Analyzing Union Budget 2024: Focus Areas for Research, Agriculture, and Power Sector Growth

Blog by Prachi Maitra (R&D associate).

The Union Budget 2024-25, presented by Finance Minister Nirmala Sitharaman, has laid out a roadmap for India’s journey towards becoming a developed nation by 2047. With a strong emphasis on research, innovation, and infrastructure development, the budget aims to propel the country’s economic growth to new heights.

Key Highlights of the Union Budget

Boosting Research and Development:

Powering Innovation, Research & Development (R&D) Anusandhan National Research Fund: A dedicated fund of Rs 1 lakh crore to support basic research and prototype development.
Focus on private sector-driven innovation: Encouraging commercialization of research findings.

Revitalizing Agriculture:

Increased budget allocation: A significant hike in the agriculture budget to ₹1.52 trillion from ₹1.45 trillion in the previous year.
Subsidy adjustments: Fertilizer subsidy reduced by 13% to ₹1.64 trillion, food subsidy reduced by 3.3% to ₹2 trillion.
Enhanced support for key schemes: Increased funding for PM-AASHA (₹64.4 billion), PLI for Food Processing (₹14.4 billion), and PM-Kisan (₹600 billion).
New initiatives: Introduction of Blended Capital Support for Startups (₹625 million) and NAMO DRONE DIDI scheme (₹5 billion).
Reduction in allocations: Agriculture Infrastructure and Development Fund (no new allocation), PM-Fasal Bima Yojna (₹146 billion), Crop Husbandry (₹757.76 billion).
Increased allocations for development programs: Rashtriya Krishi Vikas Yojna (₹75.53 billion), Agricultural Financial Institutions (₹207 billion).
Custom duty adjustments: Reduced duty on Shea Nuts, Pre-dust Breaded Powder for Seafood Processing, Artemia and Artemia Cysts.
Strategic agricultural initiatives: Digital Public Infrastructure (DPI) for Agriculture, high-yielding crop varieties, natural farming support, self-reliance in pulses and oilseeds.

Empowering the Power Sector:

Increased budgetary allocations: Higher funding for Ministry of Power (₹205.0 billion), PSDF (₹12.0 billion), Reform-Linked Distribution Scheme (₹125.9 billion), NHPC (₹111.9 billion), Green Energy Corridor (₹10 million).
Energy security and nuclear energy: Collaboration with private sector, increased allocation for nuclear power projects (₹22.3 billion), R&D of Small and Modular Nuclear Reactors, abolishment of custom duties on 25 critical minerals.
Major power projects and infrastructure development: New 2,400 MW Power Plant in Bihar, power system improvement in northeastern states, support for industrial corridors, joint venture between NTPC and BHEL.
Renewable energy and efficiency: Pradhan Mantri Surya Ghar Muft Bijli Yojana, policy for pumped storage projects, transition for hard-to-abate industries, energy audit for micro and small industries, exemptions for solar manufacturing.

Accelerating the Space Sector:

Increased budget allocation: Total allocation of ₹13,042.75 crore, including a new Venture Capital Fund of ₹1,000 crore.
Creation of industrial parks: 12 parks across India to boost space and satellite manufacturing.

Accelerating Growth in the Automotive Sector:

Increased budget allocation: Overall automotive sector allocation increased to ₹64 billion from ₹53 billion.
Electric mobility promotion schemes: EMPS 2024 with the allocation of ₹5 billion, SMEC with allocation of ₹130 million.
Production-Linked Incentive (PLI) scheme: Increased allocation for automobiles and auto components (₹35 billion), ACC battery storage (₹2.5 billion).
Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) Scheme: Allocation reduced to ₹27 billion from ₹48 billion.
Tariff adjustments: New tariff lines for e-bicycles, customs duty exemptions for 25 critical minerals, reduced duty on Ferro-Nickel and Blister Copper.

Strengthening the Pharmaceutical Sector:

Increased budget allocation: Department of Pharmaceuticals allocation increased to ₹40.9 billion from ₹27 billion.
Production-Linked Incentive (PLI) scheme: Increased allocation for KSMs/DIs, APIs, and medical devices.
Development of Pharmaceutical Industry: Allocation increased to ₹13 billion from ₹2.65 billion.
Custom duties and exemptions: Custom duty on laboratory chemicals increased to 150%, exemptions for cancer drugs, polyethylene, stainless steel, titanium alloys, and cobalt-chrome alloys.
Custom Duty on Ammonium Nitrate: Increased from 7.5% to 10%.

The Union Budget 2024-25 presents a comprehensive blueprint for India’s economic transformation. By investing in key sectors and promoting innovation, the government aims to create a robust and self-reliant economy.

What are your thoughts on the Union Budget? Which sectors do you think will benefit the most? Share your opinions in the comments below.

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