Key Announcements: India On $24 Bn Jobs Drive In Modi's First Post-Election Budget

Mumbai, India: India's government will spend $24 billion on employment and training, it said Tuesday, as Prime Minister Narendra Modi looks to address uneven economic growth and mollify disgruntled voters after a surprising election setback last month.

The funding will be used over five years for a package of five schemes and initiatives to "facilitate employment, skilling and other opportunities" for more than 40 million young people, finance minister Nirmala Sitharaman said in her annual budget speech.

Some will go on "employment-linked incentives" for companies, which the government hopes will create jobs.

"The global economy, while performing better than expected, is still in the grip of policy uncertainties," Sitharman said.

"In this context, India's economic growth continues to be the shining exception and will remain so in the years ahead," she added.

Modi's Bharatiya Janata Party (BJP) fell short of an outright majority in the recent national elections, forcing it into a coalition with regional partners, after its campaign stumbled over multiple local issues including a jobs crisis and high food inflation.

Modi has overseen India's ascent to become the world's fastest-growing major economy.

But his administration has struggled to create enough well-paying jobs for the world's most populous country, with the International Labour Organization estimating 29 percent of India's young university graduates were unemployed in 2022.

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Sitharaman's speech also had specific concessions to the BJP's regional allies, including highways in the eastern state of Bihar and facilitating "special financial support" for a new state capital in Andhra Pradesh, in the south.

Robust economic growth in India has driven a tax windfall, allowing the government to increase spending while still reducing debt.

Despite new spending plans, Sitharaman said India will lower its fiscal deficit to 4.9 percent of gross domestic product this financial year, lower than the 5.1 percent projected during an interim budget in February.

India's benchmark Nifty index fell as much as 1.8 percent during the budget speech, but it pared back some of the losses in afternoon trading.

Some of the key announcements in the budget include:

- Budget 2024 focuses on 9 priorities:

Productivity and resilience in agriculture

Employment and skill development

Improved human resources, social justice

Manufacturing and services

Urban development

Energy security

Infrastructure

Innovation, research and development

Next generation reforms

- 1cr farmers to be initiated to natural farming over two years

- Scheme for first timers - government will provide 1 month wage to all people newly entering workforce in all sectors

- Incentive to be provided at specified scale both to employee, employer in first four years of employment

- Model skill loan scheme to be revised to facilitate loans up to ₹ 7.5 lakh with guarantee from government-promoted fund

- Four expressway and bridge projects worth ₹ 26,000 crores for Bihar

- Rs15,000 crore to be arranged for Andhra Pradesh in FY25 for development of its capital

- Credit guarantee scheme for MSMEs in manufacturing to be introduced

- Mudra loans limit to be enhanced to ₹ 20 lakh from ₹ 10 lakh

- Internship in 500 top companies to be encouraged. Internship allowance of ₹ 5000 and one-time assistance of ₹ 6,000 to be provided under internship scheme

- Rental housing with dormitory-type accommodation for industrial workers to be facilitated in PPP mode with VGF support

- Transit oriented development programmes for 14 large cities with population above 30 lakh will be formulated

- Government to launch scheme to develop 100 street food hubs in select cities over five years

- PM Surya Ghar Muft Bijli launched to install roof-top solar for 1 crore households

- FY25 allocation towards CAPEX set at ₹ 11.11 lakh crore

- Assistance to Assam for flood management, irrigation projects

- Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported

- Venture capital fund of ₹ 1000 crore to be set up to encourage space technology development

- Comprehensive integration of e-Shram portal with other portals to be undertaken

- Customs duty on three more medicines for cancer treatment to be exempted

- Reduced customs duty on gold, silver to 6%, platinum to 6.4%

- Two tax exemption regimes for charities to be merged into one

- Short-term gains on some financial assets to attract 20%

- Unlisted bonds, debentures, debt mutual funds, market-linked debentures to be taxed at slab rate

- To abolish angel tax for all classes of investors

- Changes In new income tax regime slab

0-3 lakh : Nil

3-7 lakh: 5%

7-10 lakh: 10%

10-12 lakh: 15%

12-15 lakh: 20%

Above 15 lakh: 30%

- New tax regime slabs to be changed, standard tax deduction increased from 50,000 to 75,000,

- Salaried employees under new tax regime to save up ₹ 17, 500 annually in taxes

- Lower stamp duy for women property owners

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