On February 1st, Finance Minister Nirmala Sitharaman delivered the Union Budget 2023, the fifth budget (Wednesday). According to the finance minister, the total development of the Indian economy from a global viewpoint was the goal of the Union Budget 2023–24. Additionally, she stated that the Budget recommendations for the 2023–24 fiscal year are based on the idea of a successful and inclusive India, in which all regions and people, particularly our youth, women, farmers, OBCs, Scheduled Castes, and Scheduled Tribes, share in the benefits of growth. The Finance Minister further stated, “In these nine years, the Indian economy has grown in size from being the 10th to the 5th largest in the world. According to a number of international indicators, we have greatly strengthened our reputation as a country with sound governance, innovation, and a favourable economic environment. There are numerous Sustainable Development Goals where we have achieved tremendous progress.
The economic plan for realising this vision focuses on three key areas:
1st- creating enough chances for individuals, particularly young people, to realise their dreams;
2nd- giving growth and job creation a powerful boost;
3rd- enhancing macroeconomic stability.
India Budget 2023 Overview
• The expected total spending for RE 2022–23 is 41,87,232 crore, which is 3,93,431 crore greater than the actuals for FY 2021–22. The estimated total capital expenditure for RE 2022–23 is 7,28,274 crore.
• Estimated total spending for BE 2023–24 is 45,03,097 crore, of which 10,00,961 crore would be spent on capital. The Union Government’s continued commitment to strengthening economic growth through infrastructure development is seen in Budget 2023–24, which sees a 37.4% rise in capital expenditures over RE 2022–23. Effective Capital Expenditure increased by 30.1 percent over RE 2022–23 to 13,70,949 crore in BE 2023–24.
• Total resources being transferred to the States including the devolution of State’s share, Grants/Loans and releases under Centrally Sponsored Schemes, etc. in BE 2023-24 is 17,97,537 crore, which shows an increase of 1,43,056 crore over Actuals of FY 2021-22.
Priorities of Budget 2023-24:
The Budget 2023-24 adopts the following seven priorities
- Inclusive Development
- Reaching the Last Mile
- Infrastructure and Investment
- Unleashing the Potential
- Green Growth
- Youth Power
- Financial Sector
Budget 2023 Highlights: Union Budget FY 2023-2024 in a Glance
• Per capita income has more than doubled to ₹1.97 lakhs in around nine years
• The Indian economy has increased in size from being 10th to 5th largest in the world in the past nine years
• EPFO membership has more than doubled to 27 crores.
• 7,400 crore digital payments of ₹126 lakh crore have taken place through UPI in 2022.
• 11.7 crore household toilets constructed under Swachh Bharat Mission.
• 9.6 crore LPG connections provided under Ujjwala.
• 220 crore covid vaccination of 102 crore persons.
• 47.8 crore PM Jan Dhan bank accounts.
• Insurance cover for 44.6 crore persons under PM Suraksha Bima and PM Jeevan Jyoti Yojana.
• Cash transfer of ₹2.2 lakh crore to over 11.4 crore farmers under PM Kisan Samman Nidhi.
• Seven priorities of the budget ‘Saptarishi’ are inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power, and the financial sector.
Ministry Wise Budget 2023 Key Highlights are as follows:
Road Transport Budget:
• The government wants to produce 5 MMT of green hydrogen by 2030.
• National Green Hydrogen, just started, costing Rs 19,700 crore
• The Ministry of Petroleum and Natural Gas has been given Rs 35,000 crore to reach net zero and make the switch to a sustainable energy system.
• For the last and first mile of connection for the ports, coal, steel, fertiliser, and food grains industries, 100 important transport infrastructure projects have been identified. With an investment of Rs 75,000 crore, including Rs 15,000 crore from private sources, these would be addressed first.
• The FAME II scheme has been given a budget of Rs. 5,172 crore.
• The Ministry of Road Transport and Highways has received a budget allocation of Rs. 2.70 lakh crore (MoRTH).
• Digital Public Infrastructure for Agriculture:
Agriculture-related digital public infrastructure will be developed as a freely available, open-source, and interoperable public benefit. Through pertinent information services for crop planning and health, improved access to farm inputs, credit, and insurance, assistance for crop estimation, market intelligence, and support for the expansion of the agri-tech industry and start-ups, this will enable inclusive, farmer-centric solutions.
• Enhancing the productivity of cotton crop:
Through Public Private Partnerships, we will use a cluster-based and value chain approach to increase the productivity of extra-long staple cotton (PPP). Collaboration between farmers, the government, and business will be required for input distribution, extension assistance, and market connections.
Atmanirbhar Horticulture Clean Plant Program: With an investment of $2,200 crores, we will start the Atmanirbhar Clean Plant Program to increase the supply of disease-free, high-quality planting material for high-value horticultural crops.
An additional sub-plan of the PM Matsya Sampada Yojana with a targeted investment of’6,000 crores to support the activities of fishers, fish vendors, and micro & small businesses, enhance value chain effectiveness, and broaden the market.
• Agriculture Credit:
The agriculture credit target will be increased to 20 lakh crore with a focus on animal husbandry, dairy, and fisheries.
To assist MSMEs in receiving payments on time, deductions for expenses incurred on payments made to MSMEs would only be permitted when payments are actually paid.
New credit guarantee programme for MSMEs will go into effect on April 1, 2023, with an injection of Rs 9,000 crore into the corpus. This programme would permit an additional Rs 2 lakh crore of collateral-free guaranteed lending while also lowering the cost of the credit by roughly 1%.
• As many as 38,000 teachers and support staff are to be recruited in the next 3 years, for 740 Eklavya Model Residential Schools serving 3.5 lakh tribal students
• The government will launch Pradhan Mantri Kaushal Vikas Yojana 4.0
• 100 labs will be set up for developing apps using 5G services in engineering institutions
• Teacher training will be envisioned through innovative pedagogy, continuous professional development, curriculum transaction, and ICT implementation. The district institutes of education and training will be developed into vibrant institutes of excellence for this purpose
• National Child Trust, Children’s Book Trust and other sources to be encouraged to provide and replenish non-curricular titles in regional languages and English, to these libraries; collaboration with NGOs working in literacy also to be done
• PM VIKAS (Pradhan Mantri Vishwakarma Kaushal Samman), which was announced in Budget 2023, will include skilled people who are engaged in various traditional and skilled professions.
• In the Union budget for FY24, Rs 89,155 crores were allotted to the ministry of health and family welfare.
• The department of health and family welfare has been given a budget of Rs 86,175 crore, while the department of health research has been given a budget of Rs 2,980 crore.
• In the ongoing year, the budget spent on the department of health and family welfare is Rs 76, 370 while Rs 2,775 crore had been set for the department of health research.
• To facilitate the effective flow of credit, advance financial inclusion, and support financial stability, a national financial information registry will be established. It will act as the central repository for financial and related information. To oversee this credit public infrastructure, a new legislative framework will be developed in conjunction with the RBI.
• In collaboration with the general public and regulated firms, financial sector regulators must conduct a thorough analysis of the current laws. There would also be established deadlines for deciding applications under certain regulations.
• To enhance business activities in GIFT IFSC, the following measures are to be taken.
• Delegating powers under the SEZ Act to IFSCA to avoid dual regulation.
• Setting up a single window IT system for registration and approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI, and IRDAI.
• Permitting acquisition financing by IFSC Banking Units of a foreign bank.
• Establishing a subsidiary of EXIM Bank for trade refinancing.
• Amending IFSCA Act for statutory provisions for arbitration, and ancillary services, and avoiding dual regulation under SEZ Act
Urban Planning Budget:
• Public agencies will use the Urban Infrastructure Development Fund (UIDF), which will be managed by the National Housing Bank, to build urban infrastructure in Tier 2 and Tier 3 cities.
• The UIDF will be established by the use of prioritised Sector Lending deficit.
• Governments and towns are urged to modify urban planning and take other steps to make their communities “sustainable cities of tomorrow.”
The key highlights of the Budget 2023-24 Indirect Taxes are as follows:
The following are the main highlights of the Sector-Specific Budget for 2023–24:
• There are now 13 instead of 21 basic customs duty rates available for goods other than textiles and agricultural products.
• Some commodities, such as toys, bicycles, cars, and naphtha, have minor adjustments to the basic customs duties, cesses, and surcharges.
• GST-paid compressed biogas that is mixed with compressed natural gas is free from excise taxes.
• Customs duty on selected capital goods and machinery used in the production of lithium-ion batteries for electrically powered vehicles (EVs) has been extended till March 31, 2024.
• Customs duty exempted on vehicles, specified automobile parts/components, sub-systems, and tyres when imported by notified testing agencies, for the purpose of testing and/ or certification, subject to conditions.
• Customs duty on the camera lens and its inputs/parts for use in the manufacture of the camera module of cellular mobile phones was reduced to zero and concessional duty on lithium-ion cells for batteries was extended for another year.
• Basic customs duty reduced on parts of open cells of TV panels to 2.5 percent.
• Basic customs duty on electric kitchen chimneys increased to 15 percent from 7.5 percent.
This is about the union budget 2023-24..