Budget 2023 Highlights: PDF Download, Key Takeaways, Important Points
budget-2023-highlights
The Finance Minister Ms Nirmala Sitharaman presented the last full budget for the current Govt today. She focused and based the budget announcements on seven key areas for the Govt. As expected the government retained its focus on capital expenditure, governance, and technology through various announcements and allocations. On the fiscal management front, the FM stuck to balancing growth with fiscal discipline.
The seven key areas under which the FM made her Budget announcements were
i. Inclusive Development ii. Reaching the Last Mile iii. Infrastructure and Investment iv. Unleashing the Potential v. Green Growth vi. Youth Power vii. Financial Sector
#1 Key highlights and announcements under Inclusive Development Priority
Under the tagline of Sabka Saath Sabka Vikas, the Government chose to address the needs of the sectors like agriculture, health care, and education. The main announcements under this priority made during the budget are
Agri – accelerator fund Set up an Agri accelerator to fund innovative start-ups in the agricultural sector.
Targeted funding: Rs 20 lakh crore agricultural credit fund targeted at horticulture, animal husbandry, dairy, and fisheries sectors.
Set up widely available storage facilities to help farmers in better storage of their produce
The Govt also coined the term Shri Anna for millets and spoke about making India a global hub for millets under the Hyderabad-based Indian Institute of Millet Research.
Under the healthcare sector enhancements, the Govt looks at establishing 157 new nursing colleges.
The focus is also on giving impetus to the research, where a new program was launched to promote research in pharmaceuticals.
Under focus on education, the budget talked about setting up of National Digital Library for children and adolescents.
Teacher’s training is also set to be revamped with the introduction of the District Institute of Education and Training.
#2 Key highlights and announcements under Last mile Priority
To provide a sharper focus on the objective of ‘reaching the last mile’, the government had formed government has formed the ministries of AYUSH, Fisheries, Animal Husbandry and Dairying, Skill Development, Jal Shakti, and Cooperation. This budget gave further impetus to these initiatives in the form of the following initiatives.
Pradhan Mantri PVTG Development Mission to be launched, an allocation of Rs 15000 crores has been earmarked.
More teachers are being recruited for the Eklavya Model Residential Schools that serve 3.5 lakh tribal students.
The outlay for Prime Minister Awas Yojana has been enhanced by 69% to Rs 79000 crores.
#3 Key highlights and announcements under Infrastructure and Investment priority
Investments in Infrastructure and productive capacity have a large multiplier impact on growth and employment. After the subdued period of the pandemic, private investments are growing again. The Budget has taken the pole position to ramp up various projects and has come up with initiatives for investment and job creation. Main announcements were made with a focus on infrastructure and investment.
For the very first time, capex gets a two-figure allocation with Rs 10 lakh crore allocated for capital expenditure outlay. This is an increase of 33%
The railways get the highest ever outlay with Rs 2.4 lakh crore.
Creation of Urban Infrastructure in Tier 2 and 3 cities with the formation of Urban Infrastructure Development Fund
Fifty additional airports, heliports, water aerodromes and advanced landing grounds will be revived for improving regional air connectivity.
50-year interest-free loan for states to be continued for infrastructure development
#4 Key highlights and announcements under Unleashing the Potential priority
“Good Governance is the key to a nation’s progress.Our government is committed to providing a transparent and accountable administration which works for the betterment and welfare of the common citizen,” The FM quoted the Prime Minister while making allotments under this priority . Major announcements under this pillar were
Establishment of three Artificial Intelligence-based centres of excellence in educational institutions to develop AI based solutions for agriculture, healthcare and more.
Phase 3 of e-courts to be launched for better delivery of justice.
Setting up of 100 5G labs for app based development.
Entity DigiLocker is to be set up for use by businesses and charitable institutions.
#5 Key highlights and announcements under the Green Growth pillar
Green and sustainable growth is a long focus of this government. Our country looks at having Net zero carbon emissions by 2070. Major highlights of budget announcements under this pillar were
The recently launched National Green Hydrogen Mission, with an outlay of `Rs 19,700 crores is looking at an annual production of 5 MMT by 2030
For encouraging behavioral change, a Green Credit Programme will be notified under the Environment (Protection) Act. This will incentivize environmentally sustainable and responsive actions by companies, individuals, and local bodies, and help mobilize additional resources for such activities.
500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme will be established for promoting a circular economy.
The government is also allocating more money to scrap old vehicles of the State and Central govt to reduce pollution caused by older vehicles
The govt is also looking at 1 crore farmers adopting natural farming.
#6 Key highlights and announcements under the pillar Youth Power
To empower our youth and help the ‘Amrit Peedhi’ realize their dreams, the Govt has formulated the National Education Policy, focused on skilling and adopted economic policies that facilitate job creation at scale, and employment opportunities. The main announcements under this pillar were
A unified Skill India platform will be launched
To provide stipend support to 47 lakh youth in three years, Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme will be rolled out.
Boost for tourism with 50 destinations to be chosen and developed
States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism center or the financial capital for the promotion and sale of their own ODOPs (one district, one product), GI products, and other handicraft products, and for providing space for such products of all other states
#7 Key highlights and announcements under the pillar Financial Sector
Reforms in the financial sector and innovative use of technology have led to financial inclusion at scale, better and faster service delivery, ease of access to credit and participation in financial markets. This Budget proposes to further these measures with the following important announcements.
Set up a National Financial Information registry to enable financial inclusion and digital lending
Revamp of Credit Guarantee Scheme for the MSMEs with an infusion of Rs 9000 crores.
Integrated IT portal for claiming of unclaimed dividends and shares to be set up
Watch detailed YouTube video on Budget 2023
Fiscal Management and Fiscal Deficit for the FY 2023-24
States to be allowed a deficit of 3.5% of GSDP of which 0.5% is tied to power sector reforms.
Fiscal deficit for FY 2023-24 projected at 5.9% of the GDP
Fiscal deficit in line to go below 4.5% by 2025-26
Changes in Indirect taxes
A simplified tax structure with fewer tax rates helps in reducing compliance burden and improving tax administration. So, the Govt has proposed to reduce the number of basic customs duty rates on goods, other than textiles and agriculture, from 21 to 13. As a result, there are minor changes in the basic custom duties, cesses and surcharges on some items including toys, bicycles, automobiles and naphtha.
Following changes are announced
What gets costlier
Taxes on cigarettes hiked by 16%
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%
Fully imported luxury cars and EVs to cost more as govt raises custom duty from 60 pc to 70 pc in Budget
What gets cheaper
Customs duty cut on the import of certain inputs will make made in India mobile phones cheaper
Customs duty on parts of open cells of TV panels cut to 2.5%
Basic customs duty on seeds used in the manufacturing of lab-grown diamonds to be reduced
Customs duty on shrimp feed to be reduced to promote exports
Changes in Personal Income tax rates
With an aim to simplify tax structure and make tax administration easier, the Govt has proposed certain changes to the personal income tax rates
There is a tax rebate under Section 87A for anyone upto Rs 7 lakh under New tax regime. So, anyone with an income of upto Rs 7 lakh will be exempt from Income tax payment
5 major changes in personal tax rates
The slabs under new tax regime have been reduced from 6 to 5. These are the latest slabs and the tax structure.
New Tax Regime : Revised Slabs
Rs 0-3 lakh – no tax
Rs 3-6 lakh – @ 5%
Rs 6-9 lakh – @ 10%
Rs 9-12 lakh – @ 15%
Rs 12-15 lakh- @ 20%
Above ₹ 15 lakh – @ 30%
The benefit of Standard Deduction was allowed to those opting the New Tax regime
Highest surcharge of rate of 37% brought down to 25% for those with income above Rs 5 crore.
Leave encashment of upto Rs 25 lakh made tax free for leave encashment of non-governmental employees.
Changes in Corporate Taxes
Extension of 15% corporate tax benefits to new companies commencing manufacturing till March 2024.
Enhanced limits for individuals and corporates to avail presumptive taxation.
Extension of benefits of date of incorporation by another year for startups
Ability to carry forward losses for ten years as against the earlier set frame of seven years from the time of incorporation