The Union Budget for 2024, presented by Finance Minister Nirmala Sitharaman, introduces a series of significant measures aimed at boosting economic growth, supporting various sectors, and providing relief to the middle class. Here are the key highlights and detailed explanations:
Income Tax Changes
1. New Tax Regime:
- No Tax up to Rs 3 lakh: Individuals with an annual income up to Rs 3 lakh are not required to pay any income tax, offering basic financial relief.
- 5% Tax on Income between Rs 3-7 lakh: Earnings between Rs 3 lakh and Rs 7 lakh are taxed at 5%, applying a low rate to moderate incomes.
- 10% Tax on Income between Rs 7-10 lakh: Income falling within Rs 7 lakh to Rs 10 lakh is taxed at 10%, increasing the rate for higher earnings.
- 15% Tax on Income between Rs 10-12 lakh: A 15% tax rate applies to income ranging from Rs 10 lakh to Rs 12 lakh, reflecting a higher tax bracket.
- 20% Tax on Income between Rs 12-15 lakh: For income between Rs 12 lakh and Rs 15 lakh, a 20% tax rate is levied, indicating further increased taxation.
- 30% Tax on Income above Rs 15 lakh: Income exceeding Rs 15 lakh is taxed at a 30% rate, the highest bracket, targeting substantial earnings.
This restructuring aims to provide relief to the middle class by reducing the tax burden and increasing disposable income, thereby enhancing purchasing power.
2. Increased Standard Deduction:
For taxpayers choosing the new tax regime, the standard deduction has been raised from Rs 50,000 to Rs 75,000. This increase aims to offer additional relief to salaried individuals by lowering their taxable income, ultimately reducing their overall tax burden and making the tax system more favorable for those with standard salary deductions.
Fiscal Policies
1. Fiscal Deficit:
The fiscal deficit for 2024-25 is projected to be 4.9% of GDP. The government is committed to reducing this deficit to below 4.5% in future years. This goal underscores their dedication to fiscal discipline while balancing the need for economic growth and stability, ensuring effective management of national finances.
2. Capital Expenditure:
A significant allocation of Rs 11.1 lakh crore has been designated for capital expenditure, representing 3.4% of GDP. This funding will be directed mainly towards infrastructure development, which is essential for stimulating economic growth and generating employment opportunities. The investment highlights a strategic focus on enhancing infrastructure to drive long-term economic benefits.

Support for MSMEs
1. Credit Guarantee Scheme:
A new credit guarantee scheme for MSMEs (Micro, Small, and Medium Enterprises) will be launched, offering coverage of up to Rs 100 crore per applicant. This initiative aims to facilitate access to essential funds for MSMEs while reducing credit risks for lenders, thus supporting the growth and stability of small and medium-sized businesses.
2. Mudra Loans:
The limit for Mudra loans in the Tarun category will be raised from Rs 10 lakh to Rs 20 lakh. This enhancement is designed to offer greater financial support to small businesses and entrepreneurs, enabling them to access higher funding for expansion and development, and fostering growth and innovation in the entrepreneurial sector.
Housing and Agriculture
1. PM Awas Yojana-Urban 2.0:
This scheme aims to meet the housing needs of 1 crore poor and middle-class families with an investment of Rs 10 lakh crore. The central government will contribute Rs 2.2 lakh crore over the next five years, facilitating the development of affordable housing and improving living conditions for millions of families.
2. Natural Farming Initiatives:
The government plans to integrate 1 crore farmers into natural farming within the next two years and establish 10,000 bio-resource centers. This initiative is designed to promote sustainable agricultural practices, enhance soil health, and boost productivity. By supporting farmers with eco-friendly methods and resources, the program seeks to advance agricultural sustainability and resilience.
Other Key Initiatives
1. NPS-Vatsalya:
The new plan permits parents and guardians to contribute to an NPS account for minors, which will convert to a regular NPS account upon the minor’s adulthood. This scheme encourages early financial planning and provides long-term security, helping to build a solid financial foundation for children as they transition into adulthood.
2. Space Economy:
A Rs 1000 crore venture capital fund will be set up to support the space economy. This investment aims to drive innovation and growth in the space sector, enhancing India’s position as a key player in space exploration and technology. The fund will foster advancements and attract investment in this emerging field.
3. Infrastructure Support:
The government will offer Rs 1.5 lakh crore in long-term interest-free loans to state governments to support infrastructure investment. This initiative is designed to boost infrastructure development nationwide, facilitating economic growth and improving public services. By providing these loans, the government aims to enhance the quality and scope of infrastructure projects across the country.
4. Employment and Skilling:
The budget includes provisions for employment-linked incentives and skilling programs. Under the Prime Minister’s package, three new schemes will be launched to create job opportunities and enhance workforce skills. These initiatives aim to boost employment, support career development, and address skill gaps, contributing to overall economic growth and improving the quality of the labor force.
Conclusion
The Union Budget 2024 introduces comprehensive measures aimed at stimulating economic growth, supporting key sectors, and providing significant relief to the middle class. The emphasis on infrastructure development, MSME support, housing, agriculture, and innovative schemes like NPS-Vatsalya and the space economy fund reflects a forward-looking approach to achieving sustainable and inclusive growth.
For further details and official budget documents, you can visit the Union Budget Portal