India Unveils FY 2024-2025 Budget, Targets 7% Economic Growth and Major Tax Reforms

India presented its annual budget for FY 2024-2025 today, anticipating a 7% economic growth. Finance Minister Nirmala Sitharaman marked her seventh consecutive budget, setting a record for the longest streak by any finance minister.

This budget is the first of Prime Minister Narendra Modi's third term. The finance minister received approval from President Droupadi Murmu and began her budget speech at 11 AM in parliament.

Ahead of the budget, Minister Sitharaman presented the Economic Survey 2023-2024, indicating a current fiscal inflation rate of 4.5%, projected to decrease to 4.1% in FY 2025-2026.

The budget aims to reform income tax structures and trade. Opposition parties criticized the budget for lacking innovation and favoring wealthy allies. Congress leader Gaurav Gogoi claimed it would disadvantage the middle class, small traders, and taxpayers.

Finance Minister Sitharaman emphasized support for marginalized communities, women, youth, and farmers. The budget ensures a minimum support price for major agricultural products, at least 50% higher than production costs, and allocates Rs. 1.52 lakh crore for agriculture and related sectors.

The budget introduces six new tax slabs. Annual incomes up to Rs. 3 lakh are tax-exempt. Incomes between Rs. 3 lakh and Rs. 7 lakh will be taxed at 5%, Rs. 7 lakh to Rs. 10 lakh at 10%, Rs. 10 lakh to Rs. 12 lakh at 15%, Rs. 12 lakh to Rs. 15 lakh at 20%, and incomes above Rs. 15 lakh at 30%.

Sitharaman announced reviewing income tax laws every five months, reducing advance tax deduction for e-commerce transactions to 0.1%, and decriminalizing delays in advance tax deduction. The budget also introduces capital gains tax on unlisted bonds and debentures and reduces corporate tax from 40% to 30%.

The budget aims to balance economic reforms with social welfare initiatives, setting a course for India's development in the coming years.