July 2024 Budget Allocations - Sector Wise

The Finance Minister Nirmala Sitharaman presented the annual union budget for FY24 - 25  on July 23. Comprehensive measures are being taken to affect different sectors of the economy. This article highlights sector-wise budget allocations and announcements as presented in the union budget. 

Sector-wise Budget Allocation Key Highlights

These sectors have been Shortlisted based on the budget presented on 23rd July 2024. These sectors were highlighted based on the emphasis provided by the government towards the Viksit Bharath program. So, let's delve into the union budget allocation for 2024 to help you align your investments and business strategies with the government's priorities and capitalize on the growth opportunities in these highlighted sectors.

Agriculture Sector Allocations

Agriculture is one of the most essential sectors of the Indian economy as the whole nation depends on it. In the union budget, FY24 Government of India focused on the agriculture sector by allocating an expenditure budget of Rs.1.51 crores to this sector compared to 1.25 crores in the previous budget. 

In the budget government included the ‘Natural Farming Mission’ which is to familiarize 1 crore farmers with natural farming along with branding and certification.

Further, it is mentioned about the establishment of 10,000 bio-research centers to work on betterment in agricultural productivity. 

In the Union Budget allocation, special focus has been laid on FY24 for modernizing the agricultural sector to enhance sustainability. This will help in improving the production and supply chain management of vegetables through FPOs, cooperatives, and start-ups while ensuring better collection, storage, and marketing of produce in general.

In the case of shrimp production and export, financing arranged by NABARD shall be extended which will support shrimp farming, processing, and export activities, enhancing the global competitiveness of this industry.

In three years, DPI will be extended to farmers and their lands by way of digital crop surveys in 400 districts, besides provisioning Jan Samarth-based Kisan Credit Cards for easier credit availability to farmers. These initiatives help increase productivity and ensure sustainable development of the agricultural sector.

Manufacturing and Services Sector Allocations

The Union Budget of 2024 has brought considerable attention to the manufacturing and services sectors in its inclination towards stimulating economic growth and employment generation. The budget lays out a detailed plan for doubling production and creating competitive manufacturing units in many sectors. 

Another important initiative is the decision to set up twelve industrial parks under the National Industrial Corridor Development Programme, to create modern manufacturing hubs around India. 

The government has also stated it will start a Critical Minerals Mission aimed at ramping up domestic production, recycling, and overseas procurement of minerals necessary to support industries.

This budget laid emphasis on Micro, Small & Medium Enterprises (MSMEs). The government has introduced a strengthened credit support system for MSME’s specifically during the stress period. 

The announcement includes a new credit guarantee scheme for MSMEs in the manufacturing sector, with compulsory onboarding on Trade Receivables Discounting System (TReDS) to be amplified now. The budget also unveils a new assessment model for MSME credit and hikes the Mudra Loans limit to Rs 20 lakh from the previous Rs.10 lakh

Furthermore, Customs duties have been rationalized across the board to boost domestic manufacturing - customs duty lowered for mobile phones and parts to 15%. Additionally, 25 significant minerals are now exempted from customs duties. 

1,000 Industrial Training Institutes will be upgraded with an emphasis on skill development. It will also be supportive of sustainable manufacturing by helping micro and small industries to transition away from less clean energy.

Infrastructural Sector Allocations

In the Union Budget 2024, Special importance is also given to infrastructure development, which is said to be one of the factors driving the Indian economy and is very important for the development of 'Viksit Bharat' (Developed India). The budget has highlighted several allocations aimed at strengthening the country's various infrastructure sectors.

A significant provision of Rs. 11,11,111 crore which is 3.4% of GDP, has been allocated for infrastructure.

The budget has mentioned the introduction of Phase IV of the Pradhan Mantri Gram Sadak Yojana, whose focus will be providing all-weather connectivity to 25,000 rural habitations. This will go a long way in improving rural infrastructure and accessibility.

The budget allocates Rs. 1.5 lakh crore as long-term interest-free loans to states to develop infrastructure in states and promote balanced regional growth 

The budget also mentioned allocating finances toward irrigation and flood control projects, such as the Kosi-Mechi intra-state link and 20 other schemes worth about Rs. 11,500 crore. In addition to reconstruction and rehabilitation works in Himachal Pradesh, funds are provided for flood management works in the states of Assam, Sikkim, and Uttarakhand.

Energy Sector Allocations

The Budget brings in the PM Surya Ghar Muft Bijli Yojana, which aims to provide free electricity to 1 crore households for up to 300 units per month. Up until the Budget day, a total of 1.28 crore registrations and 14 lakh applications have been received under this scheme. 

In the budget, it is also mentioned that initiatives to set up Bharat Small Reactors to increase nuclear energy, along with the investment into R&D for newer nuclear technologies. 

A Joint venture between NTPC and BHEL has also been announced to establish a full-scale 800 MW thermal power plant with Advanced Ultra Super Critical technology.

Furthermore, a new Pumped Storage Policy has been approved to address the priority of integration of renewable energy through the facilitation of electricity storage and seamless integration of increasing renewable energy sources.

The government also addressed the need for energy audits and, hence, financing micro and small industries for switching over to cleaner forms of energy. It will facilitate investment-grade energy audits in 60 clusters, with expansion to 100 clusters in the next phase.

Conclusion

On a closing note, one should note that the budget presented in July 2024 was the 2nd interim budget for the year, Further Budget allocations and schemes to sectors like defense, infrastructure, and railways have been mentioned by the government in the budget presented during FEB 2024.