Budget 2024: One Crore Youth Will Directly Benefit From Our Internship Scheme, Says Finance Minister

Finance Minister Nirmala Sitharaman will present the Union Budget 2024 in the Lok Sabha on Tiuesday. This will be the first budget after the Narendra Modi government won its third term and Sitharaman's seventh presentation in a row. It will be tabled in the Lok Sabha at 11:00 a.m.

The budget comes six months after the government passed an interim spending bill in February, as per convention, before the Lok Sabha election in summer.

The National Democratic Alliance returned to power in June with a reduced majority. The Bharatiya Janata Party is reliant on allies in Parliament to pass legislation.

Finance Minister Nirmala Sitharaman will present her seventh Union Budget today. She was first appointed to her job by Prime Minister Narendra Modi in 2019 after the BJP's return to power.

Sitharaman retained her role in the third Modi government, as did all of the other top ministers like Amit Shah, Rajnath Singh and S Jaishankar.

Before her, the finance ministry was led by the late Arun Jaitley in the first Modi government.

Sitharaman presented the budget in 2019, 2020, 2021, 2022, 2023, and the interim budget in February this year—adhering to the protocol that restricts a full Budget announcement just before general elections.

Gross Domestic Product

GDP represents the total market value of all goods and services produced within the country in a specified period. It serves as a crucial indicator of the country's economic health and standard of living.

Inflation

Inflation denotes the rate at which the general price level of goods and services rises, leading to a decrease in the purchasing power of a nation's currency. It is closely monitored by policymakers to ensure economic stability.

Fiscal Consolidation

This policy aims at reducing government deficits and controlling the accumulation of debt, thereby fostering fiscal discipline.

Fiscal Deficit

When a government's expenditures exceed its revenues, excluding borrowings, it results in a fiscal deficit. This deficit, if not managed effectively, can lead to economic instability.

Revenue Deficit

A situation where actual revenues fall short of expected revenues, leading to a deficit when expenditures exceed the available revenue.

Government Borrowing

The funds borrowed by the government to finance its expenditures and investments in public services and infrastructure.

Disinvestment

The strategic sale or liquidation of government assets or subsidiaries, aimed at optimizing returns on investments.

Gross Fixed Capital Formation

The total value of investments in fixed assets such as buildings, machinery, and infrastructure, excluding land sales.

Monetary Policy

Controlled by the Reserve Bank of India, it regulates the money supply and interest rates to achieve economic stability and growth.

Fiscal Policy

The government's use of taxation and spending to influence economic conditions, often working in conjunction with monetary policy.

Purchasing Power Parity

A theory that adjusts exchange rates between countries to account for differences in purchasing power, ensuring fair comparisons of living standards.

Value Added Tax

A consumption tax levied on the value added to a product at each stage of its production and distribution.

Goods and Services Tax

An upcoming comprehensive indirect tax that aims to replace multiple state and central taxes to streamline the taxation system.

Here are nine important facts about the Union Budget and its historical context in independent India:

1. First Budget: The inaugural Union Budget of independent India was presented on November 26, 1947, by the nation's first finance minister, RK Shanmukham Chetty.

2. Most Budgets Presented: Former Prime Minister Morarji Desai holds the record for presenting the highest number of budgets, totalling 10 during his tenure as Finance Minister under Prime Ministers Jawaharlal Nehru and Lal Bahadur Shastri.

3. Second Highest Number Of Budgets: P Chidambaram, former finance minister, presented the budget on nine occasions, spanning various governments and economic contexts.

4. Third Highest Number Of Budgets: Pranab Mukherjee, another former finance minister, presented eight budgets during his tenure, including five consecutive ones from 2009 to 2012.

5. Manmohan Singh's Tenure: Former Prime Minister Manmohan Singh, known for his economic reforms, presented five consecutive budgets between 1991 and 1995.

6. Longest Budget Speech: Nirmala Sitharaman holds the record for delivering the longest budget speech, lasting two hours and forty minutes during her presentation on February 1, 2020.

7. Shortest Budget Speech: The shortest interim Budget speech was delivered by Hirubhai Mulljibhai Patel in 1977, totalling just 800 words.

8. Timing Change: Traditionally presented at 5 p.m. on the last day of February to align with colonial-era practices, the Budget timing was changed to 11 am in 1999 during Yashwant Sinha's tenure as finance minister.

9. Shift to February 1: In 2017, the Budget presentation date was shifted to February 1 to expedite the parliamentary approval process and facilitate budget implementation from the start of the fiscal year on April 1.

India's real gross domestic product growth is estimated at 6.5-7% for the financial year ending March 31, 2025, according to the latest economic survey report. "The survey conservatively projects a real GDP growth of 6.5–7%, with risks evenly balanced, cognizant of the fact that the market expectations are on the higher side," the report said.

Domestic growth drivers have supported economic growth in FY24 despite uncertain global economic performance, the survey said, adding that improved balance sheets will help the private sector cater to strong investment demand.

However, private capital formation after good growth in the last three years may turn slightly more cautious because of fears of cheaper imports from countries that have excess capacity, the survey said.

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According to the Economic Survey, capital expenditure of the Union Government increased 2.2 times from fiscal 2021 to fiscal 2024, and that of state governments increased by 2.1 times.

It must be noted that the infrastructure push of the government has led to a rise in capex, the Survey noted.

If one were to see the breakup of this, the gross budgetary support to railways and National Highway Authority of India increased from 36.4% in March 2021 to 42.9% in March 2024.

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As India’s Finance Minister unveils the Union Budget, all eyes will be on key sectors and themes like infrastructure, consumption and public sector companies. Additionally, market watchers expect that this might propel the equity benchmarks to surpass its landmark levels. 

Investors have already begun adjusting their positions in the equity market, as the 10-day volatility of key indices is seeing mild upticks going into the budget announcement. Market swings are expected to rise amid these circumstances, especially with the quarterly earnings that recently began with the information technology majors.

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Finance Minister Nirmala Sitharaman will lay on the table, a statement (in English and Hindi) of the estimated receipts and expenditure of the government, for the year 2024–25 in the Rajya Sabha. She will table the Budget one hour after the conclusion of the presentation of the Union Budget 2024-25 in the Lok Sabha.

The minister will also lay on the Table, under subsection (1) of Section 3 of the Fiscal Responsibility and Budget Management Act, 2003, a copy each (in English and Hindi) of the following papers:

• (i) Medium-term Fiscal Policy cum Fiscal Policy Strategy Statement;

• (ii) Macro-Economic Framework Statement.

Sitharaman will further lay on the table, statements (in English and Hindi) of the estimated receipts and expenditure (2024-25) of the union territory of Jammu and Kashmir (with legislature).

• Fiscal Deficit: The budgeted fiscal deficit, which is the difference between the government expenditure and income, for the current fiscal is 5.1% as projected in the Interim Budget in February, against 5.8% in the last fiscal year. The full Budget is expected to provide better-than-earlier projections as there has been tax buoyancy. The government has projected fiscal deficit at 4.5% of the GDP in FY26.

• Capital Expenditure: The government's planned capital expenditure for this fiscal year is budgeted at Rs 11.1 lakh crore, higher than Rs 9.5 lakh crore in the last fiscal year. The government has been pushing infrastructure creation and also incentivising states to step up capex.

• Tax Revenue: The Interim Budget had pegged gross tax revenue at Rs 38.31 lakh crore for 2024-25, an 11.46% growth over the last fiscal. This includes Rs 21.99 lakh crore estimated to come from direct taxes (personal income tax + corporate tax), and Rs 16.22 lakh crore from indirect taxes (customs + excise duty + GST).

• GST: Goods and Services Tax (GST) collection in 2024-25 is estimated to rise to Rs 10.68 lakh crore, an increase of 11.6%. The tax revenue figures will have to be watched out for in the final Budget for the 2024-25 fiscal year.

• Borrowing: The government's gross borrowing Budget was Rs 14.13 lakh crore in the current financial year as per the Interim Budget. The government borrows from the market to fund its fiscal deficit. The borrowing number will be watched by the market, especially on the back of more-than-expected dividend from the RBI and financial institutions.

• Nominal GDP: India's nominal GDP growth (real GDP plus inflation) in the current fiscal year is estimated to be 10.5% to Rs 327.7 trillion as per the Interim Budget. In view of expected normal monsoon, improvement in revenue collections and pick up in rural consumption, is expected that there could be upward revision in growth estimate. Real GDP growth in current fiscal is projected at 7.2%, as per the RBI.

• Dividend: The interim Budget had projected Rs 1.02 lakh crore from RBI and financial institutions. This will be revised upwards as the RBI has already made surplus transfer of Rs 2.11 lakh crore earlier in May.

  At the same time, Rs 43,000 crore expected to be garnered from CPSEs.

Spotlight would also be on spending on key schemes, like NREGA, as well as key sectors like health and education.

(With PTI inputs)

At 8:30 a.m., the GIFT Nifty was trading 5 points, or 0.01%, higher at 24,540.00.

Finance Minister Nirmala Sitharaman left her residence. She will present the Union Budget today at the Parliament.

Meanwhile, Chief Economic Advisor V Anantha Nageswaran arrived at Ministry of Finance, ahead of Union Budget presentation.

Finance Minister Nirmala Sitharaman has reached the Ministry of Finance. Minister of State for Finance Pankaj Chaudhary, Chief Economic Advisor V Anantha Nageswaran and other top officials are also present.

The customary Budget team photo of the Finance Minister and other top officials will be taken in North Block at 9:00 a.m.

The minister will reach the president's residence along with her team, at 9:10 a.m. to present the budget. Then, she will head to Parliament at 9:45 a.m. A cabinet meeting will be held there at 10:15 a.m.

The budget will be presented at 11:00 a.m.

The local currency strengthened by 2 paise to open at 83.64 against the US dollar, ahead of Budget. It closed at 83.66 on Monday.

Source: Bloomberg

The yield on the benchmark 10-year government bond opened flat at 6.97%, ahead of Budget. It closed at 6.97% on Monday.

Source: Cogencis

Finance Minister Nirmala Sitharaman walked out of the finance ministry with a tablet in a red sleeve and the national emblem. From the traditional briefcase to a "bahi-khata" and now a 'Made in India' tablet, the budget is now a paperless document.

Indian benchmarks recovered losses from past couple of session as Mahindra & Mahindra Ltd., and Larsen & Toubro Ltd. rose while investors keenly await Budget 2024.

Edelweiss Mutual Fund MD and CEO Radhika Gupta said she expects tweaks in short-term capital gains in the Budget today. She also said taxation on arbitrage funds is unlikely to happen.

Key highlights of Nomura's take on Economic Survey 2024 released on Monday.

• Fiscal consolidation to be still key.

• Nominal growth likely unchanged, survey forecasted FY25 real GDP growth at 6.5-7.0%.

• Nominal GDP growth assumption of 10.5% YoY made in interim budget to be retained.

• Expired tax cuts for manufacturing firms may not be extended.

• Commentary suggests that govt support to the farm sector is already adequate.

"We expect government to show up better fiscal consolidation. We expect fiscal deficit 4.9%-5% after RBI dividend transfer," said Tanvee Gupta Jain, UBS India Economist.

She also expects double-digit growth in government capital expectation to support rural recovery.

Finance Minister Nirmala Sitharaman met President Droupadi Murmu at Rashtrapati Bhavan, ahead of the Budget presentation at 11 a.m. in Parliament.

Finance Minister Nirmala Sitharaman will head to Parliament shortly to present the Union Budget 2024. The cabinet is expected to meet before her Lok Sabha speech.

"There can be rally in Indian equities if there are no changes in taxes. But given RBI and SEBI concerns on retail participation, private capex cannot pickup up if bank deposits slow. It can create margin pressure on banks," said Andrew Holland, CEO, Avendus Capital Public Markets Alternate Strategies LLP.

"Housing should have focus, as well as rural recovery. They have to be fiscally prudent. Markets have priced in everything."

Unions Ministers and other MPs have arrived at the Parliament for the Budget session today. PM Narendra Modi and Nirmala Sitharaman are expected to come shortly.

The Union Cabinet headed by PM Modi meets in Parliament to approve the Union Budget ahead of its presentation by Finance Minister Nirmala Sitharaman.

The Union Cabinet headed by PM Modi meets in Parliament has approved the Union Budget ahead of its presentation by Finance Minister Nirmala Sitharaman.

HDFC Bank and Reliance Industries were the top draggers. Broader indices also slipped in losses. Nifty Realty was up 0.38%, the most among sectoral indices.

Lok Sabha is expected to convene shortly for Finance Minister's Budget speech.

Lok Sabha has convened for Finance Minister's budget speech. Speaker Om Birla has started his address.

Lok Sabha Speaker introduced foreign dignitaries who will observe the budget session.

"The people of India have reposed their faith in government led by PM Modi. We are grateful for the support, faith, trust of the people in our policies. We are determined to ensure all Indians make substantial progress to realise their aspirations."

"Global economy is still in the grip of policy uncertainties. India’s economic growth continues to be the shining exception, will remain so in years ahead. India’s inflation continues to be low, stable, moving towards 4% target."

"Steps being taken to ensure supplies of perishable goods reach market in timely manner. The poor, women, youth, and farmer were focus of Interim Budget. PM Garib Kalyan Anna Yojana was extended by 5 years, benefiting more than 80 crore people. Schemes announced in Interim Budget are well underway."

"Budget to focus on employment, skilling, MSMEs, middle class. Rs 1.48 lakh crore provision made for education, employment, skilling."

This Budget envisages sustained focus on 9 priorities:

• Productivity and resilience in agriculture

• Employment and skilling

• Improved human resources, social justice

• Manufacturing and services

• Urban development

• Energy security

• Infrastructure

• Innovation, research and development

• Next generation reforms

• Productivity and resilience in agriculture

• Employment and skilling

• Improved human resources, social justice

• Manufacturing and services

• Urban development

• Energy security

• Infrastructure

• Innovation, research and development

• Next generation reforms

"Government to undertake comprehensive review of agricultural research and focus on developing climate resilient varieties in agriculture. New 109 high yielding, climate resilient varieties to be released to farmers. 1 crore farmers to be initiated into natural farming over 2 years. 10,000 need based bio-input centres to be established."

"The government will strengthen production, storage, marketing of oil-seeds. Large-scale clusters for vegetable production to be developed closer to consumption centres. Digital crop survey for Kharif to be taken up in 400 districts in FY25."

"Issuance of Jan Samarth-based Kisaan credit cards to be enabled in five states."

Rs 1.52 lakh crore will be set aside for agriculture, allied sectors in FY25, says Sitharaman.

"Government to set up 3 schemes for employment generation. Scheme for first timers to provide 1 month wage to all persons newly entering workforce in all sectors. First time employment scheme to benefit 2.1 crore youths."

Incentive to be provided at specified scale both to employee, employer in first four years of employment, says FM.

"All employment within salary of Rs 1 lakh per month to be counted. Government to reimburse to employers Rs 3,000 per month towards. EPFO contribution for two years for each additional employee."

Model skill loan scheme to be revised to facilitate loans up to Rs 7.5 lakh with guarantee from government promoted fund. Model skill loan scheme to benefit 25,000 students per year.

"States in Eastern part of the country to be targeted under scheme ‘Purvodaya’. Bihar, Jharkhand, Odisha and Andhra Pradesh to benefit from ‘Purvodaya Scheme’."

BJP has key allies JDU in Bihar and TDP in Andhra Pradesh.

Patna-Purnya expressway, Buxar-Bagalpur expressway, Bodhgaya-Rajgir-Vaishali-Darbanga spurs, and additional two-lane bridge over Ganga at Baksar at Rs 26,000 crore. Power projects, including 2400 MW power plant at Pir Payanti to be taken up at Rs 21,400 crore.

"Recognising Andhra Pradesh’s need for capital, to facilitate support through multi-lateral development agencies, Rs 15,000 crore to be arranged for Andhra Pradesh in FY25 for development of capital city at Amaravati."

"The introduction of 109 high-yielding, climate-resilient varieties of seeds is salutary. It will reduce production volatility and help stabilise prices over the medium term. This is crucial considering the increasing incidents of inclement weather over the past few years, which have impacted crop yields and contributed to food inflation."

"Setting up of digital agriculture infrastructure, annual digital crop survey and mapping of farmers to their land parcels will facilitate better credit risk assessment, and enhance formal credit penetration in agriculture, which stands at around 60% today."

"Allocation of over Rs 3 lakh crore made for schemes benefiting women development."

"Made provision of Rs 2.66 lakh crore for rural development including rural infrastructure."

"Credit guarantee scheme for MSMEs in manufacturing to be introduced. Credit guarantee scheme for MSMEs to operate on pooling of credit risks. New mechanism for continuation of bank credit to MSMEs during stressed periods to be introduced. Credit availability for MSMEs during stressed period to be provided through from government promoted fund."

PM Mudra loans' limit to be enhanced to Rs 20 lakh from current Rs 10 lakh for those who've paid previous loans under 'Tarun' category.

"SIDBI to open new branches to serve more MSMEs over three years. SIDBI to open 24 new branches in FY25. To enable MSMEs to sell products in international markets, e-commerce export hubs to be set up."

"Internship in 500 top companies to be encouraged under 5th new scheme of Modi government. 1 crore youth to benefit from government’s internship scheme. Internship allowance of Rs 5000 per month and one-time assistance of Rs 6,000 to be provided under internship scheme. Companies to bear training costs from their CSR funds under govt's internship scheme."

"Rental housing with dormitory-type accommodation for industrial workers to be facilitated in PPP mode with VGF support."

"Government to launch auction of first tranche of offshore blocks for mining. Building on exploration already carried out. To set up critical mineral mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets."

"The establishment of 10,000 need-based bio-inputs units will support the area under organic farming, which has increased at a compound annual growth rate of 23% between 1990 and 2023. This comes at a time when chemical fertilisers have been significantly affecting the crop response ratio (quantity of fertilisers used versus yield)."

"IBC has resolved more than 1,000 companies resulting in recovery of Rs 3.3 lakh crore to creditors. Steps for strengthening debt-recovery tribunals to be taken."

"PM Awaas Yojana – Urban 2.0 to cater to 1 crore urban poor with investment of Rs 10 lakh crore and have Central assistance of Rs 2.2 lakh crore over next five years."

"Transit oriented development programmes for 14 large cities with population above 30 lakh will be formulated. Government to launch scheme to develop 100 streetfood hubs in select cities over five years."

"Encourage states with high stamp duties to moderates rates for all, and also consider further lowering duties for properties purchased by women."

"The development of the Gaya node along the Amritsar-Kolkata route will offer a major fillip to the Eastern Dedicated Freight Corridor. Ports in eastern India will benefit over the medium term."

"PM Surya Ghar Muft Bijli launched to install roof-top solar for 1 crore households. The scheme got 1.28 crore registrations, 14 lakh applications."

"The increase in the cap for MUDRA loan classification to Rs 20 lakh was much required given the inflation over the past decade."

"Government to partner with partner with private sector to set up Bharat small reactors. Joint venture between NTPC and BHEL to set up full-scale 800 MW commercial plant using AUSC technology. Government to provide required fiscal support for NTPC, BHEL JV."

As announced in interim budget, government has set capital expenditure target of Rs 11.11 lakh crore for FY25. This represents 3.4% of GDP.

"Provision of Rs 1.5 lakh crore for long-term interest free loans made in FY25 for support to states for infrastructure," FM says.

Government to provide assistance to Assam for flood management, irrigation projects.

The Central government will provide assistance to Himachal Pradesh, Uttarakhand and Sikkim for reconstruction, rehabilitation through multi-lateral development assistance, announced Sitharaman.

"Government to support development of Nalanda as tourism destination. Comprehensive development of Vishnupad temple corridor and Mahabodhi temple corridor in Bihar will be supported on the lines of the successful Kashi Vishwanath corridor."

The government will also provide support to Odisha for development of tourism destinations.

Venture capital fund of Rs 1,000 crore to be set up to encourage space technology development, says FM Sitharaman.

"The MSME sector in India is estimated to have a significant funding shortage of Rs 20-25 lakh crore. Banks account for 75% of lending to this segment. Public sector banks will do well to set up in-house, technology-driven underwriting capacity to serve new borrowers and bring them into the formal credit fold."

"The government will operationalise 'Anusandan' national research fund for basic research and prototype development. It will set up a mechanism for spurring private sector-driven R&D at commercial scale with a financing pool of Rs 1 lakh crore."

"Rural land related actions to include assignment of unique land parcel identification number. Land records in urban areas to be digitised with GIS mapping."

"Government to facilitate wide array of services to labour. Comprehensive integration of e-Shram portal with other portals to be undertaken."

"India imports ~60% of its edible oil requirement, so the support announced to self-sufficiency in oilseeds production is welcome. Between 2015 and 2023, nine annual oilseed crops have seen a compound annual growth rate of just 7.3%."

"The government will seek required legislative approval for providing efficient mode for financing leasing of ships, aircraft, pooled funds through variable company capital structure."

• FY25 total receipts other than borrowings at Rs 32.07 lakh crore.

• FY25 total expenditure seen at Rs 48.21 lakh crore.

• FY25 net tax receipts seen at Rs 25.83 lakh crore

• Gross market borrowing in FY25 seen at Rs 14.01 lakh crore

• Net market borrowing in FY25 seen at Rs 11.63 lakh crore

• Aim to bring fiscal deficit to 4.5% of GDP in FY26

To exempt three more medicines for cancer treatment from customs duty.

Customs duty on mobile phones, related parts, chargers cut to 15%.

"Capex in the first two months of this fiscal was down 14.4% on-year. So, the government’s budgeted target of Rs 11.1 lakh crore means capex will have to grow at a 23.9% clip for the rest of this fiscal. The increased capex assistance of Rs 1.5 lakh crore to states this fiscal – up from 1.3 lakh crore announced during interim budget – will be salutary. The capex for infrastructure sectors is along the lines of the announcement in the interim budget. Over the past three years, the number is higher in absolute terms but lower as a percentage of allocation."

• Customs duty on mobile phones, related parts, chargers cut to 15%

• Propose to exempt customs duty on 25 critical minerals, reduce duty on 2

• To reduce customs duty on some brood stock, shrimp, fish feed to 5%

• To reduce customs duty on real down-filling material from duck or goose

• To reduce customs duty on MDI for manufacture of spandex yarn to 5% from 7.5%

• Export duty structure on raw hides, skin, leather to be simplified, rationalised

• To reduce customs duty on gold, silver to 6%, platinum to 6.4%

• To remove customs duty on ferro nickel and blister copper

• To remove customs duty on oxygen-free copper for manufacture of resistors