Union Budget 2024: Who gained the most? Who lost out?

Finance Minister Nirmala Sitharaman tabled her seventh consecutive Union Budget for 2024–25 on Tuesday in Parliament.

She unveiled various schemes, part of the Prime Minister’s Budget package, focusing on key areas such as creating jobs, supporting local businesses and infrastructure, skilling initiatives for the country’s youth and women, and a new, simpler tax regime for middle-class people.

The fiscal deficit target for India was reduced from 5.1 per cent of GDP, as declared during the Interim Budget in February of this year, to 4.9 per cent of GDP for the current fiscal year ending in March.

While NDA allies [JD(U) and TDP], India’s youth, middle-class, startups, and health sector have won big, equity markets and the plastic industry have incurred blows.

Let’s take a look.

More from Explainers

What happened during Trump's call with Zelenskyy and European leaders? Trump-Putin summit: Why Russia sold Alaska to the US in 1867

Winners

NDA allies

The budget focused on Andhra Pradesh and Bihar, two states led by political parties affiliated with the ruling BJP.

Nirmala Sitharaman announced the financial assistance for Bihar through aid from multilateral development agencies. “The government will also set up airports, medical colleges and sports infrastructure in Bihar. We will support the development of an industrial nod at Gaya in Bihar. It will catalyse the development of the eastern region,” she said.

Additionally, the budget seeks to assist in the construction of the Patna-Purnea expressway, the Buxar-Bhagalpur highway, and the Bodhgaya-Rajgir-Vaishali-Darbhanga road connectivity projects.

Additionally, it will allocate Rs 26,000 crore for the additional two-lane bridge over the River Ganga in Buxar. A 2,400 MW power project in Pirpainti in Bhagalpur was also announced by the FM. According to Sitharaman, banks will comply with the Bihar government’s request to expedite generating funds.

Impact Shorts

View All

'My god, what have we done': The 2 US pilots who dropped atomic bombs on Japan's Hiroshima and Nagasaki

US is making it tougher to obtain green card for married couples. Here’s why

New schemes of barrages, river pollution abatement, and irrigation projects, totalling Rs 11,500 crore, in addition to the Kosi-Michi intrastate link and 20 more ongoing were also assured.

The FM’s efforts in Andhra Pradesh have been concentrated on meeting commitments under the Andhra Pradesh Reorganisation Act.

Three districts in the state of Andhra Pradesh will get grants for their underprivileged areas. “Recognising the state’s need for capital, we will facilitate special financial support through multilateral agencies. In the current FY, Rs 15,000 crore will be arranged with additional amounts in future years,” Sitharaman said.

She said that the Centre will facilitate special financial support for the development of Amravati as the capital of Andhra Pradesh.

Sitharaman said that the government is fully committed to the completion and financing of the Polavaram irrigation project, which is considered a lifeline for Andhra Pradesh and its farmers.

Also read: Why the stock market crashed as Nirmala Sitharaman announced the Union Budget

Youth

Sitharaman’s new policies focused on employment for the youth of the country.

She introduced three new employment-linked incentive schemes that will be very beneficial to employers and employees alike.

The primary programme’s objective is to assist people who are entering the formal workforce. All first-time workers in all formal industries will get a month’s salary from the government as part of this programme.

The second initiative is to increase employment in the manufacturing industry. It is intended, especially, to provide incentives for hiring new employees. For the first four years of work, the government will offer incentives linked to EPFO contributions, which will be advantageous to both businesses and employees.

The third programme is aimed at employers in all industries and encourages them to generate more job opportunities. For every additional employee earning up to Rs 1 lakh per month, employers will receive a reimbursement of up to Rs 3,000 per month for two years towards their EPFO contributions.

Agriculture

The Centre has allocated Rs 1.52 lakh crore for agriculture in this budget.

The minister of finance stated that the Centre is concentrating on raising crop yield and cultivating climate-resilient types. For farmers to cultivate, the administration will make available 109 innovative, high-yielding, and climate-resilient varieties of 32 field and horticultural crops.

Sitharaman estimates that throughout the next five years, roughly one crore farmers will be introduced to natural farming. Large-scale vegetable production clusters close to key consumption hubs will be established by the government, along with 10,000 need-based bio-input resource centres.

Health sector

The Central government has allocated Rs 89,287 crore for developing, maintaining and improving India’s healthcare system, a slight increase from Rs 88,956 crore in FY24.

The government has also suggested exempting three additional cancer medications from basic customs duties, Finance Minister Sitharaman’s announced on Tuesday.

Sitharaman proposed to cut customs duties on Trastuzumab Deruxtecan, Osimertinib and Durvalumab from 10 per cent to nil.

This exemption is vital, as cancer treatments are expensive and frequently out of reach for many people.

Infrastructure

Infrastructure will get substantial financial support over the next five years from the Union Budget 2024–2025.

The budget has announced the construction of 25,000 new rural homes under for PMGSY 4.0. Additionally, plans are made to construct a flood control structure with funding of Rs 11,500 crore. Flood mitigation connected to Kosi will be implemented.

Aid will be given to the flood-ravaged states of Assam, Uttarakhand, Himachal Pradesh, and Sikkim.

The Union Budget has also seen an allocation to tourism. Under this, the Vishnupath temple at Gaya and Mahabodhi temple in Bodhgaya will be constructed like Kashi Vishwanath corridor. Bihar will also oversee the development of Nalanda.

In Andhra Pradesh, infrastructure projects in railways and roadways will be prioritised, the FM announced.

Also read: How Budget 2024 made selling property more taxing by removing indexation benefit

Young startups

To bolster the Indian startup ecosystem, the Indian government has abolished the angel tax for all classes of investors.

This tax, formally known under Section 56(2)(viib) of the Income Tax Act, 1961, was initially introduced in 2012 following the recommendations of the “White Paper on Black Money."

This tax burden was particularly challenging for young startups in their nascent stages, which rely heavily on external funding to scale their operations.

Middle-class people

Sitharaman also announced changes in the new tax regime, including changing the slabs and increasing the standard deduction from 50,000 to 75,000. The FM said those opting for the new tax regime can save up to Rs 17,500.

The revised slabs are:

• Rs 0 to Rs 3 lakh – Nil

• Rs 3 to Rs 7 lakh – 5 per cent

• Rs 7 to Rs 10 lakh – 10 per cent

• Rs 10 to Rs 12 lakh – 15 per cent

• Rs 12 to Rs 15 lakh – 20 per cent

• Over Rs 15 lakh – 30 per cent

Sitharaman also increased the deduction on pension from Rs 15,000 to Rs 25,000. She said this would offer relief to around four crore salaried individuals and pensioners.

Jewellery, minerals & more

Gold and silver customs duties have been lowered to six per cent and 6.4 per cent respectively, according to Sitharaman’s announcement. According to industry officials, this might increase retail demand and aid in reducing smuggling in the second-largest consumer market in the world.

The basic customs duty on ferro nickel and blister copper metals has been eliminated by the government.

Sitharaman has additionally announced a 15 per cent reduction in basic customs charges on smartphones, chargers, and other mobile components, making them more reasonably priced.

The custom duties for 25 critical minerals has been exempted.

Losers

Equity markets

The Modi 3.0 government has suggested raising the short-term capital gains tax from 15 per cent to 20 per cent and the long-term capital gains tax from 10 per cent to 12.5 per cent.

Furthermore, it increased the security transaction tax on trading in futures and options, from 0.01 per cent to 0.02 per cent.

Plastic industry

The non-biodegradable plastic items will see a hike in prices as the government has increased customs duties for them.

Telecom equipment

While cell phones have been made cheaper, some equipment has become more expensive by increasing the basic customs duty to 15 per cent from 10 per cent.

Meanwhile, the government has increased customs duty to 10 per cent, making it more expensive.

With inputs from agencies