Union Budget 2023-24
According to FM Sitharaman Indian economy is projected to grow at 7% in the current year. This is the highest among major economies of the world. India is on the right track despite time of challenges. The government’s vision for the Amrit Kaal includes technology-driven and knowledge-based economy, with strong public finances and a robust financial sector. To achieve this ‘Janbhagidari’ through ‘sabka Saath, Sabka Prayaas’ is essential. National Rural Livelihood Mission has achieved remarkable success by mobilizing rural women into 1 lakh SHGs. Per capita income has increased to Rs. 1.97 lakh. In total 220cr. Covid vax for 102cr. people were given, 9.6 cr LPG connections were provided, and 47.8cr. JanDhan accounts were opened.
Budget is based on 7 priorities (Saptarishi-7 priorities):
- Green growth
- Youth power
- Inclusive development
- Reaching the last mile
- Infrastructure and investment
- Unleashing the potential
- Launch of digital platform
Key Highlights of Budget 2023-24:
Infrastructure Sector:
- Increase in capital expenditure by 33% to Rs. 10 lakh crore, which would be 3.3 % of the GDP.
- The 50-year, interest-free loan to states for capex purposes has now been increased to Rs. 1.3 lakh crore, 30% more than what was allocated for 2022-23.
- 100 transport infra projects identified for end-to-end connectivity for ports, coal, steel, fertilizer sector.
- Creating urban infrastructure in tier 2 and 3 cities via the establishment of UIDF.
Health Sector:
- 157 nursing colleges to be set up.
- A new programme for research in pharmaceuticals will be formulated and the industry will be encouraged to invest in research
- Sickle cell anemia elimination mission to be launched.
Investment Schemes:
- One-time, new savings scheme for women with a tenure of two years. to offer 7.5 % interest rate with a partial withdrawal option.
- For senior citizens maximum deposit limit for the Senior Citizen Saving Scheme will be from 15 lakh to 30 lakh
- Investment limit in the Monthly income scheme (MIS) increased to Rs. 9 lakh, up from Rs. 4.5 lakh, for a single account. For joint accounts the limit has gone up to Rs. 15 lakh, up from Rs. 9 lakh.
Agriculture Sector:
- Millets, artisans, agri credit, micro-entrepreneurs, and small farmers-focus areas of the budget.
- Agriculture credit target expanded to Rs. 20 lakh crore.
- Decentralised storage capacity will be set up that will help farmers store their produce.
- The budget envisages India becoming a global hub for Sri Ann or Millets.
- Govt to reduce customs duty on shrimp feed to promote exports: FM Sitharaman
- Govt to provide a higher limit of Rs. 2 lakh per member for cash deposit and loans by Primary Agricultural Credit Societies
Youth Power:
- PMKVY 4.0 will be launched covering new courses like coding, AI, robotics, 3D printing, etc.
- Measures to boost the tourism sector by selecting at least 50 destinations through challenge mode which will be developed as a complete package for domestic and foreign tourists
- States will be encouraged to set up Unity malls for the promotion and sale of ODOP (One District One Product), GI, and handicraft products.
Green growth:
- Govt to launch a Rs. 2,200 crore Aatmanirbhar clean plan programme.
- FM Sitharaman has proposed an outlay of Rs. 35,000 crore to achieve energy transition and net zero objectives and listed green growth among seven priorities of the government.
- With an outlay of Rs. 19,700 crore, National Green Hydrogen Mission will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country adopt technology and market leadership in this sector.
- Government will provide viability gap funding for 4,000 MWh battery energy storage systems.
- Detailed framework for pumped storage projects will be formulated.
- Interstate transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with an investment of Rs. 20,700 crore, including the central government support of Rs. 8,300 crore.
- A green credit programme will be notified under the Environmental Protection Act.
Reaching the last mile:
- Pradhan Mantri PVTG development mission to be launched
- Financial assistance to be given for sustainable micro irrigation in drought-prone regions of Karnataka
- More teachers to be recruited for 740 Eklavya Model Residential School
- Bharat SHRI to be set up for digitization of ancient inscriptions
Custom Duty:
- Basic import duty on compounded rubber increased to 25 % from 10 %.
- Basic customs duty hiked on articles made from gold bars.
- Customs duty on kitchen electric chimney increased to 15 % from 7.5 %.
- Customs duty on parts of open cells of TV panels cut to 2.5 %.
- Govt proposes to reduce customs duty on import of certain inputs for mobile phone manufacturing
- Propose to reduce the basic customs duty rates on goods other than textile and agriculture from 21 to 13.
Railway Sector:
- Railways capex outlay of 2.40 lakh crore, highest ever; 9x of what was in 2013.
Income Tax:
- FM Sitharaman proposes to increase the income tax rebate limit from Rs. 5 lakh to Rs. 7 lakh in the new tax regime
- Govt to enhance grievance redressal mechanism for direct tax payers.
- Govt proposes to reduce the highest surcharge rate from 37 % to 25 % in new tax regime
- Govt proposes to make new tax structure as default tax option
- Govt proposes to cap deductions from capital gains on investments in residential houses to Rs.10 crore
Income Tax Slabs:
| New Tax Regime (Revised*) | New Tax Regime (Previous) | Old Tax Regime | |||||
| Income | Tax Rate (%) | Income | Tax Rate (%) | Income | Tax Rate (%) | ||
| 0-3 Lakh | NIL | 0-2.5 Lakh | NIL | 0-2.5 Lakh | NIL | ||
| 3-6 Lakh | 5% | 2.5-5 Lakh | 5% | 2.5-5 Lakh | 5% | ||
| 6-9 Lakh | 10% | 5-7.5 Lakh | 10% | 5-10 Lakh | 20% | ||
| 9-12 Lakh | 15% | 7.5-10 Lakh | 15% | Above 10 Lakh | 30% | ||
| 12-15 Lakh | 20% | 10-12.5 Lakh | 20% | ||||
| Above 15 Lakh | 30% | 12.5-15 Lakh | 25% | ||||
| *Effective from 1st April, 2023 | Above 15 Lakh | 30% | |||||
Miscellaneous:
- 100 labs for developing apps using 5G services will be set up in engineering institutions.
- NCCD taxes on cigarettes hiked by 16 %
- Revamped Credit guarantee scheme for MSMEs will take effect from 1 April 2023 with infusion of Rs. 9000 crore into the corpus.
- Government will provide R&D grants in lab grown diamond areas as well as consider custom duty reduction on key raw material i.e. lab-grown seeds.
Negative for life insurance companies:
- Income earned from all policies with a premium above Rs.5 lakh will be taxable.
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