Union Budget 2023 Highlights

Finance Minister Nirmala Sitharaman today presented the Union Budget 2023. This was the 5th budget of the Modi 2.0 government and the last detailed budget before the general elections next year.

Nirmala Sitharaman said that the Indian economy is on the right path and heading towards a bright future.

Here are a few key Union Budget 2023 highlights you shouldn’t miss. From income taxation to big capex plans and spending boosts, we have it all covered! Let’s jump right in…

Union Budget 2023 Key Priorities

Nirmala Sitharaman said the Budget 2023 is planned around seven priorities as below:

1. Inclusive development

2. Reaching the last mile

3. Infrastructure and investment

4. Unleashing the potential

5. Green growth

6. Youth power

7. Financial sector

Aim Of Budget 2023

The budget 2023 aimed at a host of factors such as:

• Strengthen macro-economic stability.

• Facilitate ample opportunities for citizens, especially the youth.

• Provide strong impetus to growth & job creation.

• Aim for the empowerment of women in Budget 2023.

• Enable women self-help groups to reach next stage of economic empowerment.

• Help self-help groups with raw material supply, branding, & marketing of products.

Macro Announcements

• India’s gross domestic growth (GDP) growth story is pegged at 7%.

• Fiscal deficit target of 6.4% retained in the Revised Estimate for FY23; the same is reduced to 5.9% for FY24. The government intends to bring fiscal deficit below 4.5% of GDP by 2025-26.

• Capital expenditure increased by 33% to Rs 10 lakh crore. This is 3.3% of GDP.

• The FM said that we have grown to be the 5th largest economy from being the 10th in the last 15 years.

• Effective capital expenditure of centre to be Rs. 13.7 lakh crore.

• Gross market borrowing seen at Rs 15.43 lakh crore in FY24.

• Net market borrowing in FY24 seen at Rs 11.8 lakh crore

Taxation

Direct Tax:

The government announced that the new tax regime will be the default tax regime. Taxpayers, however, will have the choice to choose the old tax regime.

The new Income Tax slabs and rates are as below:

• Rs. 0 to Rs. 3 lakh - NIL

• Rs. 3 to Rs. 6 lakh - 5%

• Rs. 6 to Rs. 9 lakh - 10%

• Rs. 9 to Rs. 12 lakh - 15%

• Rs. 12 to Rs. 15 lakh - 20%

• Above Rs. 15 lakhs - 30%

The Govt. also announced an increase in Income Tax rebate limit from Rs 5 lakh to Rs 7 lakh under new tax regime. A Rs 50,000 standard deduction to taxpayers has been introduced under the new regime.

The finance minister also proposed to reduce the highest surcharge rate from 37% to 25% in the new tax regime. There is no change in the old income tax regime.

The tax exemption on leave encashment on retirement of non-government salaried employees is raised to Rs. 25 lakh from Rs. 3 lakh earier.

Saving Schemes:

• The maximum deposit limit for Senior Citizen Savings Scheme will be increased from Rs 15 lakh to Rs 30 lakh.
• Monthly Income Scheme limit doubled to Rs 9 lakh and Rs 15 lakh for joint accounts
• One-time new saving scheme Mahila Samman Saving Certificate for women to be made available for 2 years up to 2025. The saving scheme is launched with 7.5% interest rate.

Indirect Tax:

• Government proposed 16% tax hike on certain cigarettes.

• New cooperatives, that commence manufacturing till March, 2024, to get lower tax rate of 15%.

• Basic customs duty on crude, glycerine reduced to 2.5%.

• Extend customs duty cut on imports of parts of mobile phones by 1 year.

• Import duty on silver bars hiked to align it with gold, platinum.

• To promote TV manufacturing, customs duty on open cells of TV panels reduced to 2.5%.

• Concessional duty on lithium-ion cells for batteries extended for another year.

Allocations For Specific Ministrie

• Ministry of Defence: Rs. 5.94 lakh crore

• Ministry of Road Transport and Highways: Rs. 2.70 lakh crore

• Ministry of Railways: Rs. 2.41 lakh crore

• Ministry of consumer affairs, food, and public distribution: Rs. 2.06 lakh crore

• Ministry of Home Affairs: Rs. 1.96 lakh crore

Allocation To Major Schemes

• Pradhan Mantri Awas Yojna: Rs 79,590 crore

• Jal Jeevan Mission: Rs 70,000 crore

• Eklavya Model Residential School: Rs 5,943 crore

• Scheme for FAME for EVs: Rs 5,172 crore

• North East Special Infra Development Scheme: Rs 2,491 crore

• Development of Pharma Industry: Rs 1,250 crore

*2023-24 Budget Estimates

Ease Of Doing Business

The FM said that the government is set to bring another dispute resolution scheme Vivad Se Vishwas-2 to settle commercial disputes.

PAN will be used as common identifier for all digital systems of government agencies.

One stop solution for reconciliation and updating identity will be maintained by various agencies to be established using digi locker and Aadhaar as foundational identity.

MSME Boost

The government announced revamped credit guarantee for Micro, Small and Medium Enterprises (MSMEs) to take effect from April 1, 2023 with infusion of Rs 9,000 crore in corpus. The scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the cost of the credit by about 1%.

Agriculture:

The government said that an Agriculture Accelerator Fund will be set up to encourage agri-startups by young entrepreneurs.

The agricultural credit target will be increased to Rs 20 lakh crores with a focus on animal husbandry, dairy and fisheries.

It said that over the next 3 years, one crore farmers will get assistance to adopt natural farming and 10,000 bio input resource centres will be set up.

Clean Energy Focus:

The government announced Rs 35,000 crores priority capital for the energy transition.

It said that a green credit programme will be notified under the Environment Protection Act

Battery storage to get viability gap funding. Government to support setting up of battery energy storage of 4,000 MwH.

The FM said that the National Green Hydrogen mission with an outlay of Rs 19,700 crore will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country assume technology and market leadership.

Digital Services:

The government announced 100 labs for developing applications to use 5G services will be set up in engineering institutions. Labs will cover smart classrooms, precision farming, and healthcare applications.

It also announced the Phase 3 of E-courts projects is to be launched with outlay of Rs 7,000 crore.

Urban Development:

The government will spend Rs. 10,000 crore per year for urban infra development fund. The cities are to be incentivised to improve creditworthiness for municipal bonds and all cities and towns will be enabled for 100% transition of sewers and septic tanks.

Education:

• Eklavaya Model Residential Schools to be set up in the next 3 years.

• The Centre will recruit 38,800 teachers and support staff for 740 schools serving 3.5 lakh tribal students.

• 3 centres of excellence for artificial intelligence to be set up in top educational institutions.

• 157 new nursing colleges will be established in colocation with the existing 157 medical colleges established since 2014.

So, those were some of the key updates from the Indian Union Budget 2023 that were announced by Finance Minister Nirmala Sitharaman today.

Head over to #BudgetKiBoli for more updates and analysis on Union Budget 2023. Click here: All You Need to Know about Union Budget 2023

Sources: Union Budget 2023, Economic Times