The Union Budget for 2024-25, in my view, has certainly drawn up a detailed roadmap and laid foundations for ‘Amrit Kaal‘ to pursue the goal of a ‘Viksit Bharat’. The government has articulated well its planning to foster long-term growth drivers for sustainable development, improvement in productivity, and creating opportunities for all.

The Budget envisages sustained efforts on the nine priorities for generating ample opportunities for all covering improvement in productivity in agriculture, employment, skilling, manufacturing & services, urban development and infrastructure and energy security, innovation, research, etc.

Although there is nothing much to incentivise the market and investors due to increase in securities transaction tax (STT), additional capital gains tax, buyback taxation, no change in taxation for high income group segment, etc., I do not foresee a big shakeup as there cannot be gains without pains. In earlier Budgets, there were initiatives such as taxing of dividends in the hands of recipients, removal of tax exemption for long-term capital gains.

One other important aspect covering taxation, in my view, could be bringing down of the tax rate for foreign companies to 35% from 40%. The related part to this could be read with the Budget proposal for simplification to improve FDI, nudge prioritisation, and promote opportunities for using Indian rupee as a currency for overseas investments.

The notable provisions cover massive efforts for raising productivity in agriculture sector through research, developing the climate resilient and high-yielding varieties, initiatives to achieve self-sufficiency in pulses and oil seeds, implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in three years. The announcement to bring National Cooperation Policy to foster growth of the rural economy and generation of employment in this segment is also a welcome move. A provision of ₹1.52 lakh crore for these initiatives is significant.

Generation of employment for youth is quite challenging. The Budget has unveiled the initiatives to generate employment opportunities through employment-linked incentives based on enrolment in the EPFO with a focus on recognition of first-time employees, and support to employees and employers. The government is also planning a new centrally-sponsored scheme for skilling in collaboration with State governments and industry.

The Budget measures like Skill Loan Scheme, subsidised education loans of higher amount, supporting economic activities of craftsmen, artisans, SC, ST and woman entrepreneurs, and street vendors will go a long way in improving the all-round , all- pervasive and all-inclusive development of farmers, youth, women and poor.

For supporting promotion of manufacturing and services, the Budget contains proposals to set up industrial parks with complete infrastructure in or near 100 cities, in partnership with the States and private sector, reforms in shipping Industry, Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets, digital public infrastructure.

In the area of urban development, the Budget has planned various initiatives such as creative brownfield redevelopment of existing cities, transit-oriented development for 14 large cities, subsidies for urban housing, bankable project for water supply, sewage treatment and solid waste management projects and services for 100 large cities, development of 100 weekly haats or street food hubs in select cities and lowering duties for properties purchased by women.

Infrastructure development needs significant investment and fiscal support. As announced in the Interim budget, there has been a proposal to provide ₹11.11 lakh crore for capital expenditure that amounts to 3.4% of the country’s GDP.

The Budget includes a proposal to formulate a policy document on appropriate energy transition pathways for resource-efficient economic growth, a policy for promoting pumped storage projects for electricity storage and integration of the growing share of renewable energy, plan to develop newer technologies for nuclear energy. The government will also provide the required fiscal support development of indigenous technology for Advanced Ultra Super Critical (AUSC) thermal power plants.

The most significant aspect of the Budget is fiscal management, which is worth taking into account the deficit placed at 4.9% of GDP for 2024-25 and the aim of the FM to bring it down to 4.5% next fiscal and a commitment to staying the course. Overall, the Budget shows that the government is continuing to pursue the path of fiscal consolidation and prudence while keeping the growth in its line of sight.

(Ashok Hinduja, Chairman, Hinduja Group of Companies (India))

R. Dinesh
| Photo Credit: AFP

I would like to congratulate the Finance Minister for laying a well-defined road map for Viksit Bharat 2047 while continuing the focus on the immediate requirement.

While each of the nine tracks highlighted in the budget have many areas to appreciate, the focus on employment generation will be a big boost, and provide the thrust for the growth of the economy. The support for the manufacturing sector, a package for employment generation, and the skilling and upskilling for 4.1 crore youth across sectors, are some of the key highlights of this budget. This, coupled with the allocation of ₹1.48 lakh crore for education, employment, and skilling, underscores the government’s commitment to harnessing India’s demographic dividend.

Logistics as a sector is a significant employment generator and therefore, will be a beneficiary of the employment incentives. This, coupled with the budget’s emphasis on skilling, will further support the growth of this sector and help enhance employment.

The upgrade of 1,000 Industrial Training Institutes, with a focus on aligning course content to industry needs, is a welcome move. This initiative will bridge the skill gap in the manufacturing sector, while the introduction of new courses for emerging needs will prepare our workforce for the industries of tomorrow.

This budget has specifically addressed issues of the micro, small and medium enterprises (MSME) sector, not only for the short-term but also for the long-term. The continued support for a credit guarantee scheme for MSMEs in the manufacturing sector, providing substantial funding, without collateral, will help the sector. This will significantly ease access to term loans for machinery and equipment purchases, fostering modernisation and expansion. This, along with support to the MSMEs during their stress period, will help MSMEs in the immediate term.

However, the focus on developing a different methodology to assess the MSMEs for their credit requirements, including usage of private sector data, is an even more important step. The focus on leveraging data, not only from publicly available information but also from other private sources, will help in providing access to finance from formal finance channels, and also provide capital for growth.

The focus on the future of the energy transition of the MSME firms through energy audits and financial support to help MSME clusters shift to cleaner energy sources is a positive step. I believe that going forward, more clusters will be added besides glass and ceramic.

This budget continues its focus on providing the building blocks, and a comprehensive approach to enable India to become ‘Viksit’. The preparation for the next-gen reforms, productivity focus, coupled with the actions on employment generation and skill development, will help sustain India in its growth path. This will also address issues on the Cost of Doing Business. The growth of the MSMEs will provide a strong foundation to further enhance this. The energy transition requirements mapping and preparing the funding for that will help India in its sustainability journey.

Prudent fiscal deficit management not only provides headroom to face the challenges of the global economy, but also gives comfort to investors to plan for the future and invest with confidence. Budget 2024 sets the agenda for the next one year, while at the same time gives the vision for how India can continue to accelerate on its growth journey.

R. Dinesh is Chairman, TVS Supply Chain Solutions Limited.

Kumar Mangalam Birla
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman accelerated the government’s thrust on the crucial infrastructure sector in her seventh successive Budget presentation and the first of PM Modi’s third term. 

A massive expansion in urban housing at an investment of ₹10 lakh crore, a rural roads programme worth ₹26,000 crore are among the major features of the big infrastructure push. The capex budget for FY25 has been retained at ₹11.1 lakh crore, or 3.4% of GDP. 

Apart from this, the FM also announced a brand new power plant for Bihar on top of investments in expressways, medical colleges, airports and new tourist circuits in the state. AP will get a brand new capital with central assistance of ₹15,000 crore in the first year and the development of industrial corridors connecting Chennai- Vizag and Bengaluru- Hyderabad. 

The Indian economy’s stunning revival from COVID and its emergence as the world’s fastest-growing major economy is partially attributed to an infrastructure revival spurred by government spending in the past few years. 

This has had a multiplier effect across industries while at the same time improving productivity, connectivity and ease of travel. 

It is heartening to see the government’s focus on sustaining the infrastructure build-up. Priorities tend to shift sometimes but this government has not swerved from its task of ushering in world-class infrastructure. Spending on infrastructure has doubled in the past three years from 1.7% of GDP to 3.4% now. 

The budgetary measures provide a great opportunity to India Inc. to participate in this nation building exercise. We should remember that better infrastructure improves quality of life, ease of living. Along with higher economic growth and rising incomes, it is one of the essential prerequisites for a developed economy. 

As the country targets $5 trillion GDP by end of this decade and seeks to transform itself into a developed economy by 2047, the private sector in the country is faced with a once-in-a-lifetime opportunity. 

So far, the private sector, especially the large business groups, have stepped up to the challenge and have proposed multi-billion dollar investments in various infrastructure projects. This is a heartening trend, and it is quite possible that smaller companies and groups will also take the plunge in the coming months and years. The buoyant state of capital markets and the healthy balance sheets of banks make financing of large projects a relatively less cumbersome exercise though a lot can be done to improve access to capital. 

India’s answer to the COVID-induced slowdown was to step on the gas on infrastructure and Tuesday’s budget shows that the government is keen to expand and build upon the progress achieved. 

Budget 2024 signals the clear intent of the government to focus on the long-term and set the foundation for a Developed India by 2047. The journey for which has well and truly begun.

(The writer is Chairman, Aditya Birla Group)

Jairam Varadaraj
| Photo Credit: The Hindu

The world is witnessing unprecedented disruptions and uncertainty. India, however, presents the promise of growth, stability, and opportunities for investment.

To avail of these opportunities, multiple steps were necessary: strong capital expenditure and infrastructure push by the Indian government; significant support to small and medium enterprises; job creation and skill development; and enhancing the purchasing power of both urban and rural Indian consumers.

There are several positive announcements in the Budget 2024 focused on some of these critical areas.

A continued focus on infrastructure development is welcome, with high budgetary allocations for roads, railways, and urban infrastructure, covering tier-two and tier-three cities too. This is crucial for enhancing connectivity and supporting the growth of manufacturing hubs across the country. Such investments are anticipated to drive demand for construction materials and equipment, providing a significant boost to the manufacturing sector.

For MSMEs, the credit guarantee scheme for acquiring plants and machinery and the announcement to formulate financing packages for technology support are laudable. These will address some of the issues MSME players face and incentivise their significant role in employment generation.

Another aspect that has attracted adverse attention in the past has been the underwhelming skill levels of the productive workforce, and lack of job creation. This, left unaddressed, may have put India’s demographic dividend at risk, even as it enjoys one of the fastest economic growth rates in the world.

Recognising this need, the Budget places this as one of the key priorities. The announcements by the Finance Minister of schemes such as the First Timer, Manufacturing Jobs Assistance, and Support to Employers, will support employment generation by providing direct benefits to employers and employees alike. These will support the job creation intent of the government and industry.

The Finance Minister has also highlighted that youth will get internship opportunities in the top 500 companies in the next five years, emphasising the importance of quality of experience. Corporates are expected to bear the training cost and 10% of the internship cost, both being funded out of their CSR obligations. It is hoped that this is embraced by the industry at large.

Reducing the scope of disputes between the tax administration and taxpayers is welcome, and the focus on this front, with reference to minimising potential future disputes and closing existing litigation goes a long way in creating a benevolent environment.

There are a couple of areas that may merit further consideration by the government in its post Budget deliberations. In implementing Production Linked Incentives (PLIs), the government has followed a sectoral approach to promoting private investments in manufacturing. This is of course important considering the needs of the Indian consumer and what is happening globally. What will also be welcome are general fiscal measures, whose benefits are not limited to select products/value chains.

It was only for five years that the window for claiming a 15% corporate tax rate was open for manufacturers. Several of these years were lost to COVID. Extending this rate to newer manufacturing investments is an opportunity worth reconsidering.

India has been embedding itself in manufacturing supply chains as an alternative to China, but it has faced competition from Vietnam, Thailand and others. The government is rightfully moving on the trade agreement front. Accelerating this agenda needs to be supplemented with incentives for Research and development (R&D). It is R&D that can move Indian manufacturers from their legacy of great execution skills and cost-arbitrage to becoming product innovators.

Incentive for innovation on the corporate tax front should travel beyond the narrow confines of patents registered in India to sale of patented products. Restoration of the earlier weighted R&D income-tax incentives can also be considered.

The Budget 2024 marks the start of a journey that has begun well, with several critical headwinds globally and Indian economic needs balanced with finesse. Expectations run high in India. The nation hopes that corporates and the Indian government work in tandem to capitalise on the momentum and standing of the Indian economy, a shining light in an otherwise murky global environment.

(Jairam Varadaraj, Managing Director of Elgi Equipments)

The 2024 Budget signals policy continuity. The economy and the fiscal situation are in fine fettle. We are targeting real growth rates of 7%+ whilst keeping fiscal deficit at 4.9% for the year gone by (versus the 5.1% indicated earlier) and reducing it further to 4.5% in the coming year. Reassuringly, we are continuing to support investments in infrastructure with almost ₹11 lakh crore of spends allocated. This combination of continuing to drive growth through investments whilst keeping inflation low through tight control on fiscal deficit will augur well in the long run.

Specifically, the Budget focuses on these key priorities – resilient agriculture, promoting skill development, driving employment and inclusivity, accelerating infrastructure development, energy security, fostering innovation and progressive reforms. All of these are relevant and critical areas to focus upon.

From an automotive industry perspective three key aspects stand out.

Focus on infrastructure

The government has earmarked an impressive capital expenditure of over ₹11 lakh crore, equivalent to 3.4% of the GDP, towards infrastructure development. This substantial allocation marks strong conviction on delivering sustainable growth by bolstering the nation’s infrastructure. By making available ₹1.5 lakh crore additionally to States in the form of long-term interest-free loans, regional infrastructure development is also being supported. The introduction of viability gap funding with conducive policies will stimulate private sector participation. These focused initiatives will accelerate the pace of infrastructure growth across the country and support all round development.

6X increase in Auto PLI

The Auto PLI outlay at ₹3,500 crore in FY25 is a 6X increase over the ₹604 crore allocated last year. This underscores the government’s continuing commitment towards building an ‘Atmanirbhar Bharat’ and its thrust on creating a global hub for manufacturing EVs in line with the larger vision of ‘Make in India for the World’. With the outlay being stepped up, we now look forward to early finalising of the procedures for claiming and settling the PLI funds. This can help OEMs focus on driving up EV penetration, enhancing localisation, improve value adds and actualise the holistic benefits of this initiative. This coupled with the much-anticipated FAME 3 scheme will give the next leg up towards mass adoption of EVs.

Thrust on green energy

With the overwhelming response to the PM Surya Ghar Muft Bijli Yojna (over 1.28 crore registrations and 14 lakh applications), the exemption of customs duties on capital goods used for manufacturing solar cells and panels will further reduce the cost of producing solar energy. The exemption of customs duty on import of lithium, cobalt and other rare minerals plus extension of concessional customs duty on Li-Ion cells till March 2026 will make storing energy more cost-optimal. These targeted actions reiterate the government’s pledge to fulfil the country’s climate commitments and accelerate the production as well as adoption of green energy.

Overall, it is a budget that inspires confidence that the agenda is set, and we are making strong strides to deliver the same in an equitable, inclusive, balanced manner whilst seizing the future and creating a ‘Viksit Bharat (Developed India)‘.

(The writer is Group CFO at Tata Motors Ltd.)

R. Nandini
| Photo Credit: SPECIAL ARRANGEMENT

The Union Budget presented by the Finance Minister on July 23 embodies an inclusive and progressive vision, effectively addressing the diverse concerns of various sectors of the economy. It not only recognises a significant portion of the recommendations put forth by economic advisers and experts but also places a strong emphasis on key stakeholders, especially youth and women.

The Economic Survey tabled in the Parliament on July 22, 2024 points out that the rising youth and women participation in the workforce presents an opportunity to tap the demographic and gender dividend. It also lists six key areas as the growth strategy for Amrit Kaal. One of it is bridging the education-employment gap.

One of the critical challenges facing the government in recent years has been the issue of unemployment. The budget adeptly tackles this by emphasising the importance of creating employment opportunities. Incentives for first-time job seekers is set to benefit approximately 2.1 crore youth across the country. The allocation of ₹1,48,000 crore for education, employment, and skill development underscores the government’s commitment to this essential sector.

As we aim for “India @ 100,” a skilled workforce is the need of the hour. The plan to upgrade 1,000 Industrial Training Institutes (ITIs) is a pivotal step toward enhancing the skill sets of our future workforce. The government has proposed in the budget a new scheme to support the skilling of 20 lakh youth over the next five years, ensuring that our young population is equipped for the challenges of tomorrow.

Additionally, students who have not benefited from previous government schemes will have the opportunity to access support loans of up to ₹10 lakh at an attractive interest rate of 3% for pursuing skill development courses in domestic institutions. This initiative will not only improve the Gross Enrollment Ratio (GER) but also empower youth by making quality education more accessible.

I am particularly heartened by the allocation of over ₹3 lakh crore for women-led development initiatives, including provisions for accommodation through working women hostels, which will greatly benefit the women workforce, especially those in the manufacturing industries.

The Budget 2024 reflects a holistic approach to national development, placing education, women empowerment, skill development, and research at its core. As the nation navigates the complexities of a post-pandemic world, these allocations represent more than just financial figures; they symbolise India’s vision for a more equitable and prosperous future. With strategic investments in these critical areas, India is poised to emerge stronger, fostering a society where every individual has the opportunity to thrive.

In conclusion, this budget signals a transformative phase for our economy, addressing pressing challenges while laying the groundwork for sustainable growth. By prioritising the needs of our youth, women, and the entrepreneurial spirit of MSMEs, we are not just investing in the economy but also in the fabric of our society.

(The writer is Managing Director of Chandra Group, and Chairperson of CII – Southern Region)

Union Finance Minister Nirmala Sitharaman shows a red pouch carrying the Budget documents.
| Photo Credit: PTI

Loaded with political pragmatism, Union Finance Minister Nirmala Sitharaman on July 23 announced development of Vishnupath temple at Gaya and Mahabodhi temple in Bodhgaya, both in Bihar, on the model of the Kashi-Vishwanath temple corridor to turn them into successful tourist destinations.

The Centre would also support the development of Nalanda and Rajgir in Bihar as tourist centres. The budget also announced an industrial node at Gaya on the Amritsar-Kolkata Industrial Corridor.

In her speech, Ms. Sitharaman said that the states in the eastern part of the country are “rich in endowments” and have “strong cultural traditions” thus the government was looking at formulating a plan for Purvodaya, for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh.

“This will cover human resource development, infrastructure, and generation of economic opportunities to make the region an engine to attain Viksit Bharat”, she said.

According to The Hindu Data team analysis, the total increase outlay for the tourism sector was 0.01 %. In her budget speech, Ms. Sitharaman said that efforts to position India as a global tourist destination will also create jobs and unlock opportunities in other sectors. “Tourism has always been a part of our civilisation. Our efforts in positioning India as a global tourist destination will also create jobs, stimulate investments and unlock economic opportunities for other sectors,” she said.

While Mahabodhi Temple is a UNESCO World Heritage Site, the Vishnupad Temple is one of the most ancient Hindu shrines. Nalanda, home to the ruins of the ancient Nalanda university, is also a UNESCO World Heritage Site.

“Rajgir holds immense religious significance for Hindus, Buddhists and Jains. The 20th Tirthankara Munisuvrat temple in the Jain temple complex is ancient. The Saptarishi or the seven hot springs form a warm water Brahm Kund that is sacred. A comprehensive development initiative for Rajgir will be undertaken. Our government will support the development of Nalanda as a tourist centre, besides reviving Nalanda university to its glorious stature,” the Finance Minister said.

The budget also focused on development of tourism in Odisha.

“Odisha’s scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes and pristine beaches make it an ultimate tourism destination. Our government will provide assistance for their development to Odisha as well,” the FM said in her speech.

There was disappointment though in the Travel and Tourism industry.

“While it is encouraging that the FM announced that India has the potential to become a global tourism hub, it would also have been nice to see budget recommendation supporting the same, such as an increase in the marketing and publicity budget, infrastructure status support to hospitality, abolishment of TCS (Tax Collected at Source) on travel and reduction in GST (Good and Services Tax) rates on tourism, travel and hospitality. The support given to spiritual tourism through corridor development and cruise tourism through tax adjustment on foreign ships in Indian shores will support these sub sectors,” Aashish Gupta, Consulting CEO, FAITH said.

Adding heft: The tech platform will increase the utility and efficiency of CIR process.

Finance Minister Nirmala Sitharaman has proposed to set up an integrated technology platform to improve the outcomes under the Insolvency & Bankruptcy Code (IBC) for achieving transparency, consistency, timely settlement and better oversight of all resolution cases.

She also said that the government would set up additional National Company Law Tribunals (NCLTs) to expedite resolution of cases under the IBC.

“The IBC has resolved 1,000 companies resulting in direct recovery of ₹3.3 lakh crore to creditors. In addition, cases worth ₹10 lakh crore have been disposed off even before admission. We will set up additional tribunals to expedite the resolution of cases, with some dedicated to resolve cases exclusively under the Companies Act,” she said.

Commenting on this M. V. Rao, Chairman, Indian Banks’ Association (IBA) & Managing Director & CEO, Central Bank of India said” The measures to improve the outcomes under the IBC, extending the services of Centre for Processing Accelerated Corporate Exit voluntary closure of LLPs, strengthening of National Company Law Tribunals and establishing more debt recovery tribunals are positive for the banking sector as it enhances the speed of the recovery processes in the system.”

“The integration of all pillars of IBC ecosystem through a tech platform will increase the utility and efficiency of CIR process. The improvement in legislative framework and increased strength of tribunals is expected to bring more efficiency in the process,” said Anoop Rawat, Partner, Shardul Amarchand Mangaldas & Co.

“The technological integration will also help in identifying source of delay and corrective measures needed for improving  efficiency,” he added.

Presenting her seventh Union Budget and the first after this year’s Lok Sabha election, Finance Minister Nirmala Sitharaman on July 23 unveiled a flurry of measures aimed at fixing the woes of unemployed youth, small businesses, and the middle class, and sought to strengthen the ruling NDA coalition’s bonds with support for multiple investment projects in Bihar and Andhra Pradesh.

Ms. Sitharaman proposed income tax rate cuts worth up to ₹17,500 a year, putting an extra ₹1,458 a month in the hands of those earning upto ₹12 lakh a year, and hiked standard deductions for salaried taxpayers and pensioners by ₹25,000 and ₹10,000, respectively. She also promised to spend ₹2 lakh crore over five years on five schemes which are part of what she called “the Prime Minister’s package”, aimed at spurring jobs and imparting skills to 4.1 crore youth.

Changing lanes

This marked a shift in strategy, or rather a frenetic changing of lanes ahead of a roundabout as drivers in the capital are prone to do, from the previous government’s preferred reliance on letting multiplier and trickle-down effects work while avoiding direct handouts to such sections of society. A similar lane change was last seen when Ms. Sitharaman’s predecessor, the late Arun Jaitley, presented his third Budget, for 2016-17.

Seeking to shed the “suit-boot sarkar” label used by the Opposition at the time, Mr. Jaitley had dedicated that Budget to the farmers, the poor, and vulnerable sections of society and switched his focus to the rural economy and job creation. The trigger for the shift, this time, could be the BJP’s electoral reverses after a decade of outright majority in Parliament, preceded by revelations such as big businesses’ electoral bond purchases.

Jobs, jobs, jobs

At a briefing after her roughly-90 minute speech, which appeared to acknowledge and begin addressing the perceived disenchantment among specific voter groups like the young, the salaried class, farmers, and small entrepreneurs, Ms. Sitharaman made it clear that the overarching theme of Budget 2024-25 was ‘EMPLOYMENT’. Used as an acronym, the theme was spelt out — Employment and Education; Micro, Small and Medium Enterprises (MSMEs); Productivity; Land; Opportunities; Youth; Middle Class; Energy Security; New Generation Reforms; and Technology.

Her speech referred to ‘employment’ 23 times, up sharply from three mentions of the word in the 2023-24 Budget, and seven (four of which were about past achievements rather than the future) in the Interim Budget presented this February. ‘Jobs’ featured four times in relation to new schemes, compared with just one mention in the pre-poll Interim Budget. Similarly, there were three references to the middle-class, from just one mention in the Interim Budget and two in 2023-24.

Shift in priorities

References to growth slipped to 10, from a combined 34 mentions in the last two Budget speeches. Mr. Jaitley’s third Budget had also slashed growth references, but the similarities with that speech don’t end there. While he had released a plan to ‘Transform India’ based on action points around nine pillars, Ms. Sitharaman on Tuesday laid out nine priorities for generating ample opportunities for all. Five of those are, in fact, similar to Mr. Jaitley’s list that led with the promise to double farmers’ incomes in five years. Ms. Sitharaman said that her first priority would be to raise productivity and resilience in agriculture, followed by employment and skilling, inclusive human resource development and social justice.

Infrastructure and next generation reforms also figure in the priorities, with the Minister promising more details about the latter through an economic policy framework to be formulated later, with a focus on fixing factors of productivity, including land, labour, capital, and entrepreneurship. She also announced a review of the Income Tax and Customs Acts, a simplification of Foreign Direct Investment (FDI) norms, and a financial sector vision document for five years.

Fiscal consolidation

While investors will need to wait for those details, the Finance Minister did provide some indirect support to private investments by accelerating the fiscal consolidation process, armed with a ₹2.1 lakh crore surprise dividend from the central bank. The fiscal deficit target for this year has been pegged at 4.9% of GDP from the 5.1% projected in the Interim Budget, and the 5.6% of GDP achieved last year. A reduction in the government’s market borrowings would facilitate a reduction in policy interest rates and encourage private investment, EY’s chief policy advisor D.K. Srivastava pointed out.

Among the PM’s employment package schemes is a plan to provide one year internships in 500 top companies to one crore youth over five years. It is not clear if this will subsume the Pradhan Mantri Kaushal Vikas Yojana 4.0 that was announced in the last Budget to “skill lakhs of youth within the next three years” with an on-the-job training component.

As is the case with many initiatives of this Budget, more details will emerge over time. But Ms. Sitharaman, who began her speech by thanking the people of India for re-electing a government led by Prime Minister Narendra Modi, will be hoping that the lens change reflected in the Budget’s focus areas will not be lost on voters gearing up to cast their ballots in the upcoming State Assembly elections.

Finance Minister Nirmala Sitharaman on July 23 announced that the Union government will launch the PM – Janjatiya Unnat Gram Abhiyaan with an aim at achieving full saturation of basic facilities among five crore Scheduled Tribe families across 63,000 villages in tribal-majority areas and aspirational districts.

The scheme, designed after the PM-JANMAN to achieve saturation of basic facilities for Particularly Vulnerable Tribal Groups, will be for Scheduled Tribe populations across the country, the Finance Minister said in her Budget (2024-25) speech on July 23, without going into the details for how much funds are being set aside for this or how this package would be implemented or overseen.

Tribal Affairs Minister Jual Oram hailed the announcement of the “transformative scheme”, expressing gratitude, adding in a social media post that it would “uplift the socio-economic conditions of tribal communities”.

Top officials of the Ministry of Tribal Affairs have not yet responded to questions about how this new package would work.

This came as the government allocated ₹13,000 crore in the Budget Estimate (24-25) for the Ministry of Tribal Affairs, which showed an increase of 4.31% compared to BE 23-24 even as the Revised Estimate for FY 23-24 had been pegged at ₹7,605 crore.

The last available Actual Expenditure for the FY 2022-23 showed that the Ministry had spent a total of ₹7,273.53 crore.

More than half of the Tribal Affairs Ministry’s allocation in this year’s Budget Estimates (24-25) – ₹6,399 crore – has gone to the scheme for Eklavya Model Residential Schools for tribal students. Ministry sources explained that this increase was largely owing to the management of the schools being brought under the Centre from 2023-24 onwards.

Marginal rise in Social Justice budget

Meanwhile, the Budget Estimate (2024-25) for the Ministry of Social Justice and Empowerment showed an allocation of ₹14,225.47 crore, which is 1.08% more than what the government had allocated in the Budget Estimate (2023-24). This came as the government pegged the Revised Estimate (2023-24) for the entire Ministry at ₹11.078.33 crore.

This marginal increase in the allocation for the Ministry was largely concentrated in the Department of Social Justice and Empowerment, with the allocation for the Department of Empowerment of Persons with Disabilities barely changing.

Scholarships rejigged

In the detailed Budget documents put out later in the day, the Budget Estimate for 2024-25 showed that the National Fellowship for OBC students was allocated ₹55 crore compared to ₹57 crore in BE(2023-24) even though the Revised Estimate (23-24) was at ₹90 crore for the scheme.

The Budget documents also showed that the allocation under Interest Subsidy on Overseas Studies for OBC and EBC students had decreased from ₹29 crore in BE(23-24) to ₹25 crore in BE (24-25) – significantly lower than the government’s Revised Estimate (23-24) for spending under this component, which stood at ₹60 crore.  

This decline was owing to a revision in the scholarship rates, which were brought in last year, officials explained. “Because the fellowship allocation comes from the Standing Finance Committee for every five-year period and this revision was brought in between, the current allocation reflects what was left out of the ₹400 crore allocated for the five-year period beginning 2021-22,” one official said.

They added that the Revised Estimate for FY 24-25 will be able to accommodate the demand for this scheme after the SFC reconvenes sometime in August this year.

Similarly, under transfers to States and UTs, the Union government allocated less than the previous year for pre and post-matric scholarships to OBCs, Extremely Backward Classes, and Denotified Tribes, which officials said was done to make room for the consequent increase in the allocation under components for scholarships under Top Class Colleges and Schools for these communities.

The pre-matric scholarship scheme for OBCs, EBCs, and DNTs saw an allocation of Rs 210 crore in BE(24-25) compared to ₹281 crore in BE(23-24). And in the post-matric scholarship scheme for this group, the allocation in BE(24-25) dropped to ₹921 crore from ₹1,087 crore in BE(23-24).

In contrast, the Top Class College scheme’s allocation was increased from ₹90 crore in BE (23-24) to ₹515 crore in this year’s Budget Estimate whereas, the allocation for Top Class Schools rose to ₹150 crore from ₹100 crore in BE(23-24).  

Slight boost for NAMASTE

In addition, it was revealed that the National Action for Mechanised Sanitation Ecosystem (NAMASTE) scheme for the eradication of manual sewer cleaning altogether was allocated ₹116.94 crore – a marginal increase compared to the allocation of ₹97 crore in BE(2023-24).

However, it was also revealed that in FY 23-24, the government’s Revised Estimate under the scheme has been pegged at just ₹30.06 crore.