The Union Finance Minister Nirmala Sitharaman presented the government's annual union budget in the Parliament on February 1, 2023, which included capital outlays in the infrastructure, agri sector, and reworked tax slabs to benefit the middle class.
This is the government's final, full-fledged budget before the Lok Sabha elections in early 2024. Sitharaman began by referring to this as the "first Budget of Amrit Kaal". She stated that her budget includes seven priorities - inclusive development, reaching the last mile, infrastructure and investment, unleashing potential, green growth, youth power, and financial sector, which she referred to as the "Saptarishis", guiding her outlook.
The economic agenda of Budget 2023 was focused on three things:
- Providing ample opportunity for citizens, particularly youth
- Providing a solid impetus for growth and job creation
- Stabilizing the macroeconomic environment
"Budget hopes to build on the foundation laid in the previous Budget. Envision a prosperous, inclusive India where the fruits of development reach all sections", quoted Sitharaman.
Union Budget 2023: Proposed Changes In Tax Structure
The finance minister proposed changes in the income tax structure regime by reducing the number of slabs to five and increasing the tax exemption limit to ₹3 Lakhs.
Revised tax slabs as per the new tax regime
Income of Rs 0-3 lakh = nil.
Income above Rs 3 lakh and up to Rs 5 lakh = to be taxed at 5% under the new regime.
Income above Rs 6 lakh and up to Rs 9 lakh = to be taxed at 10% under the new regime.
Income above Rs 12 lakh and up to Rs 15 lakh = to be taxed at 20% under the new regime.
Income above Rs 15 lakh = to be taxed at Rs 30%.
In another wave of relief, the income rebate limit has now been increased to Rs 7 lakh from Rs 5 lakh in the new tax regime. Also, the average processing time for income tax returns has been reduced from 93 days to 16 days.
As per the finance minister, the government intends to implement next-generation common IT Return forms and strengthen the grievance redressal mechanism.
Here are the top 20 takeaways from the Union Budget 2023 presented by Finance Minister Nirmala Sitharaman today:
Capital investment outlay will be increased by 33% in the next fiscal year to 10 lakh crore - 3.3% of GDP in 2023-2024.
The income tax rebate limit for salaried and individual taxpayers under the new income tax regime has been increased from Rs 5 lakh to Rs 7 lakh.
The investment limit for the Monthly Income Scheme and the Senior Citizens' Saving Scheme has also been increased. Maximum Deposit Limit for Senior Citizen saving scheme to be increased from 15 to 30 lakhs
The revised estimate will maintain the current fiscal year's fiscal deficit target of 6.4%. It will be reduced to 5.9 percent in the fiscal year 2023-2024.
The agricultural credit target has been raised to 20 lakh crore. The government has also initiated computerization for 63,000 primary agricultural credit societies with an investment of Rs 2,516 crore.
One crore farmers will be helped to transition to natural farming in the next 3 years. Ten thousand bio-input resource centers will be established.
The allocation for the PM Awas Yojna has been increased by 66% to over 79,000 crores.
The government will also establish a national digital library for children and adolescents, restructure teacher training through various programs, and launch new initiatives to promote pharmaceutical research and innovation.
Under the Eklavaya Model Residential Schools, the Centre will hire 38,800 teachers and support personnel for 740 schools serving 3.5 lakh tribal students.
One hundred labs will be established at engineering institutions to develop apps using 5G services to create new business models and employment opportunities. Apps like Smart Classrooms, Precision Farming, Intelligent Transport Systems, and Healthcare will be covered in these labs, among others.
Three centres of excellence for AI will be established in prestigious educational institutions under the 'make AI in India'.
A 2.4 lakh crore outlay for railways has been proposed, the highest in nearly a decade and four times the previous year's budget.
The government intends to produce 5 MT of Green Hydrogen by 2030.
The government will introduce another dispute resolution scheme under Vivad Se Vishwas-2 to ease business and settle commercial disputes. PAN will be used as a unique identifier for all digital systems of the government agencies listed.
Pushing transport infra projects, 50 new airports, heliports, water aerodromes, and advanced landing zones will be built. One hundred critical transport infrastructure projects for the steel, ports, fertilizer, coal, and foodgrain sectors have been identified with an Rs75,000 crore investment, including Rs 15,000 crore from private sources.
At the cost of Rs 2,200 crore, the government will launch the Atmanirbhar Clean Plant Programme to increase the availability of disease-free quality planting material for high-value horticultural crops.
PM Vishwa Karma Kaushal Samman - an initiative to assist traditional artisans and craftspeople in improving the quality, scale, and reach of their products, in addition to integrating them into the MSME value chain, has been conceptualized.
The revised credit guarantee scheme will come into effect from April 1, 2023, with an infusion of Rs 9,000 crore into the corpus. This will provide MSMEs with an additional Rs 2 lakh crore in collateral-free credit.
PMPBTG Development mission will be launched to saturate PBTG habitations with basic facilities to improve the social-economic condition of the Particularly Tribal Groups.
Basic customs duty rates have been reduced from 21 to 13. Hence, some basic custom duties, cesses, and surcharges, such as toys, bicycles, and automobiles, have undergone minor changes. Also, cigarettes will become more expensive as the budget proposes a 16% increase in duty.
That's all from the Union Budget 2023. Stay tuned for more insights and analyses of the proposed provisions in the budget.