Key Areas

Details

Economic Outlook

India continues to be a shining exception in global economic growth despite policy uncertainties. Inflation remains low and stable, moving towards a 4% target. Core inflation (non-food, non-fuel) is at 3.1%.

Interim Budget Focus

Emphasis on four major castes: ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth), and ‘Annadata’ (Farmer).

Budget Theme

Focus on employment, skilling, MSMEs, and the middle class. Prime Minister’s package includes 5 schemes for 4.1 crore youth over 5 years with a Rs 2 lakh crore outlay. Rs 1.48 lakh crore allocated for education, employment, and skilling.

Budget Priorities

The budget prioritizes 9 key areas for generating opportunities and development:

1. Productivity and Resilience in Agriculture

Comprehensive review of agriculture research, release of 109 high-yielding and climate-resilient crop varieties, initiation of 1 crore farmers into natural farming, establishment of 10,000 bio-input resource centers, strengthening of pulses and oilseeds production, and implementation of Digital Public Infrastructure in agriculture. Provision of Rs 1.52 lakh crore for agriculture and allied sectors.

2. Employment & Skilling

Implementation of 3 Employment Linked Incentive schemes, establishment of working women hostels, and creches, launch of a centrally sponsored skilling scheme for 20 lakh youth over 5 years, revision of the Model Skill Loan Scheme, and financial support for loans for higher education.

3. Inclusive Human Resource Development and Social Justice

Stepping up support for craftsmen, artisans, self-help groups, scheduled caste, schedule tribe, and women entrepreneurs. Launch of Purvodaya for the development of the eastern region and Pradhan Mantri Janjatiya Unnat Gram Abhiyan for tribal communities. Provision of ?2.66 lakh crore for rural development.

4. Manufacturing & Services

Special attention to MSMEs, enhancement of Mudra loan limits, support for setting up food irradiation and quality testing units, establishment of E-Commerce Export Hubs, and launch of an internship scheme in top companies.

5. Urban Development

Addressing housing needs through PM Awas Yojana Urban 2.0, promotion of water supply and sanitation projects, and support for developing street food hubs under PM SVANidhi.

6. Energy Security

Launch of PM Surya Ghar Muft Bijli Yojana for rooftop solar plants, and emphasis on nuclear energy.

7. Infrastructure

Continued investment in infrastructure with an allocation of Rs 11,11,111 crore for capital expenditure, launch of Phase IV of PMGSY, and support for irrigation and flood mitigation projects.

8. Innovation, Research & Development

Operationalization of Anusandhan National Research Fund, and setting up of a venture capital fund for the space economy.

9. Next Generation Reforms

Formulation of an Economic Policy Framework, labour-related reforms, development of a taxonomy for climate finance, simplification of FDI and overseas investment rules, launch of NPS Vatsalya, and review of the New Pension Scheme.

Key Areas

Details

Direct Taxes

Comprehensive review of direct and indirect taxes, rationalization of GST tax structure, review of the Custom Duty rate structure, and simplification of the Income Tax Act.

Standard Deduction

Increase from Rs 50,000 to Rs 75,000 for salaried employees under the new tax regime. Enhancement of deduction on family pension from Rs 15,000 to Rs 25,000.

New Tax Regime Rates

Income Slabs

Tax Rate

0 – 3 Lakh rupees

NIL

3 – 7 Lakh rupees

5%

7 – 10 Lakh rupees

10%

10 – 12 Lakh rupees

15%

12 – 15 Lakh rupees

20%

Above 15 Lakh rupees

30%

Investment and Start-ups

Abolition of angel tax for all investors, simpler tax regime for foreign shipping companies, benefits for foreign mining companies selling raw diamonds, and reduction of corporate tax rate on foreign companies from 40% to 35%.

Charities and TDS

Merging of two tax exemption regimes for charities, rationalization of TDS rate structure, and decriminalization of TDS payment delays.

Capital Gains

Short term gains to attract a 20% rate, long term gains on all assets to attract a 12.5% rate, and increase in exemption limit to Rs 1.25 lakh per year.

GST

Continued simplification and rationalization of GST structure, further digitalization and paperless processes in Customs and Income Tax.

Custom Duties

Reduction in duties on cancer treatment medicines, mobile phones, PCBA, and mobile chargers. Exemptions for critical minerals, seafood exports, and solar panel manufacturing. Increase in duties on ammonium nitrate and PVC flex banners.

Dispute Resolution

Introduction of Vivad se Vishwas Scheme, 2024, increase in monetary limits for filing appeals, and expansion of safe harbour rules.