By Sunisha Naik23 Jul, 2024 18:042 mins read 205 views
Image Source : https://budgetlive.nic.in/
The annual Union Budget, a financial blueprint for the nation, is more than just numbers and figures. It's a reflection of the government's priorities and its impact is felt across every strata of society.
The Union Budget 2024, in particular, has gained significant attention due to its focus on the common man. With promises of increased disposable income, tax relief, and improved social welfare, the budget aims to strike a balance between economic growth and the well-being of its citizens. This article delves deep into the budget's provisions, analyzing how it affects the average Indian and its potential implications for the economy.
Decoding Budget Jargon: Common terms that you need to know:
Before we dive into the details of this year's budget, let's clarify some common terms. Budget discussions can often sound confusing, but the core ideas are simple. In the following section, we'll explain complex financial terms in easy-to-understand language.
Union Budget:
Imagine the government is a big household.
The Union Budget is like the yearly spending plan for this household.
It shows how much money the government will earn (through taxes) and how it will spend it on things like roads, schools, hospitals, and defense.
GDP:
GDP is like measuring the size of a country's economy.
It's the total value of all goods and services produced in a country in a year.
Think of it as the country's annual income. A higher GDP generally means a stronger economy.
Fiscal Deficit:
This is like when a household spends more money than it earns.
The government's Fiscal Deficit is the gap between its income (taxes) and spending.
To cover this gap, the government usually borrows money.
Inflation:
Inflation is when prices of goods and services go up over time.
Imagine buying a chocolate for Rs. 10 today and the same chocolate costing Rs. 12 next year. That's inflation.
When things get more expensive quickly, it's called high inflation and can be a problem.
Direct and Indirect Taxes:
Direct Taxes: These are taxes paid directly by individuals or businesses to the government.
Income tax is a common example.
Indirect Taxes: These are taxes added to the price of goods and services.
When you buy something, you pay these taxes indirectly.
Examples include GST and sales tax.
Customs Duty:
This is a tax charged on goods imported into a country.
It's like a fee you pay to bring something from another country into yours.
Union budget 2024 got you confused? You can expand your financial vocabulary with Infosys Springboard's Union Budget 2024 terms guide.
— Infosys Springboard (@InfySpringboard) July 23, 2024
Overview of the Budget:
Key Highlights:
The Union Budget 2024 painted a broad stroke of the government's economic vision, marked by a keen focus on stimulating growth and improving the lives of its citizens.
Major Allocations to different Sectors:
A cornerstone of the budget was a substantial allocation towards infrastructure development, with a clear aim to enhance connectivity and create employment opportunities.
The agricultural sector, the backbone of the Indian economy, also received significant attention, with initiatives to boost farmers' income and promote agricultural technology.
The budget showcased a commitment to digital India, with increased investments in technology and digital infrastructure.
Education and healthcare, two critical social sectors, were not overlooked, with substantial provisions made for improving access and quality.
Government's Fiscal Stance:
The government's fiscal stance for the year was prudent, aiming to balance expenditure with revenue generation.
While the budget sought to provide relief to taxpayers, it also emphasized the need for fiscal consolidation.
Impact on the Common Man:
Income Tax Changes:
One of the most anticipated aspects of any budget is the changes in income tax slabs.
The Union Budget 2024 brought significant relief to taxpayers.
The government introduced a new tax regime with lower tax rates, offering taxpayers a choice between the old and new regimes.
The new tax slabs, with no exemptions or deductions, were designed to simplify the tax filing process.
While the lower tax rates are undoubtedly beneficial for many, the elimination of deductions and exemptions might impact those claiming significant deductions.
A careful analysis of individual tax situations is necessary to determine if the new regime offers more savings.
The increase in the standard deduction from Rs 50,000 to Rs 75,000 is a welcome move for salaried employees, providing them with additional tax savings.
A Salaried Employee will be saving around Rs 17,500 Income Tax with the changes in the Tax Stabs and Standard Deduction.
Similarly, the enhancement of the deduction for family pension to Rs 25,000 offers relief to pensioners.
These changes are expected to put more disposable income in the hands of taxpayers.
New Income Tax Slabs - Union Budget 2024 - Under the new Tax Regime
Upto 3 Lakh - Nil
3 Lakh to 7 Lakh - 5%
7 Lakh to 10 Lakh - 10%
10 Lakh to 12 Lakh - 15%
12 Lakh to 15 Lakh - 20%
Above 15 Lakh - 30%
Indirect Taxes:
Indirect taxes, such as excise duty, customs duty, and GST, have a direct impact on the cost of living.
Any changes in these taxes can influence the prices of goods and services.
While the budget did not announce major changes in indirect taxes, even minor adjustments can affect the overall inflation rate.
Social Welfare Schemes:
The budget made provisions for various social welfare schemes, aiming to improve the lives of the underprivileged.
Increased allocations for education, healthcare, and housing are expected to benefit a large section of the population.
These initiatives, if implemented effectively, can lead to better health outcomes, improved access to education, and affordable housing.
However, the actual impact of these schemes will depend on the efficient utilization of funds and the reach of the programs.
It is crucial to monitor the implementation process to ensure that the benefits reach the intended beneficiaries.
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The Union Budget 2024 presents a mixed bag of measures with both positive and negative implications.
On the one hand, the income tax relief and increased deductions are undoubtedly positive steps that will boost the disposable income of the middle class.
This increased spending power can fuel consumption and drive economic growth.
Moreover, the focus on infrastructure development is commendable, as it has the potential to create jobs and improve the overall quality of life.
However, the elimination of deductions and exemptions under the new tax regime might adversely impact taxpayers with high deductions, such as those claiming home loan interest or medical expenses.
The long-term impact of these changes on consumer spending and savings patterns remains to be seen.
The budget's success in achieving its objectives will depend on effective implementation.
While the intentions behind increased spending on education, healthcare, and social welfare are laudable, the actual impact will hinge on efficient utilization of funds and reaching the target beneficiaries.
Overall, the Union Budget 2024 is a step in the right direction, but its long-term efficacy will be determined by its execution.
Balancing the need for fiscal consolidation with social welfare and economic growth is a challenging task, and the government's ability to navigate this delicate equilibrium will be crucial in determining the overall impact of the budget.
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Compared to previous budgets, Budget 2024 exhibits a heightened focus on the middle class and taxpayers.
The introduction of new tax slabs with lower rates, coupled with increased deductions, marks a significant departure from the past.
While earlier budgets also emphasized infrastructure development, the current allocation seems more substantial.
Additionally, the budget's inclination towards digital India aligns with the government's ongoing push for technological advancement.
However, in comparison to previous years, there appears to be a reduced emphasis on certain social welfare programs.
While overall allocations to these sectors have increased, a deeper analysis of specific schemes is required to assess any potential reduction in per capita expenditure.
Expert Opinions:
Experts have offered mixed reactions to the Union Budget 2024.
Some applaud the government's focus on the middle class and the potential boost to consumer spending.
They believe the increased allocation for infrastructure will create jobs and stimulate economic growth.
However, concerns have been raised about the sustainability of the fiscal deficit and the potential impact of the new tax regime on overall tax collections.
Economists also emphasize the importance of effective implementation of the budget's provisions.
They highlight the need for strict monitoring and evaluation to ensure that the benefits reach the intended beneficiaries and that the government stays on track to achieve its fiscal targets.
Conclusion:
The Union Budget 2024 has undoubtedly made a concerted effort to address the concerns of the common man.
With tax reliefs, increased deductions, and focus on social welfare, the government has aimed to improve the financial well-being of its citizens.
While the budget holds promise, its ultimate impact will depend on effective implementation and the government's ability to navigate economic challenges.
The journey ahead requires vigilant monitoring and evaluation to ensure that the benefits of the budget reach the intended beneficiaries and contribute to overall economic prosperity.
