Weekly Current Capsules

23 to 31 July 2024

ECONOMIC SURVEY 2023-24 (KEY HIGHLIGHTS)

The Indian economy continues to expand, demonstrating resilience amid geopolitical challenges, according to the Economic Survey 2023-24. Here are the highlights from the survey, tabled by Finance Minister Nirmala Sitharaman in Parliament

Growth Projection: GDP growth is projected at 6.5–7 percent for FY25, in line with estimates from global agencies such as the IMF but slightly lower than the RBI’s forecast of 7.2 percent.
Job Creation: India needs to generate approximately 7.85 million jobs annually in the non-farm sector until 2030 to accommodate its growing workforce.
Inflation Management: Retail inflation decreased to 5.4 percent in FY24, down from 6.7 percent in FY23, due to effective policy responses amidst both global and domestic challenges.
Foreign Direct Investment (FDI): FDI remained resilient, despite a slight decline in new capital inflows to USD 45.8 billion in FY24 from USD 47.6 billion in FY23, reflecting broader global economic trends.
Sectoral Growth: The services sector grew by 7.6 percent in FY24, while the agriculture sector expanded by 4.18 percent over the past five years.

ECONOMIC SURVEY 2023-24 (SUMMARY)

The Finance Minister, Ms. Nirmala Sitharaman tabled the Economic Survey 2023-24 on July 22, 2024 in Parliament.

Key highlights of the Survey include:

STATE OF THE ECONOMY

Gross Domestic Product (GDP)

The Economic Survey has estimated a real GDP growth of 6.5%-7% in 2024-25. In 2023-24, India’s real GDP grew by 8.2%.
Growth in 2024-25 is expected to be supported by strong domestic investment demand, improved agricultural performance, and an increase in merchandise and services exports.
On the other hand, the survey recognised that geopolitical risks leading to supply-chain distortions, higher commodity prices, increased protectionism, and reviving inflationary pressures can adversely impact economic growth.
In addition, any slowdown in private capital formation on fears of cheaper imports and the progress of the southwest monsoon will also impact economic growth.

Inflation

Retail inflation in 2023-24 was 5.4%, the lowest level since the Covid-19 pandemic.
Food inflation increased from 6.6% in 2022-23 to 7.5% in 2023-24. This was driven by higher food inflation caused by Russia-Ukraine war and domestic weather conditions.
Core inflation (which excludes food and energy prices) moderated in 2023-24 driven by services such as housing rental inflation.
According to the Reserve Bank of India, retail inflation is estimated at 4.5% in 2024-25.
The Survey noted that India’s short- term inflation outlook is benign. However, long-term price stability may need certain measures. These include: (i) expansion in cultivation of pulses, (ii) developing modern storage facilities for vegetables, and (iii) effective monitoring of build-up of prices from the farm gate to the final consumer.

Current account balance

In 2023-24, India’s current account deficit reduced to USD 23.2 billion (0.7% of GDP) from USD 67 billion (2% of GDP) in 2022-23.
The improvement in the current account balance was because of a decrease in merchandise trade deficit, increasing net services exports, and increasing remittances.
Increase in services exports was driven by software exports, travel, and business services.
India’s trade deficit is expected to decrease further in the coming years as production-linked incentive schemes help in creating a competitive manufacturing base.
However, risks to India’s external sector include: (i) fall in demand from major trading partners, (ii) rising trade costs, (iii) volatility in commodity prices, and (iv) changes in trade policies by major trading partners.

Fiscal deficit

The fiscal deficit of the central government has reduced from 6.4% of GDP in 2022-23 to 5.6% of GDP in 2023-24.
The reduction in fiscal deficit is due to a strong growth in direct and indirect tax collections and higher-than-budgeted non-tax revenue.
This was combined with restrained revenue expenditure with a larger share of the fiscal deficit being accounted for by capital outlay.
The fiscal deficit of the central government is expected to further reduce to 4.5% of GDP or lower by 2025-26.

Debt

The general government debt-to-GDP ratio increased slightly in 2023-24 due to increasing interest rates and lower-than-budgeted nominal GDP growth. However, it is expected to decline on the back of monetary policy easing, increase in WPI inflation, and continued fiscal consolidation. The Survey noted that the Centre’s debt is characterised by low currency and interest rate risks. This is due to a low share of external debt and external borrowings being from official sources.

AGRICULTURE AND ALLIED ACTIVITIES

India’s agriculture sector has recorded an annual average growth rate of 4.2% over the last five years. The sector grew at a rate of 1.4% in 2023-24, as against a growth rate of 4.7% in 2022-23. This was due to a decrease in foodgrain production driven by delayed and poor monsoons.

The Survey noted that while India is a major agriculture producer, its crop yields are much lower compared to other major producers. Low yields are caused by: (i) fragmented land holdings, (ii) low farm investment, (iii) lack of farm mechanisation, and (iv) insufficient access to quality inputs.

Allied activities such as livestock and fisheries have performed better than traditional crops. Between 2014- 15 and 2022-23, the share of livestock in agriculture gross value added increased from 24.3% to 30.4% while the share of fisheries increased from 4.4% to 7.3% respectively.

The Survey noted that the growth of allied sectors suggest that greater emphasis should be placed on them to boost farmers’ income. Small farmers need to move to high-value agriculture such as fruits, vegetables, poultry, and dairy. Increasing private investment in the sector remains vital.

INDUSTRY

The industrial sector grew by 9.5% in 2023-24. The GVA of the industrial sector (at constant prices) in 2023-24 is 25% higher than the pre-covid level in 2019-20. This was supported by greater credit offtake, focus on capital formation, and a supportive policy framework. The sectoral composition of India’s manufacturing has changed, with automobiles, chemicals, and pharmaceuticals gaining importance.

The Survey highlighted that electronics manufacturing has witnessed significant growth since 2014. In 2021- 22, it contributed 4% to India’s total GDP. The direct workforce in the production of mobile phones more than tripled between 2016-17 and 2021-22.

The Survey observed that India continues to be import dependent in key sectors like coal, capital goods, and chemicals. Sectors like textiles and food products have lost their relative positions. Incentivising research and development and improving skill level of the work force is needed across industries. Meeting the skill shortage would require collaboration between industry and academia.

SERVICES SECTOR

The services sector constituted 55% of India’s economy in 2023-24. The demand for services such as education, healthcare, and finance is driven by a large and young population. The Survey noted that artificial intelligence is likely to restrain growth opportunities for business services and pose a challenge to long-term sustainability and job creation.

India’s e-commerce market has gained momentum over past few years due to technological advancements, new-age business models, and government initiatives. The sector’s growth is constrained by inadequate skills required for online selling. Additionally, data privacy issues and increasing online fraud are also seen as hurdle to the sector’s growth.

Some of the challenges identified for the services sector include: (i) lack of workers with relevant digital skills, (ii) difficulties in accessing finance for small and medium enterprises, (iii) tentative global economic outlook, and (iv) commodity price uncertainties.

INFRASTRUCTURE

The central government’s capital expenditure witnessed a three-fold increase in 2023-24 as compared to 2019-20 with focus on sectors such as roads and railways. The Survey noted that capital expenditure by the Union and states have a central role in funding large-scale infrastructure projects. However, given the fiscal consolidation plans of the Union and state governments, it is important for viable projects to be executed through public-private partnership.

Private sector participation in creation of infrastructure is not forthcoming to the extent desired. This could be due to: (i) lumpy capital investment and long payback period, (ii) project structuring issues involving risk estimation, allocation, and mitigation, (iii) delay in land acquisition, and (iv) lack of an independent regulator for infrastructure sectors. Higher level of private sector financing and resource mobilisation from new sources will be crucial. This would need support from central, state, and local governments.

EMPLOYMENT

The Survey noted that Indian labour market indicators have improved in the last six years with unemployment declining to 3.2% in 2022-23. However, India needs to generate an average of around 78.5 lakh jobs annually till 2030 in the non-farm sector. This would be needed to cater to a rising workforce. To generate and sustain quality employment, agro-processing and the care economy are seen as two promising sectors.

The biggest disruption for the future of work is the growth in artificial intelligence. It has the potential to boost productivity and disrupt employment in certain sectors. State governments can support hiring by businesses by easing compliances and reforming land laws. As jobs are created in the private sector, businesses must bear in mind their responsibility for employment generation.

CLIMATE CHANGE AND ENERGY TRANSITION

India has performed well on the renewable energy front, achieving a cumulative 82.6 GW of installed solar power capacity at the end of April 2024. As of May 31, 2024, non-fossil fuel sources consist of 45% of the total installed electricity generation capacity in India. Additionally, the framework for Sovereign Green Bonds has enabled resource mobilisation for green projects. The government has raised Rs 36,000 crore via sovereign green bonds in 2023.

The Survey noted that India faces a dual challenge of meeting its energy demands while reducing carbon emissions. Phasing in of non-fossil fuel sources has remained a challenge for India, amplifying the need for a diversified set of energy sources. This is expected to help India pursue its low-emission pathways and help minimise risks associated with energy systems. Availability and affordability of financial resources will drive the green transition.

UNION BUDGET 2024-25

1. HIGHLIGHTS

The Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget 2024-25 in Parliament today. The highlights of the budget are as follows:

Part-A

Budget Estimates 2024-25:

Total receipts other than borrowings: `32.07 lakh crore.
Total expenditure: `48.21 lakh crore.
Net tax receipt: `25.83 lakh crore.
Fiscal deficit: 4.9 per cent of GDP.

Government aims to reach a deficit below 4.5 per cent next year.
Inflation continues to be low, stable and moving towards the 4% target; Core inflation (non-food, non-fuel) at 3.1%.

The focus of budget is on EMPLOYMENT, SKILLING, MSMEs, and the MIDDLE CLASS.

Package of PM’s five schemes for Employment and Skilling

Prime Minister’s Package of 5 Schemes and Initiatives for employment, skilling and other opportunities for 4.1 crore youth over a 5-year period.
1. Scheme A – First Timers: One-month salary of up to `15,000 to be provided in 3 installments to first-time employees, as registered in the EPFO.
2. Scheme B – Job Creation in manufacturing: Incentive to be provided at specified scale directly, both employee and employer, with respect to their EPFO contribution in the first 4 years of employment.
3. Scheme C – Support to employers: Government to reimburse up to `3,000 per month for 2 years towards EPFO contribution of employers, for each additional employee.
4. New centrally sponsored scheme for Skilling
  - 20 lakh youth to be skilled over a 5-year period.
  - 1,000 Industrial Training Institutes to be upgraded in hub and spoke arrangements.
5. New Scheme for Internship in 500 Top Companies to 1 crore youth in 5 years

Nine Budget Priorities in pursuit of ‘Viksit Bharat’:

1. Productivity and resilience in Agriculture
2. Employment & Skilling
3. Inclusive Human Resource Development and Social Justice
4. Manufacturing & Services
5. Urban Development
6. Energy Security
7. Infrastructure
8. Innovation, Research & Development and
9. Next Generation Reforms

Priority 1: Productivity and resilience in Agriculture

Allocation of `1.52 lakh crore for agriculture and allied sectors.
New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops to be released for cultivation by farmers.
1 crore farmers across the country to be initiated into natural farming, with certification and branding in next 2 years.
10,000 need-based bio-input resource centres to be established for natural farming.
Digital Public Infrastructure (DPI) for Agriculture to be implemented for coverage of farmers and their lands in 3 years.

Priority 2: Employment & Skilling

As part of the Prime Minister’s package, 3 schemes for ‘Employment Linked Incentive’ to be implemented – Scheme A – First Timers; Scheme B – Job Creation in manufacturing; Scheme C – Support to employers.
To facilitate higher participation of women in the workforce,

working women hostels and crèches to be established with industrial collaboration
women-specific skilling programmes to be organized
market access for women SHG enterprises to be promoted

Skill Development

New centrally sponsored scheme for Skilling under Prime Minister’s Package for 20 lakh youth over a 5-year period.
Model Skill Loan Scheme to be revised to facilitate loans up to
`7.5 lakh.
Financial support for loans upto `10 lakh for higher education in domestic institutions to be provided to youth who have not been eligible for any benefit under government schemes and policies.

Priority 3: Inclusive Human Resource Development and Social Justice

Purvodaya

Industrial node at Gaya to be developed along the Amritsar-Kolkata Industrial Corridor.
Power projects, including new 2400 MW power plant at Pirpainti, to be taken up at a cost of `21,400 crore.

Andhra Pradesh Reorganization Act

- - Special financial support through multilateral development agencies of `15,000 crore in the current financial year.
  - Industrial node at Kopparthy along Vishakhapatnam-Chennai Industrial Corridor and at Orvakal along Hyderabad-Bengaluru Industrial Corridor.

Women-led development

Total allocation of more than `3 lakh crore for schemes benefitting women and girls.

Pradhan Mantri Janjatiya Unnat Gram Abhiyan

Socio-economic development of tribal families in tribal-majority villages and aspirational districts, covering 63,000 villages benefitting 5 crore tribal people.

Bank branches in North-Eastern Region

100 branches of India Post Payment Bank to be set up in the North East region.

Priority 4: Manufacturing & Services

Credit Guarantee Scheme for MSMEs in the Manufacturing Sector

A credit guarantee scheme without collateral or third-party guarantee in term loans to MSMEs for purchase of machinery and equipment.

Credit Support to MSMEs during Stress Period

New mechanism to facilitate continuation of bank credit to MSMEs during their stress period.

Mudra Loans

The limit of Mudra loans under ‘Tarun’ category to be enhanced to `20 lakh from `10 lakh for those who have successfully repaid previous loans.

Enhanced scope for mandatory onboarding in TReDS

Turnover threshold of buyers for mandatory onboarding on the TReDS platform to be reduced from `500 crore to `250 crore..

MSME Units for Food Irradiation, Quality & Safety Testing

Financial support to set up 50 multi-product food irradiation units in the MSME sector .

E-Commerce Export Hubs

E-Commerce Export Hubs to be set up under public-private-partnership (PPP) mode for MSMEs and traditional artisans to sell their products in international markets.

Critical Mineral Mission

Critical Mineral Mission to be set up for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets.

Offshore mining of minerals

Auction of the first tranche of offshore blocks for mining, building on the exploration already carried out.

Digital Public Infrastructure (DPI) Applications

Development of DPI applications in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.

Priority 5: Urban Development

Transit Oriented Development

Formulation of Transit Oriented Development plans and strategies to implement and finance 14 large cities above 30 lakh population.

Urban Housing

Investment of `10 lakh crore, including the central assistance of `2.2 lakh crore in next 5 years, under PM Awas Yojana Urban 2.0 proposed to address the , housing needs of 1 crore urban poor and middle-class families.

Street Markets

New scheme to support the development of 100 weekly ‘haats’ or street food hubs every year for the next 5 years in select cities.

Priority 6: Energy Security

Energy Transition

Policy document on ‘Energy Transition Pathways’ to balance the imperatives of employment, growth and environmental sustainability to be brought out.

Pumped Storage Policy

Policy for promoting pumped storage projects for electricity storage to be brought out.

Research and development of small and modular nuclear reactors

Government to partner with private sector for R&D of Bharat Small Modular Reactor and newer technologies for nuclear energy, and to set up Bharat Small Reactors.

Advanced Ultra Super Critical Thermal Power Plants

Joint venture proposed between NTPC and BHEL to set up a full scale 800 MW commercial plant using Advanced Ultra Super Critical (AUSC) technology.

Roadmap for ‘hard to abate’ industries

Appropriate regulations for transition of ‘hard to abate’ industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode to be put in place.

Priority 7: Infrastructure

Infrastructure investment by Central Government

`11,11,111 crore (3.4 % of GDP) to be provided for capital expenditure.

Infrastructure investment by state governments

Provision of `1.5 lakh crore for long-term interest free loans to support states in infrastructure investment.

Pradhan Mantri Gram SadakYojana (PMGSY)

Launch of phase IV of PMGSY to provide all-weather connectivity to 25,000 rural habitations.

Irrigation and Flood Mitigation

Financial support of `11,500 crore to projects such as the Kosi-Mechi intra-state link and other schemes in Bihar.
Government to provide assistance to Assam, Himachal Pradesh, Uttarakhand and Sikkim for floods, landslides and other related projects.

Tourism

Comprehensive development of Vishnupad Temple Corridor, Mahabodhi Temple Corridor and Rajgir.
Assistance for development of temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes and pristine beaches of Odisha.

Priority 8: Innovation, Research & Development

Anusandhan National Research Fund for basic research and prototype development to be operationalised.
Financing pool of `1 lakh crore for spurring private sector-driven research and innovation at commercial scale.

Space Economy

Venture capital fund of `1,000 crore to be set up for expanding the space economy by 5 times in the next 10 years.

Priority 9: Next Generation Reforms

Rural Land Related Actions

Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands
Digitization of cadastral maps
Survey of map sub-divisions as per current ownership
Establishment of land registry
Linking to the farmers registry

Urban Land Related Actions

Land records in urban areas to be digitized with GIS mapping.

Services to Labour

Integration of e-shram portal with other portals to facilitate such one-stop solution.
Open architecture databases for the rapidly changing labour market, skill requirements and available job roles.
Mechanism to connect job-aspirants with potential employers and skill providers.

NPS Vatsalya

NPS-Vatsalya as a plan for contribution by parents and guardians for minors.

PART B

Indirect Taxes

GST

Buoyed by GST’s success, tax structure to be simplified and rationalised to expand GST to remaining sectors.

Sector specific customs duty proposals

Medicines and Medical Equipment

Three cancer drugs namely TrastuzumabDeruxtecan, Osimertinib and Durvalumab fully exempted from custom duty.
Changes in Basic Customs Duty (BCD) on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme.

Mobile Phone and Related Parts

BCD on mobile phone, mobile Printed Circuit Board Assembly (PCBA) and mobile charger reduced to 15 per cent.

Precious Metals

Customs duties on gold and silver reduced to 6 per cent and that on platinum to 6.4 per cent.

Other Metals

BCD removed on ferro nickel and blister copper.
BCD removed on ferrous scrap and nickel cathode.
Concessional BCD of 2.5 per cent on copper scrap.

Electronics

BCD removed, subject to conditions, on oxygen free copper for manufacture of resistors.

Chemicals and Petrochemicals

BCD on ammonium nitrate increased from 7.5 to 10 per cent.

Plastics

BCD on PVC flex banners increased from 10 to 25 per cent.

Telecommunication Equipment

BCD increased from 10 to 15 per cent on PCBA of specified telecom equipment.

Trade facilitation

For promotion of domestic aviation and boat & ship MRO, time period for export of goods imported for repairs extended from six months to one year.
Time-limit for re-import of goods for repairs under warranty extended from three to five years.

Critical Minerals

25critical minerals fully exempted from customs duties.
BCD on two critical minerals reduced.

Solar Energy

Capital goods for use in manufacture of solar cells and panels exempted from customs duty.

Marine products

BCD on certain broodstock, polychaete worms, shrimp and fish feed reduced to 5 per cent.
Various inputs for manufacture of shrimp and fish feed exempted from customs duty.

Leather and Textile

BCD reduced on real down filling material from duck or goose.
BCD reduced, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.

Direct Taxes

Efforts to simplify taxes, improve tax payer services, provide tax certainty and reduce litigation to be continued.
Enhance revenues for funding development and welfare schemes of government.
58 per cent of corporate tax from simplified tax regime in FY23, more than two-thirds taxpayers availed simplified tax regime for personal income tax in FY 24.

Simplification for Charities and of TDS

Two tax exemption regimes for charities to be merged into one.
5 per cent TDS rate on many payments merged into 2 per cent TDS rate.
20 per cent TDS rate on repurchase of units by mutual funds or UTI withdrawn.
TDS rate on e-commerce operators reduced from one to 0.1 per cent.
Delay for payment of TDS up to due date of filing statement decriminalized.

Simplification of Reassessment

Assessment can be reopened beyond three years upto five years from the end of Assessment Year only if the escaped income is ₹ 50 lakh or more.
In search cases, time limit reduced from ten to six years before the year of search.

Simplification and Rationalisation of Capital Gains

Short term gains on certain financial assets to attract a tax rate of 20 per cent.
Long term gains on all financial and non-financial assets to attract a tax rate of 12.5 per cent.
Exemption limit of capital gains on certain financial assets increased to ₹ 1.25 lakh per year.

Tax Payer Services

All remaining services of Customs and Income Tax including rectification and order giving effect to appellate orders to be digitalized over the next two years.

Litigation and Appeals

‘Vivad Se Vishwas Scheme, 2024’ for resolution of income tax disputes pending in appeal.
Monetary limits for filing direct taxes, excise and service tax related appeals in Tax Tribunals, High Courts and Supreme Court increased to ₹60 lakh, ₹2 crore and ₹5 crore respectively.
Safe harbour rules expanded to reduce litigation and provide certainty in international taxation.

Employment and Investment

Angel tax for all classes of investors abolished to bolster start-up eco-system,.
Simpler tax regime for foreign shipping companies operating domestic cruises to promote cruise tourism in India.
Safe harbour rates for foreign mining companies selling raw diamonds in the country.
Corporate tax rate on foreign companies reduced from 40 to 35 per cent.

Deepening tax base

Security Transactions Tax on futures and options of securities increased to 0.02 per cent and 0.1 per cent respectively.
Income received on buy back of shares in the hands of recipient to be taxed.

Social Security Benefits.

Deduction of expenditure by employers towards NPS to be increased from 10 to 14 per cent of the employee’s salary.
Non-reporting of small movable foreign assets up to ₹20 lakh de-penalised.

Other major proposal in Finance Bill

Equalization levy of 2 per cent withdrawn.

Changes in Personal Income Tax under new tax regime

Standard deduction for salaried employees increased from ₹50,000 to ₹75,000.
Deduction on family pension for pensioners enhanced from ₹15,000/- to ₹25,000/-
Salaried employee in the new tax regime stands to save up to ₹ 17,500/- in income tax.

2. SUMMARY OF THE UNION BUDGET 2024-2025

Finance Minister Nirmala Sitharaman presented the Union Budget 2024 in Parliament, focusing on support for the poor, women, youth, and farmers. The budget outlines increased spending, job creation initiatives, and tax relief for the middle class. Significant changes in taxation include a hike in the Securities Transaction Tax (STT), reductions in short-term and long-term capital gains taxes, and the elimination of the angel tax. Additionally, adjustments to the personal income tax slabs in the New Tax Regime were announced.

PART A

India’s inflation continues to be low, stable, and moving towards the 4 percent target. Core inflation (non-food, non-fuel) currently is 3.1 percent

Interim Budget

The Finance Minister said that as mentioned in the interim budget, the focus is on 4 major castes, namely ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer).

Budget Theme

Particularly focus on employment, skilling, MSMEs, and the middle class.
The Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of ₹2 lakh crore. This year, ₹48 lakh crore has been allocated for education, employment and skilling.

Budget Priorities

The budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.

Productivity and resilience in Agriculture
Employment & Skilling
Inclusive Human Resource Development and Social Justice
Manufacturing & Services
Urban Development
Energy Security
Infrastructure
Innovation, Research & Development and
Next Generation Reforms

Priority 1: Productivity and resilience in Agriculture

The government will undertake a comprehensive review of the agriculture research setup to bring the focus on raising productivity.
New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers.

In the next two years, 1 crore farmers across the country will be initiated into natural farming supported by certification and branding.
10,000 need-based bio-input resource centres will be established.
Large-scale clusters for vegetable production will be developed closer to major consumption centres.
Farmer-Producer Organizations, cooperatives and start-ups for vegetable supply chains including for collection, storage, and marketing will be promoted.

Digital Public Infrastructure for Agriculture

The government, in partnership with the states, will facilitate the implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years.
During this year, digital crop survey for Kharif using the DPI will be taken up in 400 districts. The details of 6 Cr farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth based Kisan Credit Cards will be enabled in 5 states.

Shrimp Production & Export

Financial support for setting up a network of Nucleus Breeding Centres for Shrimp Broodstocks to be provided. Financing for shrimp farming, processing and export will be facilitated through NABARD.

National Cooperation Policy

National Cooperation Policy for systematic, orderly and all-round development of the cooperative sector will be drafted to fast-track the growth of the rural economy and employment generation opportunities.
INR 1.52 Lakh Cr is provided for agriculture and the allied sector.

Priority 2: Employment & Skilling

The government will implement 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers.
As a part of the Prime Minister’s package, three schemes to be implemented for‘Employment Linked Incentive’:

Scheme A: First Timers

To provide one-month wage (up to INR 15,000) to all persons newly entering the workforce in all formal sectors. The eligibility limit will be a salary of INR 1 Lakh per month.

Scheme B: Job Creation in Manufacturing

To incentivise additional employment in the manufacturing sector, linked to the employment of first-time employees.

Scheme C: Support to employers

To cover additional employment in all sectors. The government will reimburse employers up to INR 3,000 per month for 2 years towards their EPFO contribution for each additional employee.

Participation of women in the workforce

Working women hostels are to be established in collaboration with the industry. The partnership will also seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.

Skilling programme

Through a new centrally sponsored scheme for skilling in collaboration with state governments and Industry:
- 20 Lakh youth will be skilled over a 5-year period
- 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with an outcome orientation
- Course content and design will be aligned with the industry demand, and new courses will be introduced for emerging needs.

Skilling Loans

Model Skill Loan Scheme to be revised to facilitate loans up to INR 7.5 Lakh with a guarantee from a government-promoted fund, thus benefitting 25,000 students every year.

Education Loans

For helping youth not covered under any benefit under government schemes and policies, financial support for loans up to INR 10 Lakh for higher education in domestic institutions will be provided.

Government will also facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches.

Priority 3: Inclusive Human Resource Development and Social Justice

Saturation approach

For achieving social justice comprehensively, the saturation approach of covering all eligible people through various programmes, including those for education and health, will be adopted.
Implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, schedule tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up

Purvodaya

A plan for the all-round development of the eastern region, including Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh, will be formulated. The plan will cover the development of human resources, infrastructure, and the generation of economic opportunities.
On the Amritsar Kolkata Industrial Corridor, which will catalyse the industrial development of the eastern region, an industrial node at Gaya will be developed.
In Bihar, development of road connectivity and power projects will be supported and new airports, medical colleges and sports infrastructure will be constructed.

Women-led development

For promoting women-led development, the budget carries an allocation of more than INR 3 Lakh Cr for schemes benefitting women and girls.

Pradhan Mantri Janjatiya Unnat Gram Abhiyan

The Finance Minister announced that for improving the socio-economic condition of tribal communities, government will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts covering 63,000 villages and benefitting 5 crore tribal people.
More than 100 branches of India Post Payment Bank will be set up in the North East region to expand the banking services.
A provision of ₹66 lakh crore for rural development including rural infrastructure was made this year.

Priority 4: Manufacturing & Services

Support for promotion of MSMEs

This budget provides special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ₹100 crore, while the loan amount may be larger.
Similarly, Public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment.
A new mechanism for facilitating the continuation of bank credit to MSMEs during their stress period.

Mudra Loans

The limit of Mudra loans will be enhanced to ₹ 20 lakh from the current ₹ 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.

MSME Units for Food Irradiation, Quality & Safety Testing

Financial support for setting up of 50 multi-product food irradiation units in the MSME sector will be provided. Setting up of 100 food quality and safety testing labs with NABL accreditation will also be facilitated.
To enable MSMEs and traditional artisans to sell their products in international markets, E-Commerce Export Hubs will be set up in public-private-partnership (PPP) mode .

Internship in Top Companies

The 5^thscheme under the Prime Minister’s package, government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years.

Credit Support to MSMEs during Stress Period

A new mechanism for facilitating continuation of bank credit to MSMEs during their stress period was announced. While being in the Special Mention Account (SMA) stage for reasons beyond their control, MSMEs will have access to credit to continue their business and to avoid getting into the NPA stage. Credit availability will be supported through a guarantee from a government-promoted fund.

Enhanced scope for mandatory onboarding in TReDS

The turnover threshold of buyers for mandatory onboarding on the TReDS platform is to be reduced to INR 250 Cr. This will help MSMEs to unlock their working capital by converting their trade receivables into cash. This measure will bring 22 more CPSEs and 7000 more companies onto the platform. Medium enterprises will also be included in the scope of the suppliers.

SIDBI branches in MSME clusters

SIDBI will open new branches to expand its reach to serve all major MSME clusters within 3 years and provide direct credit to them. With the opening of 24 such branches this year, the service coverage will expand to 168 out of 242 major clusters.

E-Commerce Export Hubs

To enable MSMEs and traditional artisans to sell their products in international markets, E-Commerce Export Hubs will be set up in PPP mode. These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export-related services under one roof.

Measures for promotion of Manufacturing & Services

Industrial Parks

Development of investment-ready plug-and-play industrial parks with complete infrastructure in or near 100 cities, in partnership with the states and private sector, by better-using town planning schemes.
Twelve industrial parks under the National Industrial Corridor Development Programme are to be sanctioned.

Rental Housing

Rental housing with dormitory-type accommodation for industrial workers will be facilitated in PPP mode with VGF support and commitment from anchor industries.

Shipping Industry

Ownership, leasing and flagging reforms will be implemented to improve the share of the Indian shipping industry and generate more employment.

Critical Mineral Mission

For domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism.

Offshore mining of minerals

Auction of the first tranche of offshore blocks for mining, building on the exploration already carried out.

Digital Public Infrastructure Applications

Development of DPI applications at population scale for productivity gains, business opportunities, and innovation by the private sector. These are planned in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.

Integrated Technology Platform for IBC eco-system

An Integrated Technology Platform will be set up for improving the outcomes under the Insolvency and Bankruptcy Code (IBC) for achieving consistency, transparency, timely processing and better oversight for all stakeholders.

Voluntary closure of LLPs

The services of the Centre for Processing Accelerated Corporate Exit (C-PACE) will be extended for the voluntary closure of LLPs to reduce the closure time.

National Company Law Tribunals

Appropriate changes to the IBC, reforms and strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency resolution. Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act.

Debt Recovery

Steps for reforming and strengthening debt recovery tribunals will be taken. Additional tribunals will be established to speed up recovery.

Priority 5: Urban Development

Cities as Growth Hubs

Working with states, the government will facilitate development of Cities as Growth Hubs. This will be achieved through economic and transit planning, and orderly development of peri-urban areas utilising town planning schemes.

Creative redevelopment of cities

For creative brownfield redevelopment of existing cities with a transformative impact, the government will formulate a framework for enabling policies, market-based mechanisms and regulation.

Transit Oriented Development

Transit Oriented Development plans for 14 large cities with a population above 30 Lakh will be formulated, along with an implementation and financing strategy.

Urban Housing

Under the PM Awas Yojana Urban 2.0, the housing needs of 1 Cr urban poor and middle-class families will be addressed with an investment of INR 10 Lakh Cr. This will include the central assistance of INR 2.2 Lakh Cr in the next 5 years.
Enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place.

Water Supply and Sanitation

In partnership with the State Governments and Multilateral Development Banks, water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects will be promoted. These projects will also envisage the use of treated water for irrigation and filling up of tanks in nearby areas.

PM SVANidhi

Building on the success of PM SVANidhi Scheme in transforming the lives of street vendors, Government envisions a scheme to support each year, over the next five years, the development of 100 weekly ‘haats’ or street food hubs in select cities.

Priority 6: Energy Security

Energy Transition

A policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability will be drafted.

PM Surya Ghar Muft Bijli Yojana

PM Surya Ghar Muft Bijli Yojana has generated remarkable response with more than 1.28 Cr registrations and 14 Lakh applications, and the government will further encourage it.

Pumped Storage Policy

A policy for promoting pumped storage projects will be drafted for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

Research and development of small and modular nuclear reactors

Nuclear energy is expected to form a significant part of the energy mix for Viksit Bharat.
The government will partner with the private sector for setting up Bharat Small Reactors, research & development of Bharat Small Modular Reactor, and research & development of newer technologies for nuclear energy.

Advanced Ultra Super Critical Thermal Power Plants

The development of indigenous technology for Advanced Ultra Super Critical (AUSC)thermal power plants with much higher efficiency has been completed. A joint venture between NTPC and BHEL will set up a full-scale 800 MW commercial plant using AUSC technology. The government will provide the required fiscal support. Moving forward, development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy.

Roadmap for ‘hard to abate’ industries

A roadmap for moving the ‘hard to abate’ industries from ‘energy efficiency’ targets to ‘emission targets’ will be formulated. Appropriate regulations for the transition of these industries from the current ‘Perform, Achieve and Trade’ mode to the ‘Indian Carbon Market’ mode will be put in place.

Support to traditional micro and small industries

An investment-grade energy audit of traditional micro and small industries in 60 clusters, including brass and ceramic, will be facilitated. Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase.

Priority 7: Infrastructure

Infrastructure investment by Central Government

Strong fiscal support for infrastructure to continue over the next 5 years, in conjunction with imperatives of other priorities and fiscal consolidation. This year, INR 11,11,111 Cr has been provisioned for capital expenditure. This would be 3.4% of our GDP.

Infrastructure investment by state governments

Encouragement to states to provide support of similar scale for infrastructure, subject to their development priorities. A provision of 1.5 Lakh Cr for long-term interest-free loans has been made to support the states in their resource allocation.

Private investment in infrastructure

Investment in infrastructure by private sector will be promoted through viability gap funding and enabling policies and regulations. A market-based financing framework will be brought out.

Tourism

Government’s efforts in positioning India as a global tourist destination will also create jobs, stimulate investments and unlock economic opportunities for other sectors. In addition to the measures outlined in the interim budget, the following measures were proposed:
- Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported to transform them into world-class pilgrim and tourist destinations.
- Comprehensive development of Rajgir.
- The development of Nalanda as a tourist centre besides reviving Nalanda University.
- Development of Odisha’s scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes and pristine beaches to make it an ultimate tourism destination.

Pradhan Mantri Gram SadakYojana (PMGSY)

Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations which have become eligible in view of their population increase.
For Irrigation and Flood Mitigation in Bihar, through the Accelerated Irrigation Benefit Programme and other sources, government will provide financial support for projects with estimated cost of ₹11,500 crore such as the Kosi-Mechi intra-state link and 20 other ongoing and new schemes including barrages, river pollution abatement and irrigation projects.
Government will also provide assistance to Assam, Himachal Pradesh, Uttarakhand and Sikkim for flood management, landslides and related projects.

Priority 8: Innovation, Research & Development

The government will operationalize the Anusandhan National Research Fund for basic research and prototype development and set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ₹1 lakh crore in line with the announcement in the interim budget.

Space Economy

With our continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of ₹1,000 crore will be set up.

Priority 9: Next Generation Reforms

Economic Policy Framework

An Economic Policy Framework to be formulated to delineate the overarching approach to economic development and set the scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth.
The government will initiate and incentivize reforms for improving productivity of factors of production, and facilitating markets and sectors to become more efficient.
These reforms will cover all factors of production, namely land, labour, capital and entrepreneurship, and technology as an enabler of improving total factor productivity and bridging inequality.
For promoting competitive federalism and incentivizing states for faster implementation of reforms, a significant part of the 50-year interest-free loan to be earmarked. Working with the states, following reforms will be initiated:

Land-related reforms by state governments

Land-related reforms and actions, both in rural and urban areas, will cover land administration, planning and management, and urban planning, usage and building bylaws. These will be incentivized for completion within the next 3 years through appropriate fiscal support.
Rural land-related actions will include: Assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, Digitization of cadastral maps, Survey of map sub-divisions as per current ownership, Establishment of land registry, and Linking to the farmers registry. These actions will also facilitate credit flow and other agricultural services.
Land records in urban areas will be digitized with GIS mapping. An IT-based system for property record administration, updating, and tax administration will be established. These will also facilitate the improvement of the financial position of local urban bodies.

Reforms

The government will facilitate the provision of a wide array of services to labour, including those for employment and skilling. A comprehensive integration of e-shram portal with other portals will facilitate such one-stop solution. Open architecture databases for the rapidly changing labour market, skill requirements and available job roles, and a mechanism to connect job-aspirants with potential employers and skill providers will be covered in these services.
Shram Suvidha and Samadhan portals will be revamped to enhance ease of compliance for industry and trade.
To meet the financing needs of the economy, the government will bring out a financial sector vision and strategy document to prepare the sector in terms of size, capacity and skills. This will set the agenda for the next 5 years and guide the work of the government, regulators, financial institutions and market participants.

Taxonomy for climate finance

A taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation to be developed. This will support achievement of the country’s climate commitments and green transition.

Variable Capital Company structure

The Governemnt will seek the required legislative approval for providing an efficient and flexible mode for financing leasing of aircrafts and ships, and pooled funds of private equity through a ‘variable company structure’.

Foreign Direct Investment and Overseas Investment

The rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to facilitate foreign direct investments, nudge prioritization, and promote opportunities for using Indian Rupee as a currency for overseas investments.

Use of Technology

Adoption of technology towards digitalization of the economy to be enhanced.

Ease of Doing Business

For enhancing ‘Ease of Doing Business’, the government is already working on the Jan Vishwas Bill 2.0. Further, states will be incentivized for implementation of their Business Reforms Action Plans and digitalization.

Data and Statistics

For improving data governance, collection, processing and management of data and statistics, different sectoral data bases, including those established under the Digital India mission, will be utilized with active use of technology tools.