Budget Highlights
FM Nirmala Sitharaman presented her First budget in ‘Amritkaal’ on 1 Feb 2023. She begins addressing the union budget 2023 by saying the Indian economy is on the right track and heading towards a bright future.
Finance Minister Nirmala Sitharaman said, “We are taking on a people-centric agenda to take on global challenges.”
Union Budget 2023-24 focuses on 3 things-
- Facilitating ample opportunity for citizens, especially the youth,
- Providing a strong impetus to growth & job creation
- Stabilizing the macroeconomy.
She also highlighted the Seven priorities of the union budget 2023
- Inclusive development
- Reaching the last mile
- Infra & investment
- Unleashing the potential
- Green growth
- Youth power
- Financial Sector
She commenced with an achievement during the COVID pandemic addressing the program implemented by the Indian government to provide free food grains to over 80 crore people for 28 months to make sure that no one goes to bed hungry.
It is a proud moment for India for being acknowledged as a shining star globally, with an estimated growth rate of 7.0% for the current year, the highest among major economies, despite the significant global slowdown due to the pandemic and war.
The formalization of the Indian economy is evidenced by the doubling of EPFO membership, as per the FM.
She further announced the launch on January 1, 2023, a program to provide free food grain to all Antyodaya and priority households for one year under the PM Garib Kalyan Ann Yojana scheme, to uphold our dedication to food security. She also focussed on the Atmanirbhar Clean Plant Program which is aimed at increasing the supply of disease-free, high-quality planting material for valuable horticultural crops, with a budget of Rs 2,200 crore.
She also added, in the previous financial year the government had invested Rs 2,516 crore to computerize 63,000 primary agricultural credit societies.
The government plans to improvise 740 Eklavaya Model Residential Schools serving 3.5 lakh tribal students by hiring 38,800 teachers and support staff in the next three years.
The allocation for PM Awaas Yojana has been increased by 66% to a sum of over 79,000 crores in Rupees.
An increase of 33% in capital investment outlays, totaling 10 lakh crores in Rupees, equating to 3.3% of the Gross Domestic Product (GDP).
A 50-year interest-free loan to state governments has been extended for an additional year.
Infrastructure
Fifty more airports, heliports, water aerodromes, and landing zones are planned to be revitalized. One hundred key infrastructure projects for steel, ports, fertilizers, coal and food grain industries will receive a total investment of INR 75,000 crore, including INR 15,000 crore from private investors.
The National Hydrogen Mission will receive an allocation of Rs 19,700 crore from the FM, with the goal of achieving a hydrogen production capacity of 5 million metric tonnes by 2030.
FM Nirmala Sitharaman announced the launch of Pradhan Mantri Kaushal Vikas Yojana 4.0 to equip youth with in-demand skills for international opportunities. Further, she gave the good news of establishing 30 Skill India International Centers across various states is future.
50 tourist destinations will be selected through a challenging process and developed as a comprehensive package for both domestic and international tourism.
MSME
The PM Vishwa Karma Kaushal Samman, a package of support for traditional artisans and craftspeople, has been created to enhance the quality, scale, and reach of their products through integration with the MSME value chain.
A revised credit guarantee program, backed by an infusion of INR 9,000 crore into the fund, will become effective on April 1, 2023. This will provide MSMEs with an additional INR 2 lakh crore in collateral-free credit.
Agriculture
As a support to the agri-tech startups by young entrepreneurs in rural areas, the government will allot special funds.
In the next 3 years, assistance will be provided to one crore farmers to adopt natural farming and 10,000 bio-input resource centers will be established.
A National Data Governance Policy will be introduced to promote innovation and research by startups and academia. This will allow for access to anonymized data
In the next 3 years, assistance will be provided to one crore farmers to adopt natural farming and 10,000 bio-input resource centers will be established.
The government plans to establish a National Financial Information Registry as a central repository of financial and related information.
The updated fiscal deficit stands at 6.4% of GDP
100 labs for the creation of 5G-powered apps will be established in engineering institutions. These labs will explore the full range of opportunities in areas such as smart classrooms, precision farming, intelligent transport systems, and healthcare, with the goal of realizing new business models and employment potential.
The Finance Minister reiterates their aim to reduce the fiscal deficit to below 4.5% of GDP by 2025-26.
The government proposed exemptions from customs duty on the import of capital goods and machinery necessary for lithium-ion batteries. Additionally, the government proposed an increase in customs duty on silver to align it with the duty on gold and platinum.
A 16% increase in the NCCD was announced for certain types of cigarettes.
Category: Five major announcements for Income tax
The average processing time for income tax returns has been reduced from 93 days to 16 days. The government intends to implement next-generation common IT return forms and strengthen the mechanism for addressing grievances.
The income rebate limit has been increased to INR 7 lakh from INR 5 lakh under the new tax system
Impact of Union Budget 2023 on Prices of Goods and Services
The Union Budget 2023 has proposed several changes in taxation and spending. In terms of costlier items, the budget has proposed an increase in customs duties on various goods including luxury cars, tobacco products, and electronic items. Additionally, the budget has also proposed a hike in the surcharge on individuals with high incomes.
On the other hand, the budget has proposed several measures to make sure items are cheaper, including a reduction in the basic customs duty on several raw materials and capital goods, which is expected to reduce the cost of production and make goods more affordable for consumers.
Additionally, the budget has also proposed an increase in the outlay for the agriculture sector, which is expected to boost the sector and reduce the cost of agricultural produce.
Revised tax brackets under the new tax system,
- Income from INR 0 to INR 3 lakh is tax-free.
- Under the new regime, income from INR 3 lakh to INR 5 lakh will be taxed at a rate of 5%.
- Under the new regime, income above INR 6 lakh and up to INR 9 lakh will be taxed at 10%.
- Under the new regime, income above INR 12 lakh and up to INR 15 lakh will be taxed at a rate of 20%.
- Under the new regime, income above INR 15 lakh will be taxed at 30%.
The new tax system will become the default tax regime, but citizens can still choose to use the old tax regime if they opt out
