As I reflect on the Union Budget for 2024-25, presented by our Honourable Finance Minister, it becomes clear that this budget is a continuation of the previous budgets designed to continue the economic growth process. The budget emphasises infrastructure, social welfare, and fiscal prudence.
One of the standout features of the budget is the allocation of ₹11.1 lakh crore for infrastructure development, which accounts for 3.4 per cent of GDP. This is the highest allocation to infrastructure in India’s history. The usage of the funds has been presented to develop critical infrastructure, including roads, railways, and urban development projects, all being essentials for further boosting economic growth and improving the quality of life for millions of Indians.
The budget also strongly emphasises social welfare, with a particular focus on employment generation and skill development. The announcement of a comprehensive skilling program aimed at training 20 lakh youth over the next five years, supported by the establishment of 1,000 Industrial Training Institutes (ITIs) across the country, will offer industry-aligned courses designed to meet the evolving needs of the job market. In addition, the government’s financial support for higher education loans, with an annual interest subvention of 3 per cent on loans up to ₹10 lakh, is expected to benefit many students every year, making higher education more accessible and affordable for young Indians.
The commitment to reduce the fiscal deficit to 4.9 per cent of GDP in FY25, from 5.1 per cent in FY24, and further to 4.5 per cent by FY26, is a testament to the government’s dedication to sound financial management. This will undoubtedly require strict management of public funds.
The budget’s offer for some relief through an increase in the standard deduction for salaried employees from ₹50,000 to ₹75,000, coupled with the rise in the exemption limit to INR 1.25 lakhs per year, for long-term capital gains, does go well towards further reducing the tax burden on middle-class families. All indications clearly show that tax reforms will continue over the coming years.
The agriculture sector is the backbone of our economy. The government’s allocation ₹1.52 lakh crore for agriculture and allied activities focuses on increasing productivity and resilience in the sector. A significant portion of this funding will be used to support the adoption of natural farming practices, to initiate many farmers into natural farming over the next two years, which is necessary.
In innovation and research, the government has taken a bold step by operationalising the Anusandhan National Research Fund, which will provide ₹1 lakh crore in financing to spur private sector-driven research and innovation at a commercial scale. This fund will position India as a global leader in cutting-edge research and technology development. In-house technology will be used to reduce technology acquisition costs and propel technology exports, a long-needed step.
Lastly, besides many other initiatives, the budget addresses urban development, with a focus on transit-oriented development in 14 large cities. This initiative is expected to catalyze economic growth, attract private investment, and improve the quality of life in our cities. The budget also includes a significant investment in affordable housing, aimed at addressing the housing needs of 1 crore urban poor and middle-class families.
Union Budget 2024-25 is a sequel to the last few budgets, addressing short and long-term growth initiatives and sustainability. It aligns with our objective to become a $5 trillion economy by 2025 and a developed nation by 2047.
The author is Chairman, FICCI Gujarat State Council, and Chief Executive Officer & Managing Director, Hester Biosciences
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