The Union Budget for 2024-25, presented by Finance Minister Nirmala Sitharaman, is a strategic blueprint aimed at steering India towards “Viksit Bharat” (Developed India). The budget’s comprehensive approach spans crucial sectors such as agriculture, employment, skilling, MSMEs, infrastructure, and social justice, reflecting the government’s commitment to inclusive growth and sustainable development. Here is a detailed analysis of the budget’s key highlights, their impact on employment, employability, and ease of doing business, along with reactions from various stakeholders.
Key Features of the Budget
Agriculture and Rural Development
- Transforming Agriculture Research and Production: The government will undertake a comprehensive review of the agriculture research setup, focusing on raising productivity and developing climate-resilient crop varieties. A significant release of 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be cultivated by farmers(Budget_speech_July 2024).
- Natural Farming Initiatives: Over the next two years, 1 crore farmers will be initiated into natural farming, supported by certification and branding. Additionally, 10,000 bio-input resource centers will be established to aid this transition(Budget_speech_July 2024).
- Vegetable Production and Supply Chains: Large-scale clusters for vegetable production will be developed near major consumption centers. This will involve the promotion of Farmer-Producer Organizations, cooperatives, and startups to enhance vegetable supply chains(Budget_speech_July 2024).
- Digital Public Infrastructure (DPI) for Agriculture: The government plans to implement DPI for agriculture, covering farmers and their lands within three years. This year, a digital crop survey for Kharif will be conducted in 400 districts, incorporating 6 crore farmers into the digital registries(Budget_speech_July 2024).
Employment and Skilling
- Employment Linked Incentive Schemes: Three new schemes under the Prime Minister’s package are introduced to enhance employment opportunities:
- Scheme A: Provides one-month wage to new entrants in all formal sectors in three instalments up to ₹15,000, benefiting 210 lakh youth(Budget_speech_July 2024)(Key Features of Budget …).
- Scheme B: Incentivizes additional employment in manufacturing, covering EPFO contributions for 30 lakh youth for the first four years(Budget_speech_July 2024)(Key Features of Budget …).
- Scheme C: The government will reimburse EPFO contributions of employers up to ₹3,000 per month for two years for all new hires, expected to generate 50 lakh jobs(Budget_speech_July 2024)(Key Features of Budget …).
- Women Participation and Skilling: To facilitate higher participation of women in the workforce, the government will set up working women hostels in collaboration with industry and establish creches. Financial support for loans up to ₹10 lakh for higher education in domestic institutions will be provided, including direct e-vouchers for 1 lakh students annually(Budget_speech_July 2024).
MSMEs: Fueling Growth and Innovation
- Credit Guarantee and Support Schemes: A new credit guarantee scheme will facilitate term loans to MSMEs for purchasing machinery and equipment without collateral. Public sector banks will also develop new credit assessment models based on digital footprints(Budget_speech_July 2024).
- Credit Support During Stress Periods: To support MSMEs during stress periods, a new mechanism for continued bank credit will be introduced, backed by a government-promoted guarantee fund(Budget_speech_July 2024).
- Enhanced Mudra Loans: The limit for Mudra loans will be increased to ₹20 lakh from ₹10 lakh for entrepreneurs who have successfully repaid previous loans(Budget_speech_July 2024).
Infrastructure Development
- Significant Allocations: Allocation of ₹11.11 lakh crore for infrastructure, constituting 3.4% of GDP(Budget_speech_July 2024).
- PMGSY Phase IV: Launch of Phase IV of Pradhan Mantri Gram Sadak Yojana (PMGSY) to ensure all-weather connectivity for 25,000 rural habitations(Budget_speech_July 2024).
- Urban Development: Significant investment in water supply, sewage treatment, and solid waste management projects in 100 large cities. PM Awas Yojana Urban 2.0 aims to address housing needs for 1 crore urban poor and middle-class families with an investment of ₹10 lakh crore(Budget_speech_July 2024).
Energy and Sustainable Development
- PM Surya Ghar Muft Bijli Yojana: Launch of PM Surya Ghar Muft Bijli Yojana to provide free electricity up to 300 units per month to 1 crore households(Key Features of Budget …).
- Pumped Storage Projects: Policy for promoting pumped storage projects to facilitate the integration of renewable energy into the grid(Key Features of Budget …).
- Nuclear Energy: Collaboration with the private sector for setting up Bharat Small Reactors and developing new nuclear energy technologies(Key Features of Budget …).
Social Justice and Human Resource Development
- Inclusive Growth: Substantial funds to improve the socio-economic conditions of marginalized communities, including ₹3 lakh crore for women and girls’ schemes and support for tribal communities through the Pradhan Mantri Janjatiya Unnat Gram Abhiyan(Budget_speech_July 2024)
- Education Initiatives: Revised Model Skill Loan Scheme providing loans up to ₹7.5 lakh for 25,000 students annually(Budget_speech_July 2024).
Impact on Employment, Employability, and Ease of Doing Business
- Enhancing Job Opportunities: The budget introduces three new schemes under the Prime Minister’s Employment Linked Incentive (ELI) package, which are expected to create millions of jobs. Scheme A aims to provide wages to new entrants in formal sectors, Scheme B incentivizes job creation in manufacturing, and Scheme C reimburses EPFO contributions for new hires. These measures are poised to significantly boost employment across various sectors, particularly benefiting the youth and addressing unemployment challenges(Budget_speech_July 2024)(Key Features of Budget …).
- Skilling Initiatives: The focus on skilling is evident through the Revised Model Skill Loan Scheme, which provides financial support for skill development. The government’s commitment to enhancing women’s participation in the workforce through hostels and creches, and financial support for higher education, will empower women and increase their employability. These initiatives are crucial for building a skilled workforce that can meet the demands of a rapidly evolving job market(Budget_speech_July 2024).
- Support for MSMEs: The budget introduces several measures to support Micro, Small, and Medium Enterprises (MSMEs), which are the backbone of the Indian economy. The new credit guarantee scheme, enhanced Mudra loans, and support during stress periods will provide much-needed financial stability and growth opportunities for MSMEs. These measures will facilitate easier access to credit and foster innovation, driving the growth of small businesses(Budget_speech_July 2024).
- Infrastructure Development: With a significant allocation of ₹11.11 lakh crore for infrastructure, the government aims to enhance connectivity and urban development. The launch of PMGSY Phase IV and investments in urban infrastructure projects will improve logistics, reduce operational costs, and create a more conducive environment for businesses to thrive. Improved infrastructure is a key enabler for ease of doing business, attracting investments, and driving economic growth(Budget_speech_July 2024).
- Digital Public Infrastructure (DPI): The implementation of DPI for agriculture and the promotion of digital footprints for credit assessment will streamline processes and enhance transparency. This digital transformation will simplify regulatory procedures, reduce bureaucratic hurdles, and make it easier for businesses to operate efficiently. The adoption of digital technologies will also enhance productivity and competitiveness, positioning India as a hub for innovation and entrepreneurship(Budget_speech_July 2024).
The Union Budget 2024-25 sets an ambitious path for India’s economic and social development, with a balanced approach towards fiscal management, infrastructure investment, and inclusive growth. While the initiatives have been widely appreciated, the true test will lie in their effective implementation and the government’s ability to navigate the challenges ahead.
Reference: BUDGET 2024-2025 NIRMALA SITHARAMAN
