The Los Angeles Post
U.S. World Business Lifestyle
Today: April 11, 2025
Today: April 11, 2025

India budget pushes jobs, rural development and raises tax on equities

A man watches a screen displaying India's Finance Minister Nirmala Sitharaman's budget speech at a railway station in Mumbai
July 23, 2024
Manoj Kumar - Reuters

By Manoj Kumar

NEW DELHI (Reuters) - India's finance minister unveiled $576 billion in spending plans in the current fiscal year on Tuesday, marginally higher than interim budget estimates, aiming to boost manufacturing and jobs in the world's fastest growing major economy.

The government will spend 2.66 trillion rupees ($32 billion) on rural development, Finance Minister Nirmala Sitharaman said, while unveiling new programmes in the annual budget for states led by two key allies who shore up Prime Minister Narendra Modi's coalition government.

India budget pushes jobs, rural development and raises tax on equities
Workers fasten iron rods together at the construction site of a residential building of Pradhan Mantri Awas Yojana in Ahmedabad

The budget spending estimate of 48.21 trillion rupees is 1.2% higher than the 47.66 trillion rupees estimate in the interim budget presented in February, helped by a bumper transfer of dividends from the central bank, while the fiscal deficit target was reduced to 4.9% of GDP.

The government will allocate 2 trillion rupees ($24 billion) for job creation over the next five years, Sitharaman said.

Modi's Hindu nationalist Bharatiya Janata Party (BJP) failed to secure an outright majority in the general election last month, making it dependent on fickle regional parties to form a government for the first time since he swept to power a decade ago.

Here are the highlights of the budget:

India budget pushes jobs, rural development and raises tax on equities
India's youth flock to cram schools in search of security of government jobs

ECONOMIC GROWTH

* 2024/25 nominal GDP growth seen at 10.5% y/y vs 9.6% in 23/24

* Government to focus on infrastructure investments to promote private investments

* Global uncertainties pose a downward risk to short-term growth prospects

India budget pushes jobs, rural development and raises tax on equities
India's Finance Minister Nirmala Sitharaman holds up a folder with the Government of India's logo, in New Delhi

FISCAL DEFICIT

* 2024/25 fiscal deficit target lowered to 4.9% of GDP from 5.1% in February's interim budget

* To reduce fiscal deficit to below 4.5% by FY26

* Record surplus of 2.11 trillion rupees ($25.3 billion) from central bank helps narrow fiscal deficit

* Government's gross market borrowings for 24/25 cut by 120 billion rupees to 14.01 trillion rupees.

* Government's net market borrowing at 11.63 trillion rupees vs 11.75 trillion rupees in interim budget

TAX CHANGES

* Corporate tax rate for foreign companies cut to 35% from 40%, to attract investments

* Import tax on gold and silver reduced to 6% from 15%

* Tax rate raised for equity investments held for less than one year to 20% from 15% and for shares held for more than 12 months to 12.5% from 10%

* Import tax cut on mobile phones and some key parts from 20% to 15%

* To review import duties structure in next six months

JOB CREATION

* Budget proposes to allocate 2 trillion rupees for job creation over 5 years

* Allocates 1.52 trillion rupees for agriculture and allied sectors

* To launch 3 schemes for employment-linked incentives

INFLATION

* Finance minister says inflation remains low, moving toward 4% target

* Proposes to take supply-side measures to contain food inflation

INFRASTRUCTURE INVESTMENTS

* Capex outlay for infrastructure retained at the interim budget target of 11.1 trillion rupees ($133 billion) or 3.4% of GDP

* Proposes 1.5 trillion rupees for long-term loans to states for infrastructure investments

EXPENDITURE PLANS

* Allocation for major subsidies including food, fertiliser estimated at 3.81 trillion rupees, 1.2% of GDP

* Spending on interest payment services estimated at 11.63 trillion rupees, 3.6% of GDP

* To allocate 150 billion rupees as special financial support through multilateral development agencies to Andhra Pradesh state, ruled by Modi's biggest ally TDP

* Credit support to small and medium businesses during the stress period

* Proposes to support setting up of 12 industrial parks

* Proposes to enhance small loans to 2 million rupees for small and medium businesses

* To set up a venture capital fund of 10 billion rupees for space

RURAL DEVELOPMENT

* Provision of 2.66 trillion rupees ($32 billion) for rural development

* Proposes state aid for 30 million affordable housing units in urban and rural areas

URBAN DEVELOPMENT

* Proposes 2.2 trillion rupees ($26 billion) federal government assistance for affordable urban housing over the next five years

* Government will partner with private players to develop small nuclear reactors

($1 = 83.6600 Indian rupees)

(Additional reporting by Ainnie Arif; Editing by YP Rajesh)

Related

Business|Economy|Finance|Political|Stock Markets|US

Investors grapple with tariff-driven economic threat as market swings persist

Business|Economy|Political|Technology|US

Trump's tariff confusion could leave aircraft deliveries in limbo

Asia|Business|Economy|Finance

Growth risks to nudge India central bank towards deeper rate cuts, economists say

Asia|Business|Economy|Political|US

Taiwan to be one of first to talk tariffs with US, president says

Local

News|Local

Palisades Recreation Center to be rebuilt

Arts|Celebrity|Entertainment|Local|News|WrittenByLAPost

Weezer bassist to play Coachella despite wifeโ€™s arrest

Environment|Local|News

Most Colorado River states lag in water recycling: New study

Local

How gas prices have changed in El Centro in the last week

Share This

Popular

Business|Economy|Finance|Political|Stock Markets|US

Investors grapple with tariff-driven economic threat as market swings persist

Investors grapple with tariff-driven economic threat as market swings persist
Business|Economy|Political|Technology|US

Trump's tariff confusion could leave aircraft deliveries in limbo

Trump's tariff confusion could leave aircraft deliveries in limbo
Asia|Business|Economy|Finance

Growth risks to nudge India central bank towards deeper rate cuts, economists say

Growth risks to nudge India central bank towards deeper rate cuts, economists say
Asia|Business|Economy|Political|US

Taiwan to be one of first to talk tariffs with US, president says

Taiwan to be one of first to talk tariffs with US, president says

Economy

Economy|Europe|Finance|Stock Markets|US|World

Back to white-knuckle ride in the markets

Back to white-knuckle ride in the markets
Business|Economy|Europe|Political|US

France's Macron: Trump tariff suspension only provides a 'fragile pause'

France's Macron: Trump tariff suspension only provides a 'fragile pause'
Asia|Business|Economy|Finance

Japan household inflation expectations rise, keep BOJ rate hike view alive

Japan household inflation expectations rise, keep BOJ rate hike view alive
Asia|Business|Economy|Finance

Japan inflation probably accelerated in March on rice price rise - Reuters poll

Japan inflation probably accelerated in March on rice price rise - Reuters poll

Access this article for free.

Already have an account? Sign In