The Union Finance Minister has presented the Union Budget 2023-24 in Parliament today. The highlights of the Budget are as follows:
Major achievements discussed
- Per capita income: PCI has more than doubled to ₹1.97 lakh in around nine years.
- 5th largest economy tag: Indian economy has increased in size from being 10th to 5th largest in the world in the past nine years.
- Formalized employment: EPFO membership has more than doubled to 27 crore.
- Direct Benefit Transfer: Cash transfer of ₹2.2 lakh crore to over 11.4 crore farmers under PM Kisan Samman Nidhi.
- Digital transactions: 7,400 crore digital payments of ₹126 lakh crore has taken place through UPI in 2022.
- Household toilets: 11.7 crore toilets constructed under Swachh Bharat Mission.
- Insurance cover: For 44.6 crore persons under PM Suraksha Bima and PM Jeevan Jyoti Yojana.
- Others: 9.6 crore LPG connections provided under Ujjwala; 220 crore covid vaccination of 102 crore persons; 47.8 crore PM Jan Dhan bank accounts.
Part A: Major Announcements
(1) Seven priorities of the budget ‘Saptarishi’
- These include inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector.
(2) Welfare
- Housing for all: Outlay for PM Awas Yojana is being enhanced by 66% to over Rs. 79,000 crore.
- Silver Economy: The maximum deposit limit for Senior Citizen Savings Scheme to be enhanced from Rs 15 lakh to Rs 30 lakh.
- Mahila Samman Savings Certificate: To commemorate Azadi Ka Amrit Mahotsav, a one-time new small savings scheme, Mahila Samman Savings Certificate to be launched. It will offer deposit facility upto Rs 2 lakh in the name of women or girls for tenure of 2 years (up to March 2025) at fixed interest rate of 7.5 per cent with partial withdrawal option.
(3) Industrial sector boost
- Entity DigiLocker: Entity DigiLocker will be setup for use by MSMEs, large business and charitable trusts to store and share documents online securely.
- PAN as business identifier: FM has said the Permanent Account Number (PAN) will be made as a single business identifier for all digital systems of all specified departments of the government.
- Credit facilitation for MSMEs: Revamped credit guarantee scheme for MSMEs to take effect from 1st April 2023 through infusion of Rs 9,000 crore in the corpus. This scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the cost of the credit by about 1 per cent.
- Central Processing Centre: This is to be setup for faster response to companies through centralized handling of various forms filed with field offices under the Companies Act.
- Diamond Industry: R & D grant for Lab Grown Diamonds (LGD) sector to encourage indigenous production of LGD seeds and machines and to reduce import dependency.
- Unity Mall: States to be encouraged to set up a Unity Mall for promotion and sale of their own and also all others states’ ODOPs (One District, One Product), GI products and handicrafts.
(4) Infrastructure push
- New Infrastructure Finance Secretariat: It will be established to enhance opportunities for private investment in infrastructure.
- Massive outlays: Investment of Rs. 75,000 crore, including Rs. 15,000 crore from private sources, for one hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors.
- Highest ever outlay for Railways: Capital outlay of Rs. 2.40 lakh crore has been provided for the Railways, which is the highest ever outlay and about nine times the outlay made in 2013-14.
- Urban Infrastructure Development Fund (UIDF): It will be established through use of priority Sector Lending shortfall, which will be managed by the national Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.
(5) Agricultural boost
- Agriculture Accelerator Fund: It will be set-up to encourage agri-startups by young entrepreneurs in rural areas.
- Millet boost: To make India a global hub for ‘Shree Anna’, the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
- PRANAM Scheme: “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” (PM-PRANAM) to be launched to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.
- Animal husbandry: ₹20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries A new sub-scheme of PM Matsya Sampada Yojana with targeted investment of ₹6,000 crore to be launched to further enable activities of fishermen, fish vendors, and micro & small enterprises, improve value chain efficiencies, and expand the market.
- Digital public infrastructure for agriculture: It will be built as an open source, open standard and inter operable public good to enable inclusive farmer centric solutions and support for growth of agri-tech industry and start-ups.
- APMC Storage: Massive decentralised storage capacity to be set up to help farmers store their produce and realize remunerative prices through sale at appropriate times.
- Atmanirbhar Clean Plant Program: This has been given an outlay of ₹2200 crore to be launched to boost availability of disease-free, quality planting material for high value horticultural crops.
- Bio-Input Resource Centres: Centre to facilitate one crore farmers to adopt natural farming over the next three years. For this, 10,000 Bio-Input Resource Centres to be set-up, creating a national-level distributed micro-fertilizer and pesticide manufacturing network.
(6) Health sector boost
- Sickle Cell Anaemia Elimination Mission: FM announced a mission to eliminate sickle cell anemia by 2047, which will include universal screening of seven crore persons between the ages of 0 and 40 years in affected tribal areas.
- Medical research: Joint public and Private Medical research to be encouraged via select ICMR labs for encouraging collaborative research and innovation. New Programme to promote research in Pharmaceuticals to be launched.
- More nursing colleges: 157 new nursing colleges to be established in co-location with the existing 157 medical colleges established since 2014.
(7) Rural Development
- Aspirational Blocks Programme covering 500 blocks: Launched for saturation of essential government services across multiple domains such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure.
- PVTG Development mission: FM announced the launch of a national mission for vulnerable tribes with an outlay of Rs 15,000 crore. The mission aims to provide support to India’s vulnerable tribes in areas of health, clean water and sanitation, basic infrastructure, and sustainable livelihood opportunities, among others.
(8) Higher Education
- District Institutes of Education and Training to be developed as vibrant institutes of excellence for Teachers’ Training.
- National Digital Library for Children and Adolescents to be set-up for facilitating availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility.
- ‘Bharat Shared Repository of Inscriptions’ to be set up in a digital epigraphy museum, with digitization of one lakh ancient inscriptions in the first stage.
(9) Finance Sector
- ‘Effective Capital Expenditure’ of Centre: Rs. 13.7 lakh crore
- Continuation of 50-year interest free loan: Such loans for state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions.
- National Financial Information Registry: To be set up to serve as the central repository of financial and ancillary information for facilitating efficient flow of credit, promoting financial inclusion, and fostering financial stability. A new legislative framework to be designed in consultation with RBI to govern this credit public infrastructure.
(10) Urban development
- Sustainable cities of tomorrow: Encouragement to states and cities to undertake urban planning reforms and actions to transform our cities into ‘sustainable cities of tomorrow’.
- Mechanized sanitation work: Transition from manhole to machine-hole mode by enabling all cities and towns to undertake 100 percent mechanical desludging of septic tanks and sewers.
(11) Skill development
- iGOT Karmayogi: An integrated online training platform, launched to provide continuous learning opportunities for lakhs of government employees to upgrade their skills and facilitate people-centric approach.
- Unified Skill India Digital platform: To be launched for enabling demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes.
- National Apprenticeship Promotion Scheme: Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme to be rolled out to provide stipend support to 47 lakh youth in three years.
- Tribal education: Centre to recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students over the next three years.
- Pradhan Mantri Kaushal Vikas Yojana 4.0: It will be launched to skill lakhs of youth within the next three years covering new age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills. 30 Skill India International Centres to be set up across different States to skill youth for international opportunities.
(12) Ease of Doing Business
- Jan Vishwas Bill: To amend 42 Central Acts have been introduced to further trust-based governance.
- Decriminalization of certain compliances: More than 39,000 compliances reduced and more than 3,400 legal provisions decriminalized to enhance Ease of Doing Business.
(13) IT push
- National Data Governance Policy: To be brought out to unleash innovation and research by start-ups and academia.
- AI push: Three centres of excellence for Artificial Intelligence to be set-up in top educational institutions to realise the vision of “Make AI in India and Make AI work for India”.
- 5G rollout: 100 labs to be setup for 5G services based application development to realize a new range of opportunities, business models, and employment potential.
- Infra push for E-Courts: Phase-3 of the E-Courts project to be launched with an outlay of Rs. 7,000 crore for efficient administration of justice.
(14) Energy
- Mandatory Compress Biogas blend of 5%: 5 per cent compressed biogas mandate to be introduced for all organizations marketing natural and bio gas.
- Green hydrogen: Annual production of 5 MMT under Green Hydrogen Mission to be targeted by 2030 to facilitate transition of the economy to low carbon intensity and to reduce dependence on fossil fuel imports.
- Battery storage: The government will support setting up of battery storage capacity of 4,000 MWH in India with viability gap funding.
- RE pus in Ladakh: 20,700 crore outlay provided for renewable energy grid integration and evacuation from Ladakh.
(15) Climate change mitigation
- GOBARdhan Boost: 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme to be established for promoting circular economy at total investment of Rs 10,000 crore.
- ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’, MISHTI: To be taken up for mangrove plantation along the coastline and on salt pan lands, through convergence between MGNREGS, CAMPA Fund and other sources.
- Green Credit Programme to be notified under the Environment (Protection) Act to incentivize and mobilize additional resources for environmentally sustainable and responsive actions.
- Amrit Dharohar scheme to be implemented over the next three years to encourage optimal use of wetlands, enhance bio-diversity, carbon stock, eco-tourism opportunities and income generation for local communities.
- Net zero commitments: ₹35000 crore outlay for energy security, energy transition and net zero objectives.
- Green credit programme: FM also says a green credit programme will be notified under the Environment Protection Act.
(16) Tourism Boost
- Model destinations: At least 50 destinations will be selected through challenge mode — physical, virtual connectivity, tourism security, guides, would be made available on an app to enhance tourist experience.
- Sector specific skilling and entrepreneurship development: To be dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative.
- Vibrant Villages Programme: Border tourism infrastructure and amenities to be facilitated in border villages.
(17) Others
ISFC reforms: To enhance business activities in GIFT IFSC, the following measures 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 foreign bank.
- Establishing a subsidiary of EXIM Bank for trade re-financing.
- Amending IFSCA Act for statutory provisions for arbitration, ancillary services, and avoiding dual regulation under SEZ Act
- Recognizing offshore derivative instruments as valid contracts.
Part B: Estimates
Revised Estimates 2022-23
- The total receipts other than borrowings is Rs 24.3 lakh crore, of which the net tax receipts are Rs 20.9 lakh crore.
- The total expenditure is Rs 41.9 lakh crore, of which the capital expenditure is about Rs 7.3 lakh crore.
- The fiscal deficit is 6.4 per cent of GDP, adhering to the Budget Estimate.
Budget Estimates 2023-24
- The total receipts other than borrowings is estimated at Rs 27.2 lakh crore and the total expenditure is estimated at Rs 45 lakh crore.
- The net tax receipts are estimated at Rs 23.3 lakh crore.
- The fiscal deficit is estimated to be 5.9 per cent of GDP.
- To finance the fiscal deficit in 2023-24, the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore.
- The gross market borrowings are estimated at Rs 15.4 lakh crore.
Part C: Direct Taxes
- Increased Rebate limit of Personal Income Tax: To be increased to Rs. 7 lakh from the current Rs. 5 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs. 7 lakh to not pay any tax.
- Tax slabs: Tax structure in new personal income tax regime, introduced in 2020 with six income slabs, to change by reducing the number of slabs to five and increasing the tax exemption limit to Rs. 3 lakh.
| New Tax Regime (current) | Tax Rates under the 2020 regime |
| Rs 0 to Rs 3 lakh – Exempt Rs 3 to 6 lakh – 5% Rs 6 to 9 lakh – 10% Rs 9 to 12 lakh – 15% Rs 12 to 15 lakh – 20% Above Rs 15 lakhs – 30% | Income till Rs 2.5 lakh – Exempt Rs 2.5 to Rs 5 lakh – 5% Rs 5 lakh to Rs 7.5 lakh – 15% Rs 7.5 lakh to Rs 10 lakh – 20% Above Rs 10 lakh – 30% |
- Agniveer Fund to be provided EEE status: The payment received from the Agniveer Corpus Fund by the Agniveers enrolled in Agnipath Scheme, 2022 proposed to be exempt from taxes. Deduction in the computation of total income is proposed to be allowed to the Agniveer on the contribution made by him or the Central Government to his Seva Nidhi account.
Part D: Direct Taxes
- EV push: Customs Duty on specified capital goods/machinery for manufacture of lithium-ion cell for use in battery of electrically operated vehicle (EVs) extended to 31.03.2024
Electronics manufacturing push
- Customs duty on camera lens and its inputs/parts for use in manufacture of camera module of cellular mobile phone reduced to zero and concessional duty on lithium-ion cells for batteries extended for another year.
- Basic customs duty reduced on parts of open cells of TV panels to 2.5 per cent.
- Basic customs duty on electric kitchen chimney increased to 15 per cent from 7.5 per cent.
- Basic customs duty on heat coil for manufacture of electric kitchen chimneys reduced to 15 per cent from 20 per cent.
Legislative Changes in Customs Laws
- Customs Act, 1962: To be amended to specify a time limit of nine months from date of filing application for passing final order by Settlement Commission.
- Customs Tariff Act: To be amended to clarify the intent and scope of provisions relating to Anti-Dumping Duty (ADD), Countervailing Duty (CVD), and Safeguard Measures.
CGST Act to be amended
- to raise the minimum threshold of tax amount for launching prosecution under GST from one crore to two crore;
- to reduce the compounding amount from the present range of 50 to 150 per cent of tax amount to the range of 25 to 100 per cent;
- decriminalise certain offences;
- to restrict filing of returns/statements to a maximum period of three years from the due date of filing of the relevant return/statement; and
- to enable unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators (ECOs).
