Indian Finance Minister Nirmala Sitharaman presented a $550 billion progressive and inclusive Union Budget for 2023-24 today. According to her, Indian economics are heading in the right direction despite challenging times globally. Economic growth in the current year is estimated at 7%, according to Ms Sitharaman. According to the Finance Minister, the vision for Amrit Kaal includes a knowledge-based economy, strong public finances, and a robust financial sector. The budget hopes to build on the foundation laid in last year’s budget and the blueprint for India@100 laid out in the previous budget.
According to the Finance Minister, the capital investment outlay will increase by 33 percent to 10 lakh crore rupees, or 3.3% of GDP. To spur investment in infrastructure, Ms Sitharaman said, the government has decided to continue the 50-year interest-free loan to state governments for one more year to incentivize them to implement complementary policies, with a significantly increased outlay of 1.3 lakh crore rupees.
To encourage agri-startups by young entrepreneurs in rural areas, Ms Sitharaman said an Agriculture Accelerator Fund would be set up. The fund will provide farmers with innovative and affordable solutions to their challenges. Moreover, the Finance Minister announced that the agriculture credit target would be increased to 20 lakh crore rupees, with a focus on dairy, fisheries, and animal husbandry.
Ms Sitharaman said a plan would be implemented to set up massive decentralized storage capacity. This will enable farmers to store their produce and sell it at the right time to realize remunerative prices. It has been declared that 2023 is the International Year of Millets. India will become a global hub for ‘Shree Anna‘ by supporting the Indian Institute of Millet Research in Hyderabad as a Centre of Excellence. This will enable sharing best practices, research, and technologies.
As part of the government’s commitment to providing nutrition and food to the poor, Ms Sitharaman said the government will spend about 2 lakh crore rupees on supplying free food grains to all Antyodaya and priority households for the next one year under the PM GaribKalyan Anna Yojana (PMGKAY).
Asserting that traditional artisans and craftspeople have brought India renown for centuries, the Finance Minister said that a package of assistance under PM-Vishwakarma Kaushal Samman has been conceptualized for them. By integrating their products into the MSME value chain, the aim is to improve the quality, scale, and reach of their products.
Finance Minister said the government would increase the outlay for Pradhan Mantri Awas Yojana by 66% to over 79,000 crore rupees. In order to improve the socio-economic conditions of Particularly Vulnerable Tribal Groups (PVTGs), the Finance Minister announced the Pradhan Mantri PVTG Development Mission. During the next three years, 15,000 crore rupees will be allocated for the implementation of the mission.
The Finance Minister announced that poor people in prison who cannot afford the penalty or bail amount would receive the necessary financial assistance. A central assistance of 5,300 crore rupees will be given to the Upper Bhadra Project to provide sustainable micro irrigation and fill up surface tanks for drinking water in the “drought-prone” central region of Karnataka.
The Finance Minister announced major concessions for individual taxpayers. Under the revised tax regime, the rebate limit has been raised from 5 lakh rupees to 7 lakh rupees. With the proposed changes to the tax regime, persons with income up to 7 lakh rupees will not be taxed.
The government has also reduced the number of tax slabs to five and increased the tax exemption limit to 3 lakh rupees. All taxpayers will benefit from this upcoming regime. Individuals earning 9 lakh rupees a year will have to pay only 45 thousand rupees in income tax, or 5% of their income. An individual earning 15 lakh rupees will pay only 1.5 lakh rupees, or 10% of his or her income, in taxes.
Under the newly enacted tax regime, the government has extended the standard deduction to the salaried class and pensioners, including family pensioners. A salaried person with an income of 15.5 lakh rupees or more will thus benefit from 52 thousand 500 rupees. Under the revised tax regime, the top surcharge has been reduced from 37 percent to 25 percent. This will result in a reduction in the maximum tax rate to 39 percent.
Non-government salaried employees will now be able to cash 25 lakh rupees in leave on retirement without paying tax. To avoid cascading taxes on blended compressed natural gas, the Finance Minister has exempted GST-paid compressed biogas from excise duty. A customs duty exemption has been extended to imports of capital goods and machinery required for making lithium-ion batteries for electric vehicles. A concessional duty on lithium-ion cells for batteries has been extended for another year so that cell phone manufacturing in the country can be boosted.
Furthermore, the Finance Minister reduced the basic customs duty on parts of open cells of TV panels to 2.5 percent to promote value addition. To support the Ethanol Blending Programme and facilitate energy transition, the government has exempted basic customs duty on denatured ethyl alcohol. As with gold and platinum, the Finance Minister has increased the import duty on silver bars, dores, and articles.
To stop circumvention of duties, the basic customs duty rate on compounded rubber has been increased from 10% to 25% or 30 rupees per kg, whichever is lower. The government has increased the National Calamity Contingent Duty (NCCD) on specified cigarettes by about 16 percent. The lower tax rate of 15% will be available to newly formed manufacturing companies that begin manufacturing activities before 31st March 2024. Prime Minister Narendra Modi is taking this step to fulfill his goal of Sahkar se Samriddhi, and to connect Amrit Kaal and the spirit of cooperation.
Primary Agricultural Co-operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs) have been given a limit of 2 lakh per member for cash deposits and loans. Cooperative societies will also be given a higher limit of 3 crore for TDS on cash withdrawals. Agniveers will receive tax-free payments from the Agniveer Corpus Fund. An Agniveer’s contribution to his Seva Nidhi account is proposed to be deductible in the calculation of his total income under the new proposal. Approximately 9 times more than the outlay made in 2013-14, the Finance Minister announced a capital outlay of 2.40 lakh crore rupees for the Railways.
In addition, she announced that 100 critical transport infrastructure projects would be undertaken on a priority basis with investments of 75,000 crore, including 15,000 crore from private sources. These projects would be for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains. Improve regional air connectivity by reviving fifty additional airports, heliports, water aerodromes, and advanced landing grounds.
The Minister informed that the “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” will be launched in order to encourage states and union territories to promote alternative fertilizers and balanced use of chemical fertilizers. In order to promote the circular economy, 500 new ‘waste to wealth’ plants will be established under GOBARdhan.
The Pradhan Mantri PVTG Development Mission will improve the socioeconomic conditions of particularly vulnerable tribal groups (PVTGs). Families and habitations of PVTG will be provided with basic facilities such as safe housing, clean drinking water, sanitation, improved access to education, health, and nutrition, road and telecom connectivity, and sustainable livelihood opportunities. Under the Development Action Plan for Scheduled Tribes, 15,000 crore will be made available to implement the Mission.
The business community and the common people have welcomed the budget presented by Union Finance Minister Nirmala Sitaraman in Parliament on 1st February 2023. It has been unanimously agreed that the budget is based primarily on the future vision of the country’s development. Increasing the income tax slab provides a big relief to the middle class, according to the people.
According to people, the government’s budget focused on all sections of society and industries. The budget has also been welcomed by ASSOCHAM’s Sumant Sinha. Sinha said that the announcements in the budget will make it easier for small and medium-sized businesses to do business. FICCI (Federation of Indian Chambers of Commerce and Industry) has welcomed the Union Budget as balanced and progressive.
Nitin Gadkari, Minister of Road Transport and Highways, called the Union budget progressive and inclusive. Gadkari said this budget will equip India with new-age infrastructure, reduce imports, and strengthen the energy sector. According to him, the fruits of development will reach all sections of society, including youth, women, farmers, OBCs, SCs, and STs. During the past nine years, the Indian economy has moved from being the 10th largest economy to the 5th largest economy in the world, according to the Minister.