23 July 2024: PIB Summary for UPSC

23 July 2024 PIB
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TABLE OF CONTENTS

1. Income Tax Day
2. Electric Mobility Promotion Scheme (EMPS), 2024
3. Union Budget 2024-25

1. Income Tax Day

Syllabus: GS-3, Economy

Prelims: Income Tax Day

Mains: Income Tax in India

Context: 

Income Tax Day is observed on 24 July every year.

Details:

• Income Tax Day, celebrated on July 24th, marks the introduction of income tax in India by Sir James Wilson in 1860. 
• This led to a comprehensive Income-tax Act of 1922, which formalized the tax system and its administration. 
• Key developments include the Central Board of Revenue Act in 1924, the recruitment of Group A officers in 1946, and the establishment of the I.R.S. (Direct Taxes) Staff College in 1957. 
• Technological advancements, such as computerization in 1981 and the Centralized Processing Centre in 2009, have modernized tax processing.
• Income Tax Day honors these advancements and the ongoing efforts to create an efficient tax system.

Also read: Taxation System in India.

 

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2. Electric Mobility Promotion Scheme (EMPS), 2024

Syllabus: GS-2, Schemes

Prelims: Electric Mobility Promotion Scheme (EMPS), 2024

Mains: Schemes and initiatives for the promotion of electric mobility in India

Context:

The Ministry of Heavy Industries has launched the Electric Mobility Promotion Scheme (EMPS), 2024 to provide further impetus to the green mobility and development of India’s electric vehicle (EV) manufacturing ecosystem.

Details:

• The scheme duration is 4 months i.e. April 01, 2024, till July 31, 2024, with an outlay of Rs. 500 crore.
• EMPS 2024 has limited funds, a restricted number of vehicles, and is a term-limited Scheme. 
• Subsidies for demand incentives are available for e-2W and e-3W sold and registered until funds are depleted, the maximum number of vehicles per category is reached (as detailed above), or July 31, 2024, whichever occurs first. 
• Eligible EVs must be manufactured and registered within the validity period of the EMPS 2024 certificate.
• The total payout under the demand incentive is capped at Rs. 493.55 crore, as outlined above. 
• If funds for the Scheme or its sub-components are exhausted before July 31, 2024, the Scheme or relevant sub-components will close, and no further claims will be accepted. Incentives will be granted on a first-come, first-served basis.

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3. Union Budget 2024-25

Syllabus: GS-3, Economy

Prelims/Mains: Union Budget 2024-25 

Context:

Summary and highlights of the Union Budget 2024-25.

Summary of the Union Budget:

• Budget theme: Focus on employment, skilling, MSMEs, and the middle class. 
• Budget priorities:
  • 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
• Priority 1: Productivity and Resilience in Agriculture
  • The Finance Minister announced a comprehensive review of agriculture research to enhance productivity. 
  • The government will release 109 high-yielding, climate-resilient crop varieties and initiate 1 crore farmers into natural farming within two years, supported by certification and branding. 
  • Additionally, 10,000 bio-input resource centers will be established. 
  • Efforts to achieve self-sufficiency in pulses and oilseeds will be strengthened.
  • The government will implement Digital Public Infrastructure in agriculture in collaboration with states over the next three years. 
  • This year, ₹1.52 lakh crore has been allocated for the agriculture and allied sectors.
• Priority 2: Employment & Skilling
  • The Finance Minister announced three employment-linked incentive schemes based on EPFO enrollment, targeting first-time employees and offering support to both employees and employers. 
  • To boost women’s workforce participation, the government will set up working women hostels and creches in collaboration with industry. 
  • A new skilling program, the fourth scheme under the Prime Minister’s package, will skill 20 lakh youth over five years and upgrade 1,000 Industrial Training Institutes. 
  • The Model Skill Loan Scheme will be revised to provide loans up to ₹7.5 lakh, benefiting 25,000 students annually. 
  • Additionally, financial support for loans up to ₹10 lakh for higher education in domestic institutions will be offered, with e-vouchers providing annual interest subvention to 1 lakh students each year.
• Priority 3: Inclusive Human Resource Development and Social Justice
  • The Finance Minister emphasized the “Saturation approach” to boost schemes supporting economic activities for craftsmen, artisans, self-help groups, scheduled castes, scheduled tribes, women entrepreneurs, and street vendors, including PM Vishwakarma, PM SVANidhi, National Livelihood Missions, and Stand-Up India.
  • Purvodaya Plan:
    • A comprehensive development plan, Purvodaya, will be formulated for the eastern region (Bihar, Jharkhand, West Bengal, Odisha, and Andhra Pradesh) focusing on human resource development, infrastructure, and economic opportunities to drive the region’s growth.
  • Pradhan Mantri Janjatiya Unnat Gram Abhiyan:
    • A new initiative will be launched to improve the socio-economic conditions of tribal communities by providing saturation coverage for tribal families in 63,000 villages across tribal-majority and aspirational districts, benefiting 5 crore tribal people.
  • More than 100 branches of India Post Payment Bank will be established in the Northeast region to expand banking services.
  • She also announced an allocation of ₹2.66 lakh crore for rural development, including rural infrastructure, this year.
• Priority 4: Manufacturing & Services
  • Support for MSMEs: 
    • The budget focuses on MSMEs and labor-intensive manufacturing. 
    • A self-financing guarantee fund will provide up to ₹100 crore in guarantee cover per applicant. 
    • Public sector banks will develop internal credit assessment capabilities for MSMEs and a new mechanism will ensure the continuation of bank credit during stress periods.
  • Mudra Loans: 
    • The limit for Mudra loans will be increased from ₹10 lakh to ₹20 lakh for entrepreneurs who have successfully repaid previous loans under the ‘Tarun’ category.
  • MSME Units for Food Irradiation, Quality & Safety Testing: 
    • Financial support will be provided for 50 multi-product food irradiation units and 100 food quality and safety testing labs with NABL accreditation. 
    • E-Commerce Export Hubs will be established in public-private partnership (PPP) mode to help MSMEs and traditional artisans sell their products internationally.
  • Internships in Top Companies: 
    • A new scheme will be launched to provide internship opportunities in 500 top companies to 1 crore youth over five years.
• Priority 5: Urban Development        
  • Urban Housing: 
    • Under PM Awas Yojana Urban 2.0, housing needs for 1 crore urban poor and middle-class families will be addressed with an investment of ₹10 lakh crore, including ₹2.2 lakh crore in central assistance over the next five years.
  • Water Supply and Sanitation: 
    • The government, in partnership with State Governments and Multilateral Development Banks, will promote water supply, sewage treatment, and solid waste management projects for 100 large cities through bankable projects.
  • PM SVANidhi: 
    • Building on the success of the PM SVANidhi Scheme, the government plans to develop 100 weekly ‘haats’ or street food hubs in select cities each year for the next five years.
• Priority 6: Energy Security
  • PM Surya Ghar Muft Bijli Yojana: 
    • The Finance Minister announced the launch of PM Surya Ghar Muft Bijli Yojana, which aims to install rooftop solar plants to provide 1 crore households with up to 300 units of free electricity each month. 
    • The scheme has received significant interest, with over 1.28 crore registrations and 14 lakh applications.
  • Nuclear Energy: 
    • Nuclear energy is anticipated to play a crucial role in India’s future energy mix for Viksit Bharat.
• Priority 7: Infrastructure
  • The Finance Minister highlighted that the Central Government’s significant investment in infrastructure has had a substantial positive impact on the economy. 
  • The government plans to continue strong fiscal support for infrastructure over the next five years, balancing this with other priorities and fiscal consolidation. 
  • This year, ₹11,11,111 crore has been allocated for capital expenditure, representing 3.4% of GDP.
  • Pradhan Mantri Gram Sadak Yojana (PMGSY): 
    • Phase IV of PMGSY will be launched to provide all-weather connectivity to 25,000 rural habitations that have recently become eligible due to population growth.
  • Irrigation and Flood Mitigation: 
    • The government will support irrigation and flood mitigation projects in Bihar, including the Kosi-Mechi intra-state link and 20 other schemes, with an estimated cost of ₹11,500 crore. Assistance will also be provided to Assam, Himachal Pradesh, Uttarakhand, and Sikkim for flood management, landslides, and related projects.
• Priority 8: Innovation, Research & Development
  • Research and Innovation: 
    • The government will establish the Anusandhan National Research Fund to support basic research and prototype development, and create a mechanism to promote private sector-driven research and innovation, with a ₹1 lakh crore financing pool.
  • Space Economy: 
    • To expand the space economy fivefold over the next decade, a venture capital fund of ₹1,000 crore will be set up.
• Priority 9: Next Generation Reforms
  • Economic Policy Framework: 
    • The government will develop an Economic Policy Framework to define its approach to economic development and outline the next generation of reforms aimed at creating employment opportunities and sustaining high growth.
  • Labour-Related Reforms: 
    • The government will enhance services for labor, including employment and skilling, by integrating the e-shram portal with other platforms for a one-stop solution. 
    • The Shram Suvidha and Samadhan portals will be revamped to improve compliance for industry and trade.
• The government will create a taxonomy for climate finance to improve access to capital for climate adaptation and mitigation.
• Foreign Direct Investment and Overseas Investment: The rules for Foreign Direct Investment and Overseas Investments will be simplified to facilitate foreign investments, prioritize key areas, and encourage the use of Indian Rupees for overseas investments.
• NPS Vatsalya: A new plan called NPS-Vatsalya will allow parents and guardians to contribute on behalf of minors. Upon reaching adulthood, the plan can be seamlessly converted into a regular NPS account.
• New Pension Scheme (NPS): The Committee reviewing the NPS is making significant progress and will develop a solution that addresses key issues while ensuring fiscal prudence to protect citizens.
• Budget Estimates 2024-25:
  • For the year 2024-25, total receipts (excluding borrowings) are estimated at ₹32.07 lakh crore, while total expenditure is projected at ₹48.21 lakh crore. 
  • Net tax receipts are expected to be ₹25.83 lakh crore, with a fiscal deficit of 4.9% of GDP. 
  • Gross and net market borrowings are estimated at ₹14.01 lakh crore and ₹11.63 lakh crore, respectively. 
  • The Finance Minister highlighted that the fiscal consolidation strategy from 2021 has been effective, and the government aims to reduce the deficit to below 4.5% next year.
• Income Tax Details

• Investment and Tax Reforms:
  • To boost investment and employment, the Budget supports entrepreneurship and the start-up ecosystem by abolishing angel tax for all investors. It proposes a simplified tax regime for foreign shipping companies operating domestic cruises and safe harbor rates for foreign mining companies selling raw diamonds. Corporate tax rates for foreign companies are reduced from 40% to 35% to attract foreign capital.
• Tax Simplifications:
  • The direct tax regime for charities is simplified, merging two tax exemption regimes into one.
  • TDS rates are adjusted: 5% on many payments reduced to 2%, 20% on mutual fund repurchases withdrawn, and TDS on e-commerce operators cut from 1% to 0.1%.
  • Credit for TCS will be allowed on TDS deducted from salaries, and the delay in TDS payment is decriminalized up to the due date of the TDS statement.
• Capital Gains:
  • Short-term capital gains now attract a 20% rate, while long-term gains on all assets will be taxed at 12.5%.
  • The annual exemption limit for capital gains is increased to ₹1.25 lakh, benefiting lower and middle-income classes.
  • Financial assets held for over a year and unlisted assets held for over two years will be considered long-term.
• GST and Customs Duties:
  • GST is recognized for reducing tax incidence, compliance burden, and logistics costs. The government aims to simplify and expand the GST structure further.
  • Customs duties are revised to ease trade and reduce disputes. Key changes include:
    • Full exemption for three cancer-treating medicines.
    • Reduced duties on X-ray machines, mobile phones, and rare earth minerals.
    • Exemptions for solar panel manufacturing capital goods.
    • Reduced duties on seafood exports and Indian leather and textiles.
    • Increased duties on PVC flex banners and ammonium nitrate to support domestic industries and environmental protection.
• Vivad se Vishwas Scheme, 2024:
• • To resolve income tax disputes and clear backlogs, the Finance Minister proposed the Vivad se Vishwas Scheme, 2024. 
  • The scheme will address certain income tax disputes pending in appeal. 
  • Additionally, the monetary limits for filing appeals related to direct taxes, excise, and service tax have been increased to ₹60 lakh for High Courts, ₹2 crore for Supreme Courts, and ₹5 crore for tribunals. 
  • To reduce litigation and provide certainty in international taxation, the scope of safe harbour rules will be expanded, and the transfer pricing assessment procedure will be streamlined.

Read previous PIB articles here.

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