Finance Minister Nirmala Sitharaman presents the Union Budget 2024 in the Indian Parliament.
The first union budget of Modi 3.0 – the first government led by Prime Minister Narendra Modi since 2014 without the Bharatiya Janata Party (BJP) winning a majority in the Indian Lower House – presented by Finance Minister Nirmala Sitharaman on Tuesday is expected to address issues related to the ruling party’s performance in the parliamentary elections, which were held in seven phases between April and June.
Post-election reports said that the BJP, which won a record 303 seats in 2019, lost over 60 Lok Sabha seats this time around, mainly due to anger among the youth, especially job seekers. As a result, its ally parties, the Janata Dal United, which governs Bihar, and the Telugu Desam Party, which governs Andhra Pradesh, are key to the BJP-led coalition government at the Centre.
Then, days after the results, the JDU and TDP pressed the BJP to grant special status to the two states, but the Modi government found it difficult to accede to their demands for technical reasons. Instead, it increased funding allocations for the two states.
Jobs and Youth in the 2024 Federal Budget
Finance Minister Sitharaman also plans to increase spending to create more jobs and spur economic growth to give jobs to young people, in a move that aims to appease coalition partners she needs to stay in power. She said the government is focused on boosting domestic growth through jobs, training and small and medium-sized enterprises.
The proposed budget includes a 200 lakh crore (2 trillion rupees, $24 billion) package for job creation over the next five years and also boosts disbursement of loans for small and medium-sized enterprises, aimed at targeting 41 million young people.
The finance minister said that for FY25, Rs 1.48 trillion has been budgeted for education, employment and skill training.
The finance minister also proposed to launch an ambitious plan to provide internship opportunities to 10 million young people in 500 top companies over a five-year period.
Under the scheme, the youth will be given an internship allowance of Rs 5,000 per month and a one-off assistance of Rs 6,000.
These youths will be exposed to a real business environment, various jobs and employment opportunities for 12 months. Sitharaman said the training costs will be borne by the companies. In return, companies can fund 10 per cent of the internship fee from their CSR (corporate social responsibility) funds.
The Companies Act, 2013 states that certain types of profit-making organisations must spend at least 2% of their annual net profits for a three-year period on CSR activities in a particular financial year.
Employment-related incentives
Sitharaman also announced plans to launch three schemes for employment-related incentives.
She said the government would implement three schemes of ’employment linked incentives’ as part of the Prime Minister’s policy package.
“These will be based on EPFO enrolment and focus will be on recognition of first-time employees and support to employees and employers,” Sitharaman said.
Sharing details, she said the new scheme for “first-timers” will “provide one month’s wages to every new entrant into the workforce in all formal sectors.”
Direct payment of one month’s salary in three instalments to freshers registered with EPFO will be up to Rs 15,000.The eligibility limit is a monthly salary of Rs 10 lakh.
“The scheme is expected to benefit 2.1 million youth,” Sitharaman said.
She said under the “Job Creation in Manufacturing” plan, the government will encourage additional employment in the manufacturing sector in conjunction with hiring new employees.
“A specific scale of incentives will be provided directly to both employees and employers in terms of EPFO contributions for the first four years of employment,” the finance minister said, adding that the scheme is expected to benefit three million employed youth and their employers.
The third scheme, Support for Employers, is an employer-focused scheme that will cover additional jobs across all sectors.
Every additional job with a monthly salary of up to Rs 10 lakh will be counted. The government will reimburse employers up to Rs 3,000 per month for two years as EPFO contribution for each additional employee. The scheme is expected to facilitate five million additional jobs.
Sitharaman further said that to increase women’s participation in the workforce, the government will collaborate with industries to set up hostels for working women and set up crèches to encourage women to join the workforce.
The Union Budget also announced a new Centrally led scheme to skill two million youth over the next five years. The Model Skill Acquisition Loan Scheme will be revised to facilitate loans of up to Rs 75 lakh.
These announcements came a day after the Economic Survey said the Indian economy will need to create around 7.85 million (7.85 million) jobs per year on average in the non-farm sector by 2030 to cater to a growing workforce.
Big money for Nitish’s Bihar in Union Budget 2024
The Union Budget announced major deals for Bihar, proposing a total outlay of over Rs 6 trillion for various projects including three highways, power plants, a cultural heritage corridor, a new airport and funding for sports infrastructure.
The finance minister also proposed building a corridor modelled on the Kashi Vishwanath temple corridor in Varanasi and development of the Visnupad temple in Gaya and the Mahabodhi temple in Bodh Gaya.
“Modelled on the successful Kashi Vishwanath Temple Corridor, we will support comprehensive development of the Vishnupad Temple Corridor and Mahabodhi Temple Corridor and transform them into world class pilgrimage and tourist destinations,” Sitharaman said in her budget speech.
The budget also proposes a comprehensive development plan for Rajgir, which has religious significance for Hindus, Buddhists and Jains. “My government will not only accord Nalanda University its illustrious status but also support Nalanda as a tourist destination,” she said.
Minister Sitharaman announced central government support for three road link projects — Patna-Purnea Expressway, Buxar-Bhagalpur Expressway, Bodh Gaya, Rajgir, Vaishali and Darbhanga branch lines — and construction of an additional two-lane bridge over river Ganga at Buxar.
Sitharaman said the total cost of these four projects will be Rs 26,000 crore.
Another boon for Bihar – a state ruled by the NDA, led by JDU leader Nitish Kumar as chief minister – will be the setting up of a 2,400 MW power plant at Pirpainti in Bhagalpur district, “to be built at a cost of Rs 21,400 crore.”
“A new airport, medical college and sports infrastructure will be built in Bihar,” Sitharaman said.
The Centre will also help Bihar state, which faces frequent floods from many rivers originating in Nepal. “My government will provide financial assistance through the Accelerated Irrigation Benefit Programme and other sources for projects with an estimated cost of Rs 11,500 crore, including the Koshi-Mechi Inland Waterway and 20 other ongoing and new schemes such as barrages, river pollution control and irrigation projects,” Sitharaman said.
While the central government had denied the Bihar government’s demand for special status, Sitharaman said, “The Bihar government’s request for external assistance from multilateral development banks will be processed expeditiously.”
Sitharaman also announced a special scheme, ‘Poorvodaya’, for the all-round development of the states of the eastern region, including Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh.
Contents of Naidu’s Union Budget for Andhra Pradesh
Andhra Pradesh Chief Minister N. Chandrababu Naidu, another pillar of Modi’s central government, has also called for more financial support for his state. In the Union Budget, Sitharaman announced that the central government would provide 150 billion rupees to Andhra Pradesh for the development of Amaravati.
She said the NDA government at the Centre was committed to fund and early completion of the Polavaram irrigation project, which is considered a lifeline for Andhra Pradesh and its farmers.
“The government has made concerted efforts to fulfil the promises of the Andhra Pradesh Reorganisation Act. We are aware that the state needs a capital city. We will facilitate special financial assistance through multilateral development agencies. Provision has been made for Rs 1,500 crore this financial year and more amount will be added in future,” Sitharaman said.
Sitharaman further said that under the AP Reorganisation Act, funds will be provided for essential infrastructure like water, power, rail and roads to promote industrial development and grant aid will also be provided to the backward areas of Rayalaseema, Prakasam and north coastal Andhra Pradesh as provided in the Act.
Earlier on Monday, Union Minister of State for Finance Pankaj Chaudhary told the Indian House of Representatives that the Modi government has provided over Rs 6.3 trillion to Andhra Pradesh under various centrally sponsored schemes in the last five years.
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