: Budget 2023-24
Huge relief for middle-class, no income tax upto Rs. 7 lakh
The Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget 2023-24 in Parliament on 01 February, 2023. While presenting the first Budget of the Amrit Kaal Smt. Nirmala Sitharaman said in the 75th year of India’s Independence, the World has recognized the Indian Economy as a ‘bright star’ as the Economic Growth is estimated at 7 per cent, which is the highest among all major economies, in spite of the massive global slowdown caused by COVID-19 and Russia-Ukraine War. She emphasized that Indian economy is on the right track, and despite a time of challenges, heading towards a bright future.
The economic agenda would focus on three priorities :
1. Facilitating ample opportunities for citizens, especially the youth, to fulfil their aspirations;
2. Providing strong impetus to growth and job creation; and
3. Strengthening macro-economic stability
Smt. Nirmala Sitharaman listed seven priorities of the Union Budget and said that they complement each other and act as the ‘Saptarishi’ guiding us through the Amrit Kaal. They are as follows:
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
Vision for Amrit Kaal – an empowered and inclusive economy
The Union Finance Minister highlighted that “Our vision for the ‘Amrit Kaal’ includes technology-driven and knowledge-based economy with strong public finances and a robust financial sector”. To achieve this, ‘Jan Bhagidari’ through ‘Sabka Saath Sabka Prayas’ is essential, she added.
Smt. Sitharaman further said this Budget hopes to build on the foundation laid in the previous Budget, and the blueprint drawn for India@100, which envisions a prosperous and inclusive India, where the fruits of development reach all regions and citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and Scheduled Tribes.
She said that India’s rising global profile is due to several accomplishments like unique World Class Digital Public Infrastructure namely, Aadhaar, Co-Win and UPI; COVID-19 vaccination drive in unparalleled scale and speed; proactive role in frontier areas such as achieving the climate related goals, mission LiFE, and National Hydrogen Mission.
She said that during the Covid-19 pandemic, Government ensured that no one goes to bed hungry, with a scheme to supply free food grains to over 80 Crore persons for 28 months. The Minister added that continuing with Centre’s commitment to ensure food and nutritional security, Government is implementing, from 1st January 2023, a scheme to supply free food grain to all Antyodaya and priority households for the next one year, under PM Garib Kalyan Anna Yojana (PMGKAY). The entire expenditure of about Rs 2 lakh crore will be borne by the Central Government.
Smt. Sitharaman pointed out that the efficient implementation of many schemes, with universalisation of targeted benefits, has resulted in inclusive development and listed some of the schemes such as 11.7 crore household toilets under Swachh Bharat Mission, 9.6 crore LPG connections under Ujjwala, 220 crore Covid vaccinations of 102 crore persons, 47.8 crore PM Jan Dhan Bank Accounts, Insurance cover for 44.6 crore persons under PM Suraksha Bima and PM Jeevan Jyoti Yojana, and Cash transfer of Rs 2.2 lakh crore to over 11.4 crore farmers under PM Kisan Samman Nidhi.
The highlights of the Budget are as follows :
• Per capita income has more than doubled to Rs. 1.97 lakh in around nine years.
• Indian economy has increased in size from being 10th to 5th largest in the world in the past nine years.
• EPFO membership has more than doubled to 27 crore.
• 7,400 crore digital payments of Rs.126 lakh crore has taken place through UPI in 2022.
• 11.7 crore household toilets constructed under Swachh Bharat Mission.
• 9.6 crore LPG connections provided under Ujjwala.
• 220 crore Covid vaccination of 102 crore persons.
• 47.8 crore PM Jan Dhan bank accounts.
• Insurance cover for 44.6 crore persons under PM Suraksha Bima and PM Jeevan Jyoti Yojana.
• Cash transfer of Rs. 2.2 lakh crore to over 11.4 crore farmers under PM Kisan Samman Nidhi.
• Atmanirbhar Clean Plant Program with an outlay of Rs. 2200 crore to be launched to boost availability of disease-free, quality planting material for high value horticultural crops.
Education and Skilling
• 157 new nursing colleges to be established in co-location with the existing 157 medical colleges established since 2014.
• Centre to recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students over the next three years.
• District Institutes of Education and Training to be developed as vibrant institutes of excellence for Teachers’ Training.
• A National Digital Library for Children and Adolescents to be set-up for facilitating availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility.
• Pradhan Mantri Kaushal Vikas Yojana 4.0, to be launched to skill lakhs of youth within the next three years covering new age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.
• 30 Skill India International Centres to be set up across different States to skill youth for international opportunities.
RAILWAYS & URBAN INFRA
• Capital outlay of Rs. 2.40 lakh crore has been provided for the Railways, which is
the highest ever outlay and about nine times the outlay made in 2013-14.
• Urban Infrastructure Development Fund (UIDF) will be established through use of priority Sector Lending shortfall, which will be managed by the national Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.
• Agriculture Accelerator Fund to be set-up to encourage agri-startups by young entrepreneurs in rural areas.
• To make India a global hub for ‘Shree Anna’, the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
• Rs. 20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries
• A new sub-scheme of PM Matsya Sampada Yojana with targeted investment of Rs. 6,000 crore to be launched to further enable activities of fishermen, fish vendors, and micro & small enterprises, improve value chain efficiencies, and expand the market.
• Digital public infrastructure for agriculture to be built as an open source, open standard and inter operable public good to enable inclusive farmer centric solutions and support for growth of agri-tech industry and start-ups.
• Computerisation of 63,000 Primary Agricultural Credit Societies (PACS) with an investment of Rs. 2,516 crore initiated.
• Massive decentralised storage capacity to be set up to help farmers store their produce and realize remunerative prices through sale at appropriate times.
Outlay for PM Awas Yojana is being enhanced by 66% to over Rs. 79,000 crore.
500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme to be established for promoting circular economy at total investment of Rs 10,000 crore. 5 per cent compressed biogas mandate to be introduced for all organizations marketing natural and bio gas.
Centre to facilitate one crore farmers to adopt natural farming over the next three years. For this, 10,000 Bio-Input Resource Centres to be set-up, creating a national-level distributed micro-fertilizer and pesticide manufacturing network.
• Sickle Cell Anaemia elimination mission to be launched.
• Joint public and Private Medical research to be encouraged via select ICMR labs for encouraging collaborative research and innovation.
• New Programme to promote research in Pharmaceuticals to be launched.
• Rs. 10 lakh crore capital investments, a steep increase of 33% for third year in a row, to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds.
• Aspirational Blocks Programme covering 500 blocks launched for saturation of essential government services across multiple domains such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure.
• Rs. 15,000 crore for implementation of Pradhan Mantri PVTG Development Mission over the next three years under the Development Action Plan for the Scheduled Tribes.
• Investment of Rs. 75,000 crore, including Rs. 15,000 crore from private sources, for one hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors.
• New Infrastructure Finance Secretariat established to enhance opportunities for private investment in infrastructure.
• Rs. 5,300 crore to be given as central assistance to Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for drinking water.
• ‘Effective Capital Expenditure’ of Centre to be Rs. 13.7 lakh crore.
• Continuation of 50-year interest free loan to state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions.
• Encouragement to states and cities to undertake urban planning reforms and actions to transform our cities into ‘sustainable cities of tomorrow’.
• ‘Bharat Shared Repository of Inscriptions’ to be set up in a digital epigraphy museum, with digitization of one lakh ancient inscriptions in the first stage.
Here’s how Indian Industrial leaders rated the Budget
“FICCI congratulates the Hon’ble Finance Minister for delivering a balanced and progressive Union Budget which gives primacy to inclusive growth. The announcements made today capture the pulse of the economy while retaining credibility both in terms of projections as well as committing to the fiscal consolidation glide path…”
“CII welcomes the budget for new India which addresses the growth imperatives without compromising on the fiscal prudence path. Through a slew of measures in forward-looking areas encompassing green growth, digital infra, urban rejuvenation among others, we are happy to note that the budget lays the roadmap for preparing India for the Amrit Kaal…”
“The Union Budget for 2023-24 presented by Finance Minister Smt. Nirmala Sitharaman in Parliament is a roadmap of nation-building with a continued focus on massive public expenditure on infrastructure, sustainable economic growth, encouraging consumption demand while staying on course of strict fiscal prudence…”
(Chairman, Mahindra Group)
“…I was gratified to see the higher capex. That’s all about investing for higher growth. This budget has lived up to India’s conservative tradition of financial discipline. In line with our conservatism, it was good to see us back on a trajectory towards a lower fiscal deficit.”
(President of Indian Steel Association)
A progressive ‘Saptarshi’ Budget – the first in Amrit Kaal – has hit the right notes to fuel growth across industries and propel India to become a global manufacturing hub. A significant 33% increase in capital expenditure will translate into robust domestic steel demand, thus spurring private investments and job creations.
(MD & CEO, Tata Consultancy Services)
The Union Budget 2023 by the Hon’ble Finance Minister further builds on the government’s focus on enhancing India’s digital infrastructure and enabling growth pathways for the Indian economy. Overall, it’s a forward-looking budget that will fortify the digital spine of the country.
• iGOT Karmayogi, an integrated online training platform, launched to provide continuous learning opportunities for lakhs of government employees to upgrade their skills and facilitate people-centric approach.
• Three centres of excellence for Artificial Intelligence to be set-up in top educational institutions to realise the vision of “Make AI in India and Make AI work for India”.
• National Data Governance Policy to be brought out to unleash innovation and research by start-ups and academia.
EASE OF DOING BUSINESS
• Transition from manhole to machine-hole mode by enabling all cities and towns to undertake 100 percent mechanical desludging of septic tanks and sewers.
• More than 39,000 compliances reduced and more than 3,400 legal provisions decriminalized to enhance Ease of Doing Business.
• Jan Vishwas Bill to amend 42 Central Acts have been introduced to further trust-based governance.
• One stop solution for reconciliation and updation of identity and address of individuals to be established using DigiLocker service and Aadhaar as foundational identity.
• PAN will be used as the common identifier for all digital systems of specified government agencies to bring in Ease of Doing Business.
• 95 per cent of the forfeited amount relating to bid or performance security, will be returned to MSME’s by government and government undertakings in cases the MSME’s failed to execute contracts during Covid period.
• Result Based Financing to better allocate scarce resources for competing development needs.
• R & D grant for Lab Grown Diamonds (LGD) sector to encourage indigenous production of LGD seeds and machines and to reduce import dependency.
• Revamped credit guarantee scheme for MSMEs to take effect from 1st April 2023 through infusion of Rs 9,000 crore in the corpus. This scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the cost of the credit by about 1 per cent.
• Central Processing Centre to be setup for faster response to companies through centralized handling of various forms filed with field offices under the Companies Act.
• Entity DigiLocker to be setup for use by MSMEs, large business and charitable trusts to store and share documents online securely.
• 100 labs to be setup for 5G services based application development to realize a new range of opportunities, business models, and employment potential.
• Phase-3 of the E-Courts project to be launched with an outlay of Rs. 7,000 crore for efficient administration of justice.
• Annual production of 5 MMT under Green Hydrogen Mission to be targeted by 2030 to facilitate transition of the economy to low carbon intensity and to reduce dependence on fossil fuel imports.
• Rs. 35000 crore outlay for energy security, energy transition and net zero objectives.
• Battery energy storage systems to be promoted to steer the economy on the sustainable development path.
• 20,700 crore outlay provided for renewable energy grid integration and evacuation from Ladakh.
• “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” (PM-PRANAM) to be launched to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.
• ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’, MISHTI, to be taken up for mangrove plantation along the coastline and on salt pan lands, through convergence between MGNREGS, CAMPA Fund and other sources.
• Green Credit Programme to be notified under the Environment (Protection) Act to incentivize and mobilize additional resources for environmentally sustainable and responsive actions.
• Amrit Dharohar scheme to be implemented over the next three years to encourage optimal use of wetlands, enhance bio-diversity, carbon stock, eco-tourism opportunities and income generation for local communities.
A unified Skill India Digital platform to be launched for enabling demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes.
Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme to be rolled out to provide stipend support to 47 lakh youth in three years.
At least 50 tourist destinations to be selected through challenge mode; to be developed as a complete package for domestic and foreign tourists.
Sector specific skilling and entrepreneurship development to be dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative.
• Tourism infrastructure and amenities to be facilitated in border villages through the Vibrant Villages Programme.
• States to be encouraged to set up a Unity Mall for promotion and sale of their own and also all others states’ ODOPs (One District, One Product), GI products and handicrafts.
BANKING & FINANCE
• National Financial Information Registry to be set up to serve as the central
repository of financial and ancillary information for facilitating efficient flow of credit, promoting financial inclusion, and fostering financial stability. A new legislative framework to be designed in consultation with RBI to govern this credit public infrastructure.
• Financial sector regulators to carry out a comprehensive review of existing regulations in consultation with public and regulated entities. Time limits to decide the applications under various regulations would also be laid down.
• To enhance business activities in GIFT IFSC, the following measures to be taken.
• Delegating powers under the SEZ Act to IFSCA to avoid dual regulation.
• Setting up a single window IT system for registration and approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and IRDAI.
• Permitting acquisition financing by IFSC Banking Units of foreign bank.
• Establishing a subsidiary of EXIM Bank for trade re-financing.
• Amending IFSCA Act for statutory provisions for arbitration, ancillary services, and avoiding dual regulation under SEZ Act
MAHILA SAMMAN SAVINGS CERTIFICATE
• Integrated IT portal to be established to enable investors to easily reclaim the unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority.
• To commemorate Azadi Ka Amrit Mahotsav, a one-time new small savings scheme, Mahila Samman Savings Certificate to be launched. It will offer deposit facility upto Rs 2 lakh in the name of women or girls for tenure of 2 years (up to March 2025) at fixed interest rate of 7.5 per cent with partial withdrawal option.
• The maximum deposit limit for Monthly Income Account Scheme to be enhanced from Rs 4.5 lakh to Rs 9 lakh for single account and from Rs 9 lakh to Rs 15 lakh for joint account.
SENIOR CITIZEN SAVINGS & PENSIONS
• The maximum deposit limit for Senior Citizen Savings Scheme to be enhanced from Rs 15 lakh to Rs 30 lakh.
• The expenditure to witness rise to about Rs.2.45 lakh crore in RE 2022-23 from Rs 2.07 lakh crore in BE 2022-23. The main reason behind this increase in RE 2022-23 is clearing the dues of OROP with respect to Defence Personnel.
• Pension payments are expected to be at Rs.2.34 lakh crore in BE 2023-24, representing 0.8 per cent of the estimated GDP.
• This includes a provision of about Rs.1.38 lakh crore for defence pensions.
FIFTY-YEAR INTEREST FREE LOAN TO STATES
The entire fifty-year interest free loan to states to be spent on capital expenditure within 2023-24. Part of the loan is conditional on States increasing actual Capital expenditure and parts of outlay will be linked to States undertaking specific loans.
PERSONAL INCOME TAX
There are five major announcements relating to the personal income tax. The rebate limit in the new tax regime has been increased to Rs. 7 lakh, meaning that persons in the new tax regime with income upto Rs. 7 lakh will not have to pay any tax. The tax structure in the new personal tax regime has been changed by reducing number of slabs to five and increasing the tax exemption limit to Rs. 3 lakh. This will provide major relief to all tax payers in the new regime.