Union Budget for 2023-24 pegs country’s economic growth for current FY at seven percent

Finance Minister Nirmala Sitharaman presented Union Budget for 2023-24 in Parliament today. She said that Indian economic is on the right track and is heading towards a bright future, despite challenging times. Ms Sitharaman said the economic growth in the current year is estimated to be at 7 per cent. Stating that this is the first budget in Amrit Kaal, the Finance Minister said, the vision for the Amrit Kaal includes technology-driven and knowledge-based economy with strong public finances, and a robust financial sector. The budget hopes to build on the foundation laid in the previous budget and blueprint drawn for India@100.

The Finance Minister announced that the Capital investment outlay will be increased by 33 per cent to 10 lakh crore rupees, which would be 3.3 per cent 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 for complementary policy actions, with a significantly enhanced outlay of 1.3 lakh crore rupees.  

Focussing on the Agriculture Sector, Ms Sitharaman said an Agriculture Accelerator Fund will be set-up to encourage agri-startups by young entrepreneurs in rural areas. The Fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. The Finance Minister also announced that the agriculture credit target will be increased to 20 lakh crore rupees, with focus on animal husbandry, dairy and fisheries.

Ms Sitharaman said, a plan will be implemented to set up massive decentralised storage capacity to help farmers store their produce and realize remunerative prices through sale at appropriate times. The year 2023 has been declared as the international year of millets.  The Finance Minister said, 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 in order to make India a global hub for ‘Shree Anna’.

Continuing with the commitment to ensure food and nutritional for the poor, Ms Sitharaman said the  government will bear an expenditure of about  2 lakh crore rupees to supply free food grain to all Antyodaya and priority households for the next one year under PM GaribKalyan Anna Yojana (PMGKAY). The scheme is being implemented  from 1st January 2023.

Stating that traditional artisans and craftpeople have brought India renown for centuries, the Finance Minister said that for the time ,  a package of assistance under  PM-VISHWAKARMA KAUSHAL SAMMAN  has been conceptualized for them. The aim is to enable them to improve the quality, scale and reach of their products, integrating them with the MSME value chain.

In a further push for the government’s objective of housing for all, the Finance Minister said, an outlay for Pradhan Mantri Awas Yojana will be enhanced by 66 per cent to over  79,000 crore rupees.

With an aim to improve socio-economic conditions of the Particularly Vulnerable Tribal Groups (PVTGs), the Finance Minister announced that Pradhan Mantri PVTG Development Mission will be launched. An amount  of  15,000 crore rupees has been earmarked for the implementation of the mission in the next three years.

Announcing relief for poor persons who are in prison and unable to afford the penalty or the bail amount, the Finance Minister announced that required financial support will be provided to them.

The Finance Minister announced that a central assistance of  5,300 crore rupees will be given to Upper Bhadra Project in “drought-prone” central region of Karnataka, to provide sustainable micro irrigation and filling up of surface tanks for drinking water.

The Finance Minster has announced major concessions for individual taxpayers. The rebate limit has been hiked from existing 5 lakh rupees per annum to 7 lakh rupees in the new tax regime. Thus, persons in the new tax regime, with income up to 7 lakh rupees will not have to pay any tax.

The government has also reduced the number of tax slabs to 5 and increased the tax exemption limit to 3 lakh rupees. This will provide major relief to all taxpayers in the new regime. An individual with an annual income of 9 lakh rupees will be required to pay only 45 thousand as income tax which is only 5 per cent of his or her income. Similarly, an individual with an income of 15 lakh rupees will be required to pay only 1.5 lakh rupees or 10 per cent of his or her income.

Government has extended the benefit of standard deduction for the salaried class and the pensioners including family pensioners under the  new tax regime. Each salaried person with an income of15.5 lakh rupees or more will thus stand to benefit by 52 thousand 500 rupees.

The Finance Minister has reduced the highest surcharge on personal income tax from 37 percent to 25 percent in the new tax regime.  This will result in reduction of maximum tax rate to 39 percent.

The government has increased tax exemption limit on leave encashment on retirement of non-government salaried employees from existing 3 lakh rupees to 25 lakh rupees.

Finance Minster has exempted excise duty on GST-paid compressed bio gas to avoid cascading of taxes on blended compressed natural gas. To further provide impetus to green mobility, customs duty exemption has been extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles.

Government has provided relief in customs duty on import of certain parts and inputs like camera lens and continue the concessional duty on lithium-ion cells for batteries for another year to give boost to manufacturing of Mobile phones in the country.

Similarly, to promote value addition in manufacture of televisions, the Finance Minister reduced the basic customs duty on parts of open cells of TV panels to 2.5 per cent.

The government has exempt basic customs duty on denatured ethyl alcohol to support the Ethanol Blending Programme and facilitate our endeavour for energy transition.

The Finance Minister has increased the import duty on silver dore, bars and articles to align them with that on gold and platinum.

The basic customs duty rate on compounded rubber has been  increased from 10 per cent to 25 per cent or 30 ruppes per kg whichever is lower to curb circumvention of duty.

Government has hiked National Calamity Contingent Duty (NCCD) on specified cigarettes by about 16 per cent.

New co-operatives that commence manufacturing activities till 31st of March 2024 will get the benefit of a lower tax rate of 15 per cent, as is presently available to new manufacturing companies.

The move is aimed at realizing Prime Minister’s goal of Sahkar se Samriddhi, and his resolve to “connect the spirit of cooperation with the spirit of Amrit Kaal.

Government has hiked  limit of 2 lakh per member for cash deposits to and loans in cash by Primary Agricultural Co-operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs). Similarly, a higher limit of3 crore for TDS on cash withdrawal is being provided to co-operative societies.

The payment to be received by the Agniveers from the Agniveer Corpus Fund has been exempted from taxes. According to the new proposal, deduction in the computation of total income is proposed to be allowed to the Agniveer on the contribution made by him or the Central Government to his Seva Nidhi account.

The Finance Minister announced that a capital outlay of 2.40 lakh crore rupees has been provided for the Railways, highest ever outlay about 9 times the outlay made in 2013-14.

She also announced that one hundred critical transport infrastructure projects to be taken up on priority with investment of 75,000 crore, including 15,000 crore from private sources for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors. Fifty additional airports, heliports, water aerodromes and advance landing grounds to be revived for improving regional air connectivity.

The Minister informed that “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” will be launched to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.500 new ‘waste to wealth’ plants under GOBARdhan scheme will be established for promoting circular economy.

To improve the socio-economic conditions of the particularly vulnerable tribal groups (PVTGs), Pradhan Mantri PVTG Development Mission will be launched. This will saturate PVTG families and habitations with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, health and nutrition, road and telecom connectivity, and sustainable livelihood opportunities. 

An amount of 15,000 crore will be made available to implement the Mission in the next three years under the Development Action Plan for the Scheduled Tribes.