On Wednesday, Finance Minister Nirmala Sitharaman presented Union Budget 2023. The Union Cabinet, headed by Prime Minister Narendra Modi, approved the Budget for the fiscal year 2023-24 before it was presented. Here are some highlights of the Budget.

Highlights of the Budget

Finance Minister Nirmala Sitharaman lists ‘Saptrishi’ or seven priorities of the Budget. These are inclusive development, reaching the last mile, infrastructure development, unleashing the potential, green growth, youth power, & finance sector. India’s mission for ‘Amrit Kaal’ includes a technology-driven and knowledge-based economy. The government’s economic agenda remains to facilitate opportunities, provide a strong impetus for job creation, and strengthen macroeconomic stability.

Direct Taxes

1. Providing much-awaited tax relief, the government has increased the income tax exemption limit to Rs 7 lakh under the new tax regime. The finance minister said that an individual with an annual income of Rs 9 lakh would have to pay only Rs 45,000 in taxes.
2. She added that an individual with an income of Rs 15 lakh would have to pay Rs 1.5 lakh tax, and an individual with an income of Rs 15 lakh would have to pay Rs 1.5 lakh tax down from Rs 1.87 lakh under the new tax structure.
3. New 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	15%
Rs over 15 lakhs	30%

4. The government has proposed to reduce the highest surcharge rate from 37% to 25% under the new tax regime. The government also proposes to cap deductions from capital gains on investments in residential houses to Rs 10 crore.

Indirect Taxes

1. Regarding indirect taxes, the government announced a 16% increase in NCCD on certain cigarettes.
2. Further, the basic customs duty on crude glycerine is proposed to be reduced to 2.5%. The finance minister proposed to increase import duty on silver bars to align them with gold and platinum.
3. In the Budget, customs duty on open cells of TV panels was reduced to 2.5% to promote value addition in the manufacturing of TVs.
4. The government also provided relief on Customs Duty on the import of certain parts & inputs like camera lenses & continue the concessional duty on lithium-ion cells for batteries for another year.

Fiscal Position

1. Finance Minister Nirmala Sitharaman reiterated her intention to bring the fiscal deficit below 4.5% of GDP by 2025-26. In the Budget, India set a fiscal deficit target of 5.9% of GDP in FY24.
2. The Finance Minister said the fiscal deficit target had been revised to 6.4% of GDP for the current year. States will be allowed a fiscal deficit of 3.5% of GSDP, of which 0.5% will be tied up to power sector reforms.

Capital Expenditure

Capital expenditure (capex) outlay has been enhanced by 33% to Rs 10 lakh crore, which would be 3.3% of GDP. This is almost three times the outlay made in 2020. Also, enhanced capex for Rs 10 lakh crore has been allocated for infrastructure developments, which is 3.3% of the GDP.

Railway

An outlay of Rs 2.4 lakh crore was provided for railways in FY24. It’s the highest-ever allocation for Railways.

Education

The government will employ 38,800 teachers and support staff in the next three years for 740 Eklavya model schools supporting tribal students. The government will also establish a digital library for children and adolescents will be set up to facilitate quality books.

Agriculture

The agriculture credit target will be increased to Rs 20 lakh crore, focusing on animal husbandry, dairy and fisheries.

Skill training:

The Government will launch Pradhan Mantri Kaushal Vikas Yojana 4.0. Also, 30 Skill India International Centres will be established across different states to skill the youth for international opportunities.

Clean Energy:

1. The Budget outlays Rs 35,000 crores in priority capital for the energy transition. Also, a Green credit programme will be notified under the Environment Protection Act. Battery storage will get viability gap funding.
2. The Government intends to support the establishment of battery energy storage of 4,000 MwH.
3. National Green Hydrogen mission, with an outlay of Rs 19,700 crore, will facilitate the economy’s transition to low carbon intensity and reduce dependence on fossil fuel imports.

Saving Schemes:

1. The Finance Minister said that the maximum deposit limit for Senior Citizen Savings Scheme is to be enhanced to Rs 30 lakh from Rs 15 lakh. Also, the Monthly Income Scheme limit doubled to Rs 9 lakh and Rs 15 lakh for joint accounts.
2. A new small savings scheme has been announced for women – Mahila Savings Certificate for two years up to March 2025.

MSME

In order to push MSMEs further, revamped credit guarantee for MSMEs is to take effect from Apr 1, 2023, with an infusion of Rs 9,000 crore in the corpus. It will reduce the cost of credit by one percentage point. 

Housing and Urban Development

The outlay for PM Awas Yojana is being increased by 66% to over Rs 79,000 crore. The government is likely to spend Rs 10,000 crore per year for the urban infra development fund. Also, cities are to be incentivised to improve creditworthiness for municipal bonds. 

Ease of Doing Business

1. The government has introduced many provisions for this sector. Government is to bring another dispute resolution scheme Vivad Se Vishwas-2 to settle commercial disputes. PAN will be the common identifier for all digital systems of government agencies. 
2. One-stop solution for reconciliation and updating identity maintained by various agencies to be established using Digi locker and Aadhar as foundational identity. 
3. Central Processing Centre is to be established for faster response to companies filing forms under the Companies Act. 

Digital Services

1. The Finance Minister said that the economy had become a lot more formalised, as reflected by the doubling of EPFO membership to 27 crores and Rs 7,400 crore digital payments of Rs 126 lakh crore through UPI in 2022.
2. While the government emphasised enhancing the scope of services in DigiLocker, it also announced setting up 100 labs in engineering institutions for developing applications to use 5G services. Also, Phase 3 of E-courts projects is to be launched with an outlay of Rs 7,000 crore.