7 Priorities In Union Budget 2023 To Guide India Through ‘Amrit Kaal’

1. 1. Inclusive development

   2. Reaching the last mile

   3. Infrastructure and investment

   4. Unleashing the potential

   5. Green growth

   6. Youth power

   7. Financial sector

Here are 10 key points on Budget 2023

1. In a big push for income tax relief, the government has simplified the slabs in the new tax regime. While there will be no tax on income up upto ₹ 7 lakhs a year, The country’s top tax bracket has been brought down from 42.74 % to 39 %.

2. For senior citizens, the investment cap for the Monthly Income Scheme and Senior Citizens’ Saving Scheme has been raised. 

3. The agricultural credit target has been increased to ₹ 20 lakhs crore and in another populist measure, the allocation for PM Awas Yojna increased by 66 % to over ₹ 79,000 crores.

4. For the railways, the minister has announced an outlay of ₹ 2.4 lakhs crore – the highest in almost a decade and four times the last year’s budget.

5. For ease of business and to settle commercial disputes, the government will bring another dispute resolution scheme under Vivad Se Vishwas-2. There will be a one-stop solution for the reconciliation of IDs maintained by various government agencies.

6. PAN will be used as a common identifier for all digital systems of specified government agencies.

7. With a focus on switching to green fuel, the government is targeting 5 MT of Green Hydrogen production by 2030.

8. The government has also announced the provision of a 2% interest subsidy to ensure farmers get short-term loans of up to Rs 3 lakhs at an effective rate of 7% per annum.

9. The RBI has decided to raise the limit for collateral-free agriculture loans from the previous amount of Rs 1 lakhs to Rs 1.6 lakhs.

10. 100 labs to be set up for 5G solutions across engineering colleges.

Budget 2023: Income Tax

• The threshold limit of total income for rebate under section 87A for the default tax regime is increased from Rs. 5 lakhs to Rs. 7 lakhs, thus increasing the maximum rebate to Rs. 25,000. Employees paying tax as per the default tax regime can now claim standard deduction under section 16. The new tax regime is the default. There will be five slabs now instead of six in the new tax regime.
• The highest rate of surcharge for assesses under the default tax regime is reduced from 37% to 2, max rate of 39%.
• Rebate under section 87A is available to resident individuals whose total income during the previous year does not exceed Rs. 5 lakhs. Rebate is available to the extent of Rs. 12,500 only, and no rebate will be available if the total income exceeds Rs. 5 lakhs.
• Rebate under section 87A is available to resident individuals whose total income during the previous year does not exceed Rs. 7 lakhs. Rebate is available to the extent of Rs. 25,000 only, and no rebate will be available if the total income exceeds Rs. 7 lakhs.
• Leave encashment on retirement for non-government salaried employees increased from 3 Lakh to 25 Lakhs.

A. Direct Tax

• To enhance limits of presumptive taxation to Rs 3 Crore for Micro Enterprises and Rs 75 lakhs for professionals with cash payments less than 5%.
• Start-Ups: The date of Incorporation for Income Tax benefits to Start-Ups extended to 31st March 2024.
• The threshold limit for co-operatives to withdraw cash without TOS increased to Rs 3 Crore.
• Manufacturing co-operative societies established on or after 01-04-2023 and beginning production on or before 31-03-2024 may pay tax at a reduced rate of 15% (plus 10% surcharge and cess) under the new tax regime of Section 115BAE, provided specified incentives or deductions are not claimed.
• Winning from any online game shall be taxable at a rate of 30% (plus applicable surcharge and cess) under a new Section 115BBJ.
• Section 44 AD LIMIT – Increased from 2cr to 3cr no (cash receipts should not exceed 5% of total turnover)
• Section 44 ADA LIMIT – Increased From 50 Lakhs To 75 Lakhs (Cash Receipts Should Not Exceed 5% Of Total Turnover)

B. Indirect Tax

• Basic customs duty on kitchen chimneys increased from 7.5% to 15% and that on heat coils reduced from 20% to 15%.
• 16% increase in NCCD on certain cigarettes. -The govt proposed Customs duty
• The government also proposes to increase customs duty on silver to align with duty on gold and platinum.
• Relief in custom duty on the import of certain parts of mobile phones like camera lenses and batteries by another year.

Union Budget 2023-24 has announced the legalization of the permanent account number (PAN) as a single business identification. The move is to allow businesses to use PAN instead of other data as a unique identifier for entering into the national single-window system. This is expected to ease the compliance burden of businesses. Also announced that more than 39,000 compliances have been reduced and 3,400 plus legal proceedings have been decriminalized to enhance the ease of doing business.

Budget 2023: Agricultural accelerator fund to catalyze start-up interest in the sector.

An agricultural accelerator fund is to be set up to fund start-ups by entrepreneurs in rural areas to develop affordable and innovative solutions for challenges faced by farmers. The objective is to bring modern technology to transform agricultural practices and enhance India’s Agri production. 

Budget 2023: To give a push for auto sales and EVs, Govt to support states in replacing old vehicles.

The Finance Minister has announced a scheme to support state governments and municipalities in replacing their old polluting vehicles. This is set to give a push to the sales of automobiles in the country, including electric vehicles, as the focus of the government is also on a shift to green fuels by 2030.

Budget 2023: Health and family welfare.

• The Union health and family welfare ministry has been allocated Rs 89,155 crores in the Union budget FY24 marking a rise of a meager 12% when compared to the revised budget estimated for FY 23.
• For the upcoming financial year, Rs 86,175 crore has been allocated to the department of health and family welfare while Rs 2,980 crore has been allocated to the department of health research.
• In the ongoing fiscal, the budget spent on the department of health and family welfare is Rs 76, 370 while Rs 2,775 crore has been allocated for the department of health research.

Budget 2023: Green Growth

• The FM has announced an outlay of Rs 35,000 crore for energy transition investment.
• A detailed framework for pumped storage will also be formulated.
• The inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with an investment of Rs 20,700 crore including Central support of Rs 8,300 crore.
• The government will support the setting up of a battery storage capacity of 4,000 MWH in India with viability gap funding. The aim is to touch green hydrogen production of 5 million tonnes by 2030.

Govt to introduce 5% CBG mandate

• The government plans to introduce a 5% compressed biogas mandate for all entities marketing natural gas in India. This may mean that companies marketing natural gas in India will have to market compressed biogas, or CBG, to the extent of 5% of their volumes. 
• The government has been pushing for increased production of CBG and its blending with natural gas, particularly in the transportation segment that uses compressed natural gas, or CNG, as a fuel.

Budget 2023: MSMEs

• In a big relief to Covid-hit micro, small and medium enterprises (MSMEs), the Credit Guarantee Scheme for MSMEs will be extended with an infusion of Rs 9,000 crore. This will enable collateral for Rs 2 lakhs crore loans to MSMEs. This is expected to boost fund flow to the distressed and fund-starved MSME sector. The proposed scheme will take effect from April 1, 2023.
• The government’s Emergency Credit Line Guarantee Scheme (ECLGS) was earlier extended up to March 2023 from March 2022. Its guarantee cover was also expanded by Rs 50,000 crore to a total cover of Rs 5 lakhs crore with the additional amount being earmarked exclusively for hospitality and related enterprises. 

Budget 2023: Educational infra

• Eklavya Modern Schools in the next three years.
• 157 new nursing colleges will be established in colocation with the existing 157 medical colleges established since 2014.

Budget 2023: Agriculture Sector

• The target for agricultural credit has been set at Rs 20 lakhs crore for 2023-24.
• Overall bank credit surged in 2022, with the latest RBI data showing non-food bank credit was up 15.3% in December, up from 9.4% a year ago.
• However, credit to agriculture and allied activities was up 11.5% in December, down from 14.2% a year ago.
• The total outstanding bank loans to agriculture and allied activities stood at Rs 16.3 lakh crore as on December 30, up Rs 1.69 lakhs crore from the end of 2021-22.
• The Finance Minister says a National Cooperative database is being prepared, as well as plans to set up a massive de-centralized storage capacity. This will facilitate the setting up of fisheries, farm, and dairy cooperative societies in uncovered villages over the next five years. This is aimed at offering a boost to allied agricultural activities in the hinterland.

The budget proposes a framework for access to anonymized data

• A national data governance framework will be brought out to enable access to anonymized data. Last year, MeitY released a draft of this policy under which non-personal data housed with the Centre will be shared with Indian start-ups and researchers. Private companies will be “encouraged” to share such data with start-ups, the draft policy said.

Budget 2023: To boost the t tourism sector

• At least 50 destinations will be selected through challenge mode — physical, virtual connectivity, tourism security ty, and guides would be made available on an app to enhance the tourist experience. The focus on the development of tourism will be both domestic and foreign tourists, a major service sector.

Budget 2023: Rs 7,000 crore outlay for Phase 3 of the eCourts project

• Finance Minister announces phase three of the eCourts project, to be launched with an outlay of Rs 7,000 crore. According to a panel overseeing the eCourts project, the third phase envisions digital courts that “deliver justice as a service to all, beyond simply replicating offline processes digitally”.

Budget 2023: National Digital Library to bridge losses due to pandemic.

• A national digital library for children and adolescents will be set up for providing access to quality books to children across the country. Agencies such as the National Book Trust and Children’s Book Trust will also be encouraged to provide and replenish rural libraries with non-curricular books on regional languages.

Another year of a big jump in capex

• At Rs 10 lakh crore, the Centre’s capex target for 2023-24 is 33% higher than the budget estimate of Rs 7.5 lakh crore for 2022-23.

A new small savings scheme for women “Mahila Samman Saving scheme” launched

Mahila Saman Savings Scheme is being launched for women and girls. The scheme will have a tenure of two years till March 2025. The scheme will offer an interest rate of 7% for a maximum deposit of Rs 2 lakh. “For commemorating Azadi Ka Amrit Mahotsav, a one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available for two years up to March 2025. This will offer a deposit facility of up to 2 lacks in the name of women or girls for a tenor of 2 years at a fixed interest rate of 7.5% with a partial withdrawal option. “

The National Financial Information Registry will also be set up as a repository of financial information. More details on this are still awaited. This will also definitely help the financial sector which relies heavily on the real-time financial information of the customers for effective sanctioning and disbursement of its products.