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Everything You Need To Know About the Union Budget 2023

calendar01 Feb, 2023
timeReading Time: 9 Minutes
Everything You Need To Know About the Union Budget 2023

Before the 2024 Lok Sabha elections, the central government of Narendra Modi announced its final union budget for 2023–2024 today. Nirmala Sitharaman, Minister of Finance of the Union announced the Budget.

The annual financial statement (AFS) for a certain fiscal year is another name for the union budget. The government presents it to emphasise its outlays and income during the fiscal year. Article 112 of the Constitution mandates that the administration give the Parliament a summary of anticipated revenues and expenditures for each fiscal year, which runs from April 1 to March 31. The projections of the government’s accounts for the upcoming fiscal year, known as budget estimates, are also included in the budget or AFS. Revenue Budget and Capital Budget are two categories for the Union Budget.

The previous budget established the groundwork for this one, and the plan for it is contained in India@100, a roadmap based on a competitiveness strategy. It establishes the foundation for India to execute sector- and region-specific policies based on the 4 S principles and reach high-income status by 2047. The budget’s sharp nudge to taxpayers to switch from the old tax system to the new one is its most interesting aspect. Some of the goals outlined in this budget include reducing fertiliser use and encouraging mangrove plantations and organic bio-resources under the MISHTI initiative.

Here is an article that explains all the budget terminology to assist you in better comprehending the budget announcement.

What is Saptarishi as mentioned by the Union Minister today?

Today, when introducing the Union Budget to the parliament, Union Finance Minister Nirmala Sitharaman said, “This is the first budget of Amrit Kaal.” She said, “We are celebrating Azadi ka Amrit Mahotsav and have entered into Amrit Kaal, the 25-year leadup to India@100,” as she presented the budget.

The world has recognised the Indian economy as a “bright light” in the 75th year of our independence. Our current year’s economic growth is expected to reach 7%. This is remarkable since it is the highest among all major economies. This is despite the worldwide downturn induced by Covid-19 and a war. As a result, the Indian economy is on the right road and, despite recent problems, is on pace for a bright future. Today, as Indians hold their heads high and the world recognises India’s achievements and victories, we are confident that the seniors who battled for India’s freedom would bless us in our future endeavours with delight.

The FM also mentioned the term “saptarishi” while explaining her economic vision. She referred to the seven main areas on which the government will focus as ‘saptarishis’, or seven great sages: inclusive development, reaching the last mile, infrastructure and investment, unleashing potential, green growth, youth power, and the financial sector. These seven emphasis areas will drive India forward in the same way that the seven sages steered the country towards righteousness. The Finance Minister’s seven priorities are as follows:

  • Inclusive development

            It will prioritise ensuring that everyone benefits from the country’s growth and success. The government will prioritise measures that promote equitable growth, reduce inequities, and foster a more inclusive society.

  • Reaching the last mile

The government will prioritise ensuring that all programmes and efforts reach the most remote and neglected segments of society. This goal will be met by making use of technology and innovative approaches.

  • Infrastructure and investment

The government intends to address the nation’s pressing need for greater infrastructure, including investment on ports, airports, railways, and highways.

  • Unleashing the potential

Will prioritise removing hurdles and obstacles to economic growth and progress. It is possible to do this through adopting changes in critical areas such as labour, land, and education.

  • Green growth

The government will place a high priority on promoting ecologically responsible and sustainable growth. In order to do this, it may take into account investing in renewable energy, upholding environmental standards, and taking steps to lessen the consequences of climate change.

  • Youth power

This will be accomplished through increasing expenditures in education and skill development, job creation, and entrepreneurial encouragement.

  • Financial sector

The Indian government intends to enhance the “financial sector,” which would contribute to national prosperity and development.

The Budget was unveiled today, and Prime Minister Narendra Modi hailed it, saying it will provide a solid basis for creating a developed India. According to the prime minister, the budget prioritises the underprivileged and will realise the aspirations of the middle class, farmers, and aspirational society.

In an interview BC Bhartia, National President and Praveen Khandelwal, Secretary General of CAIT said, “The Union Budget is a comprehensive and progressive economic document which ensures development of each and every sector in a structured way and provides ease of doing business to traders, ensuring robust growth in health sector and other services. Efforts to benefit the small manufacturing units will leverage the trading sector since the manufacturing goods and consumable income will come to economy and therefore will meet the current challenges of financial liquidity in the trading sector.”

Complete Analysis of the Union Budget 2023

While present the Annual financial statement, the Honorable Finance Minister proposed the following announcements:

  • Inclusive development – Sabka Sath Sabka Vikas

Major developments under this head includes:

  1. Nine (9) Crore drinking water connects to the rural houses of India.
  2. A cash transfer of 11.4 Crores for the Indian farmers under the PM-KISAN Yojna.
  3. A total fund of 6 Hundred Crore has been allocated to fisheries.
  4. 30 Skill India International Centers will be set up across different States under Pradhan Mantri Kaushal Vikas Yojana.
  • Agriculture and Cooperative
  1. The government has planned to build an accessible, inclusive and informative solutions for the Indian farmers. To promote the agriculture sector and to encourage innovative start-ups, an agriculture accelerator fund for agri startups will be set up in the rural areas.
  2. The Union Budget increased the agricultural credit target to Rs 20 lakh crore with a focus on animal husbandry, dairy and fisheries.
  3. To promote the horticulture, the budget also proposes to launch the ANB Horticulture Clean Plant Program.
  4. The Budget also aims to provide support IIMR Hyderabad to promote research and make India a global hub for millets
  • Health
  1. Government has planned to launch 157 new nursing colleges in year 2023 – 2024.
  2. Through this budget the Central government aims to launch, Sickle Cell Anaemia Elimination Mission.
  3. New programmes will be launched to be launched to promote the research in the field of pharmaceuticals. 
  • Education and skilling
  1. Central government through this budget aims to revamp the teachers training programme via District Institutes of Education and Training.
  2. Union Budget aims to encourage all the panchayat and ward levels to set up physical libraries in their areas. With this National Digital Library will be set up for the children and adolescents.
  • Reaching the last mile
  1. With this Union Budget the Central Government plans to launch the Pradhan Mantri PVTG Development Mission.
  2. Government plans to hire a total of 38, 800 teachers for Eklavya Model Rsedential School which is currently serving 3.5 lakhs tribal students.
  3. Union Budget of 2023 aims to provide the financial assistance for sustainable micro irrigation in the drought prone regions of Karnataka.
  4. Government will also set up a Bharat SHRI for digitization of ancient inscriptions.
  • Infrastructure and investment
  1. Union Budget aims to increase the capital investment outlaw by 33.4 per cent to a total of 10 Lakh Crores.
  2. The government has planned to continue with the 50 years interest free loan to state governments.
  3. The government will create more infrastructures in tire 2 and tire 3 cities in India by establishing Urban Infrastructure Development Fund.
  4. Budget has allocated a fund of INR 2.4 Lakh Crore for the Indian Railways. This is highest ever capital outlaw for the Indian railways.
  5. Budget 2023 will also hike the outlay of PM Awas Yojna by 66 per cent to INR 79,000 Crore.
  • Unleashing the potential – Trust based governance
  1. The Union Budget 2023 talks about making India an AI centre. For this 3 (three) AI specialised centres will be set up in the educational institutes to provide AI based solutions for agriculture and health.
  2. The government will also introduce the National Data Governance Policy.
  3. Budget also aims to introduce Vivad Se Vishwas – I, this will provide relief to MSMES in India which were affected during the Covid-19 period.
  4. Introduction of Vivad Se Vishwas – II to resolve the disputes arising out of contact between the Government of India and Government undertakings.
  5. Government will also set up Digi Lockers[1], to facilitate secure sharing and storing of document by the business enterprises and charitable trusts.
  6. To set up 100 labs for 5G services in India. This will create more employment and business opportunities.
  7. The Budget talks about lab grown diamonds (LGD) and R&D grants to this sector.
  • Green growth
  1. With this Union Budget 2023, the government plans to establish GOBARdhan scheme for promoting circular economy.
  2. Union budget 2023 will also launch PM-PRANAM to encourage state and UT governments to promote the usage of alternative fertilizers.
  3. Government also aims to set up 10,000 bio- inputs resource centres to facilitate farmers to adopt natural farming.
  4. The government also aims to set up 500 new waste to wealth plants.The budget also introduced Green Credit Programme.
  • Youth power – Amrit peedhi
  1. Budget introduced new courses like coding, AI, robotics and 3D printing under PMKVY 4.0
  2. Under this Budget measures have been taken to boost tourism in India by selecting 50 destinations by the challenge mode for complete package for domestic and foreign tourists.
  3. State governments will be encourages to set up unity malls within their states for the promotion of One District-One-Product, GI and handcraft products.  
  • Financial Sector
  1. The Budget has increased the maximum deposit limit for the senior citizens of India under the Senior Citizen Saving Scheme from INR 15 Lakhs to INR 30 Lakhs.
  2. Mahia Samman Bachat Patra, under this scheme the government has announced one time saving scheme for a 2 year period with 7.5 per cent interest rate and partial withdrawal option. The scheme provide the deposit facility up to INR 2 Lakhs.
  3. The government has planned to set up the Central Data Processing Centre for faster handing of administrative work under the Companies Act of 2013.
  4. Union Budget 2023 also aims to set up a National Financial Information Registry to enhance financial stability in the country.
  5. With the Credit Grant Scheme, Central government has planned to expand the corpus of MSME and under the revamp scheme the Budget will provide additional collateral free guarantee credit of INR 2 Lakh crore.
  6. Union Budget 2023 has proposed to create more trained professionals in Indian securities market through award of educational certificates.
  7. Budget also promises to promote business activities in GIFT IFSC.  

With above 7 key pointers, the Union Budget 2023 also discusses on the following points:

  • Fiscal management
  1. Under the Union Budget 2023, government has announced, 50 year interest free loans to be given to state governments.
  2. Budget also allows fiscal deficit of 3.5 per cent of GDSP for states out of this 0.5 per cent is tied to the power sector reforms.
  3. Central Government with this budget targets the fiscal deficit to be below 4.5 per cent by 2025 – 2026.
  • Tax proposals under Union Budget 2023

With the Union Budget 2023 government has planned to make some changes to the custom duty on:

  1. Import of capital goods for Li-ion battery manufacturing
  2. Import of mobile camera lens
  3. Compounded rubber so that it can be at par with natural rubber
  4. Seeds for manufacturing lab grown diamonds
  5. Denatured ethyl alcohol
  • Tax benefits for the industries
  1. Union Budget 2023 aims to enhance the limit for micro enterprises and professionals to avail benefits of presumptive taxations with that 95 per cent of receipts to be non-cash.
  2. The budget has also extended 15 per cent corporate tax benefits to new co-operatives, commencing manufactures till March 31, 2014.
  3. The government has also introduced the higher limit of INR 2 Lakh per member for deposits and loans in cash by PACS and PCARDBs. With this a higher limit of INR 3 Crore for TDS on cash withdrawal for co-operative societies.
  4. The government has also accounted to exempt income of authorities, boards and commissions set up by the statutes of Union or State Government from income tax under certain section.
  5. Union Budget 2023 has also provided the extension of period of tax benefits to funds relocated to IFSC, GIFT City till March 31, 2025.
  • Simplifying personal income tax

By increasing the tax rebate to up to 7 lakhs, the government has taken a significant step. It has provided the middle class with long-awaited tax relief in the shape of a tax rebate, with no tax up to $7 lakh and only 5% tax up to $9 lakh. More money will be available to people as a result, which they will use for investments. The increased total spending brought on by the extra cash will also assist to improve the economic situation.

AS per the new tax slabs, on total income between Rs. 3 lakh and Rs. 6 lakh, a 5% tax will be applied. On income between Rs. 6 lakh and Rs. 9 lakh, a 10% tax will be applied. On income between Rs. 12 lakh and Rs. 15 lakh, a 20% tax will be applied. And on income over Rs. 15 lakh, a 30% tax will be applied.

Other important highlights

  • Capital investment outlay increased by 33 per cent to INR 10 Lakh crore
  • Effective capital expenditure at 4.5 per cent of GDP.
  • Fiscal deficit estimate to be 5.9 per cent of GDP for the year 2023 – 2024
  • Real GDP to grow at 7 per cent in the year 2023 – 2024
  • Exports to grow at 12.5 per cent in the year 2023 – 2024
  • Atmanirbhar clean plant program with outlay of INR 2200 Crore
  • Basic custom duty rates on goods (other than textiles and agriculture) to be reduces from 21 to 13 for the year 2023 – 2024
  • Sub Scheme of PM Matsya Sampada Yojna to be set up with an outlay of INR 6,000 Crore.

Allocation of funds to different ministries under Union Budget 2023

The funds have been distributed among the ministries in the following manner:

  • Ministry of Defence – INR 5.94 lakh crore
  • Ministry of Road Transport and Highways – INR 2.70 lakh crore
  • Ministry of Railways – INR 2.41 lakh crore
  • Ministry of Consumer Affairs, Food and Public Distribution – INR 2.06 lakh crore
  • Ministry of Home Affairs – INR 1.96 lakh crore
  • Ministry of Chemicals and Fertilisers – INR 1.78 lakh crore
  • Ministry of Rural Development – INR 1.60 lakh crore
  • Ministry of Agriculture and Farmers Welfare – INR 1.25 lakh crore
  • Ministry of Communications -INR 1.23 lakh crore

Conclusion

Before the 2024 Lok Sabha elections, the central government of Narendra Modi announced its final union budget for 2023–2024 today. Nirmala Sitharaman, Minister of Finance of the Union announced the Budget. The Budget was unveiled today, and Prime Minister Narendra Modi hailed it, saying it will provide a solid basis for creating a developed India. According to the prime minister, the budget prioritises the underprivileged and will realise the aspirations of the middle class, farmers, and aspirational society.

Read Our Article: An Overview Of The Union Budget 2021-2022 (Part-A)

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