The upcoming Union Budget for 2024-25 is likely to introduce measures aimed at helping middle-class and low-income groups affected by high food prices and average incomes. Some expected changes can be in reducing personal income taxes, increasing opportunities for Agniveers to join the regular armed forces, and boosting support for urban housing to stimulate the construction sector.
In the recent elections, where the BJP didn’t secure a clear majority, the government sees the Budget 2024 as crucial for gaining public support, especially with key state elections approaching in Maharashtra and Haryana later this year.
Government officials are discussing plans to make the new income tax system more appealing by increasing standard deductions, which could mean less tax for individuals earning up to Rs 8 lakh annually. The government may also expand the cities considered for higher House Rent Allowance (HRA) to include places like Bangalore and Hyderabad due to higher living costs there.
Additionally, If we see National Pension System, there’s a proposal to provide guaranteed pensions to government employees under the National Pension System (NPS), aiming to enhance retirement benefits. The government is considering offering a guaranteed pension option under the National Pension System (NPS) for central staff, potentially amounting to 40% or more of their last basic pay. A panel led by finance secretary T V Somanathan was set up in March 2023 to explore enhancing pension benefits under NPS for government employees while avoiding the issue of the non-contributory old pension system.
To address concerns among young aspirants seeking careers in the armed forces the government also plans to revise the Agnipath scheme. This includes significantly increasing absorption into regular service with full pay and pension after four years of contractual service. Currently only a quarter of Agniveers are absorbed into regular service.
These measures are part of efforts to address economic challenges and garner voter support ahead of upcoming elections.