Do You Know-While Sitharaman has allocated Rs 11,11,111 crore (3.4% of GDP), a 17% higher outlay for capital expenditure, or spending that is directed towards creating productive assets, it is lower than the 28% increase she had provided in 2023-24. But this probably comes from confidence that boardrooms in India Inc will now start clearing investment plans. In fact, projecting lower borrowing in 2024-25, she said, “Now that the private investments are happening at scale, the lower borrowings by the Central government will facilitate larger availability of credit for the private sector.” Market borrowings are estimated to almost Rs 50,000 crore lower in the next financial year.
The Budget did not make any changes in tax rates, but offered a resolution scheme that effectively will lead to the withdrawal of outstanding direct tax demands of up to Rs 25,000 up to 2009-10, and up to Rs 10,000 for financial years 2010-11 to 2014-15, because of which refunds to taxpayers were held back. “This is expected to benefit about a crore tax-payers,” Sitharaman said. Officials said this could mean a benefit to one in eight tax filers.
In line with developments in the technology and startup ecosystem, the Finance Minister also announced the setting up of a Rs 1 lakh crore corpus with 50-year interest free loan. The corpus will provide almost zero or low interest rate loans with a long tenor for research and innovation by the private sector in sunrise industries. Alongside, she said a new scheme would be launched for strengthening deep tech in defence and for ‘atmanirbharta’.
To incentivise states towards more productive spending, the Finance Minister also continued with the scheme to provide a 50-year interest free loan for capital expenditure. For 2024-25, she allocated Rs 1.3 lakh crore, 30% more in 2023-24. This includes Rs 75,000 crore as 50-year interest free loans to support milestone-linked reforms by states under Viksit Bharat. Further, to encourage states to develop, brand and market iconic tourist centres at global scale, she said long-term interest free loans will be provided to them on matching basis.
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