Crack Grade B - Budget 2024-25 PDF

Crack Grade B 1 History of Budget: India’s first budget was presented on April 7, 1860, when India was still under the British colonial rule. It was introduced by the then Finance Minister of India, James Wilson. Independent India's first...

Crack Grade B 1 History of Budget: India’s first budget was presented on April 7, 1860, when India was still under the British colonial rule. It was introduced by the then Finance Minister of India, James Wilson. Independent India's first budget was presented on November 26, 1947 by the then Finance Minister RK Shanmukham Chetty. Former Prime Minister Moraraji Desai holds the record of presenting the most number of budgets in the history of the country. He had presented 10 budgets during his stint as finance minister during 1962-69, followed by P Chidambaram (9), Pranab Mukherjee (8), Finance Minister Nirmala Sitharaman (7). The Budget 1999-2000, Finance Minister Yashwant Sinha presented the Budget at 11 am for the first time in India before that it was being presented at 5pm. From Budget 2017-18, the budget was started to be presented on 1st February and Railway Budget was merged. By presenting 7th budget 2024-25, Finance Minister Nirmala Sitharaman has broken the record of former Prime Minister Morarji Desai (6 budgets) by presenting seven budgets in a row since 2019. Released by: BUDGET DIVISION, Department of Economic Affairs, MINISTRY OF FINANCE Budget Classification The article 112 specifies that the budget must distinguish the expenditures on revenue account from other expenditures (capital account). Therefore, the budget comprises of the Revenue Budget and Capital Budget. BUDGET Revenue Capital Budget Budget Revenue Capital Capital Revenue Receipts Receipts Exp. Exp. Tax Non Tax Revenue Revenue www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 2 Revenue Receipts: Those receipts of the government which neither creates a liability for the government nor reduces the assets (physical or financial) of the government are called revenue receipts. Revenue receipts are non-redeemable i.e. they cannot be reclaimed from the government. Revenue receipts can be of two types. Tax Revenues consists of direct and indirect taxes of the central government. Non-Tax Revenue consists of interest receipts on account of loans given by central government, dividend and profits on investments made by the central government (i.e. PSUs), fees and fines and other receipts for services rendered by the government like passport fees etc. o Cash grants-in-aid from foreign countries and international organisations are also part of the non-tax revenue. REVENUE RECEIPTS Tax Revenue Gross Tax Revenue o Corporation Tax o Taxes on Income o Wealth Tax o Customs o Union Excise Duties (ALCOHOL, PETROLEUM products, Cess, Surcharge etc) o Service Tax o GST ▪ CGST ▪ IGST o GST Compensation Cess o Taxes of Union Territories Non-Tax Revenue Interest receipts Dividends and Profits (Dividends from Public Sector Enterprises and other investments, Dividend/Surplus of Reserve Bank of India, Nationalized Banks & Financial Institutions) External Grants Other Non-Tax Revenue Receipts of Union Territories Examples of Other Non-Tax Revenue: Fiscal Services (Currency, Coinage and Mint), Social Services, Economic Services, Grants-in-aid and Contributions. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 3 Social Services: Economic Services Agriculture and allied activities Industry and Minerals Energy (Power, petroleum, coal, royalties from energy sector etc) Transport Communications Revenue Expenditure Those expenses of the government which neither creates any asset (physical or financial) nor reduces any liabilities are called revenue expenditure. Revenue expenses relate to the expenses incurred for the normal functioning of the government departments and various services, establishment of defence services, interest payments on debt incurred by the central government and grants given to the state government and local bodies and subsidies Capital Receipts: Those receipts of the government which either creates liability or reduces the assets (physical or financial) are called capital receipts. The main items of capital receipts are loans raised by the government from the public (market borrowings), borrowing by the government from the RBI, commercial banks and other financial institutions through the sale of government securities (treasury bills and dated securities), loans received from foreign governments and international organizations, and recovery of loans previously granted by the central government. It also includes small savings schemes (Post office savings accounts, National Savings Certificates etc.), Provident Funds and net receipts obtained from the sale of shares in PSUs (disinvestment). Debt Receipts (Net): o Market Borrowings (G-sec) o Short term Borrowing (T- Bill etc.) o Securities against Small Savings o State Provident Funds o External Debt o Gold Bonds, Gold Monetisation etc Non-Debt Receipts (Net): o Recoveries of loans and advances o Disinvestment Receipts of Government stake in Public Sector Banks and Financial Institutions www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 4 Capital Expenditure Those expenses of the government which either creates assets (physical or financial) or reduces liabilities are called capital expenditures. Capital expenditures include acquisition of land, building, machinery, equipment, Capital Outlay of the Defence Services, purchase of shares, by the government and loans and advances by the central government to state and union territory governments, PSUs and other parties. Government Deficits: When a government spends more than it collects by way of revenue, it incurs a deficit. There are mainly three ways through which government captures this deficit. 1. Revenue Deficit: Revenue Deficit is the difference between the government's revenue expenditure and revenue receipts. Revenue Deficit = Revenue Expenditure - Revenue Receipts Revenue Deficit implies that government's current expenses are more than its current revenues and will have to use up the savings of other sectors of the economy to finance its consumption expenditure. Since a major part of the revenue expenditure (salary, pension, interest payments, subsidies etc.) is committed expenditure, it cannot be reduced. When the government is faced with revenue deficit, it generally reduces the productive capital expenditure and welfare expenditure to cover up the excess revenue expenses. This would mean lower future growth and adverse welfare implications. Revenue Deficit is bad because it implies that government is spending more on its current and day to day needs (which may not give return in future) than its current revenues. 2. Fiscal Deficit: Fiscal deficit is the difference between the government's total expenditure (Revenue and Capital) and its total receipts (Revenue and Capital) except the borrowings. Fiscal Deficit = Total Expenditure - Total Receipts except borrowing = (Rev Exp. + Cap Exp.) - (Rev Rec. + Cap Rec. except borrowing) = (Rev Exp. - Rev Rec.) + (Cap Exp. - Cap Rec. except borrowing) = Revenue Deficit + Cap Exp. - Cap Rec. except borrowing = Total borrowing = Net borrowing at home + borrowing from RBI + Borrowing from abroad Let us understand with an example. Suppose, government's total expenditure = 17 lakh crore and total receipts = 13 lakh crore www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 5 Then government will have to borrow (17 lakh crore -13 lakh crore) 4 lakh crore to meet its expenditure. And this 4 lakh crore is called the fiscal deficit. That is why fiscal deficit is also equal to the total borrowing i.e. 4 lakh crore. But this 4 lakh crore which government borrows is also part of capital receipt for the government and it must be included in capital receipts. So in actual sense government's total receipts will become 17 lakh crore (i.e. 13 lakh crore + 4 lakh crore borrowing). Hence, in the above example: Fiscal Deficit = Total expenditure - total receipts except borrowing Otherwise the difference of total expenditure and total receipts will always be zero. Fiscal deficit indicates the total borrowing of the government from all sources i.e. domestic borrowing plus borrowing from external sources. Domestic borrowing includes governments debt securities like Treasury Bills and Dated Securities. Commercial banks purchase these securities on a major scale to meet their SLR requirements. Other financial institutions and RBI also purchases these securities. The fiscal deficit is a key variable in judging the financial health of the government sector and the stability of economy. It can be seen from above that revenue deficit is a part of fiscal deficit. A large share of revenue deficit in the fiscal deficit indicates that a large part of borrowing is being used to meet its consumption expenditure needs rather than investment. 3. Primary Deficit: A large part of the government's fiscal deficit is because it needs to pay interest on its previous accumulated debt. If we want to measure the government's deficit excluding the interest payment on the previous debt then it is called the primary deficit. The goal of measuring the primary deficit is to focus on present fiscal imbalances. Primary Deficit = Fiscal Deficit - Net interest liabilities So, primary deficit tells about the deficit in the government's budget excluding the interest liabilities on the government's accumulated debt. In the Union Budget 2011-12, government introduced a new term called the "effective revenue deficit". The definition of the revenue expenditure is that it shall not create any physical or financial assets. But this creates a problem in accounts. There are several grants given by the Central Government to the States / UTs which comes under revenue expenditure for the central government but some of these grants create assets, which are owned by the State government and not by the Central government. Hence, for Central Government it is basically a revenue expenditure but ultimately it is creating asset for the State government. For example, under the MGNREGA programme, some capital assets such as roads, ponds etc. are created, thus the grants for such expenditure shall not strictly fall in the revenue expenditure. Hence the central government also calculates "effective revenue deficit" which excludes such grants which are used for creation of assets. Effective Revenue Deficit = Revenue Deficit - Grants for creation of capital assets www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 6 Deficit financing is the budgetary situation where government expenditure is higher than its revenue. It is a practice adopted for financing the excess expenditure with outside resources by either printing of additional currency or through borrowing. Sources of Financing for Fiscal Deficit: Market Borrowings (G-sec) (Highest share) Securities against Small Savings (2nd highest share) External Debt State Provident Funds Budget at a Glance: Budget at a Glance presents broad aggregates of the Budget for easy understanding. This document shows receipts and expenditure as well as the Fiscal Deficit (FD), Revenue Deficit (RD, Effective Revenue Deficit (ERD) and the Primary Deficit (PD) of the Government of India. BUDGET PROFILE: The total expenditure in BE 2024-25 is estimated at 48,20,512 crores. The capital expenditure is `11,11,111 crore Receipt: 2024-25 (lakh crs) Capital Receipt 16.91 Revenue receipt 31.29 Tax receipt 25.83 Non tax receipt 5.45 Total budget 48.20 Gross Tax receipt in BE 2024-25 = 38.40 lakh crores State Share of Taxes in BE 2024-25 =12.47 lakh crores Total resources being transferred to the States including the devolution of State’s share, Grants/Loans and releases under Centrally Sponsored Schemes, etc. in BE 2024-25 is `22.91 lakh crore, which shows an increase of `4.82 lakh crore over Actuals of FY 2022- 23 The GDP for Budget FY 2024-25 (Regular) is estimated at 326.36 lakh crore which is 10.5% over the Provisional Estimates of FY 2023-24. Expenditures: 2024-25 ( lakh crs) Capital Expenditure 11.11 (16.9 per cent over RE 2023-24) Revenue Expenditure 37.09 Total budget 48.20 Effective Capital Expenditure: 15.01 lakh crores (18.02 per cent over RE 2023-24) www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 7 Effective Capital Expenditure of Government: Capital Expenditure + Grants in Aid for creation of capital asset REVENUE RECEIPTS Tax Revenue sources: Taxes on Income > GST > Corporation Tax > Customs Non-Tax Revenue sources: Dividends and Profits > other non-tax revenue>Interest receipts Fiscal Deficit in 2024-25: 16.13 lakh Crores (4.9% of GDP) Revenue Deficit in 2024-25: 5.80 lakh Crores (1.8% of GDP) 2023-24 (RE) 2024-25 (BE) Fiscal Deficit 5.6% 4.9% Revenue Deficit 2.6% 1.8% Effective Revenue Deficit 1.6% 0.6% Primary Deficit 2.0% 1.4% Fiscal Deficit = Total Expenditure-Total Receipts except borrowing Revenue Deficit = Revenue Expenditure - Revenue Receipts Effective Revenue Deficit = Revenue Deficit - Grants for creation of capital assets Primary Deficit = Fiscal Deficit - Net interest liabilities Trends in Tax receipt: TAX RECEIPTS (%GDP): Tax receipts 2023-24 2024-25 (BE) Direct 6.6% 6.8% Indirect 5.1% 5.0% Total 11.7% 11.8% Sources of Financing Fiscal Deficit in 2024-25: 16.13 lakh crores ▪ Market Borrowings (G-sec) (Highest share) ▪ Securities against Small Savings (2nd highest share) ▪ External Debt ▪ State Provident Funds Total Central Sector Schemes expenditures in 2024-25: 15.16 lacs crore Highest rupees come from: Borrowing and other liabilities (27%) > income tax (19%) > GST (18%) > Corporation tax (17%) Highest rupees goes to: State share of taxes & duties >Interest Payment > Central sector scheme Budget Speech Highlights: PART A www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 8 Despite global economy remaining under the grip of policy uncertainties, India’s economic growth continues to be the shining exception and will remain so in the years ahead. Minister of Finance and Corporate Affairs Smt Nirmala Sitharaman, while presenting the Union Budget 2024-25 in Parliament said that India’s inflation continues to be low, stable and moving towards the 4 per cent target. Core inflation (non-food, non-fuel) currently is 3.1 per cent and steps are being taken to ensure supplies of perishable goods reach market adequately. The Finance Minister said that as mentioned in the interim budget, the focus is on 4 major castes, namely ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer) Budget Theme: ▪ Dwelling on the Budget theme, Smt Sitharaman said that budget particularly focus on employment, skilling, MSMEs, and the middle class. The Finance Minister announced the Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of ₹2 lakh crore. This year, ₹1.48 lakh crore has been allocated for education, employment and skilling. Budget Priorities: The Finance Minister said, for pursuit of ‘Viksit Bharat’, the budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all. 1. Productivity and resilience in Agriculture 2. Employment & Skilling 3. Inclusive Human Resource Development and Social Justice 4. Manufacturing & Services 5. Urban Development 6. Energy Security 7. Infrastructure 8. Innovation, Research & Development and 9. Next Generation Reforms Priority 1: Productivity and resilience in Agriculture Transforming The government will undertake a comprehensive review of agriculture the agriculture research setup to bring the focus on raising research productivity and developing climate resilient varieties. Funding will be provided in challenge mode, including to the private sector. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 9 Domain experts both from the government and outside will oversee the conduct of such research Release of new New 109 high-yielding and climate-resilient varieties varieties of 32 field and horticulture crops will be released for cultivation by farmers. Natural Farming In the next two years, 1 crore farmers across the country will be initiated into natural farming supported by certification and branding. Implementation will be through scientific institutions and willing gram panchayats. 10,000 need-based bio-input resource centres will be established Missions for pulses For achieving self-sufficiency in pulses and oilseeds, and oilseeds government will strengthen their production, storage and marketing and to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower. Vegetable Large scale clusters for vegetable production will be production & developed closer to major consumption centres. Supply Chains Government will promote Farmer-Producer Organizations, cooperatives and start-ups for vegetable supply chains including for collection, storage, and marketing. Digital Public Government will facilitate the implementation of the Infrastructure for Digital Public Infrastructure (DPI) in agriculture for Agriculture coverage of farmers and their lands in 3 years. During this year, digital crop survey for Kharif using the DPI will be taken up in 400 districts. The details of 6 crore farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth based Kisan Credit Cards will be enabled in 5 states. Shrimp Production Financial support for setting up a network of Nucleus & Export Breeding Centres for Shrimp Broodstocks will be provided. Financing for shrimp farming, processing and export will be facilitated through NABARD. National Government will bring out a National Cooperation Policy Cooperation Policy: for systematic, orderly and all-round development of the cooperative sector. Fast-tracking growth of rural economy and generation of employment opportunities on a large scale will be the policy goal. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 10 Agriculture and Government has made a provision of 1.52 lakh crore for allied sector. agriculture and allied sector. Priority 2: Employment & Skilling Employment Government will implement following 3 schemes for Linked Incentive: ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers Scheme A: First This scheme will provide one-month wage to all persons Timers newly entering the workforce in all formal sectors. The direct benefit transfer of one-month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to ` 15,000. The eligibility limit will be a salary of ` 1 lakh per month. The scheme is expected to benefit 210 lakh youth. Scheme B: Job This scheme will incentivize additional employment in Creation in the manufacturing sector, linked to the employment manufacturing of first-time employees. An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first 4 years of employment. The scheme is expected to benefit 30 lakh youth entering employment, and their employers. Scheme C: Support ▪ This employer-focussed scheme will cover additional to employers employment in all sectors. ▪ All additional employment within a salary of ` 1 lakh per month will be counted. ▪ The government will reimburse to employers up to ` 3,000 per month for 2 years towards their EPFO contribution for each additional employee. ▪ The scheme is expected to incentivize additional employment of 50 lakh persons. Participation of The government will facilitate higher participation of women in the women in the workforce through setting up of working workforce women hostels in collaboration with industry, and establishing creches. In addition, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 11 Skilling programme Government has announced that a new centrally sponsored scheme, as the 4th scheme under the Prime Minister’s package, for skilling in collaboration with state governments and Industry. 20 lakh youth will be skilled over a 5-year period. 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of industry, and new courses will be introduced for emerging needs. Skilling Loans ▪ The Model Skill Loan Scheme will be revised to facilitate loans up to 7.5 lakh with a guarantee from a government promoted Fund. ▪ This measure is expected to help 25,000 students every year Education Loans For helping the youth, who have not been eligible for any benefit under government schemes and policies, Government announced a financial support for loans up to ₹10 lakh for higher education in domestic institutions. o E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of the loan amount. Priority 3: Inclusive Human Resource Development and Social Justice Saturation approach ▪ Government is committed to all-round, all-pervasive and all- inclusive development of people, particularly, farmers, youth, women and poor. ▪ For achieving social justice comprehensively, the saturation approach of covering all eligible people through various programmes including those for education and health will be adopted to empower them by improving their capabilities. ▪ Implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, schedule tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up. Purvodaya Government will formulate a plan, 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. Bihar: www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 12 On the Amritsar Kolkata Industrial Corridor, we will support development of an industrial node at Gaya. o This corridor will catalyze industrial development of the eastern region. o This model shall showcase “Vikas bhi Virasat bhi” in our growth trajectory. Government will also support development of road connectivity projects, at a total cost of 26,000 crore namely: o Patna-Purnea Expressway o Buxar-Bhagalpur Expressway o Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and o additional 2-lane bridge over river Ganga at Buxar Power projects, including setting up of a new 2400 MW power plant at Pirpainti, will be taken up at a cost of ` 21,400 crore. New airports, medical colleges and sports infrastructure in Bihar will be constructed. An additional allocation to support capital investments will be provided. The requests of Bihar Government for external assistance from multilateral development banks will be expedited. Andhra Pradesh ▪ The government has made concerted efforts to fulfil the Reorganization Act commitments in the Andhra Pradesh Reorganization Act. ▪ Recognizing the state’s need for a capital, we will facilitate special financial support through multilateral development agencies. ▪ In the current financial year 15,000 crore will be arranged, with additional amounts in future years. ▪ Our government is fully committed to financing and early completion of the Polavaram Irrigation Project, which is the lifeline for Andhra Pradesh and its farmers. This will facilitate our country’s food security as well. (The Polavaram Project is an under construction multi-purpose irrigation project on the Godavari River in the Eluru District and East Godavari District in Andhra Pradesh) ▪ Under the Act, for promoting industrial development, funds will be provided for essential infrastructure such as water, power, railways and roads in Kopparthy node on the Vishakhapatnam-Chennai Industrial Corridor and Orvakal node on Hyderabad-Bengaluru Industrial Corridor. ▪ An additional allocation will be provided this year towards capital investment for economic growth. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 13 ▪ Grants for backward regions of Rayalaseema, Prakasam and North Coastal Andhra, as stated in the Act, will also be provided PM Awas Yojana Three crore additional houses under the PM Awas Yojana in rural and urban areas in the country have been announced, for which the necessary allocations are being made. Women-led For promoting women-led development, the budget development carries an allocation of more than ` 3 lakh crore for schemes benefitting women and girls. Pradhan Mantri The Finance Minister announced that for improving the Janjatiya Unnat socio-economic condition of tribal communities, Gram Abhiyan government will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts covering 63,000 villages and benefitting 5 crore tribal people. Bank branches in More than 100 branches of India Post Payment Bank North-Eastern will be set up in the North East region to expand the Region banking services. Allocation for rural This year government has made a provision of 2.66 development lakh crore for rural development including rural infrastructure Priority 4: Manufacturing & Services Support for This budget provides special attention to MSMEs and promotion of manufacturing, particularly labour-intensive MSMEs manufacturing. Government have formulated a package covering financing, regulatory changes and technology support for MSMEs to help them grow and also compete globally, as mentioned in the interim budget Credit Guarantee For facilitating term loans to MSMEs for purchase of Scheme for MSMEs machinery and equipment without collateral or third- in the party guarantee, a credit guarantee scheme will be Manufacturing introduced. Sector The scheme will operate on pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to 100 crore, while the loan amount may be larger. The borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reducing loan balance www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 14 New assessment Public sector banks will build their in-house capability model for MSME to assess MSMEs for credit, instead of relying on external credit assessment. Public sector banks will develop a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy. This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. That will also cover MSMEs without a formal accounting system. Credit Support to A new mechanism for facilitating continuation of bank MSMEs during credit to MSMEs during their stress period. While being Stress Period in the ‘special mention account’ (SMA) stage for reasons beyond their control, MSMEs need credit to continue their business and to avoid getting into the NPA stage. Credit availability will be supported through a guarantee from a government promoted fund. Mudra Loans The limit of Mudra loans will be enhanced to ₹ 20 lakh from the current ₹ 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category. Enhanced scope for For facilitating MSMEs, Government has proposed to reduce mandatory the turnover threshold of buyers for mandatory onboarding onboarding in on the TReDS platform from ` 500 crore to ` 250 crore. TReDS This measure will bring 22 more CPSEs and 7000 more companies onto the platform. Medium enterprises will also be included in the scope of the suppliers SIDBI branches in SIDBI will open new branches to expand its reach to serve MSME clusters all major MSME clusters within 3 years, and provide direct credit to them. With the opening of 24 such branches this year, the service coverage will expand to 168 out of 242 major clusters. MSME Units for Financial support for setting up of 50 multi-product Food Irradiation, food irradiation units in the MSME sector will be Quality & Safety provided. Testing Setting up of 100 food quality and safety testing labs with National Accreditation Board for Testing and Calibration Laboratories (NABL) accreditation will be facilitated. E-Commerce To enable MSMEs and traditional artisans to sell their Export Hubs products in international markets, E-Commerce Export Hubs will be set up in public-private-partnership (PPP) mode. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 15 These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export related services under one roof. Measures for Internship in Top Companies: promotion of o As the 5th scheme under the Prime Minister’s Manufacturing & package, our government will launch a Services comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. o They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities. o An internship allowance of ` 5,000 per month along with a one-time assistance of ` 6,000 will be provided. o Companies will be expected to bear the training cost and 10 per cent of the internship cost from Industrial Parks Development of investment-ready “plug and play” industrial parks with complete infrastructure in or near 100 cities, in partnership with the states and private sector, by better using town planning schemes. Twelve industrial parks under the National Industrial Corridor Development Programme. Rental Housing Rental housing with dormitory type accommodation for industrial workers will be facilitated in Public Private Partnerships (PPP) mode with Viability Gap Funding (VGF) support and commitment from anchor industries. About VGF: o Approved on July 25, 2005 by Cabinet Committee on Economic Affairs (CCEA) o for Financial Support to PPPs in Infrastructure o Implemented by the Department of Economic Affairs, Ministry of Finance o 60% of the Total Project Cost (maximum up to 30% by the Central and State Governments each) for the social sectors i.e. Water Supply, Waste Water Treatment, Solid Waste Management and Health, Education, and o upto 80% of the Total Project Cost (maximum up to 40% by the Central and State Governments each) for Pilot/Demonstration Projects in Health and Education sectors. o Scheme is administered by the Empowered Committee. o Composition of Empowered Committee ▪ Secretary (Economic Affairs) ▪ CEO, NITI Aayog www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 16 ▪ Secretary (Expenditure) ▪ Secretary of the line Ministry dealing with the subject ▪ Joint Secretary, DEA- Member Secretary o The Empowered Committee will sanction Viability Gap Funding up to Rs. 200 crore (Rupees two hundred crore) for each project. o Amounts exceeding Rs. 200 crore may be sanctioned by the Empowered Committee with the approval of Finance Minister. Shipping industry Ownership, leasing and flagging reforms will be implemented to improve the share of the Indian shipping industry and generate more employment. Critical Mineral Government will set up a Critical Mineral Mission for: Mission o domestic production, o recycling of critical minerals, and o overseas acquisition of critical mineral assets. Its mandate will include: o technology development, o skilled workforce, o extended producer responsibility framework, and o a suitable financing mechanism Offshore mining of Government will launch the auction of the first tranche minerals of offshore blocks for mining, building on the exploration already carried out. Digital Public Development of DPI applications at population scale for Infrastructure (DPI) productivity gains, business opportunities, and Applications innovation by the private sector. These are planned in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance. Integrated An Integrated Technology Platform will be set up for Technology improving the outcomes under the Insolvency and Platform for IBC Bankruptcy Code (IBC) for achieving: eco-system o consistency, o transparency, o timely processing and o better oversight for all stakeholders. Voluntary closure The services of the Centre for Processing Accelerated of LLPs Corporate Exit (C-PACE) will be extended for voluntary (Limited Liability closure of LLPs to reduce the closure time. Partnerships) National Company The IBC has resolved more than 1,000 companies, Law Tribunals resulting in direct recovery of over ` 3.3 lakh crore to creditors. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 17 In addition, 28,000 cases involving over ` 10 lakh crore have been disposed of, even prior to admission. Appropriate changes to the IBC, reforms and strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency resolution. Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act. Debt Recovery Steps for reforming and strengthening debt recovery tribunals will be taken. Additional tribunals will be established to speed up recovery Priority 5: Urban Development Cities as Growth Working with states, Government will facilitate Hubs development of ‘Cities as Growth Hubs’. This will be achieved through economic and transit planning, and orderly development of peri-urban areas utilising town planning schemes. Creative For creative brownfield redevelopment of existing cities redevelopment of with a transformative impact, government will formulate cities a framework for enabling policies, market-based mechanisms and regulation. Transit Oriented Transit Oriented Development plans for 14 large cities Development with a population above 30 lakh will be formulated, along with an implementation and financing strategy. Urban Housing PM Awas Yojana Urban 2.0, housing needs of 1 crore urban poor and middle-class families will be addressed with an investment of ₹ 10 lakh crore. This will include the central assistance of ₹ 2.2 lakh crore in the next 5 years. A provision of interest subsidy to facilitate loans at affordable rates is also envisaged. In addition, enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place. Water Supply and In partnership with the State Governments and Sanitation Multilateral Development Banks, Government will promote water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects. o These projects will also envisage use of treated water for irrigation and filling up of tanks in nearby areas. Street Markets Building on the success of PM SVANidhi Scheme in transforming the lives of street vendors, Government envisions a scheme to support each year, over the next www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 18 five years, the development of 100 weekly ‘haats’ or street food hubs in select cities. Stamp Duty Government will encourage states which continue to charge high stamp duty to moderate the rates for all, and also consider further lowering duties for properties purchased by women. This reform will be made an essential component of urban development schemes. Priority 6: Energy Security Energy Transition Government will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability. PM Surya Ghar Muft As announced in the interim budget, PM Surya Ghar Muft Bijli Yojana Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month. The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications. Pumped Storage A policy for promoting pumped storage projects will be Policy brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix. Research and Government will partner with the private sector for development of (1) setting up Bharat Small Reactors, small and modular nuclear reactors (2) research & development of Bharat Small Modular Reactor, and (3) research & development of newer technologies for nuclear energy. The R&D funding announced in the interim budget will be made available for this sector. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 19 Advanced Ultra The development of indigenous technology for Advanced Super Critical Ultra Super Critical (AUSC) thermal power plants with Thermal Power much higher efficiency has been completed. Plants A joint venture between NTPC and BHEL will set up a full scale 800 MW commercial plant using AUSC technology. The government will provide the required fiscal support. Moving forward, development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in benefits for the economy. A roadmap for moving the ‘hard to abate’ industries from Roadmap for ‘hard ‘energy efficiency’ targets to ‘emission targets’ will be to abate’ industries formulated. Appropriate regulations for transition of these industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode will be put in place. Support to An investment-grade energy audit of traditional micro traditional micro and small industries in 60 clusters, including brass and and small ceramic, will be facilitated. industries Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase. Priority 7: Infrastructure Infrastructure Significant investment the Central Government has made investment by over the years in building and improving infrastructure Central has had a strong multiplier effect on the economy. Government Government will endeavour to maintain strong fiscal support for infrastructure over the next 5 years, in conjunction with imperatives of other priorities and fiscal consolidation. Government has 11,11,111 crore for capital expenditure. This would be 3.4 per cent of our GDP. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 20 Infrastructure Government will encourage states to provide support of investment by similar scale for infrastructure, subject to their state governments development priorities. A provision of 1.5 lakh crore for long-term interest free loans has been made this year also to support the states in their resource allocation. Private investment Investment in infrastructure by private sector will be promoted in infrastructure through viability gap funding and enabling policies and regulations. A market-based financing framework will be brought out. Pradhan Mantri Phase IV of PMGSY will be launched to provide all-weather Gram Sadak Yojana connectivity to 25,000 rural habitations which have become (PMGSY) eligible in view of their population increase. Irrigation and Flood Bihar has frequently suffered from floods, many of them Mitigation originating outside the country. Plans to build flood control structures in Nepal are yet to progress. Government, through the Accelerated Irrigation Benefit Programme and other sources, will provide financial support for projects with estimated cost of ` 11,500 crore such as the Kosi-Mechi intra-state link and 20 other ongoing and new schemes including barrages, river pollution abatement and irrigation projects. In addition, survey and investigation of Kosi related flood mitigation and irrigation projects will be undertaken. Government will provide assistance to the following states: o To Assam due to floods every year by the Brahmaputra River and its tributaries, originating outside India. o To Himachal Pradesh which suffered extensive losses due to floods o To Uttarakhand which suffered losses due to cloud bursts and massive landslides. o To Sikkim which witnessed devastating flash floods and landslides Tourism Tourism has always been a part of our civilization. Government’s efforts in positioning India as a global tourist destination will also create jobs, stimulate www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 21 investments and unlock economic opportunities for other sectors. Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor in Bihar will be supported, modelled on the successful Kashi Vishwanath Temple Corridor, to transform them into world class pilgrim and tourist destinations. Rajgir (district Nalanda) holds immense religious significance for Hindus, Buddhists and Jains. The 20th Tirthankara Munisuvrata temple in the Jain Temple complex is ancient. The Saptharishi or the 7 hotsprings form a warm water Brahmakund that is sacred. A comprehensive development initiative for Rajgir will be undertaken. Government will support the development of Nalanda as a tourist centre besides reviving Nalanda University to its glorious stature. 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. Priority 8: Innovation, Research & Development Anusandhan Government will operationalize the Anusandhan National National Research Research Fund for basic research and prototype development. Fund Also will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ` 1 lakh crore in line with the announcement in the interim budget. Space Economy With our continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of ` 1,000 crore will be set up. Priority 9: Next Generation Reforms Economic Policy Government will formulate an Economic Policy Framework Framework to delineate the overarching approach to economic development and set the scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 22 Government will initiate and incentivize reforms for: o improving productivity of factors of production, and o facilitating markets and sectors to become more efficient. These reforms will cover all factors of production, namely land, labour, capital and entrepreneurship, and technology as an enabler of improving total factor productivity and bridging inequality. Effective implementation of several of these reforms requires collaboration between the Centre and the states and building consensus, as development of the country lies in development of the states. For promoting competitive federalism and incentivizing states for faster implementation of reforms, Government proposes to earmark a significant part of the 50-year interest-free loan. Land-related Land-related reforms and actions, both in rural and urban reforms by state areas, will cover governments: (1) land administration, planning and management, and (2) urban planning, usage and building bylaws. These will be incentivized for completion within the next 3 years through appropriate fiscal support. Rural Land related Rural land related actions will include actions (1) assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, (2) digitization of cadastral maps, (3) survey of map sub-divisions as per current ownership, (4) establishment of land registry, and (5) linking to the farmers registry. These actions will also facilitate credit flow and other agricultural services. Urban Land related Land records in urban areas will be digitized with GIS actions mapping. An IT based system for property record administration, updating, and tax administration will be established. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 23 These will also facilitate improving the financial position of urban local bodies Labour related Services to Labour: reforms Government will facilitate the provision of a wide array of services to labour, including those for employment and skilling. A comprehensive integration of e-shram portal with other portals will facilitate such one-stop solution. Open architecture databases for the rapidly changing labour market, skill requirements and available job roles, and a mechanism to connect job-aspirants with potential employers and skill providers will be covered in these services. Shram Suvidha & Samadhan Portal: Shram Suvidha and Samadhan portals will be revamped to enhance ease of compliance for industry and trade. Capital and Financial sector vision and strategy: entrepreneurship For meeting financing needs of the economy, government related reforms will bring out a financial sector vision and strategy document to prepare the sector in terms of size, capacity and skills. This will set the agenda for the next 5 years and guide the work of the government, regulators, financial institutions and market participants. Taxonomy for Government will develop a taxonomy for climate finance climate finance for enhancing the availability of capital for climate adaptation and mitigation. This will support achievement of the country’s climate commitments and green transition. Variable Capital Government will seek the required legislative approval for Company structure providing an efficient and flexible mode for financing leasing of aircrafts and ships, and pooled funds of private equity through a ‘variable company structure’. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 24 Foreign Direct The rules and regulations for Foreign Direct Investment and Investment and Overseas Investments will be simplified to Overseas (1) facilitate foreign direct investments, Investment (2) nudge prioritization, and (3) promote opportunities for using Indian Rupee as a currency for overseas investments NPS Vatsalya NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started. On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account. Use of Technology Government have successfully used technology for improving productivity and bridging inequality in our economy during the past 10 years. Public investment in digital infrastructure and innovations by the private sector have helped in improving access of all citizens, particularly the common people, to market resources, education, health and services. Government will step up adoption of technology towards digitalization of the economy. Ease of Doing For enhancing ‘Ease of Doing Business’, Government is Business already working on the Jan Vishwas Bill 2.0. Further, states will be incentivized for implementation of their Business Reforms Action Plans and digitalization. Data and Statistics: For improving data governance, collection, processing and management of data and statistics, different sectoral data bases, including those established under the Digital India mission, will be utilized with active use of technology tools. New Pension The Committee to review the NPS has made Scheme (NPS) considerable progress in its work. o Staff Side of the National Council of the Joint Consultative Machinery for Central Government Employees have taken a constructive approach. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 25 o A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens. Budget Estimates For the year 2024-25, the total receipts other than 2024-25 borrowings and the total expenditure are estimated at ` 32.07 lakh crore and ` 48.21 lakh crore respectively. The net tax receipts are estimated at ` 25.83 lakh crore. The fiscal deficit is estimated at 4.9 per cent of GDP. The gross and net market borrowings through dated securities during 2024-25 are estimated at ` 14.01 lakh crore and ` 11.63 lakh crore respectively. Both will be less than that in 2023-24. The fiscal consolidation path announced by me in 2021 has served our economy very well, and government aims to reach a deficit below 4.5 per cent next year. From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central Government debt will be on a declining path as percentage of GDP. Part B: Indirect Taxes Medicines and To provide relief to cancer patients, Government proposes Medical Equipment to fully exempt three more medicines from customs duties. Government also proposes changes in the Basic Customs Duty (BCD) on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, so as to synchronise them with domestic capacity addition. Mobile Phone and With a three-fold increase in domestic production and Related Parts almost 100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured. In the interest of consumers, Government proposes to reduce the BCD on mobile phone, mobile PCBA and mobile charger to 15 per cent. Critical Minerals Minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 26 renewable energy, space, defence, telecommunications, and high-tech electronics. Government proposes to fully exempt customs duties on 25 critical minerals and reduce BCD on two of them. Marine products India’s seafood exports in the last financial year touched an all-time high of more than ₹ 60,000 crore. Frozen shrimp accounted for about two-thirds of these exports. To enhance their competitiveness, government proposes to reduce BCD on certain broodstock, polychaete worms, shrimp and fish feed to 5 per cent. Government proposes to exempt customs duty on various inputs for manufacture of shrimp and fish feed. Precious Metals Government proposes to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent. Other Metals Nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap. Chemicals and BCD on ammonium nitrate increased from 7.5 to 10 per Petrochemicals cent Plastics PVC flex banners are non-biodegradable and hazardous for environment and health. To curb their imports, government has raised the BCD on them from 10 to 25 per cent. Telecommunication To incentivize domestic manufacturing, BCD increased Equipment from 10 to 15 per cent on PCBA of specified telecom equipment. Trade facilitation To promote domestic aviation and boat & ship MRO, Government proposes to extend the period for export of goods imported for repairs from six months to one year The time-limit for re-import of goods for repairs under warranty increased from three to five years. Amendment to Reduction in the pre-deposit for filing appeal with the reduce the Appellate Authority from Rs. 25 crore of central tax to Rs. maximum amount 20 crore of central tax. of pre-deposit for www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 27 filing appeals for Reduction in the amount of pre-deposit for filing appeal GST with the Appellate Tribunal from 20% with a maximum amount of Rs. 50 crore of central tax to 10 % with a maximum of Rs. 20 crore of central tax. Direct Taxes 58 per cent of corporate tax came from the simplified tax regime in financial year 2022-23. Similarly, as per data available till now for the last fiscal, more than two-thirds have availed the new personal income tax regime. Comprehensive The purpose is to make the Act concise, lucid, easy to read Review of the and understand. Income-tax Act, This will reduce disputes and litigation, thereby providing 1961 tax certainty to the tax payers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months. Simplification for The two tax exemption regimes for charities are Charities and of proposed to be merged into one. TDS o The 5 per cent TDS rate on many payments is being merged into the 2 per cent TDS rate and o the 20 per cent TDS rate on repurchase of units by mutual funds or UTI is being withdrawn. TDS rate on e-commerce operators is proposed to be reduced from one to 0.1 per cent. Moreover, credit of TCS is proposed to be given in the TDS to be deducted on salary. Government proposes to decriminalize delay for payment of TDS up to the due date of filing statement for the same. Government will provide a standard operating procedure for TDS defaults and simplify and rationalise the compounding guidelines for such defaults. Simplification of An assessment hereinafter can be reopened beyond three Reassessment years from the end of the assessment year only if the escaped income is ₹ 50 lakh or more, up to a maximum period of five years from the end of the assessment year. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 28 Even in search cases, a time limit of six years before the year of search, as against the existing time limit of ten years, is proposed. This will reduce tax-uncertainty and disputes. Simplification and Short term gains on certain financial assets shall Rationalisation of henceforth attract a tax rate of 20 per cent, while that on Capital Gains all other financial assets and all non-financial assets shall continue to attract the applicable tax rate. Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 per cent. Indexation has been done away with for ease of computation with simultaneous reduction of rate from 20 percent to 12.5 percent. For the benefit of the lower and middle-income classes, Government proposes to increase the limit of exemption of capital gains on certain financial assets to ₹ 1.25 lakh per year. Listed financial assets held for more than a year will be classified as long term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term. Unlisted bonds and debentures, debt mutual funds and market linked debentures, irrespective of holding period, however, will attract tax on capital gains at applicable rates. The new provisions for taxation of capital gains come into force from July 23, 2024. Tax Payer Services All the major tax payer services under GST and most services under Customs and Income Tax have been digitalised. All remaining services of Customs and Income Tax including rectification and order giving effect to appellate orders shall be digitalized and made paper-less over the next two years. Litigation and For resolution of certain income tax disputes pending in Appeals appeal Government has proposed Vivad Se Vishwas Scheme, 2024 www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 29 Government proposes to increase monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court to ₹ 60 lakh, ₹ 2 crore and ₹ 5 crore respectively Employment and Proposals to promote investment and foster employment: Investment o Angel tax for all classes of investors have been abolished to bolster the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation. o a simpler tax regime for foreign shipping companies operating domestic cruises in the country. o safe harbour rates for foreign mining companies selling raw diamonds in the country. o Reduction of the corporate tax rate on foreign companies from 40 to 35 per cent. o Buy-back of shares: It is proposed that the income from buy-back of shares by companies be Deepening the tax chargeable in the hands of recipient investor as base dividend, instead of the current regime of additional income-tax in the hands of the company. Further, the cost of such shares shall be treated as a capital loss to the investor. o Securities transaction tax (STT) rates: It is proposed to increase the rates of STT on sale of an option in securities from 0.0625 per cent to 0.1 per cent of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 per cent of the price at which such futures are traded. o Income from letting out of a house or part of the house by the owner, will be chargeable to tax under the head ‘income from house property’ only. o Payments made by firm to its partner in the nature of salary, remuneration, commission, bonus and interest, etc shall be subject to TDS at the rate of 10 per cent for aggregate amounts more than ` 20,000 in a financial year. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 30 o To enable TCS on luxury goods, it is proposed to levy TCS of 1 per cent on notified goods of value exceeding ten lakh rupees. o TDS is proposed on interest exceeding ten thousand rupees on Floating Rate Savings (Taxable) Bonds (FRSB) 2020 or any other notified security of the Central or State Governments. o It is proposed to increase the rate of simple interest from 1 per cent to 1.5 per cent on delayed payments of TCS after collection, as in the case of TDS. Others o section 80CCD: To improve social security benefits, deduction of expenditure by employers towards NPS is proposed to be increased from 10 to 14 per cent of the employee’s salary. ▪ Similarly, deduction of this expenditure up to 14 per cent of salary from the income of employees in private sector, public sector banks and undertakings, opting for the new tax regime, is proposed to be provided. o Indian professionals working in multinationals get ESOPs and invest in social security schemes and other movable assets abroad. Non-reporting of such small foreign assets has penal consequences under the Black Money Act. Such non-reporting of movable assets up to ₹ 20 lakh is proposed to be de-penalised. o Other major proposals in the Finance Bill relate to: ▪ Withdrawal of equalization levy of 2 per cent; ▪ Expansion of tax benefits to certain funds and entities in IFSCs; and ▪ immunity from penalty and prosecution to benamidar on full and true disclosure so as to improve conviction under the Benami Transactions (Prohibition) Act, 1988. Personal Income o First, the standard deduction for salaried Tax employees is proposed to be increased from ₹50,000/- to ₹75,000/-. www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 31 ▪ Similarly, deduction on family pension for pensioners is proposed to be enhanced from ₹ 15,000/- to ₹ 25,000/-. ▪ This will provide relief to about four crore salaried individuals and pensioners. o Second, in the new tax regime, the tax rate structure is proposed to be revised, as follows: 0-3 lakh rupees Nil 3-7 lakh rupees 5 per cent 7-10 lakh rupees 10 per cent 10-12 lakh rupees 15 per cent 12-15 lakh rupees 20 per cent Above 15 lakh rupees 30 per cent o As a result of these changes, a salaried employee in the new tax regime stands to save up to ₹ 17,500/- in income tax. o As a result of these proposals, revenue of about ₹ 37,000 crore – ₹ 29,000 crore in direct taxes and ₹ 8,000 crore in indirect taxes – will be forgone while revenue of about ₹ 30,000 crore rupees will be additionally mobilized. Thus, the total revenue forgone is about ₹ 7,000 crore annually. Outline of Schemes 1. Employment Linked Incentive Scheme A: First Timers: One month’s wage as subsidy (maximum `15,000) Applicable to all sectors First timers have a learning curve before they become fully productive; subsidy is to assist employees and employers in hiring of first timers. Applicable to all persons newly entering the workforce (EPFO) with wage/salary less than `1 lakh per month. Subsidy will be paid to the employee in three instalments www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 32 Employee must undergo compulsory online Financial Literacy course before claiming the second instalment. Subsidy to be refunded by employer if the employment to the first timer ends within 12 months of recruitment. Expected to cover approximately one crore persons per annum. Scheme will be implemented for 2 years. Expenditure Duration: 3 years Beneficiaries: 210 lakhs Budgetary outlay: 23000 crs 2. Employment linked Incentive Scheme B: Job creation in manufacturing: Applicable for substantial hiring of first time employees in the manufacturing sector All employers which are corporate entities and those non-corporate entities with a three year track record of EPFO contribution will be eligible. Employer must hire at least the following number of previously non-EPFO enrolled workers: ▪ 50 or ▪ 25% of the baseline (previous year’s number of EPFO employees) [whichever is lower] Incentive will be paid for four years partly to the employee and partly to the employer as follows: Year Incentive (as % of wage / salary, shared equally between employer & employee) 1 24 2 24 3 16 4 8 Employer must maintain threshold level of enhanced employment throughout, failing which subsidy benefit will stop. Employee must be directly working in the entity paying salary/wage (i.e. in-sourced employee). Employees with a wage/ salary of up to `1 lakh per month will be eligible, subject to contribution to EPFO. For those with wages/salary greater than `25,000/month, incentive will be calculated at `25,000/month. Subsidy to be refunded by employer if the employment to first timer ends within 12 months of recruitment. This subsidy will be in addition to benefit under Part-A Scheme will be implemented for 2 years. Expenditure Duration: 6 years www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 33 Beneficiaries: 30 lakhs Budgetary outlay: 52000 crs 3. Employment Linked Incentive Scheme C: Support to employers: Applicable to an employer who: ▪ Increases employment above the baseline (previous year’s number of EPFO employees) by at least two employees (for those with less than 50 employees) or 5 employees (for those with 50 or more employees) and sustains the higher level, and ▪ For employees whose salary does not exceed `1,00,000/month ▪ New employees under this Part need not be new entrants to EPFO For two years Government will reimburse EPFO employer contribution [up to] `3,000/month to the Employer for the additional Employees hired in the previous year. If the employer creates more than 1000 jobs: ▪ Reimbursement will be done quarterly for the previous quarter ▪ Subsidy will continue for the 3rd and 4th year on the same scale as Employer benefit in Part-B Not applicable for those Employees covered under Part-B. This subsidy will be in addition to benefit under Part-A. Scheme will be implemented for 2 years. Expenditure Duration: 6 years Beneficiaries: 50 lakhs Budgetary outlay: 32000 crs 4. Skilling Programme and Upgradation of Industrial Training Institutes: 1000 Industrial Training Institutes (ITIs) to be upgraded in hub and spoke arrangements in five years New Centrally Sponsored Scheme in collaboration with states and industry Focus on outcome and quality of skilling Course content and design aligned to needs of industry Total outlay of ` 60,000 crore over five years o Government of India—` 30,000 crore o State Governments—` 20,000 crore o Industry—` 10,000 crore (including CSR funding) 200 hubs and 800 spoke ITIs –all with industry collaboration o Re-design and review of existing courses o New courses o 1 to 2 year courses in all 1000 ITIs o Short term specialised courses in Hub ITIs www.crackgradeb.com | [email protected] | 9310558455  Crack Grade B 34 Capacity augmentation of 5 national institutes for training of trainers 20 lakh students expected to benefit 5. Internship in Top Companies One crore youth to be skilled by India’s top companies in five years. Twelve months Prime Minister’s Internship with monthly allowance of `5,000 Applicable to those who are not employed and not engaged in full time education. Youth aged between 21 and 24 will be eligible to apply. Cost sharing (per annum): ▪ Government – `54,000 towards monthly allowance (plus `6,000 grant for incidentals) ▪ Company – Rs 6,000 from CSR funds towards monthly allowance ▪ Training cost to be borne by the Company from CSR funds. ▪ Administrative costs to be borne by respective parties (for the Company, reasonable administrative expenses can be counted as CSR expenditure) Participation of companies is voluntary Applications through an online portal Company to select from a short list; short listing based on objective criteria with emphasis on those with lower employability Ineligible candidates (indicative list) ▪ Candidate has IIT, IIM, IISER, CA, CMA etc as qualification ▪ Any member of the family is assessed to Income Tax ▪ Any member of the family is a government employee, etc. Company is expected to provide the person an actual working experience on a skill in which the company is directly involved. At least half the time should be in actual working experience/job environment, not in classroom. In case the Company cannot directly do so, it must tie-up with: ▪ Companies in its forward and backward supply chain (e.g. suppliers or customers) or ▪ Other Companies/Institutions in its Group or otherwise Will be co-ordinated with State Government initiatives wherever applicable. Phase 1 of the scheme will be for 2 years (30 lakhs beneficiaries) followed by Phase 2 for 3 years (70 lakhs beneficiaries). www.crackgradeb.com | [email protected] | 9310558455