All about Union Budget 2023

In the fifth budget speech, Finance Minister Nirmala Sitharaman has stepped onto the pedal with a budget of Rs. 10 lakh crores in hand. The fiscal deficit target for the financial year 2023-24 has been fixed at 5.9% of the Gross Domestic Product (GDP), which is a decrease of 50 Basis Points from 6.4% in 2022. Let’s find out more about budget 2023 and what exactly to anticipate from the outlay.

What’s New in Budget 2023-24?

Now that the budget is out, here is everything you should be wary of and know about the new things proposed by India’s Finance Minister - Ms. Nirmala Sitharaman.

What got Cheaper and Costlier?

Here is the list of things that got cheaper and costlier:

The Pradhan Mantri Gareeb Anna Yojana

The Union Budget for FY 2023-24 put focus on the importance of millets or coarse grains as the means of sustainable cultivation that not just offers nutritional and food security but can also increase the Income of small farmers living in arid regions. Undoubtedly, millet is one such grain that has been an essential part of the Indian diet for centuries. Considering it requires low input and water, it is advantageous to the environment and offers several health benefits.

India comes in the first position in terms of producing Shree Anna and in the second position as an importer of this grain across the world. The country grows a variety of Shree Anna, such as Jowar, Saama, Raagi, Cheena, Bajra, and Ramdana. As per the Union Budget 2023-24, the Indian Institute of Millet Research, Hyderabad will get the utmost support to share best practices, technologies, and research at an international level to make the country a global hub for Shree Anna. Moreover, as per the finance minister, the Indian government has transferred a whopping amount of Rs. 2.2 lakh crores to farmers under the PM Kisan scheme.

The Pradhan Mantri Vishwakarma Kaushal Samman Scheme

For a long time now, the craftsmen and artisans of India have been disappearing. The Indian government has been trying to give a boost to the country’s economic status while retaining traditional crafts and age-old arts. Thus, with this in mind, the FM announced the Pradhan Mantri Vishwakarama Kaushal Samman. The primary objective of this scheme is to enhance the status of artisans and craftsmen in India. With this scheme, the government aims to achieve an increased caliber of craftsmen and an expanded reach of their products. The scheme will be put into the chain of MSME Value and will offer financial support to craftsmen and artisans.

Training and skill programs for age-old and traditional crafts will be organized where people will be encouraged to adopt this art and learn everything about it. The latest, advanced technology skills will be taught during these programs to improve profit and productivity. Not just that, craftsmen and artisans will also be introduced to the system of paperless payments. The government is going to come up with Pradhan Mantri Kaushal Vikas Yojana 4.0 wherein the youth will be skilled for international opportunities. For this, up to 30 Skill India International Centres will be established across varying states. A National Apprenticeship Promotion Scheme will be launched where 47 lakh youngsters will get 'Direct Benefit Transfer' in the next three years.

The Mahila Samman Saving Certificate Scheme

The finance minister has announced a ‘Mahila Samman Saving Certificate’ for women and girls of the country. This one-time small saving scheme is available for two years and will end in March 2025. Under this scheme, you can avail a deposit Facility of up to Rs. 2 lakhs at a Fixed Interest Rate of 7.5% per annum. It also comes with an option for partial withdrawal.

An Increase in Other Saving Schemes

Other than the one announced for Indian women and girls, those who have invested in Senior Citizen Savings Scheme can now increase their limit to Rs. 30 lakhs. Earlier, the maximum deposit limit was Rs. 15 lakhs. Along with this, for joint accounts, the monthly income scheme limit has been increased to Rs. 15 lakhs from Rs. 9 lakhs.

Life Insurance Premium Tax

For Life Insurance policies that have been issued on or post-April 1, 2023, under Section 10(10D), the tax exemption on maturity benefits will be applicable only if the total premium paid is up to Rs. 5 lakhs.

Leave Encashment for Non-Government Employees

For the retirement of non-government salaried employees, the tax exemption on leave encashment has been increased to Rs. 25 lakhs from Rs. 3 lakhs.

All About Indirect Taxes

Here the key points to know about indirect Taxes:

• 16% tax increase has been put on a few cigarettes
• A few basic custom duty rates on products (excluding agriculture and textiles) is decreased to 13 from 21; thus, there are minimal changes in taxes on a few products, such as automobiles, bicycles, and toys
• New cooperatives that will be beginning Manufacturing till March 2024 will get a lower Tax Rate of 15%
• There is an extension on concessional duty on lithium-ion cells for batteries for another year
• Basic customs duty on glycerine, crude has been decreased to 2.5%
• Import of some parts and inputs, such as camera lens, have experienced relief on customs duty
• Import Duty on silver bars has been increased
• Customs duty on TV panels’ open cells is decreased to 2.5% to promote the manufacturing of TV units
• Imports of some parts of mobile phones have extended customs duty for one more year

A Boost to Railways

The Indian railways has received a budget of Rs. 2.4 lakh crores for the financial year 2024. This has been the highest-ever budget for Railways in history.

A Hike in Defence Budget

The defence budget has been increased from Rs. 5.25 lakh crores to Rs. 5.94 lakh crores. Besides, Rs. 1.62 lakh crores have been put aside to Handle Capital expenses, such as the purchase of new military hardware, weapons, warships, and aircrafts.

Key Points Regarding the Fiscal Budget

• The fiscal deficit has been targeted to be decreased and reach under 4.5% by 2025-26
• The net tax receipts for FY24 are at Rs. 23.3 lakh crores
• The 6.4% target for fiscal deficit target is retained in the revised estimate for FY23; however, for FY24, it has been decreased to 5.9%
• The gross Market borrowing for FY24 is at Rs. 15.43 lakh crores

Budget 2023-24 for Business People

If you are a business person or are thinking to commence one anytime soon, you must know these key points discussed in budget 2023-24:

• The Indian government will be bringing Vivad Se Vishwas-2, which is another dispute resolution scheme meant to settle down commercial issues and disputes
• There will be several measures to improve business activity in the GIFT City
• PAN will be considered as the common identifier for all the digital systems of the government agencies
• Jan Vishwas Bill will be used to amend up to 42 Central Acts to ensure trust-based governance
• For the purpose of Reconciliation and updating identity as maintained by several agencies, a one-stop solution will be established through Aadhaar and digi locker
• A Central Processing Centre will be established to ensure quicker response to those companies that are filing forms under Companies Act

Digital Services and Urban Development

As far as the digital services are concerned, the Digilocker scope will be expanded tremendously. Along with this, 100 new labs will be established in engineering institutions to develop apps that use 5G services. These labs will work on healthcare, precision farming and smart classroom apps. Phase 3 of e-Courts projects will get launched with a budget of Rs. 7,000 crores.

Coming to urban development, the government will be spending Rs. 10,000 crores each year to ensure adequate urban infrastructure development. The cities will be incentivised to enhance the reliability of municipal Bonds. All the towns and cities will have a 100% transition of septic tanks and sewers.

An Objective to Remove Sickle Cell Anemia

The government has set up a mission to eradicate sickle cell anemia by 2047. Besides that, there will be a new programme to conduct pharmaceutical research.

Enhancement in the Housing Scheme

For the Pradhan Mantri Awaas Yojana, the budget has been improved by 66% and the latest outlay is more than Rs. 79,000 crores.

Understand the Changes in the Education Sector

Three new centres for artificial intelligence will be established in top educational institutes. Alongside, 157 nursing colleges will be set up in co-location with the existing 157 medical colleges. The Eklavaya Model Residential Schools will be established in the next three years that will recruit 38,800 teachers for 740 schools serving tribal students.

A National Digital Library will be established for adolescents and children alike. The Children’s Book Trust will replenish those non-curricular titles that are available in English and regional languages to digital libraries. States will be encouraged to establish physical libraries at ward and panchayat levels to offer better infrastructure for accessing resources of the National Digital Library.

Highlights of the Agriculture Sector

• To give a boost to agri-startups run by young entrepreneurs, an Agriculture Accelerator Fund will be established
• The agriculture sector will have a digital public infrastructure
• A budget of Rs. 20 lakh crore has been set up for animal husbandry, fisheries and dairy
• In the next three years, up to one crore farmers will get supported to adopt natural farming
• 10,000 bio input resource centres will be established

Changes in the Tourism Sector

• 50 tourist destinations will get chosen via a challenge mode to be developed as a complete package for international and domestic tourism
• A Unity Mall will be established in the state capitals or the popular destinations in varying states to promote One District, One Product along with handicrafts and other GI products

Tax Slab

Finance Minister Nirmala Sitharaman has presented the Union Budget 2023-24 intending to increase income and boost purchasing power. As per the speech, the basic exemption limit has come down to Rs. 2.5 lakhs from Rs. 3 lakhs. Not just that, the rebate under Section 87A has been increased to Rs. 7 lakhs from Rs. 5 lakhs.

Here is the new tax slab rate as per the Union Budget 2023-24 -

Those individuals who have an income of Rs. 15.5 lakhs and above will be eligible for the standard Deduction of Rs. 52,000. Moreover, the new tax regime has become the Default one. Yet, people have the option to retain the old tax regime, which is as follows:

Conclusion

The Union budget 2023-24 was a much-awaited Call by the Indians. While the budget mainly concentrated on raising capital expenses by the government, eye-catching rebates & incentives in the income tax and fiscal consolidation, the bigger picture was an increase in the rebate limit, which is now the default, to Rs. 7 lakhs from Rs. 5 lakhs. Now that you have everything about the budget in front of you, it will be easier for you to take the next step towards achieving your Financial goals.