Interim Budget 2024: Focus On Employment, Skilling & Tax Reforms

Finance Minister Nirmala Sitharaman presented the Union Budget 2024, aiming to further the progress laid out in the previous budget and the envisioned blueprint for India@100. The primary goal is to ensure the fruits of development reach every corner of the nation, with a special emphasis on empowering youth, women, farmers, OBCs, Scheduled Castes, and Scheduled Tribes.

Economic Empowerment Initiatives

The budget underscores the significance of economic empowerment, particularly for women. Through the Deendayal Antyodaya Yojana National Rural Livelihood Mission, which has successfully mobilised rural women into 81 lakh Self Help Groups, the government aims to take these groups to the next level of economic empowerment. The goal is to enable them to scale operations, aligning with the success trajectory seen in several start-ups growing into 'Unicorns.'

Additionally, the budget introduces the PM Vishwakarma Kaushal Samman (PM VIKAS), a dedicated package of assistance for traditional artisans and craftspeople, often referred to as Vishwakarma. This initiative aims to uplift this sector by improving the quality, scale, and reach of their products. The comprehensive scheme includes financial support, access to advanced skill training, knowledge of modern digital techniques, brand promotion, market linkages, digital payments and social security. 

Health, Education & Skilling

The budget allocates resources to fortify the healthcare and education sectors. It proposes the establishment of 157 new nursing colleges in conjunction with existing medical colleges, fostering a skilled healthcare workforce. Additionally, the introduction of dedicated multidisciplinary courses for medical devices aims to ensure the availability of skilled manpower for futuristic medical technologies, high-end manufacturing and research.

In the education sector, the focus extends to re-envisioning teachers’ training through innovative pedagogy, curriculum transaction, continuous professional development, dipstick surveys and ICT implementation. The District Institutes of Education and Training will be developed as vibrant institutes of excellence for this purpose. The budget also emphasises recruiting 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools over the next three years.

Capital Investment & Job Creation

A key highlight of the budget is the steep 33 per cent increase in the capital investment outlay for the third consecutive year, reaching ₹10 lakh crore, equivalent to 3.3 per cent of GDP. This substantial increase over recent years is central to the government’s strategy to enhance growth potential and job creation, encourage private investments, and provide a cushion against global headwinds.

Under the banner of Mission Karmayogi, the budget showcases the government's commitment to capacity-building for civil servants. The integrated online training platform, iGOT Karmayogi, aims to provide continuous learning opportunities for government employees to upgrade their skills, fostering a people-centric approach.

Technology & Innovation

The budget introduces plans for fostering innovation and technology adoption. Three centres of excellence for Artificial Intelligence (AI) will be established in top educational institutions, with leading industry players partnering to conduct interdisciplinary research. This initiative aims to develop cutting-edge applications and scalable problem solutions in crucial sectors like agriculture, health, and sustainable cities, contributing to an effective AI ecosystem and nurturing quality human resources.

Recognising the transformative potential of 5G services, the budget allocates resources for setting up 100 labs in engineering institutions, fostering the development of applications using 5G services. Additionally, the emerging sector of Lab Grown Diamonds (LGD) receives acknowledgment, being recognised as a technology-driven sector with high employment potential.

Youth Empowerment 

The budget places a strong emphasis on empowering the youth to realise their aspirations. It highlights the implementation of the National Education Policy, a focus on skilling and economic policies that facilitate job creation and support business opportunities.

Under the Pradhan Mantri Kaushal Vikas Yojana 4.0, the government introduces a comprehensive skill development initiative to skill lakhs of youth in the next three years. This initiative focuses on on-job training, industry partnerships and aligning courses with the needs of the industry. Notably, it covers new age courses for Industry 4.0, such as coding, AI, robotics, mechatronics, IoT, 3D printing, drones and soft skills. To prepare youth for international opportunities, 30 Skill India International Centres will be set up across different States.

The budget also introduces the Skill India Digital platform, a unified platform aimed at enabling demand-based formal skilling, linking with employers, including MSMEs, and facilitating access to entrepreneurship schemes. Moreover, the National Apprenticeship Promotion Scheme is rolled out to provide stipend support to 47 lakh youth over three years.

Personal Income Tax Reforms

In a significant move aimed at providing relief to the middle class, the budget announces a series of changes in personal income tax. The rebate limit for the new tax regime is increased to ₹7 lakh, benefiting individuals with income up to this limit. Changes in the tax structure reduce the number of slabs to five and increase the tax exemption limit to ₹3 lakh. This results in substantial relief for taxpayers in the new regime, with reduced tax liability for various income brackets.

For the salaried class and pensioners, the budget extends the benefit of standard deduction to the new tax regime. This implies that each salaried person with an income of ₹15.5 lakh or more stands to benefit by ₹52,500. In a move to address the highest tax rate, the budget proposes a reduction in the highest surcharge rate from 37 to 25 per cent in the new tax regime. This results in a reduction of the maximum tax rate to 39 per cent.

Lastly, the budget acknowledges the need for updating the tax exemption limit on leave encashment on retirement for non-government salaried employees. The limit is proposed to be increased from ₹3 lakh to ₹25 lakh. The budget outlines the new income tax regime as the default, providing citizens the option to avail benefits under the old tax regime.

The Union Budget 2024 unfolds as a comprehensive strategy to drive economic growth, job creation, and empowerment across various sectors. HR professionals need to closely monitor these developments to align their strategies with the evolving economic landscape. The initiatives outlined in the budget lay the groundwork for a dynamic and inclusive India that leverages technology and innovation.