The Budget 2024-25 aims to set a clear five-year roadmap for India’s economy, focusing on sustainable growth and development. This budget outlines the government’s strategic, optimistic plans to boost key sectors, enhance infrastructure, and promote digital innovation.

With a vision to make India a global economic powerhouse, the budget addresses critical areas like healthcare, education, and employment while emphasising fiscal discipline and efficient resource allocation. The fiscal deficit target for 2024-25 is set at 4.9% of GDP, signalling a disciplined approach to managing public finances. 

The budget aims to achieve a fiscal deficit of 4.5% of GDP in the following fiscal year, moving closer to the long-term goal of a sustainable fiscal balance. The government projects a decrease in the debt-to-GDP ratio from 58.2% to 56.8%, indicating proactive efforts to manage the country’s debt levels and maintain investor confidence. 

Incorporating flexibility in fiscal policy allows the government to respond quickly to economic fluctuations, though it may limit predictability for businesses and investors. The government continues to utilise surplus revenues, particularly from the Reserve Bank of India, to support fiscal consolidation and demonstrate budgetary prudence.

The budget balances deficit reduction and critical expenditure needs. Additional resources have been allocated to fiscal consolidation, essential public services, and infrastructure projects. 

The budget outlines initiatives to address challenges highlighted in the Economic Survey 2023-24, including employability, employment for the youth, and improved infrastructure. Initiatives to enhance employability and improve infrastructure are proposed, and the proposal to present an economic policy framework is a positive step.

The budget outlines proposals aimed at rationalising tax structures, with a focus on indirect and direct tax reforms:

1. Indirect Tax Reforms – GST Rationalization: The budget aims to rationalise GST rates, streamline tax slabs, and expand the GST base to boost economic activity and revenue.

2. Recalibration of Customs Duties: The government proposes regular recalibration of customs duties to address economic concerns, such as lowering the cost of essential imports or protecting domestic industries.

3. Direct Tax Reforms: The budget proposes a comprehensive review of the Income Tax Act to simplify the tax code and introduces the Vivad se Vishwas 2024 scheme to resolve tax disputes. 

Measures to limit appeals and address inequality through higher taxes on capital gains and enhanced Securities Transaction Tax (STT) are also highlighted.

4. The budget proposes measures to limit the number of tax department appeals in cases involving small liabilities to reduce unnecessary litigation and focus on significant cases. 

It also addresses economic inequality by proposing higher taxes on capital gains and high-income earners while raising the exemption limit for retail investors. 

5. The budget suggests enhanced Securities Transaction Tax (STT) on futures and options transactions to curb speculative activities in the capital markets and create a more stable investment environment.

These reforms aim to create a more coherent, inclusive, and balanced tax regime.

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