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Insights into the Interim Union Budget 2024

The Interim Union Budget 2024, presented by the central government, outlines the fiscal roadmap for the country until a full budget is introduced in July 2024.

Key highlights of the Interim Union Budget 2024 and its potential impact on the economic growth.

1. Boosting infrastructure development

Continuing its impetus on infrastructure development as an imperative to achieve its ambition of Viksit Bharat, the Government has allocated substantial funds for the construction of highways, railways, airports, and advancement of other critical infrastructure development projects. Acknowledging that the infrastructure sector is the backbone of the economy, this investment is expected to create new business opportunities, enhance connectivity, and stimulate economic growth

2. Focus on Research and Development

Recognising the importance of innovation and technology, the Interim Union Budget 2024 allocates significant funds for research and development (R&D) initiatives. This move is expected to foster innovation, enhance competitiveness, and incentivise the private sector to substantially enhance research and innovation efforts and drive growth in sectors such as technology, pharmaceuticals, and manufacturing

3. Skill Development and Education

Emphasising the empowerment of the youth, the budget places a strong emphasis on skill development and education, recognising the role of a skilled workforce in driving economic growth. The Government has allocated funds to enhance vocational training programmes, promote digital literacy, and establish centres of excellence

4. Sustainable Development and Green Initiatives

In line with global sustainability goals and its commitment to meet the net zero commitments, the Interim Union Budget 2024 emphasises sustainable development and green initiatives. The Government has allocated funds for renewable energy projects, waste management, and pollution control measures

5. Tax proposals

While the Finance Minister did not propose any significant changes relating to taxation, there were announcements on the extension of sunset dates for certain tax benefits to start-ups, investments made by sovereign wealth funds/pension funds and some International Financial Services centre units from 31 March 2024 to 31 March 2025. On the other hand, the sunset date of 31 March 2024 applicable for claim of concessional tax rate by a new domestic manufacturing company has not received any extension.

The provisions relating to Tax Collection at Source on remittance under the ‘Liberalised Remittance Scheme’ and payment for overseas tour program package have been rationalised.

On the GST front, continuing its focus to encourage voluntary compliances / registrations, input Service Distributor mechanism has been made mandatory for distribution of input tax credit, and penalty provisions are proposed to be introduced for failure to register certain machines used in manufacture of specified tobacco-based goods.

All in all, the Interim Union Budget 2024 sets a positive tone, with its focus on infrastructure development, research and development, skill development, and sustainable initiatives.

This micro-site is your consolidated resource for all Budget related information. Through this platform, KPMG in India’s partners and sector leaders will engage with you and share their views and insights on Union Budget 2024-25.