India budget 2024: Steering across cost shifts and economic priorities

The long-awaited Budget of India, for FY 2024-25, comes with significant overhauls across consumer goods and the industrial sectors. To balance between growth and affordability, through strategic development, the customs duties and taxes have been revised on the following products.

What's Cheaper?

The budget holds cheer for the buyers of the following products: the customs duty on gold and silver has been reduced from 12 per cent to 6 per cent, which will make the precious metals cheaper for consumers and jewellers. Tariffs were slashed on several goods like X-ray machines, medicines used in treating cancer, mobiles and their charging equipment, solar panels, electric vehicles, leather goods, certain jewellery imported into India, etc. This reduction is going to spur consumption and affordability across healthcare, technology, renewable energy, and automotive industries.

What's Costlier?

On the other hand, some products are slapped with higher tariffs. A key agricultural and industrial input, ammonium nitrate, will become more expensive, making activities that rely on this chemical more expensive. Plastic products and telecom equipment will also attract higher duties, which could mean more costs for manufacturers and consumers.

The overall approach of the 2024-25 Budget would, therefore, be to strike a balance between cost implications and broader economic objectives. Revision in taxes and tariffs is towards growth in strategic sectors, with emphasis on the reining in of inflationary pressures and furtherance of equitable development. Changes in the rate of long-term capital gains tax and standard deductions under income tax may impact investors and taxpayers differently, thereby impacting financial decisions and spending patterns.

The budget under Modi's Government 3.0 spells a strategy for rebalancing the economy that is having heavy increases in tax burdens by initiatives aimed at stimulating resilience and inclusivity. How far these measures succeed in bringing in sustained growth and social welfare would be moot as the fiscal progresses.