Union Budget 2024-25: New Duty Cuts and Hikes- What's Cheaper and What's Costlier?

Union Minister Nirmala Sitharaman presented the Union Budget 2024-25 in the Lok Sabha on Tuesday. This budget has been crafted with a focus on the middle class, aiming to address their expectations and needs. The Minister proposed several changes, including a reduction in basic customs duty on mobile phones and chargers to 15%. This move is expected to benefit consumers significantly.

The Indian mobile phone industry has witnessed substantial growth over the past six years. Domestic has tripled, and exports have surged nearly 100 times. To support this growth further, the government has decided to reduce customs duty on mobile phones, mobile PCBA, and mobile chargers to 15%. Sitharaman stated, "In the interest of consumers, I now propose to reduce the BCD (basic customs duty) on mobile phones, mobile PCBA and mobile chargers to 15 percent."

Impact on Household Expenses:

The budget also brings relief in other areas. Basic customs duty has been exempted on three cancer drugs, making them more affordable for patients. Additionally, customs duty on gold and silver has been reduced to 6%, while platinum sees a reduction to 6.4%. These changes are expected to lower costs for consumers purchasing these items.

Solar panels and related equipment will also become cheaper as the government expands the list of exempted capital goods used in their manufacture. X-ray machines, X-ray tubes, plate panels, footwear, leather goods, and 25 critical minerals have been fully exempted from customs duty as well. Furthermore, customs duty on shrimp and fish feed has been reduced to 5%, benefiting the aquaculture industry.

Items Becoming More Expensive:

On the other hand, certain items will see an increase in prices due to higher customs duties. The government has proposed raising customs duty on specific telecom equipment from 10% to 15%. This increase aims to support domestic manufacturing in the telecom sector.
Plastic products will also become more expensive as their customs duty is set to rise. This measure is intended to mitigate the environmental impact of plastic waste. Additionally, ammonium nitrate's customs duty will increase from 7.5% to 10%, affecting industries that rely on this chemical.

Other items facing higher costs include imported garden umbrellas and laboratory chemicals. These changes reflect the government's effort to balance economic growth with environmental sustainability and domestic industry support.

The most notable feature of this budget is the new tax system's provision that exempts individuals earning up to Rs 3 lakh annually from income tax. This change is expected to provide significant relief for low-income earners.

The Union Budget 2024-25 presents a mixed bag of changes impacting various sectors differently. While some items become cheaper due to reduced duties, others will see price hikes aimed at supporting local industries and protecting the environment.