ASSIGNMENT

OF
MANAGERIAL ECONOMICS

SUBMITTED BY:-
SRISHTI SINHA
ID – 924559
SEC-“G”
PGDM 2024-26

SUBMITTED TO:-
MR. PRIYANK KULSHRESTH
 Topic :- Budget
Introduction of the 2024 Budget: A Strategic Vision for Future Growth

In a pivotal move for the nation's economic future, the government has unveiled the
2024 budget, laying out a comprehensive plan to steer the country through the
upcoming fiscal year. This budget aims to balance economic growth with fiscal
responsibility, addressing both immediate needs and long-term goals.

Economic Overview

The 2024 budget kicks off with a robust analysis of the current economic landscape.
Despite global economic uncertainties and domestic challenges, the government's
projections suggest a moderate growth rate of 3.2% for the year. Inflation, while still
a concern, is expected to stabilize around 2.5%, thanks to targeted fiscal and
monetary policies.

Revenue Streams and Tax Policies

A significant highlight of the budget is the proposed overhaul of the tax system. The
government plans to increase revenue through a modest rise in corporate tax rates
and a new digital services tax aimed at tech giants. Additionally, there will be
adjustments to personal income tax brackets to better reflect inflation and income
changes.

Expenditure Priorities

The budget outlines an ambitious expenditure plan with a strong focus on

infrastructure and social welfare. Key allocations include:

Healthcare :- An increase of 15% in funding to expand access to services and

modernize facilities.
Education :- A 10% boost in educational spending, including grants for schools and
support for vocational training programs.

Climate Action :- Substantial investments in renewable energy projects and green

technology, reflecting the government’s commitment to tackling climate change.

Infrastructure :- A significant allocation for upgrading transportation networks and

urban development projects.

Fiscal Discipline and Debt Management

Despite increased spending, the budget remains focused on maintaining fiscal

discipline. The projected deficit is expected to decrease slightly from previous years,
thanks to a combination of higher revenues and controlled spending. The
government has outlined a clear strategy for managing national debt, aiming for a
gradual reduction over the next decade.

When discussing a national budget, there are several key aspects and details to
consider. Here’s a deeper dive into what a comprehensive budget entails, along with
additional considerations:

Key Components of a National Budget

1. Budget Statement :-

➢ Executive Summary: This provides an overview of the budget’s key

elements, including economic assumptions, major policy changes,
and fiscal objectives.
➢ Economic Outlook: A forecast of economic indicators such as GDP
growth, inflation rates, and unemployment, which helps
contextualize the budgetary measures.
2. Revenue Projections :-

➢ Tax Revenue: Detailed estimates of revenue from various taxes,

including personal income tax, corporate tax, VAT/GST, and excise
duties.

➢ Non-Tax Revenue: Income from sources such as government-owned

enterprises, investments, and fines.

3. Expenditure Plans :-

➢ Mandatory Spending: Includes spending on programs that are legally

required, such as Social Security, Medicare, or other entitlement
programs.

➢ Discretionary Spending: Funds allocated to various government

departments and programs that are subject to annual approval by the
legislature.

➢ Interest Payments: Costs associated with servicing national debt.

4. Budget Deficit/Surplus :-

➢ Deficit: Occurs when expenditures exceed revenues. The budget will

outline the expected deficit and the strategies for managing it.

➢ Surplus: Occurs when revenues exceed expenditures. A surplus might

be used to pay down debt or fund additional initiatives.

5. Debt Management :-

➢ Current Debt Levels: Information on national debt, including total debt

and debt-to-GDP ratio.

➢ Debt Servicing Costs: Details on interest payments and the strategy for
managing and reducing national debt.
 6. Economic and Fiscal Policies :-

➢ Monetary Policy Coordination: How the budget aligns with central

bank policies to manage inflation, interest rates, and economic stability.

➢ Fiscal Stimulus or Austerity Measures: Policies aimed at either

stimulating economic growth or reducing spending to address deficits.

Additional Considerations :-

1. Impact Assessment :-

o Social Impact: Evaluations of how budgetary measures will affect

different demographics and regions, focusing on equity and inclusivity.

o Economic Impact: Analysis of how proposed policies will influence

economic growth, job creation, and business activity.

2. Legislative Process :-

o Approval and Debate: The budget must go through a legislative

process, including debate, revisions, and approval by parliament or
congress.

o Public Engagement: Opportunities for public comment and

consultation to ensure transparency and gather diverse input.

3. Monitoring and Accountability :-

o Implementation Oversight: Mechanisms for tracking the

implementation of budgetary measures and ensuring that funds are
used effectively.

o Audit and Evaluation: Regular audits and evaluations to assess the

impact and efficiency of budget expenditures.
 4. Economic Risks and Contingency Planning :-

o Risk Management: Identifying potential economic risks, such as global

economic downturns, and outlining contingency plans to address them.

o Emergency Funds: Allocating funds for emergencies and unforeseen

events, such as natural disasters or economic shocks.

5. Long-Term Planning :-

o Strategic Investments: Investing in long-term projects that contribute

to sustainable growth, such as infrastructure, education, and research.

o Intergenerational Equity: Ensuring that the budget supports not only

current needs but also future generations by maintaining fiscal
sustainability.

6. Global Considerations :-

o International Relations: How the budget impacts international relations

and trade, including any changes in foreign aid or trade policies.

o Economic Integration: Considerations of how global economic trends

and agreements might affect the domestic budget.

Strategic Goals
The 2024 budget sets forth several strategic goals, including:

❖ Economic Resilience : Enhancing the country's economic resilience through

diversified investments and support for emerging industries.
❖ Job Creation : Promoting job growth through targeted employment
programs and incentives for businesses.
 ❖ Social Equity : Addressing income inequality with increased support for low-
income families and vulnerable groups.

Some Unique Features Of Budget 2024

1. Innovative Policy Initiatives :-

• New Technology Integration: Implementation of cutting-edge technologies,

such as blockchain for transparency or AI for data analysis and budgeting
efficiency.

• Digital Currency Trials: Introduction or support for digital currencies or

central bank digital currencies (CBDCs) as part of the fiscal strategy.

2. Sustainability and Climate Goals :-

• Green Budgeting: Specific allocations for sustainability projects, such as

funding for carbon capture technologies, sustainable agriculture, or urban
green spaces.

• Climate Resilience Measures: Investment in climate adaptation projects, such

as flood defenses, drought-resistant infrastructure, and sustainable urban
planning.

3. Social Innovation Programs :-

• Universal Basic Income Trials: Pilot programs for universal basic income (UBI)
to address income inequality and explore its effects on economic stability.

• Social Impact Bonds: Use of social impact bonds to fund and measure the
effectiveness of social programs, such as reducing homelessness or improving
educational outcomes.
4. Economic Diversification Strategies :-

• Support for Emerging Industries: Targeted investment in emerging sectors

such as biotechnology, renewable energy, or space exploration to drive future
economic growth.

• Creative Economy Investments: Funding for creative industries and cultural

sectors, recognizing their role in economic development and national identity.

5. Citizen Engagement and Transparency :-

• Participatory Budgeting: Inclusion of mechanisms for direct public

involvement in budgetary decision-making, allowing citizens to vote on or
propose specific spending projects.

• Real-Time Budget Tracking: Implementation of platforms or apps that allow

citizens to track budget expenditures in real-time, enhancing transparency and
accountability.

6. Health and Wellness Focus :-

• Holistic Health Programs: Integration of mental health and wellness into the
budget alongside traditional healthcare funding, addressing the broader
aspects of public well-being.

• Pandemic Preparedness: Allocations for advanced healthcare infrastructure

and pandemic preparedness, including stockpiling vaccines and improving
rapid response systems.

7. Educational Reforms :-

• Future Skills Development: Funding for programs that focus on developing

skills for the future job market, such as coding, digital literacy, and critical
thinking.
 • Global Education Partnerships: Initiatives to collaborate with international
educational institutions and organizations to enhance global learning
opportunities.

8. Fiscal Innovations :-

• Green Bonds: Issuance of green bonds to finance environmentally friendly

projects, attracting investors interested in sustainable investments.

• Social Impact Investments: Use of innovative financial instruments like social

impact bonds or development impact bonds to fund projects with measurable
social outcomes.

9. Regional Development Focus :-

• Decentralized Funding: Targeted investments in underdeveloped or

economically distressed regions to promote balanced regional development
and reduce disparities.

• Local Innovation Hubs: Establishment of innovation hubs or economic zones

in various regions to stimulate local entrepreneurship and economic activity.

10. Cultural and Historical Preservation :-

• Heritage Projects: Funding for the preservation and promotion of cultural

heritage, historic sites, and indigenous cultures, recognizing their value to
national identity and tourism.

Each of these unique elements reflects a particular focus or innovation that can
distinguish a budget from others. They often represent the government’s
commitment to addressing contemporary challenges, seizing new opportunities, and
engaging with citizens in novel ways.
Highlights of Priority 1: Agriculture

• The government has made a provision of Rs.1.52 lakh crore for agriculture
and allied sectors.

• The government will release 109 new high-yielding and climate-resilient

varieties of 32 field and horticulture crops for cultivation by farmers.

• One crore farmer across the country will be initiated into natural farming in
the next two years, which will be supported by certification and branding. For
this purpose, the government will establish 10,000 need-based bio-input
resource centers.

• The government will promote Farmer-Producer Organizations, startups and

cooperatives for vegetable supply chains, including storage, collection and
marketing.

• A strategy is being developed to achieve ‘Atmanirbhart

• a’ for oil seeds such as groundnut, mustard, soybean, sesame, and sunflower.

• The government will facilitate the implementation of the Digital Public

Infrastructure (DPI) in agriculture in partnership with the states to cover
farmers and their lands in 3 years. The details of 6 crore farmers and their
lands will be recorded in the farmer and land registries. The Jan Samarth-
based Kisan Credit Cards will be issued and enabled in 5 states.

• Financial support will be provided to set up a network of Nucleus Breeding

Centers for Shrimp Broodstocks.

Highlights of Priority 2: Employment and Education

The government will implement 3 new schemes for ‘Employment Linked Incentive’
based on EPFO enrolment :-
 • Scheme A: First Timers - This scheme will provide a direct benefit
transfer of one month’s salary in 3 instalments of up to Rs.15,000 to first-
time employees in the formal sector registered in the EPFO.

• Scheme B: Job Creation in Manufacturing - An incentive will be

provided at a specified scale directly to the employee and the employer
based on their EPFO contribution in the first 4 years of employment.

• Scheme C: Support to Employers - The government will reimburse

employers up to Rs.3,000 per month for 2 years based on their EPFO
contribution for each additional employee. All additional employment
within a salary of Rs.1 lakh per month is included.

• A new centrally sponsored scheme for skilling will be introduced in collaboration

with the Industry and state governments. Under this scheme, 20 lakh youth will
be skilled over a 5-year period, and 1,000 Industrial Training Institutes (ITI) will
be upgraded in hub-and-spoke arrangements with outcome orientation.

• The Model Skill Loan Scheme will be revised to facilitate loans up to Rs.7.5 lakh
for students with a guarantee from a government-promoted Fund.

• The government has announced financial support for loans up to Rs.10 lakh for
higher education of students in domestic institutions. E-vouchers will be given
directly to 1 lakh students every year for an annual interest subvention of 3% of
the loan amount.

Highlights of Priority 3: Inclusive Human Resource Development and Social

Justice

• The government has provided Rs.2.66 lakh crore for rural development and
rural infrastructure.
• The government will formulate a plan, Purvodaya, for the all-round
development of the eastern region of India, covering Jharkhand, Bihar,
Odisha, West Bengal, and Andhra Pradesh.

• The government will support the development of the industrial node at

Gaya, i.e. Amritsar Kolkata Industrial Corridor. This corridor will catalyse the
industrial development of the eastern region.

• The government will also support the development of road connectivity

projects, i.e. Patna-Purnea Expressway, Buxar-Bhagalpur Expressway,
Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and additional 2-lane bridge
over river Ganga at Buxar at a total cost of Rs.26,000 crore.

• The government will take up power projects, including setting up of a new

2400 MW power plant at Pirpainti at a cost of Rs.21,400 crore.

• The government is committed to fulfilling the Andhra Pradesh

Reorganization Act and will facilitate special financial support through
multilateral development agencies. The government will arrange Rs.15,000 crore
in the current financial year, with additional amounts in future years.

• The government has announced three crore additional houses under the PM
Awas Yojana in rural and urban areas.

• The government has allocated more than Rs.3 lakh crore to promote women-led
development and benefit women and girls.

• The government will launch a new scheme, Pradhan Mantri Janjatiya Unnat
Gram Abhiyan, to improve the socio-economic condition of tribal
communities. It will cover 63,000 villages, benefitting 5 crore tribal people.

• To expand banking services, more than 100 branches of India Post Payment
Bank will be set up in the North East region.
Highlights of Priority 4: Manufacturing and Services

Promotion of MSMEs :-

• The government will introduce a credit guarantee scheme to facilitate term

loans to MSMEs to purchase machinery and equipment without collateral
or third-party guarantee. It will be a separately constituted self-financing
guarantee fund that will provide a guarantee cover up to Rs.100 crore for each
applicant.

• Public sector banks will build an in-house capability to assess MSMEs for
credit instead of relying on external assessment. They will also develop or get
a new credit assessment model based on the scoring of digital footprints of
MSMEs in the economy.

• The government announced a new mechanism to facilitate the continuation of

bank credit to MSMEs during their stress period.

• The limit of the Mudra loans is enhanced to Rs.20 lakh from the current
Rs.10 lakh under the 'Tarun' category for those entrepreneurs who have
successfully repaid previous loans under the same category.

• The turnover threshold of buyers for mandatory onboarding on the TReDS

platform is reduced from Rs.500 crore to Rs.250 crore.

• SIDBI will open new branches to expand its reach to serve major MSME
clusters and provide direct credit to them within 3 years.

• Financial support will be provided to set up 50 multi-product food irradiation

units in the MSME sector. The government will facilitate the setting up 100
food quality and safety testing labs with NABL accreditation.
 • E-Commerce Export Hubs will be set up in public-private-partnership
(PPP) mode to enable MSMEs and traditional artisans to sell their products in
international markets.

Promotion of Manufacturing and Services

• The government will launch a comprehensive scheme to provide internship

opportunities to 1 crore youth in 5 years in the top 500 companies. An
internship allowance of Rs.5,000 per month and a one-time assistance of
Rs.6,000 will be provided.

• The government will facilitate the development of investment-ready “plug

and play” industrial parks with the states and private sector.

• The government will sanction 12 industrial parks under the National

Industrial Corridor Development Programme.

• The government will set up a Critical Mineral Mission to recycle critical

minerals, promote domestic production, and overseas acquisition of critical
mineral assets.

• The government will launch the first tranche auction of offshore blocks for
mining, building on the exploration already carried out.

• An Integrated Technology Platform will be set up to improve the outcomes

under the Insolvency and Bankruptcy Code (IBC).

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

• Additional National Company Law Tribunals to speed up insolvency

resolution. Out of these, some Tribunals will be notified to decide cases
exclusively under the Companies Act.
 • Additional Debt Recovery Tribunals will be established to speed up the
recovery process.

Highlights of Priority 5: Urban Development

• The government will formulate a Transit Oriented Development plan for 14

large cities with a population of above 30 lakhs.

• Under the PM Awas Yojana Urban 2.0, the housing needs of 1 crore urban
middle-class and poor families will be addressed with an investment of Rs.10
lakh crore. This will include the central assistance of Rs.2.2 lakh crore in the
next 5 years.

• State Governments and Multilateral Development Banks will promote sewage

treatment, water supply and solid waste management projects and services
for 100 large cities through bankable projects.

• The government will launch a scheme to support the development of 100

weekly ‘haats’ or street food hubs in select cities over the next five years.

• The government will encourage states to moderate stamp duty rate which
charge high stamp duty for all, and consider further lowering duties for
properties purchased by women.

Highlights of Priority 6: Energy Security

• PM Surya Ghar Muft Bijli Yojana has been launched to achieve 300 units of
free electricity per month for 1 crore households through rooftop solarisation.

• A policy for promoting pumped storage projects will be introduced for

electricity storage and facilitate smooth integration of the growing share of
renewable energy.
 • The government will partner with the private sector to set up Bharat Small
Reactors, research and development of Bharat Small Modular Reactor, and
research and development of newer technologies for nuclear energy.

• A joint venture between NTPC and BHEL will establish a full-scale 800 MW
commercial plant using the Advanced Ultra Super Critical (AUSC)
technology.

• The government will facilitate an investment-grade energy audit of traditional

micro and small industries in 60 clusters, provide financial support to shift
them to cleaner forms of energy and implement energy efficiency measures.

Highlights of Priority 7: Infrastructure

• The government has provided Rs.11,11,111 crore for capital expenditure.

• The government has provided Rs.1.5 lakh crore for long-term interest-free
loans to support the states in their resource allocation.

• Phase IV of the Pradhan Mantri Gram Sadak Yojana (PMGSY) will be

launched to provide all-weather connectivity to 25,000 rural habitations.

• The government will provide financial support through the Accelerated

Irrigation Benefit Programme and other sources for projects with an
estimated cost of Rs.11,500 crore, such as the Kosi-Mechi intra-state link and
20 other ongoing and new schemes, including river pollution abatement,
barrages and irrigation projects.

• The government will undertake the comprehensive development of the

Vishnupad Temple Corridor and Mahabodhi Temple Corridor in Rajgir,
Nalanda, and Odisha.

Highlights of Priority 8: Innovation, Research and Development

 • The government will set up a mechanism for boosting private sector-driven
research and innovation at commercial scale with a finance pool of Rs.1 lakh
crore.

• The government will operationalise the Anusandhan National Research Fund

for basic research and prototype development.

• A venture capital fund of Rs.1,000 crore will be set up to expand the space
economy by five times in the next 10 years.

Highlights of Priority 9: Next Generation Reforms

• The government will work with the states to initiate land-related reforms, rural
land-related actions, and urban land-related actions.

• There will be a comprehensive integration of e-SHRAM portal with other

portals to facilitate such a one-stop solution to provide a wide array of
services to Labor.

• Shram Suvidha and Samadhan portals will be revamped to enhance trade and
industry ease of compliance.

• The government will develop a taxonomy for climate finance to enhance the
availability of capital for climate adaptation and mitigation.

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

• The government will start NPS Vatsalya, a plan for the contribution by
parents and guardians for minors.

• The government is working on Jan Vishwas Bill 2.0 to enhance ‘Ease of

Doing Business’.
Government Main Focus on:-

In Budget 2024, the FM announced that the theme for this year’s Budget would be
‘Viksit Bharat Budget 2024’, which envisions a developed India by 2047.

The four pillars of Viksit Bharat will include :-

1. ‘Garib’ (Poor)
2. ‘Mahilayen’(Women)
3. ‘Yuva’ (Youth)
4. ‘Annadata’ (Farmers).

Budget 2024 prioritizes agriculture, employment & skilling, human resource and
justice, manufacturing services, urban development, energy security, infrastructure,
research & development, next generation reforms. It also put forths a simplified tax
structure for individuals.

The tax slab change in 2024

Tax Slab Tax Rate

upto ₹ 3 lakh Nil

₹ 3 lakh - ₹ 7 lakh 5%

₹ 7 lakh - ₹ 10 lakh 10%

₹ 10 lakh - ₹ 12 lakh 15%

 ₹ 12 lakh - ₹ 15 lakh 20%

more than ₹ 15 lakh 30%

FM Nirmala Sitharaman has proposed a change in the tax slab for the FY 2024-25 in
the Budget 2024 as follows,

Apart from these, the standard deduction for the FY 2024-25 under the new tax
regime has changed from Rs 50,000 to Rs 75,000. In addition to that deduction on
family pension has also been increased from Rs 15,000 to Rs 25,000. If your
employer contributes to your pension scheme, there is also increase in deduction
claimed on it by your employer under section 80CCD(2) is now at 14% of your salary
+DA from 10%.

Addtionally few changes under the new tax regime have been proposed,

1. Standard Deduction limit has been increased to ₹ 75,000 from ₹ 50,000

2. Deduction on family pension has increased to ₹ 25,000 from ₹ 15,000.

3. Section 80CCD(2) provides for deduction for the employers contribution to

the pensions scheme has increased to 14% of employees salary + DA as
against 10% earlier limit.

In order to provide tax relief for the taxpayers, FM has proposed the following
changes for the FY 2024-25,

1. Capital gains on Short-term gains will attract tax rate at 20%.

2. Long-term capital gains on all the financial and non-financial assets, tax will
be charged at 12.5%. Further the exemption limit for LTCG on financial assets
has now been extended to Rs 1.25 lakh per year.
 3. For all class of investors 'Angel Tax' has been abolished.

4. Foreign company's corporate tax has now been reduced to 35% from 40%.

GOOD POINTS OF BUDGET

Here are some potential positive aspects that might be highlighted in the 2024
budget:-

1. Job Creation

• Employment Programs: Initiatives aimed at job creation and support for

emerging industries can stimulate economic activity and reduce
unemployment, contributing to overall economic health.

2. Social Equity

• Support for Vulnerable Groups: Increased funding for social welfare

programs can help address income inequality and provide targeted support to
low-income families and other vulnerable populations.

3. Economic Diversification

• Support for Emerging Industries: By investing in diverse sectors such as

technology, renewable energy, and innovation, the budget can help diversify
the economy and reduce dependency on traditional industries.

4. Long-Term Vision

• Strategic Planning: A focus on long-term economic goals, such as improving

infrastructure and investing in human capital, reflects a forward-looking
approach that can help position the country for sustained growth and
development.
5. Public Engagement

• Transparency and Consultation: If the budget process includes thorough

consultation with stakeholders and clear communication of its goals and
impacts, it can enhance public trust and engagement with the budgetary
process.

6. Social Spending
• Healthcare Funding: Increased investment in healthcare can improve access
to services, enhance quality of care, and address health disparities,
benefiting public health overall.
• Education: Boosts in education funding can lead to better educational
facilities, higher teacher salaries, and expanded access to higher education
and vocational training, supporting long-term human capital development.

Suggestions

When crafting a budget, particularly one as significant as the 2024 budget, it's
important to consider various suggestions to enhance its effectiveness,
address potential drawbacks, and align with broader economic and social
goals. Here are some suggestions that could be relevant for the 2024 budget:

1. Environmental Sustainability

• Green Investments: Prioritize funding for renewable energy projects, energy

efficiency programs, and climate resilience initiatives to address climate
change and promote sustainable development.
• Environmental Regulations: Implement or strengthen regulations that
encourage businesses to adopt environmentally friendly practices.
2. Transparency and Accountability

• Clear Communication: Ensure that budget proposals and their implications

are communicated transparently to the public, with clear explanations of how
funds will be allocated and the expected outcomes.
• Monitoring and Evaluation: Establish mechanisms for monitoring and
evaluating the effectiveness of budgetary measures and programs to ensure
they achieve their intended goals.

3. Public Consultation

• Stakeholder Engagement: Engage with various stakeholders, including

industry groups, community organizations, and the general public, to gather
input and address concerns related to the budget.
• Feedback Mechanisms: Implement feedback mechanisms to continuously
gather public and stakeholder input throughout the budget implementation
process.

4. Flexibility and Adaptability

• Contingency Planning: Build flexibility into the budget to allow for

adjustments in response to unforeseen economic conditions or emergencies.
This could include creating contingency funds or emergency reserves.
• Adaptation to Economic Changes: Regularly review and adjust budget
allocations as needed based on changing economic conditions and emerging
priorities.

5. Investment in Infrastructure

• Prioritize Key Projects: Focus on high-impact infrastructure projects that

enhance economic efficiency and connectivity, such as transportation
networks, digital infrastructure, and urban development.