who presents the budget speech in parliament

Wednesday, 14 August

READ IN FULL | Finance Minister Enoch Godongwana's 2024 Budget speech

Madam Speaker, according to two prominent economists, Alberto Alesina and Dani Rodrik, "A crude distinction between economics and politics would be that economics is concerned with expanding the pie while politics is about distributing it".

The point, Madam Speaker, is that the size and quality of the national pie is what informs, and ultimately determines, the realisation of our political imperative of redistribution. Our mission over the past 30 years has been to restore both social and economic justice to our nation, and to decisively address the inequality that was the hallmark of systemic discrimination and dispossession.

The budgets we have tabled since 1994 have been about securing the goal of growing the economy, so that we can do more to address the inequalities and deprivation that still scar our society and undermine the promise of democracy. So, it is with a great sense of privilege and purpose that I stand before you to present this last budget of the sixth democratic administration.

Madam Speaker, I therefore table the following documents before this House: 

• The 2024 Division of Revenue Bill;
• The 2024 Appropriation Bill;
• The Estimates of National Expenditure;
• The 2024 Budget Review;
• The 2024 Fiscal Framework;
• The Second Adjustments Appropriation Bill;
• The Budget Speech; and
• The Gold and Foreign Exchange Contingency Reserve Account Adjustment Bill.

Economic outlook

Global Outlook Allow me to begin, Madam Speaker, with the global outlook. Global growth is forecast to increase, from 3.1 per cent this year to 3.2 per cent in 2025. The moderate improvement is due to growth in the United States and several large emerging economies.

There are downside risks from potential spikes in the global oil price, if the conflict in the Middle East escalates and if growth falters in China – the country’s largest trade partner. Domestic Outlook Despite the improved global outlook for 2024, South Africa’s near-term growth remains hamstrung by lower commodity prices and structural constraints.

We estimate real GDP growth of 0.6 per cent in 2023. This is down from 0.8 per cent growth estimated during the 2023 MTBPS. The revision is due to weaker-than-expected outcomes in the third quarter of 2023, particularly in household consumption and fixed investment. Between 2024 and 2026, growth is projected to average 1.6 per cent.

The growth outlook is supported by the expected easing of power cuts as new energy projects begin production, and as lower inflation supports household consumption and credit extension.

But, there are also risks to the domestic outlook. These include persistent constraints in electricity supply, freight rail and ports; and a high sovereign credit risk. Our challenge, honourable members, is that the size of the pie is not growing fast enough to meet our developmental needs.

Fiscal outlook and strategy

As such, our fiscal strategy supports economic growth and reduces risks to the economy while ensuring fiscal sustainability. Compared to a year ago, the budget deficit for 2023/24 is estimated to worsen from 4% to 4.9% of GDP.

The higher budget deficit means that debt-service costs in 2023/24 have been revised higher, by R15.7 billion to R356 billion. Debt-service costs will absorb more than 20% of revenue. To put this into perspective, spending on debt-service costs is greater than the respective budgets of social protection, health, or peace and security.

For this reason, Honourable Members, we are strengthening our strategy and sticking to our fiscal goals. A net reduction of R80.6 billion in non-interest expenditure is being implemented over the medium-term. At the same time, revenue has been revised up by R45.6 billion over the medium-term, relative to 2023 MTBPS.

And, we have taken the decision to introduce a reform of the Gold and Foreign Exchange Contingency Reserve Account, also known as GFECRA. Taken together, even with the spending increases I will announce later, the national government gross borrowing requirement will decline, from R457.7 billion in 2024/25 to R428.5 billion in 2026/27.

The deficit will begin to improve from 2024/25, to an estimated 4.5% of GDP, reaching 3.3 per cent by 2026/27. Debt will now peak at 75.3  of GDP in 2025/26. All of this puts us in a position to continue to protect core services.

It allows 60% of non-interest spending to be directed to the social wage. It also allows us to preserve capital spending. Compared to the MTBPS, we are adding R57.6 billion to pay for the salaries of teachers, nurses and doctors, among many other critical services. Madam Speaker, as I mentioned earlier, in this budget we are announcing a reform of GFECRA.

GFECRA is an account held at the Reserve Bank that captures gains and losses on the country's foreign currency reserve transactions. Simply put: if the Rand strengthens against the US Dollar and other reserve currencies, the account balance declines, and vice versa.

The account balance has grown to over R500 billion over the years because the Rand has depreciated over time. A new settlement arrangement is being introduced that will reduce government borrowing and improve the Reserve Bank’s equity position. Ultimately, we are bringing South Africa closer to our peers and ensuring alignment to international best practice.

We will draw down R150 billion of the GFECRA balance once we have ensured that sufficient buffers are available to absorb exchange rate swings and the solvency of the Reserve Bank is not compromised.

Supporting economic growth

We have embarked on a broad structural reform agenda that aims to address the challenges that have held back our growth. This agenda has included areas like electricity, logistics, water, telecommunications and visa reforms.

The Budget Review details the good progress that has been made in these areas over the past few years.

But obstacles remain, and let me focus on the two largest of these. Electricity load shedding is a problem that confronts all South Africans. It disrupts production, operations and livelihoods. Reforming the sector will result in long-term energy security.

We took the necessary decisions in the past five years, and these are bearing fruit. To promote further investments in renewable energy, this budget proposes an increase in the limit for renewable energy projects that can qualify for the carbon offsets regime, from 15 megawatts to 30 megawatts. Eskom continues to be a key role player in the electricity sector.

And the debt relief plan allows the entity to focus on its core business. We will release the report on the independent review of Eskom’s coal-fired power stations in the coming week. The review was done to inform part of the conditions attached to the debt relief plan.

The recommendations will feed into Eskom’s corporate plans to bolster accountability and oversight. It is through the combination of private investment in new energy projects, rooftop solar installations and improvements in Eskom’s generation fleet that load shedding will reduce, and reliability and security of supply improve.

In addition, to support these efforts, we are introducing a new R2 billion conditional grant over the medium term to fund the rollout of smart prepaid meters.

This will begin with municipalities that have been approved for debt relief. Logistics To address South Africa’s increasingly unreliable logistics system, Cabinet approved the Freight Logistics Roadmap in December 2023. The roadmap outlines immediate steps needed to improve port equipment, locomotive availability and network security.

It also sets out a clear path for enhancing efficiencies, facilitating the introduction of competition and leveraging the financial and technical support of the private sector. In this regard, third-party access to the freight rail network will be introduced by May 2024.

In ports, a private partner has been secured to upgrade Pier 2 of the Durban Container Terminal. This should increase private investment in equipment, enhance technological capability and improve operational efficiency. Government has provided Transnet with a R47 billion guarantee facility to support the entity’s recovery plan and meet its immediate debt obligations.

Like Eskom, the guarantee comes with conditions. These conditions require Transnet to focus on its core activities, and for the entity to introduce private sector partnerships. This will improve Transnet’s sustainability and support the implementation of the roadmap. Supporting Public Infrastructure Investment Madam Speaker, I am proud to announce that as part of this budget, we are introducing fundamental and far-reaching reforms to infrastructure financing and delivery.

The reforms are to optimise the infrastructure value chain to be effective and efficient. In this way, we will strengthen the public investment management and the associated value chain. We will also attract private sector participation.

 In this regard: 

• We gazetted the amendments to the PPP regulatory framework for public comments earlier this week. The amendments seek to reduce the procedural complexity of undertaking PPPs, create capacity to support and manage PPPs, formulate clear rules for managing unsolicited bids, and strengthen the governance of fiscal risk. • We are reviewing institutional arrangements and governance for catalytic infrastructure. The intention is to create clearer mechanisms for accountability, cooperation and coordination.
• We are also consolidating similar functions to reduce duplication and inefficiencies. The intention is to fast-track delivery, particularly of blended finance arrangements.
• We are introducing several new financing instruments, such as infrastructure bonds and concessional loans. As part of this, a flow-through tax vehicle for specific infrastructure projects, similar to trusts and other investment vehicles, is being considered.
• A new funding window for proposals under the new dispensation of financing instruments will be opened to public institutions shortly.

Through these reforms, greater efficiency gains and infrastructure delivery will be fast-tracked. This will benefit network sectors, social infrastructure, PPPs and blended finance projects.

Mainstreaming Climate Finance Madam Speaker, the National Treasury plays a crucial role in mobilising resources, designing incentives, and influencing policy to mainstream climate change. As climate-related disasters intensify, a multi-layered risk-based approach is being developed to manage the associated fiscal risks. This considers various funding instruments from grants to contingency funds, including the Climate Change Response Fund, depending on the incidence and intensity of the disaster event.

The National Treasury is reviewing disaster response grants to improve efficiency and create incentives for disaster planning, preparedness and risk reduction. It is also developing a climate-budget tagging framework to influence policy, planning, and budget decisions by tracking climate-related expenditures in public budgets.

The support of concessional funding providers, such as Multilateral Development Banks, is going a long way to support our climate adaptation, mitigation, energy transition, and sustainability initiatives. Crowding-in the private sector is necessary to managing the climate disaster funds.

The government has raised US$3.3 billion so far from Multilateral Development Banks and International Finance Institutions to support climate change, energy, and just transition objectives. We are actively participating in climate negotiations, aligning with the government's advocacy for reforming multilateral finance institutions.

We are also working with eight municipalities to adapt and mitigate the effects of climate and weather-related events, by providing technical assistance for climate-responsive capital projects.

Supporting the Production of New Energy Vehicles The Electric Vehicles White Paper outlines our strategy to transition towards a broader new energy vehicle production and consumption in South Africa, starting with electric vehicles.

It aims to transition the automotive industry from primarily producing internal combustion engine vehicles to a dual platform that includes electric vehicles by 2035. To encourage the production of electric vehicles in South Africa, government will introduce an investment allowance for new investments, beginning 1 March 2026.

This will allow producers to claim 150 per cent of qualifying investment spending on electric and hydrogen-powered vehicles in the first year. The incentive will be implemented in addition to the existing support under the Automotive Production Development Programme.

Government has also reprioritised R964 million over the medium term to support the transition to electric vehicles. Leveraging Procurement for Transformation Honourable Members, the Public Procurement Bill was expeditiously passed by the National Assembly.

The amended Bill has now been referred to the National Council of Provinces for concurrence. National Treasury is supporting provincial legislatures as they process the Bill and conduct nationwide public hearings.

The Bill provides for transformation measures through set asides, pre-qualification and advancement of persons disadvantaged by unfair discrimination.

These measures would be applicable to specified categories of persons, including small enterprises owned by black people, black women, black youth, black people with disabilities, and enterprises within a particular geographical area including enforcement of transformation through the BBBEE level status. The Bill also makes provision for local industrialisation through designations and measures for sustainable development, labour absorption and enterprise development, amongst others.

We are well aware that currently, procurement processes often fall short of delivering the most cost-effective solutions to government’s needs. Too often, there is a substantial disparity between the prices government is being charged and the prevailing market prices.

For instance, the government buys ICT hardware such as laptops, uninterrupted power supply devices, monitors, and toners, at between 1.2 and 2 times more than market price. Given that government buys in large quantities, we should, in fact, be paying less and leveraging our buying power to get more value for our money. Obtaining value for money, as well as the principles of efficiency, transparency, and competition, remain paramount.

And we want to assure South Africans that these principles are not incompatible with transformation.

Revenue and tax proposals

Honourable Members, the weak performance of our economy has resulted in a sharp deterioration in tax revenue collection for 2023/24. At R1.73 trillion, tax revenue for 2023/24 is R56.1 billion lower than estimated in the 2023 Budget. The shortfall is largely due to the decline in corporate profits and revenue from taxes on mining.

Over the medium term, revenue projections are R45.6 billion higher than the 2023 MTBPS estimates which increased personal income tax and additional medium term revenue proposals. This budget contains tax measures that will raise R15 billion in 2024/25 to alleviate immediate fiscal pressure and support faster debt stabilisation.

Revenue is mostly raised through personal income tax by not adjusting the tax brackets, rebates and medical tax credit for inflation. For alcohol products excise duties, above-inflation increases of between 6.7 and 7.2 per cent for 2024/25 are proposed.

This means: 

• A can of beer increases by 14 cents;
• A can of a cider and alcoholic fruit beverage goes up by 14 cents;
• A bottle of wine will cost an extra 28 cents;
• A bottle of fortified wine will cost an extra 47 cents;
• A bottle of sparkling wine will cost an extra 89 cents; and
• A bottle of spirits, including whisky, gin or vodka, increases by R5.53. We also propose to increase tobacco excise duties by 4.7 per cent for cigarettes and cigarette tobacco, and by 8.2 per cent for pipe tobacco and cigars. This translates to:
• A R9.51 cents increase for cigars;
• A 97 cents increase to a pack of cigarettes; and
• An extra 57 cents for a pipe of tobacco.

Tax calculator | See how this year's budget hits your pocket

Kamogelo Mogane from Soweto, one of the over two-thousand-seven-hundred South Africans who sent Budget Tips to the Minister, has a suggestion I would like to share.

Kamo says: “I would suggest an introduction of tax payment for hubbly bubbly, e-cigarettes and other alternatives. The country has seen an increase in the number of youth smoking these products and parents are not pleased with this at all.”

Kamo, as a parent myself, I agree with you. And I am certain the Minister of Health also agrees.

You will be happy to hear, then, that we are tabling an increase of the excise duty on electronic nicotine and non-nicotine delivery systems, known as vapes, to R3.04 per millilitre. On environmental taxes, the carbon tax increased from R159 to R190 per tonne of carbon dioxide equivalent as of 1 January 2024.

The carbon fuel levy will increase to 11 cents per litre for petrol and 14 cents per litre for diesel effective from 3 April 2024. A discussion paper outlining proposals for the second phase of the carbon tax will be published for public comment later in the year.

Madam Speaker, we are mindful of the already high cost of living and the impact fuel prices have on food and transport costs. In this regard, we are proposing no increases to the general fuel levy for 2024/25. This will result in tax relief of around R4 billion. This is money back in the pockets of consumers.

Madam Speaker, progress has been made on the two-pot retirement system since I last addressed you during the MTBPS. Contributions to retirement funds will be split, with one-third going into a “savings component” and two-thirds going into a “retirement component”.

From 1 September 2024, the first cash withdrawals could be made from the savings pot. The two-pot system ensures that we strike a balance between preserving contributions to safeguard a better retirement for members, while addressing the plight of the people to access some of their retirement funds to help ease their financial burdens in times of distress.

Over the next few years, we are also implementing a global minimum corporate tax to limit the negative effects of tax competition.

Multinational corporations with annual revenue exceeding €750 million will be subject to an effective tax rate of at least 15 per cent, regardless of where their profits are generated. The proposed reform is expected to yield an additional R8 billion in corporate tax revenue in 2026/27. I encourage interested parties to provide comments on the draft Global Minimum Tax Bill published today. Our long-term tax policy strategy remains focused on broadening the tax base while improving tax compliance and administrative efficiency.

Visible progress has been made in rebuilding and modernising SARS. The tax authority has expanded the tax register, improved debt collections and reduced fraudulent refunds and trade valuations. This has led to improvements in revenue collection.

To address the high levels of illicit tobacco, SARS is deploying CCTV and related technologies at licensed tobacco manufacturers. Investigations and prosecutions have resulted in R10 billion in additional assessments from the key players in the illicit gold and tobacco industry, of which over R4 billion from key players in the illicit gold and tobacco industry.

These and other efforts have assisted with the improvement in revenue. Our bigger challenge, as I have stated earlier, is that our pie is not growing fast enough and this limits our ability to generate sufficient revenues to distribute among our priority areas.

Spending plans

Madam Speaker, at the time of the 2023 MTBPS when revenue collection had performed much worse than anticipated, departments had to reprioritise spending and absorb the wage increase within their baselines.

These measures were taken to protect our fiscal integrity. Equally, critical programmes had to be protected.

This is a practical expression of fiscal consolidation that supports delivery of core services and the social wage. Since then, we have been able to reverse some of the fiscal consolidation announced at the time of the MTBPS.

In this Budget, I am able to announce that the education sector is allocated an additional R25.7 billion for the carry-through costs of the wage increase over the medium term. At the same time, we were able to protect the budgets of critical programmes such as the school nutrition programme. The programme provides food to pupils in almost 20,000 schools. The early childhood development grant is allocated R1.6 billion rising to R2 billion over the medium term.

Health is allocated a total of R848 billion over the MTEF. These allocations include R11.6 billion to address the 2023 wage agreement, R27.3 billion for infrastructure, and R1.4 billion for the NHI grant over the same period.

The allocation for the NHI is a demonstration of the government’s commitment to this policy. There remains a range of system-strengthening activities that are key enablers of an improved public health care system that must be undertaken.

Such activities include: 

• Building a national health information system and digital patient records;
• Upgrading health facilities and improving quality of care to ensure that they meet the minimum criteria to be certified and accredited for contracting under NHI;
• Strengthening facility and district management in preparation for contracting;
• Granting semi-autonomous status for central (and potentially other) hospitals; and
• Developing reference prices and provider payment methods for hospitals.

Many of these activities are already underway but require further development before the NHI can be rolled out at scale. Madam Speaker, there has also been significant progress in improving access to public transport services for low-income commuters.

The rail recovery programme of the Passenger Rail Agency of South Africa is continuing, with 27 corridors reopened by December 2023. This will increase the number of passengers on Metrorail from 15.6 million in 2022/23 to an estimated 48.6 million by 2026/27.

To ensure the effective discharge of its duties during elections, and its other responsibilities beyond the polls, the Independent Electoral Commission is allocated an additional R2.3 billion. The police and defence are also allocated an additional R350 million to support elections.

A further R200 million will be allocated for political party funding as political parties prepare for the general elections. Government also supports resettled farmers through land redistribution and tenure reform programmes, which have been allocated R6 billion over the MTEF.

To keep pace with inflation and increase access, permanent social grants are increased. • An increase of R100 to the old age, war veterans, disability and care dependency grants.

This amount will be divided into R90 effective from April, and R10 effective October; • A R50 increase to the foster care grant; and • A R20 increase to the child support grant.

We are sensitive to the increase in the cost of living for the nearly 19 million South Africans who rely on these grants to make ends meet. In this regard, we have done as much as the fiscal envelope allows. Work is currently underway to improve the COVID-19 Social Relief of Distress Grant by April this year.

National Treasury will work with the Department of Social Development in ensuring that improvements in this grant are captured in the final regulations. These improvements will be within the current fiscal framework.

For the extension of the grant beyond March 2025, the social security policy reforms, together with the funding source, will be finalised. We have also made provision for key initiatives aimed at job creation. R61.4 billion is allocated for employment programmes over the medium term.

R7.4 billion has been identified for the Presidential Employment Initiative. Government is also prioritising fighting crime and corruption with a focus on enhancing law enforcement agencies.

A total of R765 billion is allocated to the peace and security cluster. In the coming financial year, 10,000 new police recruits will be trained. As part of the country’s responsibility to promote regional peace and stability, this budget will also allocate funding for the deployment of soldiers in Mozambique and the DRC.

Work on costing and identifying the needs for these critical missions will continue throughout the year and funding will be allocated as such. R628 million has been allocated to the Department of Justice and Constitutional Development for the implementation of FATF and State Capture Commission recommendations, bringing the total funding to these efforts to R2.3 billion.

Government is using R2.9 billion from the Criminal Asset Recovery Account to combat illegal mining and other priority crimes, with 60% allocated for police deployments, including vehicle procurement. This budget is also prioritising infrastructure provision.

Government plans to invest more than R943 billion in public infrastructure. The spending will support the refurbishment and maintenance of existing assets and the building of new infrastructure.

Division of revenue

Madam Speaker, R2.8 trillion, or 51.1%, of total non-interest expenditures, is allocated to provinces and municipalities over the next three years.

R531.7 billion is allocated to local governments, and R2.3 trillion for provinces. An additional R105.5 billion rand is allocated to provinces over the next three years to cover the cost of implementing the 2023 public-service wage agreement, mainly in the education and health sectors.

The provision of these additional funds will cushion the wage bill pressures faced by these critical, personnel intensive departments, while freeing up of resources for capital investment and goods and services.

Moreover, reductions that were previously made on some grants have been reversed. Restoring the baselines of these grants will help maintain important services for the most vulnerable and provide for critical capital investments.

However, to ensure public finances remain sustainable, reductions are made to several other grant baselines, although many continue to grow over the next three years despite the reductions. Regarding municipalities, an additional R1.4 billion is provided for the municipal disaster recovery grant to fund the repair and reconstruction of infrastructure damaged by the tragic floods of 2023.

Madam Speaker, municipalities are the coalface of service delivery. Sadly, an unacceptable number of them are experiencing weaknesses in governance, financial management, and service delivery. To address these challenges, and to transform municipalities into engines of growth, we have adopted a multi-pronged approach.

It focuses on tightening budget processes, ramping up oversight, increasing the skills and capacity of municipal employees, and driving investment in maintaining and building infrastructure. THE YEAR AHEAD Madam Speaker, this year our country hosts the annual meetings of the New Development Bank, which will happen for the second time since the formation of the BRICS bloc.

In 2025, South Africa takes on the presidency of the G20, following that of Brazil and India before that. South Africa’s G20 presidency is an opportunity for us to advance the most pressing economic, developmental, and financial issues that face poor and developing countries.

As President Ramaphosa rightly stated in his State of the Nation Address, our goal is to “place Africa’s development at the top of the agenda when we host the G20 in 2025”.

We are working on the necessary allocations and identification of funds to make sure the various events are a success. As we have shown recently, South Africa remains an important regional and international leader.

Through participation and advocacy on platforms such as the G20, we can push for the substantive reform of multilateral institutions like the IMF and World Bank, so that developing countries can participate more equally in the decision-making processes and global governance. Moral courage and know-how are not in short supply in our country.

We should harness these gifts, not only to better ourselves and our economy, but for the benefit of the entire continent.

Madam Speaker, we have come a long way in the last 30 years. The 30 years ahead of us, and whatever challenges and opportunities they may bring, are something we should look forward to. Given our difficult past, and some of the inevitable challenges we have faced as a young democracy trying to find its place in a world marked by a number of new and overlapping crises, it would be easy to indulge in extremes; either of blind optimism or crippling pessimism.

We should resist both these extremes.

Rather, we should heed the words of our first democratic President, Nelson Mandela, who more than most saw that the pursuit of socioeconomic justice and shared prosperity is a journey rather than a destination.

Allow me to quote him at length: “I have walked that long road to freedom. I have tried not to falter; I have made missteps along the way.

But I have discovered the secret that after climbing a great hill, one only finds that there are many more hills to climb. I have taken a moment here to rest, to steal a view of the glorious vista that surrounds me, to look back on the distance I have come. But I can only rest for a moment, for with freedom come responsibilities, and I dare not linger, for my long walk is not ended.”

Inde lendlela.

Madam Speaker, as I conclude, I want to remind South Africans that the message they should take from this Budget is this: government is making the most out of very limited resources.

We continue to: 

• Support economic growth;
• Reduce the growth of government debt and the cost of debt; and
• Allocate more funds for core services, provide for the social wage and preserve infrastructure budgets.

I am grateful to the President and Deputy President for their continued support and leadership. Thank you to the Deputy Minister of Finance, Dr David Masondo, and the excellent National Treasury team led by the Director-General, Dr Duncan Pieterse.

Thank you to the Commissioner of the South African Revenue Service and the Governor of the South African Reserve Bank. Thank you to my colleagues in the Ministers’ Committee on the Budget and in the Budget Council, who share the heavy load of the tough decisions that we make to maintain sustainable public finances. To Parliamentary Committees of Finance, Appropriations and Public Accounts, I express my sincere appreciation. To my wife and family, your love, support and forbearance are a daily inspiration.

Lastly, thank you to each and every South African. Thank you.

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First Published: Dec 13 2023 | 4:04 PM IST

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Media Advisory: Finance Minister to Deliver 2024 Budget Speech in Parliament

Parliament, Wednesday, 14 February 2024 –  Following the President’s State of the Nation Address last week, the Minister of Finance, Mr Enoch Godongwana, will present the budget allocation for 2024 to Parliament on Wednesday, 21 February at 14:00 in Cape Town City Hall. President Cyril Ramaphosa delivered the SONA 2024 last Thursday and outlined the national government's plans to tackle the country's energy crisis and other socio-economic challenges. The budget speech, among others, aims to balance economic growth and support for the vulnerable in our society despite limited resources. During the speech, Mr Godongwana will outline all the financial, economic, and social commitments that the government will prioritise in its planned expenditure. Minister Godongwana will provide a detailed plan for 2024 spending, including proposals for revenue collection to help fund government’s planned interventions and commitments. He will also introduce the Appropriation Bill and table the Division of Revenue Bill which Parliament will process in the following months. Members of the media, including photographers, who wish to attend the proceedings in the Cape Town City Hall are requested to forward their details to Mlindi Mpindi  at ( [email protected] ) and  Manelisi Ntsodo at [email protected] by 15:00 on Friday, 16 February 2024 . The required details are as follows: Full name, name of the media house, cell phone number, and ID number or passport number. DETAILS OF THE BUDGET SPEECH AT CITY HALL: DATE: WEDNESDAY, 21 FEBRUARY 2024 TIME: 14:00 VENUE: CAPE TOWN CITY HALL  Minister Godongwana’s 2024 Budget Speech will be broadcast live on Parliament’s DSTV Channel 408, livestreamed on Parliament’s website and social media platforms, including Parliament’s YouTube Channel. Parliament will also provide live feeds to the interested broadcasters upon request. Parliamentary sittings are open to the media and the public. Members of the public can follow parliamentary sittings live on Parliament TV (DSTV Channel 408), through a live stream on Parliament’s website, Parliament’s YouTube channel, and X (Twitter) page on the links below: X (Twitter): https://twitter.com/ParliamentofRSA Facebook: https://facebook.com/ParliamentofRSA YouTube: https://www.youtube.com/ParliamentofRSA Important to note: Members of the Media who wish to be part of the National Treasury’s lock up must contact Xolisa Dodo by email:  [email protected]   ISSUED BY THE PARLIAMENT OF THE REPUBLIC OF SOUTH AFRICA Enquiries: Moloto Mothapo

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Union Budget 2024: Full text of Nirmala Sitharaman's speech in Parliament

Finance minister nirmala sitharaman in her budget speech announced income tax relief for middle class, a ₹2 lakh crore outlay for job creation schemes.

Hon’ble Speaker,

I present the Budget for 2024-25.

Introduction

The people of India have reposed their faith in the government led by the Hon’ble Prime Minister Shri Narendra Modi and re-elected it for a historic third term under his leadership. We are grateful for their support, faith and trust in our policies. We are determined to ensure that all Indians, regardless of religion, caste, gender and age, make substantial progress in realising their life goals and aspirations. Union Budget 2024 LIVE Coverage

Global Context

The global economy, while performing better than expected, is still in the grip of policy uncertainties. Elevated asset prices, political uncertainties and shipping disruptions continue to pose significant downside risks for growth and upside risks to inflation.

In this context, India’s economic growth continues to be the shining exception and will remain so in the years ahead. India’s inflation continues to be low, stable and moving towards the 4 per cent target. Core inflation (non-food, non-fuel) currently is 3.1 per cent. Steps are being taken to ensure supplies of perishable goods reach market adequately.

ALSO READ: Union budget 2024: NDA government lists its priorities for Viksit Bharat

Interim budget.

As mentioned in the interim budget, we need to focus on 4 major castes, namely ‘Garib’ (Poor), ‘Mahilayen’ (Women), ‘Yuva’ (Youth) and ‘Annadata’ (Farmer). For Annadata, we announced higher Minimum Support Prices a month ago for all major crops, delivering on the promise of at least a 50 per cent margin over costs. Pradhan Mantri Garib Kalyan Anna Yojana was extended for five years, benefitting more than 80 crore people.

Administrative actions for approval and implementation of various schemes announced in the interim budget are well underway. The required allocations have been made.

ALSO READ: Nirmala Sitharaman's optimistic outlook on India's economy: A comparative analysis

Budget theme.

Turning attention to the full year and beyond, in this budget, we particularly focus on employment, skilling, MSMEs, and the middle class. I am happy to announce the Prime Minister’s package of 5 schemes and initiatives to facilitate employment, skilling and other opportunities for 4.1 crore youth over a 5-year period with a central outlay of ` 2 lakh crore. I will speak about them shortly, while more details may be seen in the annexure. This year, I have made a provision of ` 1.48 lakh crore for education, employment and skilling.

Budget Priorities

The people have given a unique opportunity to our government to take the country on the path of strong development and all-round prosperity. In the interim budget, we promised to present a detailed roadmap for our pursuit of ‘Viksit Bharat’. In line with the strategy set out in the interim budget, this budget envisages sustained efforts on the following 9 priorities for generating ample opportunities for all.

Productivity and resilience in Agriculture

Employment & Skilling

Inclusive Human Resource Development and Social Justice

Manufacturing & Services

Urban Development

Energy Security

Infrastructure

Innovation, Research & Development and

Next Generation Reforms

Subsequent budgets will build on these, and add more priorities and actions. A more detailed formulation will be carried out as part of the ‘economic policy framework’ about which I will speak later in this speech.

This budget details some of the specific actions to be initiated in the current year towards fulfilment of these priorities with potential for transformative changes. The budget also covers some of the previously made announcements with an intent to strengthen them and step up their implementation for expediting our journey towards the goal of Viksit Bharat.

Priority 1: Productivity and resilience in Agriculture

Transforming agriculture research

Our government will undertake a comprehensive review of the agriculture research setup to bring the focus on raising productivity and developing climate resilient varieties. Funding will be provided in challenge mode, including to the private sector. Domain experts both from the government and outside will oversee the conduct of such research.

Release of new varieties

New 109 high-yielding and climate-resilient varieties of 32 field and horticulture crops will be released for cultivation by farmers.

Natural Farming

In the next two years, 1 crore farmers across the country will be initiated into natural farming supported by certification and branding. Implementation will be through scientific institutions and willing gram panchayats. 10,000 need-based bio-input resource centres will be established.

Missions for pulses and oilseeds

For achieving self-sufficiency in pulses and oilseeds, we will strengthen their production, storage and marketing. As announced in the interim budget, a strategy is being put in place to achieve ‘atmanirbharta’ for oil seeds such as mustard, groundnut, sesame, soybean, and sunflower.

Vegetable production & Supply Chains

Large scale clusters for vegetable production will be developed closer to major consumption centres. We will promote Farmer-Producer Organizations, cooperatives and start-ups for vegetable supply chains including for collection, storage, and marketing.

Digital Public Infrastructure for Agriculture

Buoyed by the success of the pilot project, our government, in partnership with the states, will facilitate the implementation of the Digital Public Infrastructure (DPI) in agriculture for coverage of farmers and their lands in 3 years. During this year, digital crop survey for Kharif using the DPI will be taken up in 400 districts. The details of 6 crore farmers and their lands will be brought into the farmer and land registries. Further, the issuance of Jan Samarth based Kisan Credit Cards will be enabled in 5 states.

Shrimp Production & Export

Financial support for setting up a network of Nucleus Breeding Centres for Shrimp Broodstocks will be provided. Financing for shrimp farming, processing and export will be facilitated through NABARD.

National Cooperation Policy

Our government will bring out a National Cooperation Policy for systematic, orderly and all-round development of the cooperative sector. Fast-tracking growth of rural economy and generation of employment opportunities on a large scale will be the policy goal.

This year, I have made a provision of ` 1.52 lakh crore for agriculture and allied sector.

Priority 2: Employment & Skilling

Employment Linked Incentive

Our government will implement following 3 schemes for ‘Employment Linked Incentive’, as part of the Prime Minister’s package. These will be based on enrolment in the EPFO, and focus on recognition of first-time employees, and support to employees and employers.

Scheme A: First Timers

This scheme will provide one-month wage to all persons newly entering the workforce in all formal sectors. The direct benefit transfer of one-month salary in 3 instalments to first-time employees, as registered in the EPFO, will be up to ` 15,000. The eligibility limit will be a salary of

` 1 lakh per month. The scheme is expected to benefit 210 lakh youth.

Scheme B: Job Creation in manufacturing

This scheme will incentivize additional employment in the manufacturing sector, linked to the employment of first-time employees. An incentive will be provided at specified scale directly both to the employee and the employer with respect to their EPFO contribution in the first 4 years of employment. The scheme is expected to benefit 30 lakh youth entering employment, and their employers.

Scheme C: Support to employers

This employer-focussed scheme will cover additional employment in all sectors. All additional employment within a salary of ` 1 lakh per month will be counted. The government will reimburse to employers up to ` 3,000 per month for 2 years towards their EPFO contribution for each additional employee. The scheme is expected to incentivize additional employment of 50 lakh persons.

Participation of women in the workforce

We will facilitate higher participation of women in the workforce through setting up of working women hostels in collaboration with industry, and establishing creches. In addition, the partnership will seek to organize women-specific skilling programmes, and promotion of market access for women SHG enterprises.

Skilling programme

I am happy to announce a new centrally sponsored scheme, as the 4th scheme under the Prime Minister’s package, for skilling in collaboration with state governments and Industry. 20 lakh youth will be skilled over a 5-year period. 1,000 Industrial Training Institutes will be upgraded in hub and spoke arrangements with outcome orientation. Course content and design will be aligned to the skill needs of industry, and new courses will be introduced for emerging needs.

Skilling Loans

The Model Skill Loan Scheme will be revised to facilitate loans up to

` 7.5 lakh with a guarantee from a government promoted Fund. This measure is expected to help 25,000 students every year.

Education Loans

For helping our youth who have not been eligible for any benefit under government schemes and policies, I am happy to announce a financial support for loans upto ` 10 lakh for higher education in domestic institutions. E-vouchers for this purpose will be given directly to 1 lakh students every year for annual interest subvention of 3 per cent of the loan amount.

Priority 3: Inclusive Human Resource Development and Social Justice

Saturation approach

Our government is committed to all-round, all-pervasive and all-inclusive development of people, particularly, farmers, youth, women and poor. For achieving social justice comprehensively, the saturation approach of covering all eligible people through various programmes including those for education and health will be adopted to empower them by improving their capabilities.

Implementation of schemes meant for supporting economic activities by craftsmen, artisans, self-help groups, scheduled caste, schedule tribe and women entrepreneurs, and street vendors, such as PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India will be stepped up.

The states in the Eastern part of the country are rich in endowments and have strong cultural traditions. We will formulate a plan, Purvodaya, for the all-round development of the eastern region of the country covering Bihar, Jharkhand, West Bengal, Odisha and Andhra Pradesh. This will cover human resource development, infrastructure, and generation of economic opportunities to make the region an engine to attain Viksit Bharat.

On the Amritsar Kolkata Industrial Corridor, we will support development of an industrial node at Gaya. This corridor will catalyze industrial development of the eastern region. The industrial node at Gaya will also be a good model for developing our ancient centres of cultural importance into future centres of modern economy. This model shall showcase “Vikas bhi Virasat bhi” in our growth trajectory.

We will also support development of road connectivity projects, namely (1) Patna-Purnea Expressway, (2) Buxar-Bhagalpur Expressway, (3) Bodhgaya, Rajgir, Vaishali and Darbhanga spurs, and (4) additional 2-lane bridge over river Ganga at Buxar at a total cost of ` 26,000 crore. Power projects, including setting up of a new 2400 MW power plant at Pirpainti, will be taken up at a cost of ` 21,400 crore. New airports, medical colleges and sports infrastructure in Bihar will be constructed.

An additional allocation to support capital investments will be provided. The requests of Bihar Government for external assistance from multilateral development banks will be expedited.

Andhra Pradesh Reorganization Act

Our government has made concerted efforts to fulfil the commitments in the Andhra Pradesh Reorganization Act. Recognizing the state’s need for a capital, we will facilitate special financial support through multilateral development agencies. In the current financial year ` 15,000 crore will be arranged, with additional amounts in future years.

Our government is fully committed to financing and early completion of the Polavaram Irrigation Project, which is the lifeline for Andhra Pradesh and its farmers. This will facilitate our country’s food security as well.

Under the Act, for promoting industrial development, funds will be provided for essential infrastructure such as water, power, railways and roads in Kopparthy node on the Vishakhapatnam-Chennai Industrial Corridor and Orvakal node on Hyderabad-Bengaluru Industrial Corridor. An additional allocation will be provided this year towards capital investment for economic growth.

Grants for backward regions of Rayalaseema, Prakasam and North Coastal Andhra, as stated in the Act, will also be provided.

PM Awas Yojana

Three crore additional houses under the PM Awas Yojana in rural and urban areas in the country have been announced, for which the necessary allocations are being made.

Women-led development

For promoting women-led development, the budget carries an allocation of more than ` 3 lakh crore for schemes benefitting women and girls. This signals our government’s commitment for enhancing women’s role in economic development.

Pradhan Mantri Janjatiya Unnat Gram Abhiyan

For improving the socio-economic condition of tribal communities, we will launch the Pradhan Mantri Janjatiya Unnat Gram Abhiyan by adopting saturation coverage for tribal families in tribal-majority villages and aspirational districts. This will cover 63,000 villages benefitting 5 crore tribal people.

Bank branches in North-Eastern Region

More than 100 branches of India Post Payment Bank will be set up in the North East region to expand the banking services.

This year, I have made a provision of ` 2.66 lakh crore for rural development including rural infrastructure.

Priority 4: Manufacturing & Services

Support for promotion of MSMEs

This budget provides special attention to MSMEs and manufacturing, particularly labour-intensive manufacturing. We have formulated a package covering financing, regulatory changes and technology support for MSMEs to help them grow and also compete globally, as mentioned in the interim budget. I am happy to announce the following specific measures.

Credit Guarantee Scheme for MSMEs in the Manufacturing Sector

For facilitating term loans to MSMEs for purchase of machinery and equipment without collateral or third-party guarantee, a credit guarantee scheme will be introduced. The scheme will operate on pooling of credit risks of such MSMEs. A separately constituted self-financing guarantee fund will provide, to each applicant, guarantee cover up to ` 100 crore, while the loan amount may be larger. The borrower will have to provide an upfront guarantee fee and an annual guarantee fee on the reducing loan balance.

New assessment model for MSME credit

Public sector banks will build their in-house capability to assess MSMEs for credit, instead of relying on external assessment. They will also take a lead in developing or getting developed a new credit assessment model, based on the scoring of digital footprints of MSMEs in the economy. This is expected to be a significant improvement over the traditional assessment of credit eligibility based only on asset or turnover criteria. That will also cover MSMEs without a formal accounting system.

Credit Support to MSMEs during Stress Period

I am happy to announce a new mechanism for facilitating continuation of bank credit to MSMEs during their stress period. While being in the ‘special mention account’ (SMA) stage for reasons beyond their control, MSMEs need credit to continue their business and to avoid getting into the NPA stage. Credit availability will be supported through a guarantee from a government promoted fund.

Mudra Loans

The limit of Mudra loans will be enhanced to ₹ 20 lakh from the current ₹ 10 lakh for those entrepreneurs who have availed and successfully repaid previous loans under the ‘Tarun’ category.

Enhanced scope for mandatory onboarding in TReDS

For facilitating MSMEs to unlock their working capital by converting their trade receivables into cash, I propose to reduce the turnover threshold of buyers for mandatory onboarding on the TReDS platform from ` 500 crore to ` 250 crore. This measure will bring 22 more CPSEs and 7000 more companies onto the platform. Medium enterprises will also be included in the scope of the suppliers.

SIDBI branches in MSME clusters

SIDBI will open new branches to expand its reach to serve all major MSME clusters within 3 years, and provide direct credit to them. With the opening of 24 such branches this year, the service coverage will expand to 168 out of 242 major clusters.

MSME Units for Food Irradiation, Quality & Safety Testing

Financial support for setting up of 50 multi-product food irradiation units in the MSME sector will be provided. Setting up of 100 food quality and safety testing labs with NABL accreditation will be facilitated.

E-Commerce Export Hubs

To enable MSMEs and traditional artisans to sell their products in international markets, E-Commerce Export Hubs will be set up in public-private-partnership (PPP) mode . These hubs, under a seamless regulatory and logistic framework, will facilitate trade and export related services under one roof.

Measures for promotion of Manufacturing & Services

Internship in Top Companies

As the 5th scheme under the Prime Minister’s package, our government will launch a comprehensive scheme for providing internship opportunities in 500 top companies to 1 crore youth in 5 years. They will gain exposure for 12 months to real-life business environment, varied professions and employment opportunities. An internship allowance of ` 5,000 per month along with a one-time assistance of ` 6,000 will be provided. Companies will be expected to bear the training cost and 10 per cent of the internship cost from their CSR funds.

Industrial Parks

Our government will facilitate development of investment-ready “plug and play” industrial parks with complete infrastructure in or near 100 cities, in partnership with the states and private sector, by better using town planning schemes.

Twelve industrial parks under the National Industrial Corridor Development Programme also will be sanctioned.

Rental Housing

Rental housing with dormitory type accommodation for industrial workers will be facilitated in PPP mode with VGF support and commitment from anchor industries.

Shipping industry

Ownership, leasing and flagging reforms will be implemented to improve the share of the Indian shipping industry and generate more employment.

Critical Mineral Mission

We will set up a Critical Mineral Mission for domestic production, recycling of critical minerals, and overseas acquisition of critical mineral assets. Its mandate will include technology development, skilled workforce, extended producer responsibility framework, and a suitable financing mechanism.

Offshore mining of minerals

Our government will launch the auction of the first tranche of offshore blocks for mining, building on the exploration already carried out.

Digital Public Infrastructure Applications

Turning to the services sector, I propose development of DPI applications at population scale for productivity gains, business opportunities, and innovation by the private sector. These are planned in the areas of credit, e-commerce, education, health, law and justice, logistics, MSME, services delivery, and urban governance.

Integrated Technology Platform for IBC eco-system

An Integrated Technology Platform will be set up for improving the outcomes under the Insolvency and Bankruptcy Code (IBC) for achieving consistency, transparency, timely processing and better oversight for all stakeholders.

Voluntary closure of LLPs

The services of the Centre for Processing Accelerated Corporate Exit (C-PACE) will be extended for voluntary closure of LLPs to reduce the closure time.

National Company Law Tribunals

The IBC has resolved more than 1,000 companies, resulting in direct recovery of over ` 3.3 lakh crore to creditors. In addition, 28,000 cases involving over ` 10 lakh crore have been disposed of, even prior to admission.

Appropriate changes to the IBC, reforms and strengthening of the tribunal and appellate tribunals will be initiated to speed up insolvency resolution. Additional tribunals will be established. Out of those, some will be notified to decide cases exclusively under the Companies Act.

Debt Recovery

Steps for reforming and strengthening debt recovery tribunals will be taken. Additional tribunals will be established to speed up recovery.

Priority 5: Urban Development

Cities as Growth Hubs

Working with states, our government will facilitate development of ‘Cities as Growth Hubs’. This will be achieved through economic and transit planning, and orderly development of peri-urban areas utilising town planning schemes.

Creative redevelopment of cities

For creative brownfield redevelopment of existing cities with a transformative impact, our government will formulate a framework for enabling policies, market-based mechanisms and regulation.

Transit Oriented Development

Transit Oriented Development plans for 14 large cities with a population above 30 lakh will be formulated, along with an implementation and financing strategy.

Urban Housing

Under the PM Awas Yojana Urban 2.0, housingneeds of 1 crore urban poor and middle-class familieswill be addressed with an investment of ₹ 10 lakh crore. This will include the central assistance of ₹ 2.2lakhcrore inthenext5 years.A provision of interest subsidy to facilitate loans at affordable rates is also envisaged.

In addition, enabling policies and regulations for efficient and transparent rental housing markets with enhanced availability will also be put in place.

Water Supply and Sanitation

In partnership with the State Governments and Multilateral Development Banks we will promote water supply, sewage treatment and solid waste management projects and services for 100 large cities through bankable projects. These projects will also envisage use of treated water for irrigation and filling up of tanks in nearby areas.

Street Markets

Building on the success of PM SVANidhi Scheme in transforming the lives of street vendors, our Government envisions a scheme to support each year, over the next five years, the development of 100 weekly ‘haats’ or street food hubs in select cities.

We will encourage states which continue to charge high stamp duty to moderate the rates for all, and also consider further lowering duties for properties purchased by women. This reform will be made an essential component of urban development schemes.

Priority 6: Energy Security

Energy Transition

In the interim budget, I had announced our strategy to sustain high and more resource-efficient economic growth, along with energy security in terms of availability, accessibility and affordability. We will bring out a policy document on appropriate energy transition pathways that balances the imperatives of employment, growth and environmental sustainability.

PM Surya Ghar Muft Bijli Yojana

In line with the announcement in the interim budget, PM Surya Ghar Muft Bijli Yojana has been launched to install rooftop solar plants to enable 1 crore households obtain free electricity up to 300 units every month. The scheme has generated remarkable response with more than 1.28 crore registrations and 14 lakh applications, and we will further encourage it.

Pumped Storage Policy

A policy for promoting pumped storage projects will be brought out for electricity storage and facilitating smooth integration of the growing share of renewable energy with its variable & intermittent nature in the overall energy mix.

Research and development of small and modular nuclear reactors

Nuclear energy is expected to form a very significant part of the energy mix for Viksit Bharat. Towards that pursuit, our government will partner with the private sector for (1) setting up Bharat Small Reactors, (2) research & development of Bharat Small Modular Reactor, and (3) research & development of newer technologies for nuclear energy. The R&D funding announced in the interim budget will be made available for this sector.

Advanced Ultra Super Critical Thermal Power Plants

The development of indigenous technology for Advanced Ultra Super Critical (AUSC) thermal power plants with much higher efficiency has been completed. A joint venture between NTPC and BHEL will set up a full scale 800 MW commercial plant using AUSC technology. The government will provide the required fiscal support. Moving forward, development of indigenous capacity for the production of high-grade steel and other advanced metallurgy materials for these plants will result in strong spin-off benefits for the economy.

Roadmap for ‘hard to abate’ industries

A roadmap for moving the ‘hard to abate’ industries from ‘energy efficiency’ targets to ‘emission targets’ will be formulated. Appropriate regulations for transition of these industries from the current ‘Perform, Achieve and Trade’ mode to ‘Indian Carbon Market’ mode will be put in place.

Support to traditional micro and small industries

An investment-grade energy audit of traditional micro and small industries in 60 clusters, including brass and ceramic, will be facilitated. Financial support will be provided for shifting them to cleaner forms of energy and implementation of energy efficiency measures. The scheme will be replicated in another 100 clusters in the next phase.

Priority 7: Infrastructure

Infrastructure investment by Central Government

Significant investment the Central Government has made over the years in building and improving infrastructure has had a strong multiplier effect on the economy. We will endeavour to maintain strong fiscal support for infrastructure over the next 5 years, in conjunction with imperatives of other priorities and fiscal consolidation. This year, I have provided ` 11,11,111 crore for capital expenditure. This would be 3.4 per cent of our GDP.

Infrastructure investment by state governments

We will encourage states to provide support of similar scale for infrastructure, subject to their development priorities. A provision of ` 1.5 lakh crore for long-term interest free loans has been made this year also to support the states in their resource allocation.

Private investment in infrastructure

Investment in infrastructure by private sector will be promoted through viability gap funding and enabling policies and regulations. A market-based financing framework will be brought out.

Pradhan Mantri Gram Sadak Yojana (PMGSY)

Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations which have become eligible in view of their population increase.

Irrigation and Flood Mitigation

Bihar has frequently suffered from floods, many of them originating outside the country. Plans to build flood control structures in Nepal are yet to progress. Our government, through the Accelerated Irrigation Benefit Programme and other sources, will provide financial support for projects with estimated cost of ` 11,500 crore such as the Kosi-Mechi intra-state link and 20 other ongoing and new schemes including barrages, river pollution abatement and irrigation projects. In addition, survey and investigation of Kosi related flood mitigation and irrigation projects will be undertaken.

Assam grapples with floods every year by the Brahmaputra River and its tributaries, originating outside India. We will provide assistance to Assam for flood management and related projects.

Himachal Pradesh suffered extensive losses due to floods last year. Our government will provide assistance to the state for reconstruction and rehabilitation through multilateral development assistance.

Uttarakhand too suffered losses due to cloud bursts and massive landslides. We will provide assistance to the state.

Recently Sikkim witnessed devastating flash floods and landslides that wreaked havoc across the state. Our Government will provide assistance to the state.

Tourism has always been a part of our civilization. Our efforts in positioning India as a global tourist destination will also create jobs, stimulate investments and unlock economic opportunities for other sectors. In addition to the measures outlined in the interim budget, I propose the following measures.

Vishnupad Temple at Gaya and Mahabodhi Temple at Bodh Gaya in Bihar are of immense spiritual significance. Comprehensive development of Vishnupad Temple Corridor and Mahabodhi Temple Corridor will be supported, modelled on the successful Kashi Vishwanath Temple Corridor, to transform them into world class pilgrim and tourist destinations.

Rajgir holds immense religious significance for Hindus, Buddhists and Jains. The 20th Tirthankara Munisuvrata temple in the Jain Temple complex is ancient. The Saptharishi or the 7 hotsprings form a warm water Brahmakund that is sacred. A comprehensive development initiative for Rajgir will be undertaken.

Our government will support the development of Nalanda as a tourist centre besides reviving Nalanda University to its glorious stature.

Odisha’s scenic beauty, temples, monuments, craftsmanship, wildlife sanctuaries, natural landscapes and pristine beaches make it an ultimate tourism destination. Our government will provide assistance for their development.

Priority 8: Innovation, Research & Development

We will operationalize the Anusandhan National Research Fund for basic research and prototype development. Further, we will set up a mechanism for spurring private sector-driven research and innovation at commercial scale with a financing pool of ` 1 lakh crore in line with the announcement in the interim budget.

Space Economy

With our continued emphasis on expanding the space economy by 5 times in the next 10 years, a venture capital fund of ` 1,000 crore will be set up.

Priority 9: Next Generation Reforms

Economic Policy Framework

We will formulate an Economic Policy Framework to delineate the overarching approach to economic development and set the scope of the next generation of reforms for facilitating employment opportunities and sustaining high growth.

Our government will initiate and incentivize reforms for (1) improving productivity of factors of production, and (2) facilitating markets and sectors to become more efficient. These reforms will cover all factors of production, namely land, labour, capital and entrepreneurship, and technology as an enabler of improving total factor productivity and bridging inequality.

Effective implementation of several of these reforms requires collaboration between the Centre and the states and building consensus, as development of the country lies in development of the states. For promoting competitive federalism and incentivizing states for faster implementation of reforms, I propose to earmark a significant part of the 50-year interest-free loan. Working with the states, we will initiate the following reforms.

Land-related reforms by state governments

Land-related reforms and actions, both in rural and urban areas, will cover (1) land administration, planning and management, and (2) urban planning, usage and building bylaws. These will be incentivized for completion within the next 3 years through appropriate fiscal support.

Rural Land related actions

Rural land related actions will include (1) assignment of Unique Land Parcel Identification Number (ULPIN) or Bhu-Aadhaar for all lands, (2) digitization of cadastral maps, (3) survey of map sub-divisions as per current ownership, (4) establishment of land registry, and (5) linking to the farmers registry. These actions will also facilitate credit flow and other agricultural services.

Urban Land related actions

Land records in urban areas will be digitized with GIS mapping. An IT based system for property record administration, updating, and tax administration will be established. These will also facilitate improving the financial position of urban local bodies.

Labour related reforms

Services to Labour

Our government will facilitate the provision of a wide array of services to labour, including those for employment and skilling. A comprehensive integration of e-shram portal with other portals will facilitate such one-stop solution. Open architecture databases for the rapidly changing labour market, skill requirements and available job roles, and a mechanism to connect job-aspirants with potential employers and skill providers will be covered in these services.

Shram Suvidha & Samadhan Portal

Shram Suvidha and Samadhan portals will be revamped to enhance ease of compliance for industry and trade.

Capital and entrepreneurship related reforms

Financial sector vision and strategy

For meeting financing needs of the economy, our government will bring out a financial sector vision and strategy document to prepare the sector in terms of size, capacity and skills. This will set the agenda for the next 5 years and guide the work of the government, regulators, financial institutions and market participants.

Taxonomy for climate finance

We will develop a taxonomy for climate finance for enhancing the availability of capital for climate adaptation and mitigation. This will support achievement of the country’s climate commitments and green transition.

Variable Capital Company structure

We will seek the required legislative approval for providing an efficient and flexible mode for financing leasing of aircrafts and ships, and pooled funds of private equity through a ‘variable company structure’.

Foreign Direct Investment and Overseas Investment

The rules and regulations for Foreign Direct Investment and Overseas Investments will be simplified to (1) facilitate foreign direct investments, (2) nudge prioritization, and (3) promote opportunities for using Indian Rupee as a currency for overseas investments.

NPS Vatsalya

NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started. On attaining the age of majority,the plan can be converted seamlessly into a normal NPS account.

Use of Technology

We have successfully used technology for improving productivity and bridging inequality in our economy during the past 10 years. Public investment in digital infrastructure and innovations by the private sector have helped in improving access of all citizens, particularly the common people, to market resources, education, health and services. We will step up adoption of technology towards digitalization of the economy.

Ease of Doing Business

For enhancing ‘Ease of Doing Business’, we are already working on the Jan Vishwas Bill 2.0. Further, states will be incentivized for implementation of their Business Reforms Action Plans and digitalization.

Data and Statistics

For improving data governance, collection, processing and management of data and statistics, different sectoral data bases, including those established under the Digital India mission, will be utilized with active use of technology tools.

New Pension Scheme (NPS)

The Committee to review the NPS has made considerable progress in its work. I am happy that the Staff Side of the National Council of the Joint Consultative Machinery for Central Government Employees have taken a constructive approach. A solution will be evolved which addresses the relevant issues while maintaining fiscal prudence to protect the common citizens.

Budget Estimates 2024-25

For the year 2024-25, the total receipts other than borrowings and the total expenditure are estimated at ` 32.07 lakh crore and ` 48.21 lakh crore respectively. The net tax receipts are estimated at ` 25.83 lakh crore. The fiscal deficit is estimated at 4.9 per cent of GDP.

The gross and net market borrowings through dated securities during 2024-25 are estimated at ` 14.01 lakh crore and ` 11.63 lakh crore respectively. Both will be less than that in 2023-24.

The fiscal consolidation path announced by me in 2021 has served our economy very well, and we aim to reach a deficit below 4.5 per cent next year. The Government is committed to staying the course. From 2026-27 onwards, our endeavour will be to keep the fiscal deficit each year such that the Central Government debt will be on a declining path as percentage of GDP.

I will, now, move to Part B.

Indirect Taxes

I start with GST. It has decreased tax incidence on the common man; reduced compliance burden and logistics cost for trade and industry; and enhanced revenues of the central and state governments. It is a success of vast proportions. To multiply the benefits of GST, we will strive to further simplify and rationalise the tax structure and endeavour to expand it to the remaining sectors.

My proposals for customs duties intend to support domestic manufacturing, deepen local value addition, promote export competitiveness, and simplify taxation, while keeping the interest of the general public and consumers surmount.

In Budget 2022-23, we reduced the number of customs duty rates.

I propose to undertake a comprehensive review of the rate structure over the next six months to rationalise and simplify it for ease of trade, removal of duty inversion and reduction of disputes.

I shall now take up sector specific customs duty proposals.

Medicines and Medical Equipment

To provide relief to cancer patients, I propose to fully exempt three more medicines from customs duties.

I also propose changes in the BCD on x-ray tubes & flat panel detectors for use in medical x-ray machines under the Phased Manufacturing Programme, so as to synchronise them with domestic capacity addition.

Mobile Phone and Related Parts

With a three-fold increase in domestic production and almost

100-fold jump in exports of mobile phones over the last six years, the Indian mobile phone industry has matured. In the interest of consumers, I now propose to reduce the BCD on mobile phone, mobile PCBA and mobile charger to 15 per cent.

Critical Minerals

Minerals such as lithium, copper, cobalt and rare earth elements are critical for sectors like nuclear energy, renewable energy, space, defence, telecommunications, and high-tech electronics. I propose to fully exempt customs duties on 25 critical minerals and reduce BCD on two of them. This will provide a major fillip to the processing and refining of such minerals and help secure their availability for these strategic and important sectors.

Solar Energy

Energy transition is critical in the fight against climate change. To support energy transition, I propose to expand the list of exempted capital goods for use in the manufacture of solar cells and panels in the country. Further, in view of sufficient domestic manufacturing capacity of solar glass and tinned copper interconnect, I propose not to extend the exemption of customs duties provided to them.

Marine products

India’s seafood exports in the last financial year touched an all-time high of more than ₹ 60,000 crore. Frozen shrimp accounted for about

two-thirds of these exports. To enhance their competitiveness, I propose to reduce BCD on certain broodstock, polychaete worms, shrimp and fish feed to 5 per cent. I also propose to exempt customs duty on various inputs for manufacture of shrimp and fish feed.

Leather and Textile

Similarly, to enhance the competitiveness of exports in the leather and textile sectors, I propose to reduce BCD on real down filling material from duck or goose. I am also making additions to the list of exempted goods for manufacture of leather and textile garments, footwear and other leather articles for export.

To rectify inversion in duty, I propose to reduce BCD, subject to conditions, on methylene diphenyl diisocyanate (MDI) for manufacture of spandex yarn from 7.5 to 5 per cent.

Furthermore, the export duty structure on raw hides, skins and leather is proposed to be simplified and rationalized.

Precious Metals

To enhance domestic value addition in gold and precious metal jewellery in the country, I propose to reduce customs duties on gold and silver to 6 per cent and that on platinum to 6.4 per cent.

Other Metals

Steel and copper are important raw materials. To reduce their cost of production, I propose to remove the BCD on ferro nickel and blister copper. I am also continuing with nil BCD on ferrous scrap and nickel cathode and concessional BCD of 2.5 per cent on copper scrap.

Electronics

To increase value addition in the domestic electronics industry,

I propose to remove the BCD, subject to conditions, on oxygen free copper for manufacture of resistors. I also propose to exempt certain parts for manufacture of connectors.

Chemicals and Petrochemicals

To support existing and new capacities in the pipeline, I propose to increase the BCD on ammonium nitrate from 7.5 to 10 per cent.

PVC flex banners are non-biodegradable and hazardous for environment and health. To curb their imports, I propose to raise the BCD on them from 10 to 25 per cent.

Telecommunication Equipment

To incentivise domestic manufacturing, I propose to increase the BCD from 10 to 15 per cent on PCBA of specified telecom equipment.

Trade facilitation

To promote domestic aviation and boat & ship MRO, I propose to extend the period for export of goods imported for repairs from six months to one year. In the same vein, I propose to extend the time-limit for re-import of goods for repairs under warranty from three to five years.

Direct Taxes

We will continue our efforts to simplify taxes, improve tax payer services, provide tax certainty and reduce litigation while enhancing revenues for funding the development and welfare schemes of the government.

It has been our endeavour to simplify taxation. We have taken a number of measures in the last few years including introduction of simplified tax regimes without exemptions and deductions for corporate tax and personal income tax. This has been appreciated by tax payers. 58 per cent of corporate tax came from the simplified tax regime in financial year 2022-23. Similarly, as per data available till now for the last fiscal, more than two-thirds have availed the new personal income tax regime.

Comprehensive Review of the Income-tax Act, 1961

I am now announcing a comprehensive review of the Income-tax Act, 1961. The purpose is to make the Act concise, lucid, easy to read and understand. This will reduce disputes and litigation, thereby providing tax certainty to the tax payers. It will also bring down the demand embroiled in litigation. It is proposed to be completed in six months.

A beginning is being made in the Finance Bill by simplifying the tax regime for charities, TDS rate structure, provisions for reassessment and search provisions and capital gains taxation.

Simplification for Charities and of TDS

The two tax exemption regimes for charities are proposed to be merged into one. The 5 per cent TDS rate on many payments is being merged into the 2 per cent TDS rate and the 20 per cent TDS rate on repurchase of units by mutual funds or UTI is being withdrawn. TDS rate on e-commerce operators is proposed to be reduced from one to 0.1 per cent. Moreover, credit of TCS is proposed to be given in the TDS to be deducted on salary. Further, I propose to decriminalize delay for payment of TDS up to the due date of filing statement for the same. I also plan to provide a standard operating procedure for TDS defaults and simplify and rationalise the compounding guidelines for such defaults.

Simplification of Reassessment

I propose to thoroughly simplify the provisions for reopening and reassessment. An assessment hereinafter can be reopened beyond three years from the end of the assessment year only if the escaped income is

₹ 50 lakh or more, up to a maximum period of five years from the end of the assessment year. Even in search cases, a time limit of six years before the year of search, as against the existing time limit of ten years, is proposed. This will reduce tax-uncertainty and disputes.

Simplification and Rationalisation of Capital Gains

Capital gains taxation is also proposed to be hugely simplified.

Short term gains on certain financial assets shall henceforth attract a tax rate of 20 per cent, while that on all other financial assets and all

non-financial assets shall continue to attract the applicable tax rate.

Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 per cent. For the benefit of the lower and middle-income classes, I propose to increase the limit of exemption of capital gains on certain financial assets to ₹ 1.25 lakh per year.

Listed financial assets held for more than a year will be classified as long term, while unlisted financial assets and all non-financial assets will have to be held for at least two years to be classified as long-term.

Unlisted bonds and debentures, debt mutual funds and market linked debentures, irrespective of holding period, however, will attract tax on capital gains at applicable rates.

Tax Payer Services

All the major tax payer services under GST and most services under Customs and Income Tax have been digitalised. All remaining services of Customs and Income Tax including rectification and order giving effect to appellate orders shall be digitalized and made paper-less over the next two years.

Litigation and Appeals

While our concerted efforts to reduce pendency of appeals at various appellate fora are beginning to show good results, it will continue to engage our highest attention.

To dispose of the backlog of first appeals, I plan to deploy more officers to hear and decide such appeals, especially those with large tax effect.

For resolution of certain income tax disputes pending in appeal, I am also proposing Vivad Se Vishwas Scheme, 2024.

Further, I propose to increase monetary limits for filing appeals related to direct taxes, excise and service tax in the Tax Tribunals, High Courts and Supreme Court to ₹ 60 lakh, ₹ 2 crore and ₹ 5 crore respectively.

With a view to reduce litigation and provide certainty in international taxation, we will expand the scope of safe harbour rules and make them more attractive. We will also streamline the transfer pricing assessment procedure.

Employment and Investment

I have a few proposals to promote investment and foster employment.

First of all, to bolster the Indian start-up eco-system, boost the entrepreneurial spirit and support innovation, I propose to abolish the so-called angel tax for all classes of investors.

Second, there is tremendous potential for cruise tourism in India. To give a fillip to this employment generating industry, I am proposing a simpler tax regime for foreign shipping companies operating domestic cruises in the country.

Third, India is a world leader in the diamond cutting and polishing industry, which employs a large number of skilled workers. To further promote the development of this sector, we would provide for safe harbour rates for foreign mining companies selling raw diamonds in the country.

Fourth, to attract foreign capital for our development needs,

I propose to reduce the corporate tax rate on foreign companies from 40 to 35 per cent.

Deepening the tax base

I have a couple of proposals for deepening the tax base. First, Security Transactions Tax on futures and options of securities is proposed to be increased to 0.02 per cent and 0.1 per cent respectively. Second, for reasons of equity, I propose to tax income received on buy back of shares in the hands of the recipient.

To improve social security benefits, deduction of expenditure by employers towards NPS is proposed to be increased from 10 to 14 per cent of the employee’s salary. Similarly, deduction of this expenditure up to 14 per cent of salary from the income of employees in private sector, public sector banks and undertakings, opting for the new tax regime, is proposed to be provided.

Indian professionals working in multinationals get ESOPs and invest in social security schemes and other movable assets abroad. Non-reporting of such small foreign assets has penal consequences under the Black Money Act. Such non-reporting of movable assets up to ₹ 20 lakh is proposed to be de-penalised.

Other major proposals in the Finance Bill relate to:

Withdrawal of equalization levy of 2 per cent;

Expansion of tax benefits to certain funds and entities in IFSCs; and

immunity from penalty and prosecution to benamidar on full and true disclosure so as to improve conviction under the Benami Transactions (Prohibition) Act, 1988.

Personal Income Tax

Coming to Personal Income Tax Rates, I have two announcements to make for those opting for the new tax regime. First, the standard deduction for salaried employees is proposed to be increased from ₹ 50,000/- to

₹ 75,000/-. Similarly, deduction on family pension for pensioners is proposed to be enhanced from ₹ 15,000/- to ₹ 25,000/-. This will provide relief to about four crore salaried individuals and pensioners.

Second, in the new tax regime, the tax rate structure is proposed to be revised, as follows:

0-3 lakh rupees Nil

3-7 lakh rupees 5 per cent

7-10 lakh rupees 10 per cent

10-12 lakh rupees 15 per cent

12-15 lakh rupees 20 per cent

Above 15 lakh rupees 30 per cent

As a result of these changes, a salaried employee in the new tax regime stands to save up to ₹ 17,500/- in income tax.

Apart from these, I am also making some other changes as given in the annexure.

As a result of these proposals, revenue of about ₹ 37,000 crore –

₹ 29,000 crore in direct taxes and ₹ 8,000 crore in indirect taxes – will be forgone while revenue of about ₹ 30,000 crore rupees will be additionally mobilized. Thus, the total revenue forgone is about ₹ 7,000 crore annually.

Mr. Speaker Sir, with this, I commend the budget to this august House.

Annexure to Part – A

Prime Minister’s Package for Employment and Skilling

Coverage and Estimated Central Outlay

Enrolment Duration Expenditure Duration Beneficiaries Central Outlay

Years (lakhs) (`Crore)

Scheme A (first timers) 2 3 210 23,000

Scheme B (bulk hiring of first timers in manufacturing) 2 6 30 52,000

Scheme C (job creation) 2 6 50 32,000

Internship Programme (Phase-1) 2 3 30 19,000

Internship Programme (Phase-2) 3* 4* 70 44,000

Upgradation of ITIs N/A 5 20 30,000

Total 410 2,00,000

*Starting from third year

Outline of Schemes

Employment Linked Incentive Scheme A: First Timers (Para 20)

One month’s wage as subsidy (maximum `15,000)

Applicable to all sectors

First timers have a learning curve before they become fully productive; subsidy is to assist employees and employers in hiring of first timers.

Applicable to all persons newly entering the workforce (EPFO) with wage/salary less than `1 lakh per month.

Subsidy will be paid to the employee in three instalments

Employee must undergo compulsory online Financial Literacy course before claiming the second instalment.

Subsidy to be refunded by employer if the employment to the first timer ends within 12 months of recruitment.

Expected to cover approximately one crore persons per annum.

Scheme will be for 2 years

Employment linked Incentive Scheme B: Job creation in manufacturing (Para 21)

Applicable for substantial hiring of first time employees in the manufacturing sector

All employers which are corporate entities and those non-corporate entities with a three year track record of EPFO contribution will be eligible.

Employer must hire at least the following number of previously non-EPFO enrolled workers:

25% of the baseline (previous year’s number of EPFO employees)

[whichever is lower]

Incentive will be paid for four years partly to the employee and partly to the employer as follows:

Year Incentive (as % of wage / salary, shared equally between employer & employee)

Employer must maintain threshold level of enhanced employment throughout, failing which subsidy benefit will stop.

Employee must be directly working in the entity paying salary/wage (i.e. in-sourced employee).

Employees with a wage/ salary of up to `1 lakh per month will be eligible, subject to contribution to EPFO.

For those with wages/salary greater than `25,000/month, incentive will be calculated at `25,000/month.

Subsidy to be refunded by employer if the employment to first timer ends within 12 months of recruitment.

This subsidy will be in addition to benefit under Part-A

Employment Linked Incentive Scheme C: Support to employers (Para 22)

Applicable to an employer who:

Increases employment above the baseline (previous year’s number of EPFO employees) by at least two employees (for those with less than 50 employees) or 5 employees (for those with 50 or more employees) and sustains the higher level, and

For employees whose salary does not exceed `1,00,000/month

New employees under this Part need not be new entrants to EPFO

For two years Government will reimburse EPFO employer contribution [up to] `3,000/month to the Employer for the additional Employees hired in the previous year.

If the employer creates more than 1000 jobs:

Reimbursement will be done quarterly for the previous quarter

Subsidy will continue for the 3rd and 4th year on the same scale as Employer benefit in Part-B

Not applicable for those Employees covered under Part-B.

This subsidy will be in addition to benefit under Part-A.

Skilling Programme and Upgradation of Industrial Training Institutes

1000 Industrial Training Institutes (ITIs) to be upgraded in hub and spoke arrangements in five years

New Centrally Sponsored Scheme in collaboration with states and industry

Focus on outcome and quality of skilling

Course content and design aligned to needs of industry

Total outlay of ` 60,000 crore over five years

Government of India—` 30,000 crore

State Governments—` 20,000 crore

Industry—` 10,000 crore (including CSR funding)

200 hubs and 800 spoke ITIs –all with industry collaboration

Re-design and review of existing courses

New courses

1 to 2 year courses in all 1000 ITIs

Short term specialised courses in Hub ITIs

Capacity augmentation of 5 national institutes for training of trainers

20 lakh students expected to benefit

5. Internship in Top Companies (Para 51)

One crore youth to be skilled by India’s top companies in five years.

Twelve months Prime Minister’s Internship with monthly allowance of `5,000

Applicable to those who are not employed and not engaged in full time education.

Youth aged between 21 and 24 will be eligible to apply.

Cost sharing (per annum):

Government – `54,000 towards monthly allowance (plus `6,000 grant for incidentals)

Company – ₹ 6,000 from CSR funds towards monthly allowance

Training cost to be borne by the Company from CSR funds.

Administrative costs to be borne by respective parties (for the Company, reasonable administrative expenses can be counted as CSR expenditure)

Participation of companies is voluntary

Applications through an online portal

Company to select from a short list; short listing based on objective criteria with emphasis on those with lower employability

Ineligible candidates (indicative list)

Candidate has IIT, IIM, IISER, CA, CMA etc as qualification

Any member of the family is assessed to Income Tax

Any member of the family is a government employee, etc.

Company is expected to provide the person an actual working experience on a skill in which the company is directly involved.

At least half the time should be in actual working experience/job environment, not in classroom.

In case the Company cannot directly do so, it must tie-up with:

Companies in its forward and backward supply chain (e.g. suppliers or customers) or

Other Companies/Institutions in its Group or otherwise

Will be co-ordinated with State Government initiatives wherever applicable.

Phase 1 of the scheme will be for 2 years followed by Phase 2 for 3 years

Note: Details of the schemes are subject to modification during the process of appraisal and approval.

Annexure to Part B

Amendments relating to Indirect Taxes

A. LEGISLATIVE CHANGES IN CUSTOMS LAWS

A.1 Amendments in the Customs Act, 1962

Section 28 DA is being amended to enable the acceptance of different types of proof of origin provided in trade agreements in order to align the said section with new trade agreements which provide for self-certification.

A proviso to sub-section (1) of Section 65 is being inserted to empower the Central Government to specify certain manufacturing and other operations in relation to a class of goods that shall not be permitted in a warehouse.

The expression “a class of importers or exporters” is being substituted with “a class of importers or exporters or any other persons” in Section 143AA of the Customs Act for purposes of facilitating trade. Consequential changes are being carried out in clause (m) of subsection (2) of Section 157 of the Customs Act.

These changes shall come into effect from date of assent to the Finance (No.2) Bill

A.2 Amendments in the Customs Tariff Act, 1975

Section 6 is being omitted on account of winding up of the Tariff Commission.

The First Schedule to the Customs Tariff Act, 1975 is being amended to,-

increase the rates on certain tariff items with effect from 24.07.2024.

create new tariff lines in respect of defence products, technical textiles, sustainable blended aviation fuel, products used in Indian semiconductor machines, e-bicycles, natural menthol, printer cartridge etc. This is to align the tariff lines with WCO classification and better identification of goods. These changes shall come into effect from 01.10.2024.

A.3 Amendment of Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995

The Customs Tariff (Identification, Assessment and Collection of Countervailing Duty on Subsidized Articles and for Determination of Injury) Rules, 1995 have been amended to insert a provision for New Shipper Review. This will be effective from 24.07.2024.

B. LEGISLATIVE CHANGES IN GST LAWS

[Save as otherwise provided, these changes will be brought into effect from a date to be notified in coordination with States, as per recommendations of the GST council]

AMENDMENT FOR TRADE FACILITATION

B.1 Amendment to keep Extra Neutral Alcohol outside the purview of central tax:

Section 9 is being amended to take Extra Neutral Alcohol used in manufacture of alcoholic liquor for human consumption out of the purview of central tax. Similar amendments are also proposed in IGST Act and UTGST Act.

B.2 Amendment to regularize non-levy and short-levy of central tax due to general practice

Section 11A is being inserted to empower the government to regularize non-levy or short levy of central tax due to any general practice prevalent in trade. Similar power is being proposed in IGST Act, UTGST Act and GST (Compensation to States) Act.

B.3 Amendment to relax the time limits to avail input tax credit

New sub-sections (5) and (6) are being inserted in section 16 of CGST Act to relax the time limit to avail input tax credit as per section 16(4) of the CGST Act with effect from 01.07.2017, as follows:

a) In respect of initial years of implementation of GST, i.e., financial years 2017-18,2018-19, 2019-20 and 2020-21:

In respect of an invoice or debit note for the Financial Years 2017-18, 2018-19, 2019-20 and 2020-21, the registered person shall be entitled to take input tax credit in any return under section 39 which is filed upto the 30th day of November, 2021

b) with respect to cases where returns have been filed after revocation:

The time limit to avail input tax credit in respect of an invoice or debit note, in cases where returns for the period from the date of cancellation of registration/ effective date of cancellation of registration till the date of revocation of cancellation of the registration, will be extended till the date of filing the said GSTR-3B return, subject to certain conditions, if the said return is filed by the registered person within thirty days of the order of revocation of cancellation of registration.

B.4 Insertion of new section to provide a common time limit for issuance of demand notices and orders

Section 74A is being inserted in the CGST Act to provide a common time limit for issuance of demand notices and orders in respect of demands for FY 2024-25 onwards, for cases involving charges of fraud, suppression of facts or wilful misstatement and the cases not involving the charges of fraud, suppression of facts or wilful misstatement etc. Also, the time limit for the taxpayers to avail the benefit of reduced penalty, by paying the tax demanded along with interest, is being increased from 30 days to 60 days.

B.5 Amendment to reduce the maximum amount of pre-deposit for filing appeals

Sections 107 and 112 of CGST Act are being amended to reduce the maximum amount of pre-deposit for filing appeal with the Appellate Authority from Rs. 25 crore of central tax to Rs. 20 crore of central tax and to reduce the amount of pre-deposit for filing appeal with the Appellate Tribunal from 20% with a maximum amount of Rs. 50 crore of central tax to 10 % with a maximum of Rs. 20 crore of central tax. Besides, the time limit for filing appeals before the Appellate Tribunal is being modified w.e.f. 1st August, 2024 to avoid the appeals from getting time barred, on account of Appellate Tribunal not coming into operation.

B.6 Amendment to provide conditional waiver of interest or penalty or both relating to demands raised under section 73, for certain tax periods

Section 128A is being inserted in the CGST Act to provide for a conditional waiver of interest and penalty in respect of demands pertaining to financial years 2017-18, 2018-19 and 2019-20, in cases where demand notices have been issued under section 73 and full tax liability is paid by the taxpayer before a date to be notified.

B.7 Amendment to enable availment of the transitional credit of eligible CENVAT credit by Input Services Distributor in respect of invoices received prior to the appointed date

Section 140(7) of CGST Act is being amended with effect from 01.07.2017, to enable availment of transitional credit in respect of input services received by an Input Services Distributor prior to the appointed day, where invoices were also received prior to the appointed day.

B.8 Amendment to empower Government to notify Appellate Tribunal to handle anti-profiteering cases and to provide for a sunset clause for accepting anti-profiteering cases

Section 171 of CGST Act is being amended to enable the Government to notify the GST Appellate Tribunal to handle anti-profiteering cases and to empower the Government to notify a date after which the Authority for anti-profiteering shall not accept applications for examination.

B.9 Amendment to clarify various activities in insurance sector as neither a supply of goods nor a supply of services

Paragraphs 8 and 9 are being inserted in Schedule III of CGST Act to provide that the activity of apportionment of co-insurance premiums by the lead insurer to the co-insurers in the co-insurance agreement and the services by insurers to reinsurers in respect of ceding/re-insurance commission will, subject to certain conditions, be treated neither as a supply of goods nor as a supply of services.

OTHER LAW AMENDMENTS IN CGST ACT

B10. Amendment to clarify time of supply of services in reverse charge supplies.

Amendment is proposed in Section 13 of CGST Act to provide for time of supply of services where the invoice is required to be issued by the recipient of services in cases of reverse charge supplies.

B11. Amendment to restrict blockage of input tax credit for tax paid under section 74 to demands upto Financial Year 2023-24

Clause (i) of Section 17 of CGST Act is being amended to restrict blockage of input tax credit for tax paid under Section 74 for demands pertaining up to FY 2023-24.

B12. Amendment to provide for conditions and restrictions for revocation of cancellation of registration

Section 30 of the CGST Act is being amended to enable the government to prescribe conditions and restrictions for revocation of cancellation of registration.

B13. Amendment to prescribe the time period for issuance of invoice by recipient in Reverse Charge Mechanism supplies

Clause (f) of section 31 of CGST Act is being amended to provide for an enabling provision to prescribe the time period within which the invoice has to be issued by the recipient under reverse charge mechanism and to clarify that a person registered solely for purpose of deducting TDS under section 51 of CGST Act shall be treated as a person not registered for the purpose of clause (f) of section 31(3) of the said Act.

B14. Amendment to make filing of monthly returns by TDS deductors mandatory.

Section 39 is being amended to mandate filing of returns by TDS deductors for every month, even if no deductions are made during the said month, and also to provide for an enabling clause for prescribing the time limit for filing such returns.

B15. Amendment to prohibit refund in zero rated supply of goods where such goods are subjected to export duty.

Section 54 of CGST Act and section 16 of IGST Act are being amended to prohibit refund of unutilized input tax credit or integrated tax on zero-rated supply of goods, which are subjected to export duty.

B16. Amendment for allowing appearance by authorised representative on behalf of a summoned person

Sub-section 1A is being inserted in section 70 of the CGST Act to enable appearance by an authorized representative on behalf of a summoned person.

B17. Amendment to empower the government to notify cases which shall be heard only by the principal Bench of GST Appellate Tribunal

Section 109 of CGST Act is being amended to empower the government to specify cases to be heard only by the Principal Bench of the Appellate Tribunal.

B18. Amendment to restrict applicability of penal provisions under Section 122(1B) to Electronic Commerce Operators who deduct TCS

Section 122(1B) of CGST Act is being amended w.e.f. 01.10.2023 to restrict the applicability of penal provisions under this section to only those Electronic Commerce Operators who are required to collect tax at source under section 52.

B19. Consequential amendments due to insertion of new section 74A in the CGST Act

Sections 73 and 74 of CGST Act are being amended to limit the applicability of these sections to demands up to FY 2023-24, since from FY 2024-25 onwards demands are to be ascertained as per provisions of newly inserted section 74A. Also, Section 75 of CGST Act is being amended to allow for redetermination of penalties if the charges of fraud, suppression, or wilful misstatement are not established. Further, references to section 74A or the concerned sub-sections of section 74A are being inserted in section 10, section 21, section 35, section 49, section 50, section 51, section 62, section 63, section 64, section 65, section 66, section 104 and section 127.

C. OTHER PROVISIONS IN THE FINANCE (No. 2)BILL

C.1 Amendment of Customs duty notification dated 10.5.2023

Notification No. 37/2023- Customs dated 10.5.23 is being validated for the period from 1st April, 2023 up to and inclusive of 10th May,2023 to provide exemption from basic customs duty and AIDC on imports of crude soyabean oil and crude sunflower seed oil subject to availability of unutilized quota in TRQ authorization for FY 2022-23 allotted by DGFT and Bill of lading issued on or before 31st March,2023. The changes will come into effect from date of assent to the Finance (No.2) Bill 2024

C.2 Amendment of Central excise duty notification dated 17.3.2012

Notification No 12/2012-Central Excise dated 17.3.2012 is being amended to extend the time period for submission of the final Mega Power Project certificate from 120 months to 156 months. The changes will come into effect from date of assent to the Finance (No.2) Bill 2024

C.3 Exemption from Clean Environment Cess

The Clean Environment Cess , levied and collected as a duty of excise, is being exempted on excisable goods lying in stock as on 30th June, 2017 , subject to payment of appropriate GST Compensation Cess on supply of such goods on or after 1st July, 2017.The changes will come into effect from date of assent to the Finance (No.2) Bill 2024

C.4 Exemption GST Compensation Cess ,2017

Based on the recommendation of the GST Council in its 53rd meeting, GST Compensation Cess is being exempted with effect from 1st July, 2017 on imports in SEZ by SEZ units or developers for authorized operations. The changes will come into effect from date of assent to the Finance(No.2) Bill 2024

D. CUSTOMS DUTY RATE CHANGES

D.1. Reduction in customs duty to reduce input costs, deepen value addition, promote export competitiveness, correct inverted duty structure, boost domestic manufacturing etc [with effect from 24.07.2024]

S. No. Commodity From

(per cent) To

I. Agricultural Products

1. Shea nuts 30 15

II. Aquafarming & Marine exports

1 Prawn and Shrimps feed 15 5

2 Fish feed 15 5

3. Following inputs for manufacture of Prawn and Shrimps feed or fish feed:

Mineral &vitamin pre mixes

Fish lipid oil

Crude fish oil

Algal prime (flour)

Algal oil 30/15/5 Nil

4 Artemia 5 Nil

5 Artemia cysts 5 Nil

6 SPF Polychaete worms 30 5

7 Live SPF Vannamei shrimp (Litopenaeus vannamei) broodstock &

Live Black tiger shrimp (Penaeus monodon) broodstock 10 5

8 Insect Meal for use in R&D for aquatic feed manufacturing 15 5

9 Single Cell Protein from Natural Gas for use in R&D for aquatic feed manufacturing 15 5

10 Pre-dust breaded powder for use in processing of sea-food 30 Nil

III. Critical Minerals

1. Antimony, Beryllium, Bismuth, Cobalt, Copper, Gallium, Germanium, Hafnium, Indium, Lithium, Molybdenum, Niobium, Nickel, Potash, REE, Rhenium, Strontium, Tantalum, Tellurium, Tin, Tungsten, Vanadium, Zirconium, Selenium , Cadmium, Silicon other than Quartz & Silicon Dioxide. 10/7.5/5/2.5 Nil

2. Graphite 7.5/5 2.5

3 Silicon Quartz

Silicon Dioxide 7.5/5 2.5

IV. Cancer Drugs

1. Trastuzumab Deruxtecan

Osimertinib

Durvalumab 10 Nil

V. Precious Metals

1. Gold bar 15 6

2. Gold dore 14.35 5.35

3. Silver bar 15 6

4. Silver dore 14.35 5.35

5. Platinum, Palladium, Osmium, Ruthenium, Iridium 15.4 6.4

6. Coins of precious metals 15 6

7. Gold/Silver findings 15 6

8. Platinum and Palladium used in the manufacture of noble metal solutions, noble metal compounds and catalytic convertors 7.5 5

9. Bushings made of platinum and rhodium alloy when imported in exchange of worn out or damaged bushings exported out of India 7.5 5

VI. Textile and Leather Sector

1. MDI for manufacture of spandex yarn 7.5 5

2. Wet white, Crust and finished leather for manufacture of textile or leather garments, leather /synthetic footwear or other leather products, for export 10 Nil

3. Certain additional accessories and embellishments for manufacture of textile or leather garments, leather/synthetic footwear or other leather products, for export As applicable Nil

4. Real Down Filling material from duck or goose for use in manufacture of textile or leather garments for export 30 10

VII. Steel Sector

1. Ferro-Nickel 2.5 Nil

2. Ferrous Scrap Nil (till 30.09.2024) Nil (till 31.03.2026)

3. Certain specified raw materials for manufacture of CRGO steel Nil (till 30.09.2024) Nil (till 31.03.2026)

VIII. Copper Sector

1. Blister Copper 5 Nil

IX. Capital Goods

1. Certain additional goods for use in petroleum exploration operations As applicable Nil

2. Certain additional capital goods for use in manufacture of solar cells and modules 7.5 Nil

X. Shipping Sector

1. Components and consumables for manufacture of vessels As applicable Nil

2. Technical documentation and spare parts for construction of warships As applicable Nil

XI. IT and Electronics

1. Cellular Mobile Phone 20 15

2. Charger/Adapter of cellular mobile phone 20 15

3. Printed Circuit Board Assembly (PCBA) of cellular mobile phone 20 15

4 Specified goods for use in manufacture of connectors 5/7.5 Nil

5. Oxygen Free Copper for use in manufacture of Resistors 5 Nil

XII. Medical Equipment

1. All types of polyethylene for use in manufacture of orthopedic implants As applicable Nil

2. Special grade stainless steel, Titanium alloys, Cobalt-chrome alloys, and all types of polyethylene for use in manufacture of other artificial parts of the body As applicable Nil

3. X-ray tubes and Flat panel detectors (including scintillators) for use in manufacture of medical, surgical, dental or veterinary X-ray machines 15 5

(till 31.03.2025)

(1.4.2025 to 31.3.2026)

(1.4.2026 onwards)

D.2. Increase in Customs duty [with effect from 24.07.2024]

S. No. Commodity

Rate of duties

I. Plastics and Chemicals

1. Ammonium Nitrate 7.5 10

2. PVC Flex Films/Flex Banners 10 25

II Chemicals

1 Laboratory Chemicals under heading 9802 10 150

III. Renewable Sector

1. Solar Glass for manufacture of solar cells or modules Nil 10

(w.e.f 1.10.24)

2. Tinned Copper Interconnect for manufacture of solar cells or modules Nil 5

IV. Miscellaneous Items

1. PCBA of specified telecom equipment 10 15

1. Garden Umbrella (tariff item 6601 10 00) 20 20 or ₹ 60 per piece whichever is higher

D.3. Increase in tariff rate with no change in effective duty rate [With effect from 01.10.2024]

S. No. Commodity Rate of duties

1 Other roasted nuts and seeds, including areca nuts 30 150

2 Other nuts, otherwise prepared or preserved , including areca nuts 30 150

D.4 Rationalization of Export duty on Raw hides, skins and leather [with effect from 24.07.2024]

1 Raw Hides & skins, all sorts (other than buffalo) 40 40

2 Raw Hides & skins of buffalo 30 30

3 Raw fur and skins including lamb fur skin 60/10 40

4 Wet Blue Chrome Leather 40 20

5 Crust Leather 40 20

6 Tanned fur skin 60 20

7 E.I. Tanned Leather Nil Nil

8 Finished leather (as defined by DGFT) Nil Nil

E. Trade Facilitation Measures

E.1. Increase in duration for re-import of goods exported out of India

The time-period of duty free re-import of goods (other than those under export promotion schemes) exported out under warranty from India has been increased from 3 years to 5 years, further extendable by 2 years.

E.2. Increase in duration for export of articles of foreign origin imported into India for repairs

Currently, articles of foreign origin can be imported into India for repairs subject to their re-exportation within six months extendable upto 1 year. The duration for export in the case of aircraft and vessels imported for maintenance, repair and overhauling has been increased from 6 months to 1 year, further extendable by 1 year.

There are few other changes of minor nature. For details of the budget proposals, the Explanatory Memorandum and other relevant budget documents may be referred to.

Amendments relating to Direct Taxes

Providing tax relief

A.1 Substantial relief is proposed under the new tax regime with new slabs and tax rates as under:-

Total income Rate of tax

Upto ` 3,00,000 Nil

From ` 3,00,001 to ` 7,00,000 5 per cent

From ` 7,00,001 to ` 10,00,000 10 per cent

From ` 10,00,001 to ` 12,00,000 15 per cent

From ` 12,00,001 to ` 15,00,000 20 per cent

Above ` 15,00,000 30 per cent

A.2 Standard deduction: Standard deduction to salaried individuals and pensioners is proposed to be increased from ` 50,000 to

` 75,000 under the new tax regime.

A.3 Family pension deduction: Deduction from family pension of

` 15,000 is proposed to be increased to ` 25,000 under the new tax regime.

A.4 Non-government employer contribution to New Pension scheme: It is proposed to increase the amount of deduction allowed to an employer in respect of his contribution to a pension scheme referred to in section 80CCD, from the extent of 10% to the extent of 14% of the salary of the employee. Further, a non-government employee in the new tax regime shall be allowed deduction of an amount not exceeding 14% of the employee’s salary in place of 10%.

Measures to promote investment and employment

B.1 Incentives to IFSC

It is proposed that retail schemes and Exchange Traded Funds in IFSC, shall enjoy tax exemptions along similar lines as available to specified funds.

It is further proposed to exempt certain income of Core Settlement Guarantee Fund set up in IFSC.

It is proposed to exclude the applicability of section 94B to certain finance companies located in IFSC.

It is proposed that where a venture capital fund (VCF) located in IFSC extends a loan / other amount to an assessee, it shall no longer be called upon to explain the source of funds.

Further, it is proposed that surcharge shall not apply on income-tax payable on income from securities by specified funds.

B.2 Reduction of rate of foreign companies to 35 per cent: It is proposed to reduce the rate of income-tax chargeable on income of foreign company (other than that chargeable at special rates) from 40 per cent to 35 per cent.

B.3 Tax on share premium: It is proposed that the provisions of clause (viib) of sub-section (2) of section 56 of the Act related to tax on share premium of private companies shall not apply from the financial year 2024-25.

B.4 Scheme of presumptive taxation for cruise ship operations by non-residents: It is proposed to put in place a presumptive taxation regime for cruise ship operations of non-residents. Further, it is proposed to provide exemption for any income of a foreign company from lease rentals of cruise ships, received from a related company which operates such ship or ships in India.

Simplification and Rationalisation

C.1 Introduction of block assessment scheme for search and seizure cases: It is proposed to introduce a new scheme of block assessment for search cases. The block period is proposed to be six previous years and the period up to the date of conclusion of search. Total income of the block period is proposed to be taxed at the rate of 60 per cent.

C.2 Reducing the time-limit for which reassessment can be done and rationalisation of the provisions: Time limit for reassessment is proposed to be reduced from ten years to five years. Further, there are proposals to rationalise the procedure for reassessment. Further, it is proposed to omit reference to Principal Chief Commissioner or Chief Commissioner in section 275 to provide clarity of time limitation for imposition of penalties. It is also proposed to withhold refund up to sixty days of assessment under section 245 and to rationalise time limit to file appeal to ITAT under section 253.

C.3 Charitable trusts/ Institutions

It is proposed to make amendments to merge the two schemes for exemption and also provide for rationalisation of filing of applications and the timelines for registration and approval of certain benefits to charitable trusts and institutions.

C.4 Simplification of taxation of Capital Gains: The taxation of capital gains is proposed to be rationalised and simplified.

Short term gains on specified financial assets shall henceforth attract a tax rate of 20 per cent instead of 15 per cent, while that on all other financial assets and non-financial assets shall continue to attract the applicable tax rate.

Long term gains on all financial and non-financial assets, on the other hand, will attract a tax rate of 12.5 per cent. For the benefit of the lower and middle-income classes, it is proposed to increase the limit of exemption of capital gains on certain listed financial assets from ₹ 1 lakh to ₹ 1.25 lakh per year.

These proposals are proposed to be given effect with immediate force.

C.5 Rationalisation of tax deducted at source (TDS) rates: It is proposed to bring down TDS rates from 5 per cent to 2 per cent in certain sections and omit section 194F where TDS rate is 20 per cent, as given below:

Section Present TDS Rate Proposed TDS Rate With effect from

Section 194D - Payment of insurance commission (in case of person other than company) 5% 2% 1.4.2025

Section 194DA - Payment in respect of life insurance policy 5% 2% 1.10.2024

Section 194G – Commission etc on sale of lottery tickets 5% 2% 1.10.2024

Section 194H - Payment of commission or brokerage 5% 2% 1.10.2024

Section 194-IB - Payment of rent by individual or HUF 5% 2% 1.10.2024

Section 194M - Payment of certain sums by certain individuals or Hindu undivided family 5% 2% 1.10.2024

Section 194-O - Payment of certain sums by e-commerce operator to e-commerce participant 1% 0.1% 1.10.2024

Section 194F relating to payments on account of repurchase of units by Mutual Fund or Unit Trust of India Proposed to be omitted 1.10.2024

C.6 Credit of TDC and TCS: It is proposed to allow credit of all tax deducted or collected while computing the amount of tax to be deducted on salary income under section 192.

C.7 Claiming credit for TCS of minor in the hands of parent: It is proposed to empower the Board to make rules to provide credit of tax collected to person other than collectee.

C.8 Alignment of interest rate on delayed payment on TCS with TDS: It is proposed to increase the rate of simple interest from 1 per cent to 1.5 per cent on delayed payments of TCS after collection, as in the case of TDS.

C.9 Increase in limit of remuneration to working partners of a firm allowed as deduction: It is proposed to increase the limit of remuneration to working partners to ` 3,00,000 or 90 per cent of the book-profit, whichever is more, on the first ` 6,00,000 of the book-profit or in case of a loss.

Widening and deepening of tax base and anti-avoidance

D.1 Buy-back of shares: It is proposed that the income from buy-back of shares by companies be chargeable in the hands of recipient investor as dividend, instead of the current regime of additional income-tax in the hands of the company. Further, the cost of such shares shall be treated as a capital loss to the investor.

D.2 Securities transaction tax (STT) rates: It is proposed to increase the rates of STT on sale of an option in securities from 0.0625 per cent to 0.1 per cent of the option premium, and on sale of a futures in securities from 0.0125 per cent to 0.02 per cent of the price at which such futures are traded.

D.3 Income from letting out of house property: It is proposed that income from letting out of a house or part of the house by the owner, shall not be charged under the head ‘profits and gains of business or profession’ and will be chargeable to tax under the head ‘income from house property’ only.

D.4 Transfer of capital asset: It is proposed to provide that the transfer of a capital asset, under a gift or will or an irrevocable trust, by an entity other than an individual or a Hindu undivided family (HUF) only, shall be regarded as transfer for the purpose of calculation of capital gain.

D.5 TDS on payment to a partner: It is proposed that payments made by firm to its partner in the nature of salary, remuneration, commission, bonus and interest, etc shall be subject to TDS at the rate of 10 per cent for aggregate amounts more than ` 20,000 in a financial year.

D.6 TCS on notified luxury goods: To enable TCS on luxury goods, it is proposed to levy TCS of 1 per cent on notified goods of value exceeding ten lakh rupees.

D.7 TDS on sale of immovable property: It is proposed to clarify that where there is more than one transferor or transferee in respect of an immovable property, then such consideration for transfer of the immovable property shall be the aggregate of the amounts paid or payable by all the transferees to the transferor or all the transferors for transfer of such immovable property.

D.8 TDS on Floating Rate Savings (Taxable) Bonds (FRSB) 2020: TDS is proposed on interest exceeding ten thousand rupees on Floating Rate Savings (Taxable) Bonds (FRSB) 2020 or any other notified security of the Central or State Governments.

D.9 Inadmissibility of non-business expenditure by life insurance companies: It is proposed to provide that any expenditure which is not admissible under the provisions of section 37 in computing the profits and gains of a business shall be included to the profits and gains of the life insurance business.

D.10 Inclusion of taxes withheld outside India for purposes of calculating total income: It is proposed to provide that income tax paid outside India by way of deduction is deemed to be income received for the purpose of computing the income of the assessee.

D.11 Excluding income mentioned in section 194J from applicability of section 194C: It is proposed to explicitly state that any sum referred to in sub-section (1) of section 194J (fees for professional or technical services) does not constitute “work” for the purposes of TDS under section 194C (payments to contractors).

D.12 Claim of settlement amounts as business expenditure: It is proposed to disallow expenses incurred as settlement fees for any contravention of law, as may be notified by the Central Government.

D.13 Definition of Fair Market Value (FMV): It is proposed to provide for a method of calculation of fair market value on 31.01.18 under section 55(2) (ac) in the case of sale of unlisted equity shares in an offer for sale in an initial public offer.

Tax Administration

E.1 Introduction of Vivad se Vishwas Scheme, 2024: It is proposed to introduce a new scheme for settlement of pending appeals. It is proposed to be made operational from a specified date. Last date for the scheme is also proposed to be notified.

E.2 Equalisation Levy: It is proposed that Equalisation Levy at the rate of 2 per cent of consideration received for e-commerce supply of goods or services, shall no longer be applicable on or after 1st August, 2024.

E.3 Non-reporting of small foreign assets has penal consequences under the Black Money Act. Such non-reporting of movable assets up to ₹ 20 lakh is proposed to be de-penalised.

E.4 It is proposed to decriminalize late payment of tax deducted at source (TDS) , if the payment is made before the time prescribed for filing the TDS statement.

E.5 It is proposed to provide that no order for failure to deduct/ collect tax from any person shall be passed after the expiry of six years from the end of the financial year in which payment is made.

E.6 Enabling processing of statements other than those filed by deductors: It is proposed to provide that the Boardmay make a scheme for processing of such statements.

E.7 Lower deduction / collection certificate of tax at source: It is proposed to allow for application for lower deduction / collection certificate of tax for section 194Q (TDS on payment for purchase of goods) and sub-section (1H) of section 206C (TCS on receipt of sale of goods).

E.8 Notification of certain persons or class of persons as exempt from TCS: It is proposed to empower the government to notify persons or class of persons from whom no collection of tax shall be made or collection of tax shall be made at a lower rate in respect of specified transactions.

E.9 Time limit to file correction statement for TDS/TCS statements: It is proposed to provide that no correction statement shall be delivered after the expiry of six years from the end of the financial year in which the TDS/TCS statement are respectively required to be delivered.

E.10 Penalty for failure to furnish statements: It is proposed to provide for penalty on late furnishing of TDS or TCS statement beyond one month instead of the existing period of 12 months.

E.11 It is proposed to prescribe the period within which annual statement of activities of a liaison office is required to be furnished. It is further proposed to provide for penalty on failure of submission of annual statement within the due period.

E.12 It is proposed to enable the Transfer Pricing Officer to deal with specified domestic transactions which have not been referred to him by the Assessing Officer.

E.13 It is proposed to discontinue the quoting of Aadhaar Enrolment ID in place of Aadhaar number.

E.14 It is proposed to provide those applications before the Board for Advance Rulings transferred from Authority of Advance Rulings may be allowed to be withdrawn before 31.10.2024.

E.15 It is proposed to empower Commissioner (Appeals) to set aside ex-parte assessment orders.

E.16 Amendment in Section 271FAA: It is proposed to amend section 271FAA to provide for a penalty on failure to comply with due diligence requirement relating to compliance with Automatic Exchange of Information (AEOI).

E.17 Tax Clearance Certificate: It is proposed to include reference of Black Money Act, 2015 for the purposes of obtaining a tax clearance certificate.

E.18 Returns filed after condonation of delay: It is proposed that in respect of returns filed after condonation of delay, the assessment can be made up to 12 months from the end of the financial year in which such return was furnished.

E.19 Donations to National Sports Development Fund: Any sums paid as donations to the National Sports Fund set up by the Central Government are presently eligible for deduction under section 80G. The name of the fund is proposed to be corrected as National Sports Development Fund.

E.20 Removing reference to National Housing Board: As housing finance companies are now under the purview of the Reserve Bank of India as a category of Non-Banking Financial Companies (NBFCs), it is proposed to remove reference to National Housing Board in section 43D of the Act.

E.21 Adjusting liability under Black Money Act, 2015 against seized assets: It is proposed to insert reference of Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 in the section 132B of the Income-tax Act, 1961 so as to enable recovery of liabilities under the Act out of seized assets.

E.22 Amendments to the Prohibition of Benami Property Transactions Act, 1988: It is proposed to provide immunity from penalty and prosecution to benamidar on full and true disclosure. It is also proposed to rationalize time limits for attachment of property and reference to adjudicating authority.

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UK finance minister Rachel Reeves to hold first budget on Oct. 30

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The Budget Explained

Every February the Minister of Finance presents his budget speech in Parliament for the upcoming fiscal year.

This is not the final budget but a proposal that has to be scrutinised and approved by Parliament.

  What is in the budget and why should I care?

The budget presents an overall synopsis of the state of the country’s economy, amendments to tax, distribution of revenue across spheres of government and distribution og expenditure across national departments. This is where the legislation accompanying the budget speech play a role, namely, the Appropriations Bill and Division of Revenue Bill. The budget serves as a practical way through which government’s plans and policies are tangibly translated into goods and services.

Since there is a limit to the resources, the need for proper budgeting arises to allocate scarce resources to various governmental activities. Every item of expenditure has to be well thought out and worked out for a specific period.

The budget is strongly aligned with constitutional imperatives: two-thirds of spending goes to realising social rights enshrined in the Constitution. It provides the Government with the money it needs to deliver its policies and run vital services in areas such as Health, Education and Defence. The budget is arguably the most important government document. It impacts s the economy at large and the everyday lives of South Africans.

The Budget cycle

Although most of us hear about the year’s Budget when it comes to Parliament, it has taken 14 months of work to prepare. In other words, by the time a Budget is introduced, the Budget for the following year has been in preparation already. The process is this lengthy because a number of time consuming processes must be completed first. Each Budget is part of an ongoing three-year plan called the Medium-Term Expenditure Framework (MTEF). Planned expenditure for the year immediately ahead (year 1 of the MTEF cycle) is fixed while the two years after that (years 2 and 3 of the cycle) are revised in the next budget cycle. Find more information here .

What happens after the speech?

Exercising budgetary power is one of Parliament's basic tasks, along with enacting legislation. Parliament exercises this power by approving the Budget.

After the speech, the debate will move from the chamber to the Committee corridor where - spread out over a couple of months – Committees will hold hearings with the Minister, Parliamentary Budget Office (PBO), Treasury, relevant departments, statutory bodies, economists and civil society before rushing out with a report (Parliament is currently reviewing the time frames and sequencing associated with the different financial instruments and bills, and the parliamentary procedures related to them). The Parliamentary Committees under the spotlight during this process are the Standing Committee on Finance and the Standing Committee on Appropriations along with their counterpart Committees in the NCOP. At the same time, the various money and tax bills which give effect to the changes and appropriations in the budget will be processed. This process hardly ever results in some change to the Budget. Attempts by the opposition to bring in amendments of their own are always repelled.

Parliament's  scrutiny of the  budget  includes  in-year reporting  and end- year reporting  as well. With respect to mid-term reporting, Parliament’s Budgetary Review and Recommendation Reports (BRRRs) are invaluable. These reports are compiled annually (during the midterm budget process) and are based on the work the Committees have done in relation to assessing government performance and audit outcomes and, most importantly, make recommendations and suggestions around the use of financial resources of government departments and entities for the next financial year. Specifically, in preparation for compilation of the BRRRs, Committees examine the medium term ENEs of departments along with strategic plans and audit outcomes.

The Minister of Finance also receives the BRRRs from Parliament and considers how these impact on the budget and MTEF in preparation for the Medium Term Budget Policy Statement.

The BRRR is tangible evidence of Parliament assessing the performance of every government department in terms of service delivery against what the department was allocated and appropriated during the budget process i.e. the Report determines if there was value for money. This is a key channel through which Parliament fulfils its all-important oversight function and holds government accountable for the way in which taxpayers money is spent. Making recommendations for future budgetary processes through the BRRR is also a critical way in which Parliament influences the process. Although the lengthy BRRR process is of paramount importance on the parliamentary calendar, oversight by Committees over departments in this way is meant to be ongoing throughout the year. It is suggested that rigorous in-year oversight by Parliament could lessen poor performance by departments at year-end.