The Union Budget 2024-25, presented on July 23, 2024, by the Finance Minister, emphasizes critical areas such as infrastructure development, youth upskilling, and agricultural modernization. This strategic focus is designed to stimulate economic growth, create employment opportunities, and enhance productivity across various sectors. Some of the key measures outlined in the Budget is listed below.
Youth Employment and Skill Development Initiatives
The budget outlines a comprehensive plan to address youth unemployment and skill gaps, with a particular emphasis on creating a pool of employable young individuals. The government has committed to investing Rs 2 lakh crore over five years to benefit approximately 4.1 crore youth through employment and skill development programs. For the fiscal year, Rs 1.48 lakh crore has been allocated to support these initiatives.
A notable feature of the budget is a scheme offering a one-month wage subsidy to new workforce entrants in formal sectors, providing direct benefit transfers in three instalments, capped at Rs 15,000 per person. This initiative is anticipated to aid 210 lakh young individuals. Furthermore, an employer-focused scheme will subsidize EPFO contributions for new employees, offering up to Rs 3,000 per month for two years. This measure aims to stimulate the hiring of 50 lakh individuals, boosting employment rates and aiding employers.
Additionally, a new centrally sponsored skilling scheme, developed in collaboration with state governments and industry, aims to equip 20 lakh youth with the necessary skills over five years. This initiative will upgrade 1,000 Industrial Training Institutes, enhancing their capacity and outcomes.
The government plans to launch a scheme to provide internship opportunities to one crore youth in 500 top companies over five years. This initiative is designed to offer practical business exposure and enhance employability. An internship allowance of Rs 5,000 per month and a one-time assistance of Rs 6,000 will be provided, with companies expected to cover training costs and a portion of the internship expenses from their CSR funds.
Agricultural Modernisation
The budget’s vision for agriculture includes steps towards modernization, including the establishment of a Digital Public Infrastructure (DPI) to cover farmers and their lands within three years. This initiative includes a digital crop survey for Kharif crops across 400 districts, aiming to document the details of 6 crore farmers and their lands. The budget has allocated Rs 1.52 lakh crore for agriculture and allied sectors, reflecting the government’s commitment to modernizing this crucial sector.
Support for MSMEs
The budget introduces a credit guarantee scheme for MSMEs to facilitate access to term loans for machinery and equipment purchases without the need for collateral. This scheme aims to mitigate credit risks and provide a guarantee cover of up to Rs 100 crore per applicant. Additionally, the Mudra loan limit has been increased to Rs 20 lakh for entrepreneurs who have successfully repaid previous loans under the ‘Tarun’ category.
To further support MSMEs, the turnover threshold for mandatory onboarding onto the Trade Receivables Discounting System (TReDS) platform will be reduced, bringing more companies, including CPSEs, into the system. This measure is designed to help MSMEs unlock working capital and improve cash flow.
Infrastructure Development
Infrastructure development remains a key priority, with the government committing Rs 11,11,111 crore to capital expenditure, representing 3.4 percent of GDP. This includes significant investments in highways, railways, and urban infrastructure. The Pradhan Mantri Gram Sadak Yojana (PMGSY) will launch Phase IV, aimed at providing all-weather connectivity to 25,000 rural habitations.
To give a boost to Manufacturing activities, the government plans to develop investment-ready industrial parks in 100 cities, in partnership with state governments and the private sector. This initiative includes the development of 12 industrial parks under the National Industrial Corridor Development Programme.
Housing and Urban Development
The PM Awas Yojana continues to be a cornerstone of the government’s housing policy, with a plan to construct an additional three crore houses in rural and urban areas. The PM Awas Yojana Urban 2.0 aims to address the housing needs of one crore urban poor and middle-class families with an investment of Rs 10 lakh crore, including a central assistance of Rs 2.2 lakh crore over the next five years. The program also includes provisions for interest subsidies to facilitate affordable housing loans.
Water Supply, Sanitation, and Energy
The budget outlines significant investments in water supply, sewage treatment, and solid waste management projects in partnership with state governments and multilateral development banks. These projects will focus on sustainability, including the use of treated water for irrigation and filling tanks.
Energy
The PM Surya Ghar Muft Bijli Yojana, aimed at installing rooftop solar plants to provide free electricity up to 300 units per month, has garnered significant interest. The government plans to develop policies to promote pumped storage projects for electricity storage and integration with the national grid.
The Central government also intends to partner with the private sector to set up Bharat Small Reactors and advance research and development in nuclear energy, including the development of Bharat Small Modular Reactors.
Flood Control Measures
The government also plans to support states like Bihar, Assam, Himachal Pradesh, Uttarakhand, and Sikkim in developing irrigation and flood mitigation projects. Bihar will receive financial support for various projects, including expressways, power plants, and infrastructure improvements.
Regional Development
The Purvodaya initiative aims to promote the all-round development of the eastern region, covering Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh. This includes infrastructure development, economic opportunities, and human resource development. Andhra Pradesh, in particular, will receive special financial support for its development needs, including the Polavaram Irrigation Project and infrastructure improvements.
Recognizing Andhra Pradesh’s need for a capital, the central government will not only facilitate special financial support through multilateral development agencies, but will allocate a sum of Rs 15,000 crore in the current year’s budget.
For the upliftment of Bihar, four expressways will be built. Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and 2-lane bridge over river Ganga at Buxar at a total cost of Rs 26,000 crore. Power projects, including setting up of a new 2,400 MW power plant at Pirpainti, will be taken up at a cost of Rs 21,400 crore. New airports, medical colleges and sports infrastructure will also be constructed in the state.
Foreign Investment
The budget also emphasizes simplifying rules and regulations for Foreign Direct Investment (FDI) and Overseas Investments, encouraging the use of the Indian Rupee in international transactions and investments.
In conclusion, the Union Budget 2024-25 lays out a comprehensive plan to drive economic growth through infrastructure development, youth skill development, agricultural modernization, and support for MSMEs. These measures are expected to enhance employment opportunities, improve living standards, and position India for sustained economic growth. The government’s commitment to fiscal responsibility, with a target to reduce the fiscal deficit to below 4.5 percent of GDP, underscores its focus on long-term economic stability and growth.
