Finance Minister Nirmala Sitharaman on Wednesday presented the Union Budget for the financial year 2023-24 in Parliament. This was the final annual budget presented by Sitharaman before the 2024 national elections and key state elections scheduled to happen later this year.
The Budget much like the previous two Budget sessions was presented in paperless form by the Finance Minister who focused on seven goals, which she dubbed the “Saptrishis guiding the country through Amrit Kaal”. The seven priorities highlighted by the government are inclusive development, reaching the last mile, infrastructure and investment, unleashing potential, green growth, youth power, and the financial sector.
The budget adopts the 7 priorities that will guide us to Amrit Kaal
— MyGovIndia (@mygovindia) February 1, 2023
1. Inclusive Development
2. Reaching the last mile
3. Infrastructure and investment
4. Unleashing the potential
5. Green Growth
6. Youth Power
7. Finance Sector@nsitharaman #Budget2023
The Union Budget this year incorporated every sector’s expectations as it announced a slew of developmental and tax-saving proposals for individual, salaried persons, industries, MSMEs, cooperatives, and even the corporates. Here are key takeaways from the Budget for the financial year 2023-24
A. Inclusive Development
Agriculture and Cooperatives
1. The government has decided to give a boost to the agricultural and rural economies. And so, it has decided to build digital public infrastructure for farmers. It has also planned to set up an agriculture accelerator fund to encourage innovative start-ups in the rural area.
2. The government has also decided to Make India a Global Hub for millets which are ‘Shri Anna’. Indian Institute of Millets Research (IIMR) institute in Hyderabad will be supported and assisted in promoting research in this sector. India is at the forefront of popularizing Millet whose consumption furthers nutrition food security and the welfare of farmers.
𝐆𝐥𝐨𝐛𝐚𝐥 𝐇𝐮𝐛 𝐟𝐨𝐫 𝐌𝐢𝐥𝐥𝐞𝐭𝐬. 𝐌𝐢𝐥𝐥𝐞𝐭𝐬 𝐰𝐡𝐢𝐜𝐡 𝐚𝐫𝐞 𝐒𝐡𝐫𝐢 𝐀𝐧𝐧𝐚.
— BJP (@BJP4India) February 1, 2023
India is at the forefront of popularising Millets whose consumption furthers nutrition food security and the welfare of farmers, said the Hon’ble PM Modi.#AmritKaalBudget pic.twitter.com/cWqaJixcbS
3. Also, huge storage capacities will be built and will be made accessible to the farmers. Their remuneration will enhanced by enabling sale of crops at appropriate time.
4. The government has decided to boost production of high value horticulture crops and has decided to target Rs 20 lakh crore of agricultural credit at Animal Husbandary, Dairy and Fisheries Sector.
Health
5. Following the epidemic, the government is looking into developing healthcare research by expanding facilities at select ICMR (Indian Council of Medical Research) labs. A new initiative for pharmaceutical development and innovation will be implemented through Centres of Excellence. The Centre has allotted Rs 1,250 crores for the development of the pharmaceutical industry.
6. In an effort to boost competent healthcare staff, the Finance Minister has also announced the establishment of 157 new nursing colleges in key regions, in addition to the current 157 medical colleges constructed since 2014.
Education
7. Teacher’s training via District Institutes of Education and Training will be revamped.
8. National Digital Liabrary will be set up for children and adolescents.
9. States will be encouraged to set up physical liabraries at Panchayat and ward levels.
B. Reaching the last mile
10. The government in the Union Budget 2023 has announced that it will launch Pradhan Mantri Particularly Vulnerable Tribal Groups (PVTG) Development mission soon. PVTGs are considered to be the most vulnerable among the tribal communities.
11. The Centre has also decided to provide financial assistance for micro irrigation in drought-prone regions in Karnataka
12. The Centre has pledged to enhance Eklavya Model Residential Schools and more teachers will be recruited for 740 such schools, providing employment opportunities to the educated class of the society.
13. Digitization of ancient sources of information is essential to have an insight into the rich culture of previous civilizations. The Centre has decided to launch Bharat Shared Repository for Inscriptions (Bharat SHRI) in Digital Epigraphy Museum for the digitization of around 1 Lakh Ancient Inscriptions in the first stage.
“Bharat Shared Repository for Inscriptions will be set up in Digital Epigraphy Museum with a digitisation of one Lakh Ancient Inscriptions in the First stage.” :
— IANS (@ians_india) February 1, 2023
Union Finance Minister Nirmala Sitharaman #Budget2023 #BudgetSession #Budget #Budgetday #NirmalaSitharaman pic.twitter.com/jOpxbmAUCh
C. Infrastructure and Investment
14. Finance Minister on Wednesday announced a steep increment in capital investment outlay, for the third year in a row, to Rs 10,00,000 crore. She outlined that India’s digital infrastructure is unmatched in the world.
15. The ’50-year interest-free loans’ to the States will be continued to facilitate infrastructure development.
HUGE push to capital investment in infrastructure to 10 lakh crores!!
— Varun Jhaveri (@Varun_Jhaveri) February 1, 2023
That’s a 33% increase from the last budget.
A budget focused on long term infra development and continuing India’s growth story. #Budget2023
16. The capital investment outlay for Railways will be increased to ₹2.40 lakh crore in the upcoming financial year, which is about 9 times higher than the outlay announced in the 2013-2014 Budget.
17. More than 100 critical transport infrastructure projects have been identified for implementation. The Minister said, 50 additional airports, helipads, advanced landing grounds, and water aero drones will be revived to improve regional air connectivity.
18. The funding for North East Special Infrastructural Scheme has been increased to Rs 2,491 crores from the current Rs 1,419 crores. Also, infusion for Jal Jeevan Mission and Pradhan Mantri Awas Yojana has been increased to Rs 70,000 crores and Rs 79,590 crores respectively.
D. Unleashing the Potential
19. Make AI in India: The government aims at establishing three specialized Artificial Intelligence centers to provide AI-based solutions in agriculture, health, and sustainable cities.
20. National Data Governance Policy: The government intends to introduce National Data Governance Policy to enable access to anonymized data for research by start-ups and academia.
21. Vivad Se Vishwas: The government said it would set up a less stringent contract execution system for MSMEs to provide them relief from the post-COVID-19 pandemic effects. “This will help in the faster settlement of contractual disputes as well”, said FM Sitharaman on February 1.
22. E-Courts: The government has decided to launch the third phase of electronic courts for ensuring the effective administration of justice.
23. Entity Digi Locker: To facilitate secure online storing and sharing of documents within the business ecosystem, Entity Digi Lockers will be set up for use by business enterprises and also charitable trusts.
24. 5G service: The government has also decided to set up around 100 labs for 5G services-based application development. This will help in tapping the employment potential and probable business opportunities.
25. Lab-Grown Diamonds: The Centre has decided to boost domestic production and reduce import dependency in the diamond sector. And so, it has granted funds and support for research and development for the Lab Grown Diamonds. LGDs are diamonds that are produced using specific technology which mimics the geological processes that grow natural diamonds.
E. Green Growth
26. The Minister allocated a budget of Rs. 19,700 crore for the recently created National Green Hydrogen Mission, which she claims would help the country transition to a low-carbon economy and reduce reliance on fossil fuel imports.
27. The Centre has allocated Rs 35,000 crores for priority capital investment in energy transition, net zero goals, and energy security.
28. To encourage sustainable growth, the Finance Minister announced viability gap support for 4,000 MWh battery energy storage installations (megawatt hour).
29. The Minister announced that a Green Credit Program will be notified under the Environment Protection Act of 1986 to stimulate behavioral change. According to her, this will incentivize ecologically sustainable and responsive actions by businesses, people, and local governments, as well as assist mobilize more resources for such initiatives.
30. The Finance Minister emphasized that replacing obsolete polluting automobiles is a critical component of greening our economy. In addition to the Vehicle Scrapping Policy outlined in Budget 2021-22, the Minister authorized cash to scrap outdated vehicles of the central government.
While presenting #Budget2023, Hon’ble Finance Minister, Smt @nsitharaman highlighted the seven priorities (saptrishi), showing the right path in the Amrit Kaal. One of them is green growth, which emphasises achieving the goal of zero carbon emission by 2070. #AmritKaalBudget pic.twitter.com/rFM7ZpLJ12
— Swachh Bharat Urban (@SwachhBharatGov) February 1, 2023
F. Amrut Peedhi- Youth Power
31. The government has decided to launch Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 to skill lakhs of youth within the next three years. New courses like coding, Artificial Intelligence, Robotics, 3D printing, etc will be included in the program, aiding the youth to get better employment opportunities.
32. The Finance Minister said that to skill youth for further international opportunity, 30 Skill India international centers will be set up across various states.
33. The Centre is also planning to boost the tourism sector by selecting at least 50 destinations and developing them as a complete package for domestic and foreign tourists.
G. Financial Sector
34. The Centre has decided to launch a new tax saving scheme for women. The scheme named ‘Mahila Samman Bachat Patra’ will enable women to save upto Rs 2 lakh for a period of 2 years.
35. The Centre in the Union Budget has also enhanced maximum deposit limit for senior citizens saving scheme from Rs 15 lakh to Rs 30 lakh.
36. Finance Minister Sitharaman also launched a new credit guarantee scheme of Rs 2 lakh crore for the MSME sector. The scheme would take effect from April 1, 2023.
37. Providing major relief to middle-class income earners, the government on Wednesday introduced new tax slab rates and extended the limit for rebates. Under the revised income tax system, the rebate limit for the new tax regime has been increased to Rs 7 lakh from Rs 5 lakh. This means, no income tax will be payable for those people who have income up to Rs 7 lakh, provided they opt to file their income tax returns under the new income tax regime.
38. Also, the number of tax slabs has been reduced to five, with an extended increase in tax exemption limit Rs 3 lakh. The new income tax slabs are:
- ₹ 0-3 Lakhs – Nil
- ₹ 3-6 Lakhs – 5%
- ₹ 6-9 Lakhs – 10%
- ₹ 9-12 Lakhs – 15%
- ₹ 12-15 Lakhs – 20%
- Above ₹ 15 Lakhs – 30%
Under new I-T regime, no tax to be paid if income is below Rs 7 lakh – truly a budget for salaried, middle class & vulnerable.#Budget2023 also simplifies tax structure by reducing slabs to 5 & increasing exemption limit to Rs 3 lakh.#AmritKaalBudget pic.twitter.com/FR23AlKcNC
— Tejasvi Surya (@Tejasvi_Surya) February 1, 2023
39. Further, the standard deduction for salaried persons has been increased from Rs 50,000 to Rs 52,500. The highest surcharge rate has also been reduced to 25 percent from the current rate of 37 percent.
40. Also, the limit of tax exemption on Leave Encashment has been increased to Rs 25 lakh from the current limit of Rs 3 lakh.
41. The Finance Minister has meanwhile maintained fiscal consolidation, planning to reduce the deficit from 6.4 percent of GDP in 2022-23 to 5.9 percent in 2023-24.
42. In a relief to the cooperatives, the government has announced to provide a 15 percent tax benefit to new cooperatives, provided they commence manufacturing by March 2024.
Notably, Prime Minister Narendra Modi lauded the Union Budget on Wednesday and said that it will fulfill the dreams of the aspirational society, farmers, and middle class. In a video address, PM Modi said, “First budget of Amrit Kaal will build a strong foundation for building a developed India. This budget will fulfill dreams of aspirational society including poor people, middle-class people, and farmers.”
This year’s Budget infuses new energy to India’s development trajectory. #AmritKaalBudget https://t.co/lyV2SMgvvs
— Narendra Modi (@narendramodi) February 1, 2023
According to the government data accessed by Opindia, the Centre has allotted Rs 5.94 lakh crores to the Ministry of Defence while the lowest of funds, Rs 1.23 lakh crores have been allotted to the Ministry of Communications. Meanwhile, the Ministry of Home Affairs gets Rs 1.96 lakh crores and the Ministry of Road Transport and Highways gets Rs 2.70 lakh crore.
In a pre-election year, the Budget intends to expand on past budgets’ roadmaps, emphasizing inclusive and progressive development, supporting growth, and job creation, while keeping the macro-economy stable yet growth-oriented. It has put more money in the hands of people and households, which will help to alleviate the increasing strain caused by home loan EMIs and rising housing prices. The budget is a balanced one for the economy while it distinctively aims at rural and urban infrastructural development and enhancing digitization.
It provides a significant boost to capital investment, prioritizes MSMEs as the engine of growth, maintains capital investment, and delivers a boost to the private sector while simultaneously providing tax breaks to people and the middle class.
