UNION BUDGET 2023-24: A Complete Guide

Commemorating India’s 75th year of independence, The Honorable Finance Minister, Madam Nirmala Sitharaman, has presented the much awaited Budget for 2023, outlining a 45 trillion rupee spending budget for the upcoming financial year. The Union Budget establishes the plan with a key focus on collective empowerment, laying the course for India’s future progress.

This year’s Budget is based on the idea of “Sabka Sath Sabka Prayaas: Janbhaagidaari” in an effort to make India self-sufficient. The Union Budget, which proudly ranks India as the fifth-largest economy in the world, aims to create the conditions for global economic stability, an atmosphere that is favorable for economic growth, and economic sustainability, or “Vasudeva Kutumbakam,” in the words of Honorable Finance Minister. Here is the viewpoint of Concept Investwell, Wealth Management Advisor Company in Surat, Gujarat on the Union Budget 2023-2024.

Saptarishi – 7 Priorities

The Union Budget 2023 places a high emphasis on creating possibilities for youth, macroeconomic stability, and growth and job development. To accomplish the objectives, the budget identifies seven priority areas: “Saptarishi” – Inclusive Development, Reaching the Last Mile, Youth Power, Financial Sector, Green Growth, Unleashing the Potential, and Infrastructure & Investment.

AGRICULTURE

  • Agriculture Credit Target to be increased to ₹20 lakh crores, with focus on animal husbandry, dairy, and fisheries.
  • The Centre will set up an agriculture accelerator fund to encourage agri startups in rural areas.
  • Build open source digital public infrastructure for agriculture focusing on farmer centric solutions for crop planning, farm inputs, insurance, crop estimation, market intelligence etc.
  • Converting Primary Agricultural Credit Societies (PACS) to multipurpose PACS as well mapping them. 63,000 Primary Agricultural Credit Societies are being computerized with investment of Rs. 2,516 crores.
  • Setting up decentralized storage capacity to help farmers realize remunerative prices through sale at appropriate times.
  • Launch Atmanirbhar Clean Plant Program focusing on Horticulture with 2200cr outlay.
  • Making India Global Hub for Millets. Support to be given IIM Hyderabad for research.

HEALTH

  • 157 new Nursing colleges to be established in co-location with existing 157 medical colleges.
  • Mission to eliminate Sickle cell Anemia by 2047 to be launched.
  • New program to promote research and innovation in pharmaceuticals will be taken up through centers of excellence.

ROAD, RAILWAY AND LOGISTICS

  • Capital investment outlay is being increased steeply for the third year in a row by 33% to INR 10 lakh crore, which would be 3.3% of GDP.
  • Support to State Governments for Capital Investment: 50-year interest free loan to state governments for one more year to spur investment in infrastructure, with a significantly enhanced outlay of INR 1.3 lakh crore.
  •  A capital outlay of INR 2.40 lakh crore has been provided for the Railways. This highest ever outlay is about 9 times the outlay made in 2013- 14.
  •  100 critical transport infrastructure projects (ports, coal, steel, fertilizer etc.) have been identified. They will be taken up on priority with investment of INR 75,000 crore, including INR 15,000 crore from private sources.
  • 50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity.

INFRASTRUCTURE

  • The outlay for PM Awas Yojana is being enhanced by 66 per cent to over 79,000 crore.
  • An Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector lending shortfall. This 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. It is expected to make available INR 10,000 crore per annum for this purpose.

BANKING & FINANCE

  • National financial information registry will be set up to serve as the central repository of financial and ancillary information.
  • Initiatives to promote business activities in GIFT IFSC like
    • Delegating powers under the SEZ Act to IFSCA to avoid dual regulation and 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 banks
    • Establishing a subsidiary of EXIM Bank for trade re-financing
  • Integrated IT portal will be established to reclaim unclaimed shares and unpaid dividend
  • Central Processing Centre will be setup for faster response to companies through centralized handling of various forms under the Companies Act.
  • One-time new small saving scheme for a 2 year period with a deposit facility of up to 2 lakh for woman at a fixed rate of 7.5%.
  • Maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from `15lakh to ` 30 lakh.

CLEAN ENERGY AND EV

  • National Green Hydrogen Mission, with an outlay of 19,700 Cr., will facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector. Government target is to reach an annual production of 5 MMT by 2030.
  • Budget provides 35,000 Cr., for priority capital investments towards energy transition and net zero objectives, and energy security.
  • Battery Energy Storage Systems with capacity of 4,000 MWH will be supported with Viability Gap Funding.
  • Inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with investment of 20,700 Cr., including central government support of 8,300 Cr.
  • To avoid cascading of taxes on blended compressed natural gas, propose to exempt excise duty on GST-paid compressed bio gas contained in it. To further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles.
  • 500 new ‘waste to wealth’ plants under GOBARdhan scheme will be established for promoting circular economy. These will include 200 compressed biogas plants, including 75 plants in urban areas, and 300 community or cluster-based plants at total investment of 10,000 crore.

EDUCATION

  • Set-up of National Digital Library for children and adolescents
  • Centre will recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students.
  • For realizing the vision of “Make AI in India and Make AI work for India”, three centers of excellence for Artificial Intelligence will be set-up in top educational institutions

OTHERS

  • Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth within the next three years.
  • Launch of a unified Skill India Digital platform for:  enabling demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes.
  • Government has also launched an integrated online training platform, iGOT Karmayogi, to provide continuous learning opportunities for lakhs of government employees to upgrade their skills and facilitate people-centric approach.
  • PAN will be used as the common identifier for all digital systems of specified government agencies.
  • For efficient administration of justice, Phase-3 of the E-Courts project will be launched with an outlay of 7,000 crore.
  • One hundred labs for developing applications using 5G services will be set up in engineering institutions to realise a new range of opportunities, business models, and employment potential.

MEDIUM, SMALL AND MICRO ENTERPRISES (MSMES)

  • Revamping credit guarantee scheme for MSMEs by infusing 9000cr, enabling additional collateral-free guaranteed credit of 2 lakh crore and further reduction in credit cost by 1%.
  • In cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security, will be returned to them by government and government undertakings.
  • An Entity DigiLocker will be set up for use by MSMEs, large business and charitable trusts.
  • Micro enterprises with turnover up to 2 crore and certain professionals with turnover of up to ` 50 lakh can avail the benefit of presumptive taxation. Also, propose to provide enhanced limits of 3 crore and 75 lakh respectively, to the tax payers whose cash receipts are no more than 5 per cent.
  • Deduction on payments made to MSME to be allowed only when payments are actually made.
  • For enhancing ease of doing business, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized.

TAX PROPOSALS

  • Rebate limit for Income tax raised to ₹7 Lakhs in the new tax regime.
  • Lowest slab of tax raised from ₹0-2.5L to ₹0-3L. 
  • Personal Tax Slab Rates Revised to:

₹0-3L: 0%

₹3-6L: 5%

₹6-9L: 10%

₹9-12L: 15%

₹12-15₹: 20%

Above ₹15L: 30% 

Tax exemptions under the new tax regime will provide increased disposable income in the hand of salaried consumers.

  • Upper limit for exemption under section 54 / 54F capped at ₹10 Cr. Section 54/54F provide relief on Capital Gains Tax on sale of capital assets. 
  • Highest tax slab in the New Tax Regime reduced from 42.74% to 39%.

The surcharge in top slab reduced from 37% to 25% in New Tax Regime.

Old tax regime rates continue.

  • Start-ups incorporated up to 31-03-2024 shall be eligible to claim tax exemptions under Section 80 IAC.

SURCHARGE AND CUSTOM DUTY REVISIONS

  • Government has reduced Custom Duty on Basic Acid Base Fluorspar from 5% to 2.5%

(Beneficial for fluorine chemistry players as fluorspar is raw material for many fluorine products)

  • Relief on customs duty on import of mobile components like:
    1. Camaras
    2. Batteries Etc.

And concession on lithium – ion batteries for one more year.

  • Reduction on customs duty on open cells used in production of televisions to 2.5%. This is likely to drive demand of televisions and beneficial for contract manufacturers.
  • Excise duty component NCCD on cigarettes increased by 16%.
  • Seeds for use in manufacturing of rough lab-grown diamonds (Custom from 5% to Nil – to Export Promotion).
  • Customs on Denatured ethyl alcohol from 5% to Nil (Positive for Chemical Industry).
  • Exempt excise on biogas contained in CNG. 
  • To Raise Basic Customs duty on Coal to 2.5% from 1%.

BUDGET 2023-2024

Rupees Comes In

Rupees Goes Out

OUR VIEW ON THE BUDGET

This is the First budget of Amrit Kaal and true to its name there was no major negative in the proposal and one big positive seen in this budget is consistency.

  • In 2021-22, Fiscal deficit reported was of 6.4% which is expected to decrease to 5.9% by FY23-24. Government continues path of Fiscal consolidation to reach a fiscal deficit below 4.5% by 2025-26.
  • The budget rightly decided to focus on economic growth by raising capital expenditure with focus on infrastructure and investing for future by focusing on Technology, Skill Development, & Green Economy.  
  • Focus of government continues to strengthen the domestic manufacturing especially at MSME segment.
  • Budget also focuses on leveraging digital infrastructure in different sectors like agriculture, Banking and Finance, education to improve overall productivity and ease of doing business.
  • One unexpected positive cue was change in Personal Income Tax slab rates. This indicates government step towards increasing consumption in the economy.

In the opinion of Concept Investwell , the budget presented by FM is growth oriented, open to digital ecosystem, capex driven and boost to domestic players by providing them with the required infrastructure. We remain bullish on the Indian growth story.

Write a Comment

Your email address will not be published. Required fields are marked *

2 − one =