Union budget 2024: FM allocates INR 26,000 cr for roads, custom duties on critical minerals exempted

Finance Minister Nirmala Sitharaman unveiled the Union Budget 2024, introducing significant initiatives across various sectors including agriculture, manufacturing, and services. The budget also brought about substantial modifications to the capital gains tax structure and income tax frameworks. Sitharaman emphasised that the government has been given a unique opportunity by the people to guide the nation towards robust development and comprehensive prosperity. She stated that this interim budget would present a detailed roadmap for the pursuit of 'Viksit Bharat'.

A major highlight of the budget was the allocation of INR 26,000 crore for enhancing road connectivity projects. This initiative is part of a broader development plan for Bihar and other eastern states under the 'Purvodaya' scheme.

The scheme aims to boost human resource development, infrastructure growth, and create economic opportunities in Bihar, Jharkhand, West Bengal, Andhra Pradesh, and Odisha. Specific to Bihar, the Finance Minister announced plans to develop the Amritsar-Kolkata industrial corridor, with Gaya as an industrial node. This move is expected to stimulate industrial development in the eastern region. The transformation of Gaya is intended to serve as a model for developing ancient cultural centers into hubs of modern economy, embodying the principle of "Vikas bhi, virasat bhi" (Development along with heritage).

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The infrastructure boost for Bihar includes the development of the Patna-Purnia expressway, Buxar-Bhagalpur expressway, and an additional two-lane bridge over the Ganga river in Buxar.

In a significant move towards mineral security, the budget introduced a 'Critical Mineral Mission' aimed at domestic production, recycling, and overseas acquisition of critical mineral assets. This mission will focus on technology development, workforce skilling, and establishing financing mechanisms. The government announced the exemption of customs duties on 25 critical minerals and a reduction in Basic Customs Duty (BCD) on two others. This measure is expected to significantly boost the processing and refining of these minerals, ensuring their availability for strategic sectors such as nuclear energy, renewable energy, space, defense, telecommunications, and high-tech electronics.

To stimulate job creation in the manufacturing sector, the Finance Minister introduced a scheme to incentivise the employment of first-time workers. This initiative will provide benefits to both employees and employers regarding EPFO contributions for the initial four years of employment. The scheme is projected to benefit 30 lakh youth and cover additional employment across all sectors. The government plans to reimburse employers up to INR 3,000 per month for two years towards EPFO contributions for each additional employee, aiming to incentivize the employment of 50 lakh people.

Support for Micro, Small, and Medium Enterprises (MSMEs) featured prominently in the budget, with eight new measures proposed. These include a credit guarantee scheme for MSMEs making capital investments in the manufacturing sector, with coverage up to INR 100 crore. Public Sector Banks are tasked with developing new assessment models for providing credit to MSMEs. The budget also proposes credit support for MSMEs during stress periods from a government-promoted fund. The MUDRA loan limit has been enhanced to INR 20 lakh for credit-worthy entrepreneurs. Other measures include reducing the turnover threshold for mandatory onboarding in TReDS, establishing 24 new SIDBI branches in MSME clusters, setting up new MSME units for food irradiation and quality testing, and creating e-commerce export hubs for MSMEs and traditional artisans.

Lastly, the Finance Minister announced a comprehensive review of the Income Tax Act to enhance its clarity and readability. Changes to the new tax regime slabs were introduced, along with an increase in the standard tax deduction from INR 50,000 to INR 75,000.