Budget 2023 Key Highlights: All you need to know about the Budget 2023

In her fifth consecutive budget speech, Union Finance Minister Nirmala Sitharaman made up to five personal income tax announcements on 1st February 2023 while releasing Budget 2023. Last year’s budget made no mention of income taxes. Three announcements stood out among these five. First, under the new tax regime (announced in the 2020 budget), persons earning up to Rs. 7 lahks per year would not be required to pay any tax. Second, the new system will be the default tax regime; nevertheless, the old regime will not be phased out, and residents may continue to utilize either. Third, the new regime’s number of slabs has been lowered from six to five. In this write up we’ll discuss Budget 2023 Key Highlights in great detail.

Quick Look

The yearly budget of the Indian government, which includes information on all expenditures, income estimates, and development goals, is a significant document. Every year, the Indian Finance Minister delivers the budget to Parliament, which acts as the foundation for allocating monies for the nation’s economic and social well-being. Every year, the budget also includes information regarding the nation’s present fiscal and economic underpinnings, as well as plans, activities, and efforts taken to enhance them. 

Likewise, this year also the Finance Minister has come up with a Budget with significant characteristics and benefits for taxpayers, farmers, and industrialists and for the overall development of the country. 

We’ll discuss Budget 2023 Key Highlights, the Aim of Budget 2023, and Characteristics of Budget 2023, so stay tuned with us and not miss any crucial information.
<h2id=”of” >Budget 2023: Aim of Budget 2023

The following are the aim of Budget 2023:

• Opportunity creation for citizen with more focus on youth
• Creation of Jobs and promoting growth
• Aims for sustaining strong and stable Macro- Economic Environment
• Prioritizing the Saptrishi- 7
  • • Inclusive Development
    • Reaching the Last Mile
    • Infrastructure and Investment
    • Unleashing the Potential, specially the youth 
    • More Greener Growth
    • Development of Financial Sector
    • Promotion of Youth Power

Budget 2023: Characteristics of Budget 2023

The Budget 2023 consists of various characteristic which are as follows:

• Agriculture and Cooperative: To promote and enhance the cooperative and agriculture development, the Government of India in its Budget 2023, have focused significantly on certain factors such as, Building Digital Public Infrastructure, Setting up Agriculture Accelerator Fund, Horticulture Clean, Targeted Funding, Making India Global Hub for Millets, Setting- up of widely available storage capacity.

• Health: Creation of new nursing colleges and elimination mission of Anemia through Sickle Cell. Also, to promote New Programme in research in Pharmaceuticals to be launch.
  Further, Joint Public and Public Medical Research to be promote via select ICMR Labs.

• Reaching the Last Mile: Over the next three years, an outlay of Rs 15000 crores is proposed for the newly created Pradhan Mantri PVTG (Primitive Vulnerable Tribal Group) to enhance the socioeconomic situations of vulnerable tribal communities.
  The budget for the PM Awaas Yojana has been increased by 66% to around Rs 79,000 crores.
  The centre intends to engage 38,800 teachers and other personnel for 740 Eklavya Model Residential Schools, which will serve 3.5 lakh indigenous kids over the next three years.

• Infrastructure and Investment: The proposed capital expenditure is up 33% to Rs 10 lakh crore. The state governments’ 50-year interest-free loan would be extended for another year, resulting in an outflow of Rs 1.3 lakh crore. A total of Rs 2.4 lakh crore is budgeted for railroads. To improve regional aviation connectivity, fifty airports, heliports, water aerodromes, and advanced landing grounds will be revitalised. The Urban Infrastructure Development Fund (UIDF) would be formed with an annual investment of Rs 10,000 crore to build urban infrastructure in Tier 2 and Tier 3 cities.

• More Green Growth: The government includes “Green Growth” as one of the Budget’s seven focal areas this year, with the goal of reaching net zero carbon emissions in India by 2070.

• Green Hydrogen: Rs 19,700 crore has been committed for the National Green Hydrogen Mission, which would promote a low-carbon economy, reduce dependency on fossil fuel imports, and position the country as a technical and market leader in this developing industry.
• Energy Transmission: A 13-GW renewable energy transmission line from Ladakh is proposed, with a total expenditure of Rs 20,700 crore, including Rs 8,300 crore in central support.
• Green credit programme: Under the Environment Protection Act, a green credit programme was established to encourage ecologically good conduct.
• Vehicle replacement: monies have been granted for the disposal of old cars held by the central government, as well as assistance to states in replacing their outdated vehicles and state ambulances.
• Energy transition: Rs 35,000 crores given for critical capital investments in energy transition, net zero objectives, and energy security.
• Battery Storage: Viability gap financing for battery energy storage systems with a capacity of 4,000 MWh has been introduced.

Budget 2023 Key Highlights

“This is the first budget in Amrit kaal, and it seeks to build on the foundation built by the previous budget as well as the blueprint prepared for India at 100,” Sitharaman said. During her budget address, the finance minister stated that the focus would continue to be on broadening the scope of economic growth by increasing critical areas such as infrastructure, manufacturing, and job creation. The following are the Key Highlights for Budget 2023:

• The Indian economy is on the Correct Path: Finance Minister Nirmala Sitharaman stated that the Indian economy is on the right track and, despite hurdles, is on pace for a prosperous future. “Our focus on wide ranging changes and good policies helped us do successfully in tough times. India’s expanding worldwide reputation is due to various achievements, including a one-of-a-kind world-class digital public infrastructure, a Covid immunization programme, and a proactive involvement in frontier areas.

• Program to provide free food grains under PM Garib Kalyan Anna Yojana: According to the finance minister, the PM Gaarib Kalyan Anna Yojana is a programme that the government has put into place to provide priority households with free food grains for the upcoming year. According to the finance minister, the government would be responsible for paying the total cost of roughly Rs 2 lakh crore.

• 7 priorities for the budget for 2023: The Union Budget will be centred around seven goals, according to the Finance Minister. They are financial sector, infrastructure and investment, unleashing potential, green growth, young power, and inclusive development.

• Amrit Kaal Budget: According to the finance minister, this budget will establish the foundation for the Amrit Kaal, which would have a knowledge-based economy and growth that is driven by technology. “A technology-driven, knowledge-based economy with sound public finances and a thriving financial sector is part of our vision for the Amrit Kaal. It’s crucial to attain this “janbhagidari” by “sabka saath, sabka prayaas,” “She said.

• A Strong Boost for Agriculture: As expected before, the finance minister made a number of statements to support the agriculture industry as a whole, including offering farmers accessible answers to problems they encounter. She unveiled a fund to “accelerate” the agriculture industry. The goal for agricultural finance would rise to Rs 20 lakh crore, with an emphasis on dairy, fisheries, and animal husbandry. Nirmala Sitharaman stated, “We would introduce a new sub-scheme with planned investment of Rs 6,000 crore to support operations of fishermen, fish merchants, and MSMSEs.

• Health Training and Education: According to the finance minister, 157 new nursing colleges would be built alongside the 157 medical colleges that have already been operational since 2014. To promote collaborative research and innovation, ICMR labs will be made accessible for use by professors from public and private medical colleges as well as R&D teams from the corporate sector. She also introduced a brand-new initiative to support pharmaceutical research and innovation. The government would also compel businesses to make investments in key sectors for research and development.
  According to the finance minister, a national digital library for kids and teenagers would be established to make it easier to access high-quality books across all levels, genres, and languages, as well as across all geographies and device types.

• Increased spending for PM Awas Yojana: The budget for the Pradhan Mantri Awas Yojana, a government programme in India that would offer affordable homes for the urban poor, is being increased by 66% to more than Rs 79,000 crore.

• Significant Increase in Investment: According to the finance minister’s budget address, the government’s primary objective is still investment and job development. The capital, she claimed Nirmala Sitharaman, the finance minister, stated during her budget address that the capital investment spending will rise by 33% to Rs 10 lakh crore, or 3.3% of GDP.
  She said that the provision for 50-year loans to state governments without interest has been extended by a further year. With an increased budget of Rs. 1.3 lakh crore, this would be done to encourage infrastructure investment and to provide them with incentives for complementary policy measures.

• Railway expenditures is 2.40 Lakh Crore Rupees: According to the finance minister, the budget for Indian Railways would be Rs 2.40 lakh crore, which is nine times more than the budget for 2013–14.

• PAN to be used as a standard Identification: According to the finance minister, the PAN will be used as a standard identity for all digital systems of the designated government agencies for businesses that are required to have one.

• Target for Fiscal Deficit in FY24: In contrast to FY23, when the fiscal deficit aim was 6.4% of GDP, FY24’s target is now 5.9% of GDP. “I reiterate my objective to lower the budget deficit below 4.5 percent of GDP by 2025-26,” the finance minister stated.

• Customs duty on certain items including Cigarettes: The finance minister recommended lowering the basic customs tax rates from 21% to 13% for commodities other than textiles and agricultural products. The fundamental customs duties, cesses, and surcharges on various commodities, such as toys, bicycles, and cars, will therefore fluctuate slightly. Cigarette import taxes have increased once more.

• Substantial changes to the new Income Tax System: According to the new income tax system, the income tax rebate has been increased to cover income up to Rs 7 lakh, according to Finance Minister Nirmala Sitharaman.
  “The new personal income tax system, with six income bands beginning at Rs 2.5 Lakhs, would be introduced in 2020. By decreasing the number of tax slabs to 5 and raising the tax exemption threshold to Rs 3 Lakhs, I propose modifying the tax system under this regime “She said.
  She also suggested that the new tax system should allow for more flexibility in tax slabs. According to Finance Minister Nirmala Sitharaman, the new tax rates are as follows: “The new tax rates are 0 to Rs 3 lakhs – zero, Rs 3 to 6 lakhs – 5%, Rs 6 to 9 lakhs – 10%, Rs 9 to 12 lakhs – 15%, Rs 12 to 15 lakhs – 20%, and beyond 15 lakhs – 30%.

Takeaway

This budget will also include measures to guarantee the growth rate in 2023 in such a scenario. The world economy is on the edge of recession, and the rupee is depreciating quickly, if we look at the current scenario in light of Budget Highlights 2023. The Finance Minister faces a number of issues in this circumstance, including decreasing the budget deficit and promoting development initiatives without inflation. The government reaffirmed its commitment to infrastructure development as Amrit Kaal’s first budget aims to increase capital spending by 33% to 10 lakh crore in FY24, equivalent to 3.3% of the nation’s GDP. With the Center’s actual capital spending, the government has boosted infrastructure funding sharply for the third year in a row.
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