Budget 2024: Formula one; focus now on getting jobs done – Times of India

The effect of 2024’s Lok Sabha election results was writ large on the first Budget of Modi 3.0, with employment creation given pride of place and keeping allies happy too very much in focus. The fact that the Budget comes at a time when the govt’s finances are relatively comfortable meant that finance minister Nirmala Sitharaman could afford to address these concerns with targeted schemes while keeping the fiscal deficit under a tight leash relative to recent years.
The middle class was given its share of goodies in the form of an enhanced standard deduction and changes in tax slabs under the new IT regime, which taken together would save Rs 17,500 a year for people with annual income above Rs 10 lakh.
Changes in the taxation of capital gains, however, cut both ways and made the markets jittery initially. Customs duty cuts on gold, silver and platinum would also give the middle class some reason to cheer. Perhaps the most heartening thing for this class, however, was the announcement that education loans of up to Rs 10 lakh for higher education would be made available for those who have not availed benefits from any government schemes.The focus on employment was such that the word was chosen to describe the budget’s focus by Sitharaman at the post-budget press conference. “EMPLOYMENT (employment & education, MSMEs, productivity, land, opportunities, youth, middle class, energy security, new generation reforms, technology) captures everything in the budget and deriving from it everything falls in place,” she said.
Among the major initiatives announced to tackle the job situation was a scheme that would provide a month’s wage to anybody newly entering the workforce in all formal sectors. The one-month salary is to be directly transferred to the first-time employee’s account as registered with the Employee Provident Fund Organisation (EPFO) in three instalments. While all new entrants with salaries up to Rs 1 lakh a month will be eligible, the cap on the amount to be transferred will be Rs 15,000. Another scheme provides monetary incentives to fresh employees and their employers in the manufacturing sector while a third scheme reimburses employers who take on new workers in all sectors.
All told, the Budget proposed spending of Rs 2 lakh crore over five years for creating jobs for youth and on skilling them. It estimated that 4.1 crore would benefit from these schemes.
These targeted scheme apart, the focus on micro, small and medium enterprises (MSMEs) was also in keeping with the overall attempt to boost employment given the labour-intensive nature of this sector.

Then there is a proposal to encourage the top 500 firms to take on interns for a one-year period with most of the cost being borne by the government and a small part by the companies from their CSR funds. The Budget speech also dwelt at some length on “skilling” including for women to encourage their participation in the workforce.
That JD(U) and TDP are key allies in this govt was evident from special packages for Bihar and Andhra Pradesh. Indeed, it is difficult to recall a Budget speech in recent memory in which a state figured as prominently as Bihar did in this one.

The Budget stuck to the capital expenditure targets set in the interim version presented in Feb with Rs 1.5 lakh crore including grants-in-aid for creation of capital assets. Sitharaman was mindful of the fiscal goal and improved upon the deficit target to 4.9% of GDP, compare with 5.1% projected in the interim budget.
Among the other themes of the Budget was adjusting to and addressing climate change, both through transitioning to renewable energy and encouraging farmers to take up climate-resistant crop varieties. This was also evident in her announcements on nuclear energy and the special focus on critical minerals, including a mission and import duty waivers.
Besides, she sought to put in place a “new approach for agriculture” that goes beyond MSP to focus on vegetables, pulses and oilseeds.
Start-ups have been given reason to cheer with the so-called angel tax, which treated external investments in start-ups as part of their income, being scrapped.