BUDGET HIGHLIGHTS 2023

Union Finance Minister Nirmala Sitharaman on Wednesday presented the Union Budget 2023, the fifth budget of Modi 2.0. In the last full-fledged Budget before the general elections next year, Nirmala Sitharaman said that the Indian economy is on the right path and heading towards a bright future. In a big boost for taxpayers and economy, Sitharaman announced major changes in tax slabs under the new tax regime and big hike in allocation for railways and capital expenditure.

Here follows a sector-wise detailed reading of the various measures Finance Minister Sitharaman announced in Budget 2023:

1. Income Tax payers:
2. No changes in the old tax regime
3. New tax regime to become the default tax regime. However, citizens can opt for the old tax regime.
4. No tax on income up to Rs 7.5 lakh a year in new tax regime (with inclusion of standard deduction)
5. Govt proposes to reduce highest surcharge rate from 37% to 25% in new tax regime

New Income Tax Slabs Under New Tax Regimes:

Rs 0-3 lakh:	Nil
Rs 3-6 lakhs:	5%
Rs 6-9 lakhs:	10%
Rs 9-12 lakhs:	15%
Rs 12-15 lakhs:	20%
Rs Over 15 lakhs:	30%

1. An individual with annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes: FM Sitharaman
2. Income of Rs 15 lakh will fetch Rs 1.5 lakh tax, down from Rs 1.87 lakh
3. A Rs 50,000 standard deduction to taxpayers has been introduced under the new regime
4. Payment received from Agniveer Corpus Fund by Agniveers to be exempted
5. Tax exemption removed in insurance policies with premium over Rs 5 lakh
6. For online games, govt proposes to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of fiscal
7. Tax exemption on leave encashment on retirement of non-government salaried employees hiked to Rs 25 lakh from Rs 3 lakh.
8. A higher limit of Rs 3 crore for TDS on cash withdrawal to be provided to co-operative societies.
9. Next-generation Common IT Return Form to be rolled out for tax payer convenience
10. Grievance redressal mechanism to be strengthen.
11. TDS rate to be reduced from 30 per cent to 20 per cent on taxable portion of EPF withdrawal in non-PAN cases.

What gets cheaper and what's get costlier:

Costlier:

Cigarettes

Silver

Compounded rubber

Imitation Jewellery

Articles made from gold bars

Imported bicycles and toys

Imported kitchen electric chimney

Imported luxury cars and EVs

Cheaper

Mobile phones

TV

Lab-grown diamonds

Shrimp feed

Machinery for lithium ion batteries

Raw materials for EV industry

Indirect Taxes:

1. 16% tax hike on certain cigarettes
2. New cooperatives that commence manufacturing till March, 2024 to get lower tax rate of 15%
3. Basic customs duty on crude, glycerine reduced to 2.5%.
4. Import duty on silver bars hiked to align it with gold, platinum
5. Extend customs duty cut on imports of parts of mobile phones by 1 year
6. To promote TV manufacturing, customs duty on open cells of TV panels reduced to 2.5%
7. Relief provided on Customs Duty on import of certain parts & inputs like camera lens
8. Concessional duty on lithium-ion cells for batteries extended for another year
9. Number of basic custom duty rates on goods other than textiles and agriculture reduced from 21 to 13. As a result, there are minor changes in taxes on some items toys, bicycles, automobiles.

Railways gets massive boost:

1. An outlay of Rs 2.40 lakh crore provided for railways in FY24.
2. It's the highest ever highest ever allocation for Railways and is nearly nine times over FY14 allocations.
3. The allocation for track renewal has been increased from Rs 15,388.05 crore in RE 2022-23 to Rs 17,296.84 crore this year.
4. The Railways is likely to roll out 75 Vande Bharat trains by August 2023.

Saving schemes announcements

Maximum deposit limit for Senior Citizen Savings Scheme to be enhanced to Rs 30 lakh from Rs 15 lakh

Monthly Income Scheme limit doubled to Rs 9 lakh and Rs 15 lakh for joint accounts

One-time new saving scheme Mahila Samman Saving Certificate for women to be made available for 2 years up to March 2025.

It will offer deposit facility of up to Rs 2 lakh in the name of women or girls for tenure of 2 years at fixed interest rate of 7.5 per cent with partial withdrawal option.

Capex hiked 33%

1. Rs 10 lakh crore capital investment, a steep hike of 33 per cent for third year in a row, to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds.
2. Effective capital expenditure of centre to be - Rs 13.7 lakh crore
3. Capital investment outlay to be 3.3% of GDP in FY24
4. Effective capital expenditure of Centre at Rs 13.7 lakh in FY24
5. New Infrastructure Finance Secretariat established to enhance opportunities for private investment in infrastructure

Defence Budget hiked by 13%:

1. Defence budget increased to Rs 5.94 lakh crore from last year's Rs 5.25 lakh crore.
2. Rs 1.62 lakh crore set aside for capital expenditure including purchases of new weapons, aircraft, warships and other military hardware.
3. For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore.
4. Capital budget of the Border Roads Organisation increased to Rs 5,000 crore.Capital outlay for the Indian Air Force was the highest at Rs 57,137.09 crore
5. Amount of Rs 52,804 crore was set aside as the capital outlay for the Indian Navy.
6. Capital outlay for the Army has been pegged at Rs 37,241 crore.
7. Allocation to Defence Research Development Organisation (DRDO) has been put at Rs 23,264 crore.

Fiscal position:

Fiscal Deficit targeted to be below 4.5 per cent by 2025-26.

Fiscal deficit target of 6.4% retained in the Revised Estimate for FY23; reduced to 5.9% for FY24

Gross market borrowing seen at Rs 15.43 lakh crore in FY24

Net market borrowing in FY24 seen at Rs 11.8 lakh crore

FY23 net tax receipts revised estimate stands at Rs 20.9 lakh crore

FY23 total expenditure revised estimate stands at Rs 41.9 lakh crore

FY23 revised estimate of total receipts other than borrowing at Rs 24.3 lakh crore

FY24 net tax receipts seen at Rs 23.3 lakh crore

MSME

Revamped credit guarantee for MSMEs to take effect from Apr 1, 2023 with infusion of Rs 9,000 crore in corpus

The scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the cost of the credit by about 1 per cent.

Banking:

Govt moots amendments to Banking Regulation Act to improve governance in banks

Jobs:

1. Government will launch Pradhan Mantri Kaushal Vikas Yojana 4.0
2. To skill the youth for international opportunities, 30 Skill India International Centres will be set up across different States.
3. Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme to be rolled out to provide stipend support to 47 lakh youth in three years.

Clean Energy:

1. Rs 35,000 crores priority capital for the energy transition
2. Green credit programme will be notified under the Environment Protection Act
3. Battery storage to get viability gap funding.
4. Govt to support setting up of battery energy storage of 4,000 MwH
5. National Green Hydrogen mission with an outlay of Rs 19,700 crore will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country assume technology and market leadership

Gems and Jewellery:

To encourage the indigenous production of lab-grown diamonds, a research and development grant is to be provided to one of the IITs for five years

Proposal to review customs duty of lab-grown diamonds to be included in Part-B of Budget document

Aviation & Highways:

50 additional airports, helipods, water aero drones, advanced landing grounds will be revived to improve regional air connectivity.

Union Budget 2023-24 allocates enhanced outlay of Rs 2.70 lakh crore for the highways sector.

Allocation to NHAI increased by 13.90 per cent to Rs 1.62 lakh crore for 2023-24.

Seven priorities of the Budget, 'Saptarishi':

Inclusive development.

Reaching the last mile.

Infrastructure and investment.

Unleashing the potential.

Green growth.

Youth power

Financial sector

PM Vishwa Karma Kaushal Samman:

PM Vishwa Karma Kaushal Samman-package of assistance for traditional artisans and craftspeople has been conceptualised, will enable them to improve quality, scale & reach of their products, integrating with MSME value chain

Sports:

Sports gets an allocation of Rs 3,397.32 crore, an increase of Rs 723.97 crore.

The Rs 3,397.32 crore is the highest sports budget allocation ever in the country.

'Khelo India' has been allotted Rs 1,045 crore.

Sports Authority of India gets Rs 785.52 crore for 2023-24.

National Sports Federations receives a hike of Rs 325 crore.

Agriculture:

An Agriculture Accelerator Fund will be set up to encourage agri-startups by young entrepreneurs

Digital public infrastructure to be developed for the agriculture sector

Rs 20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries

Over the next 3 years, one crore farmers will get assistance to adopt natural farming.

10,000 bio input resource centres will be set up

Fisheries: To launch sub-scheme under PM Mastya Sampada Yojna with outlay of Rs 6,000 crore to further enable activities of fishermen

To make India a global hub for 'Shree Anna', 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.

Rs 2,516 crore for Computerisation of 63,000 credit societies

In drought-prone central regions of Karnataka, central assistance of Rs 5,300 crore to be given to upper Badra project to provide sustainable micro-irrigation.

500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme to be established for promoting circular economy at total investment of Rs 10,000 crore.

5 per cent compressed biogas mandate to be introduced for all organizations marketing natural and bio gas.

Education:

Three centres of excellence for artificial intelligence to be set up in top educational institutions.

157 new nursing colleges will be established in colocation with the existing 157 medical colleges established since 2014.

Eklavaya Model Residential Schools to be set up in the next 3 years. The Centre will recruit 38,800 teachers and support staff for 740 schools serving 3.5 lakh tribal students.

National Data Governance Policy to be brought out to unleash innovation and research by start-ups and academia.

Grant for University Grants Commission (UGC) has been increased by Rs 459 crores (9.37 pc).

Central Universities have been increased by 17.66%, Deemed University by 27%, support to IITs have been increased by 14%, and to NITs by 10.5% as compared to BE 2022-23.

Housing:

Outlay for PM Awaas Yojana enhanced 66% to over Rs 79,000 crore

Interest-free loan to states to continue

Centre to continue 50-year interest-free loan to state governments for one more year

Digital services

Scope of services in DigiLocker to be expanded

100 labs for developing applications to use 5G services to be set up in engineering institutions

Labs will cover smart classrooms, precision farming, and healthcare applications.

Phase 3 of E-courts projects to be launched with outlay of Rs 7,000 crore

Leading industry players will partner to developing, providing scalable options for health, agri and other sectors

Ease of Doing Business:

Govt to bring another dispute resolution scheme Vivad Se Vishwas-2 to settle commercial disputes

PAN as common identifier for all digital systems of govt agencies

One stop solution for reconciliation and updating identity maintained by various agencies to be established using digi locker and Aadhaar as foundational identity

Central Processing Centre to be set up for faster response to companies filing forms under Companies Act

For business establishments required to have Permanent Account Number, the PAN will be used as a common identifier for all Digital Systems of specified government agencies.

More than 39,000 compliances have been reduced and over 3,400 legal provisions decriminalised to enhancing ease of doing business

Jan Vishwas Bill to amend 42 Central Acts have been introduced to further trust-based governance.

Finance Minister announces multiple measures to enhance business activity in GIFT City