
While the new tax regime offers additional savings, it doesn't address the limited tax base in India. The majority of the population still falls outside the tax net, primarily due to widespread informal employment and low income levels. Without strategies to broaden the tax base, the burden continues to fall disproportionately on a small segment of taxpayers.
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Implementation of Job Creation Schemes
The focus on employment and skilling is commendable, but execution has historically been a challenge. Previous budgets have also promised job creation, yet unemployment rates remain high. Effective implementation, timely disbursement of funds, and avoiding bureaucratic delays are crucial for these schemes to truly benefit the targeted groups.
Agricultural Sector Challenges
Allocating ₹1.52 lakh crore to agriculture and allied sectors is a significant commitment, but the agricultural sector in India has deeper structural issues. Problems like land fragmentation, inefficient supply chains, lack of modern technology, and farmer indebtedness need more holistic solutions. Without addressing these underlying issues, increased funding might not lead to substantial improvements.
Infrastructure Funding and Execution
Allocating funds for infrastructure, like ₹26,000 crore for highways in Bihar and ₹15,000 crore for Andhra Pradesh's capital, Amravati, is a step in the right direction. However, project delays and cost overruns have plagued infrastructure projects in the past. Effective project management and accountability are essential to ensure these funds translate into actual development.
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Housing Initiatives
Building 3 crore additional houses under the Pradhan Mantri Awas Yojana is an ambitious target. However, previous housing schemes have struggled with issues like land acquisition, financing, and delays in construction. Ensuring timely completion and addressing these challenges will be critical for the success of this initiative.
Renewable Energy Challenges
The Suryaghar Muft Bijli Yojana aims to provide free electricity to 1 crore households via rooftop solar panels. While this is a positive step towards sustainable energy, the initial setup costs and maintenance could pose challenges. Moreover, regional disparities in sunlight availability might affect the uniformity of benefits across the country.
Space Economy and Technological Advancements
A ₹1,000 crore boost for the space economy is exciting, but India needs to balance basic infrastructure needs with advanced technological investments. While investing in space technology is futuristic, the immediate needs of healthcare, education, and rural development might demand more attention.
TDS and E-Commerce Adjustments
Reducing TDS on e-commerce transactions from 1% to 0.1% is a positive move for internet stocks, but the e-commerce sector also faces challenges like data privacy issues, consumer protection, and competition from global giants. These issues need comprehensive policies beyond just tax adjustments.
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Overall Execution and Monitoring
Finally, one of the biggest loopholes historically has been the execution and monitoring of budget allocations. Ensuring that the funds allocated are used effectively and reach the intended beneficiaries remains a perennial challenge. Corruption, red tape, and inefficiency often dilute the impact of well-intentioned schemes.
Vaquills Take
While the budget for FY24-25 has made some positive strides, addressing these loopholes is essential for it to have a meaningful impact. Effective implementation, robust monitoring, and tackling deep-rooted structural issues are crucial for realizing the full potential of these budgetary promises. What do you think? Do you see other areas where the budget could have done better? Let's discuss!
What do you think? Are you excited about these changes, or do you think there's more that could be done? Let's chat!
Written by Priyansh Khodiyar
Priyansh is the co-founder of Vaquill, where he manages all technical aspects and the SEO of the website. He is a problem solver who constantly seeks to address issues using technology. Vaquill is a platform designed to bridge gaps by providing straightforward and easily understandable legal guidelines to better understand and navigate the Indian legal infrastructure. Recognizing that legal literature can be complex, we simplify it into clear and accessible language. He is also founder of https://unyaml.com
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