A REVIEW OF THE UNION BUDGET FOR 2023–24

The Union Budget 2023–24 was presented in Parliament on 1.2.2023 by Smt. Nirmala Sitharaman, the Union Minister of Finance and Corporate Affairs.

Union budget 2023-24 highlights:

The following are the budget’s standout features:

• In around nine years, the per capita income has more than doubled to 1.97 lahks.
• In the past nine years, the Indian economy has grown from being the 10th to the 5th largest in the world.
• To 27 crore, the number of EPFO members has more than doubled.
• Through UPI, 126 lakh crore worth of digital payments were made in 2022.
• 11.7 crore domestic toilets were built as part of the Swachh Bharat Mission.
• Under Ujjwala, 9.6 crore LPG connections were made.
• 102 crore people received 220 crore covid vaccinations.
• 47.8 billion bank accounts for PM Jan Dhan.
• 44.6 crore people are covered by insurance under the PM Suraksha Bima and PM Jeevan Jyoti Yojana.
• More than 11.4 crore farmers would receive cash transfers totaling 2.2 lakh crore under PM Kisan Samman Nidhi.
• Inclusionary development, closing the gap, infrastructure, and investment, maximizing potential, green growth, young power, and the financial sector are the seven priorities of the budget, or “Saptarishi.”
• The Atmanirbhar Clean Plant Program, with a budget of 2200 crore, would be introduced to increase the supply of high-quality, disease-free planting material for valuable horticulture crops.
• 157 new nursing colleges will be built alongside the 157 medical colleges that have already been operational since 2014.
  • A centre will hire 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, which will educate 3.5 lakh tribal students over the course of the next three years.
  • The PM Awas Yojana budget has been increased by 66% to more than Rs. 79,000 crore.
  • The Railways have received a capital budget of Rs. 2.40 lakh crore, which is the greatest spending ever and over nine times the outlay from 2013–14.
  • Public agencies will use the Urban Infrastructure Development Fund (UIDF), which will be administered by the National Housing Bank, to build urban infrastructure in Tier 2 and Tier 3 cities. The UIDF will be created by utilizing the priority sector lending shortfall.
• Entity MSMEs, major corporations, and charitable trusts can utilize DigiLocker to set up secure online document storage and sharing.
• To actualize a new variety of options, economic models, and employment potential, 100 labs will be set up for the development of applications based on 5G services.
  • Under the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) project, 500 new “waste to wealth” plants would be built with a total investment of Rs 10,000 crore. All businesses that market natural and biogas will be required to use 5% compressed biogas.
  • Over the following three years, the centre will assist one crore farmers in switching to ecological farming. 10,000 Bio-Input Resource Centers must be established to do this, resulting in the development of a distributed national micro-fertilizer and pesticide manufacturing network.
  • Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0, which will be introduced in the next three years and teach thousands of young people new-age skills for Industry 4.0, including coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.
  • A revised loan guarantee program for MSMEs will go into effect on April 1, 2023, thanks to 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%.
  • A central processing centre will be established to handle a variety of documents sent to field offices under the Companies Act, allowing for a quicker response to businesses.
  • The Senior Citizen Savings Scheme would increase its maximum deposit amount from Rs. 15 lahks to Rs. 30 lahks.
  • A fiscal deficit that is expected to be below 4.5% by 2025–2026.
• Agri-startups by young businesspeople in rural areas are encouraged by the creation of the Agriculture Accelerator Fund.
• The Indian Institute of Millet Research, Hyderabad, would be promoted as the Center of Excellence for Sharing Best Practices, Research, and Technologies at the International Level in order to make India a global hub for “Shree Anna”
• 20 lakh crore in agricultural finance is earmarked for dairy, fishery, and animal husbandry.
• A new sub-scheme of the PM Matsya Sampada Yojana will be introduced with a planned investment of 6,000 crores to further facilitate the activities of fish vendors, fishermen, and micro- and small businesses, increase the efficiency of the value chain, and broaden the market.
• To encourage the development of the agri-tech sector and start-ups, it is necessary to create an open-source, open-standard, and interoperable digital public infrastructure for agriculture.
• With a $2,516 crore investment, the computerization of 63,000 Primary Agricultural Credit Societies (PACS) was started.
• To assist farmers in storing their produce and obtaining fair prices through timely sales, a sizable decentralised storage capacity will be set up.
• Launch of an extermination mission for sickle cell disease.
• Select ICMR labs will promote collaborative research and innovation in joint public and private medical research.
• Launch of a new programme to support pharmaceutical development.
  • Capital investment of Rs. 10 lakh crore, a sharp rise of 33% for the third year in a row, will raise economic potential and job creation, attract private capital, and act as a buffer against global headwinds.
  • The Aspirational Blocks Programme, which will span 500 blocks, has been established to ensure that all citizens have access to fundamental government services in a variety of areas, including health, education, agriculture, water resources, nutrition, and financial inclusion.
  • Pradhan Mantri PVTG Development Mission will cost Rs. 15,000 crore to implement over the next three years as part of the Scheduled Tribes Development Action Plan.
  • 75 billion rupees would be invested in 100 crucial transportation infrastructure projects, including 15,000 billion rupees from private sources, to provide last and first mile connectivity for the ports, coal, steel, fertiliser, and food grains industries.
  • The creation of the New Infrastructure Finance Secretariat will increase prospects for private infrastructure investment.
  • District Institutes of Education and Training will become thriving centres of excellence for the preparation of teachers.
  • The establishment of a National Digital Library for Children and Adolescents to facilitate the accessibility of high-quality books across platforms, languages, genres, and reading levels.
  • The Upper Bhadra Project would receive Rs. 5,300 crore in central aid in order to offer long-term micro irrigation and fill surface tanks with potable water.
  • A digital epigraphy museum will house the “Bharat Shared Repository of Inscriptions,” which will first digitise one lakh ancient inscriptions.
  • The Center’s “Effective Capital Expenditure” will be Rs. 13.7 lakh crore.
  • A 50-year loan with no interest is extended to state governments for one more year in order to encourage them to invest in infrastructure and implement complementing policies.
  • Prompting states and local governments to implement urban planning changes and initiatives aimed at transforming their cities into “sustainable cities of tomorrow.”
  • Convert all cities and villages to a machine-hole system by allowing them to completely mechanically desludge their septic tanks and sewers.
  • iGOT Karmayogi, an integrated online training platform, was introduced to give thousands of government workers opportunities for ongoing learning so they can improve their skills and support a people-centric approach.
  • To improve the ease of doing business, more than 3,400 law provisions have been decriminalised and more than 39,000 compliances have been cut.
  • To advance trust-based governance, the Jan Vishwas Bill to alter 42 Central Acts has been introduced.
  • To realise the aim of “Make AI in India and Make AI work for India,” premier educational institutions will host three centres of excellence for artificial intelligence.
  • The National Data Governance Policy will be released to encourage research and innovation among universities and start-ups.
  • DigiLocker service and Aadhaar as the foundational identity will be used to establish a one-stop solution for reconciling and updating the identity and address of individuals.
  • PAN will be used as the common identifier for all digital systems of specified government agencies to promote ease of doing business.
  • Government and government undertakings will return 95% of the forfeited amount relating to bid or performance security to MSME’s in cases where the MSME’s request it.
• A research and development funding for the lab-grown diamonds (LGD) industry is intended to promote domestic LGD seed and machine production and to lessen reliance on imports.
• By 2030, the Green Hydrogen Mission aims to produce 5 MMT of hydrogen annually, helping the country transition to a low-carbon economy and reducing reliance on imported fossil fuels.
• Outlay of 35000 crore for net zero, energy transition, and security of energy goals.
• To guide the economy toward sustainable development, battery energy storage solutions ought to be encouraged.
• Budget of Rs. 20,700 crore is allocated for Ladakh evacuation and grid integration of renewable energy.
  • In order to encourage States and Union Territories to promote alternative fertilisers and balanced use of chemical fertilisers, the “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” (PM-PRANAM) will be introduced.
  • Through the fusion of MGNREGS, CAMPA Fund, and other sources, the “Mangrove Initiative for Shoreline Habitats & Tangible Incomes,” or MISHTI, will be undertaken for the mangrove plantation along the coastline and on salt pan areas.
  • To encourage and mobilise additional resources for ecologically responsible and responsive measures, the Green Credit Programme will be notifiable under the Environment (Protection) Act.
  • Amrit Dharohar programme will be put into place during the following three years in order to promote the best possible use of wetlands, improve biodiversity, carbon stocks, ecotourism prospects, and generate money for nearby communities.
  • Under a pan, Direct Benefit Transfer 47 lakh young people would receive stipend support through the India National Apprenticeship Promotion Scheme over the course of three years.
  • Challenge mode will be used to pick at least 50 tourist spots, which will then be built as an all-inclusive package for both domestic and international visitors.
  • To accomplish the goals of the “Dekho Apna Desh” initiative, sector-specific skilling and entrepreneurship development must be integrated.
  • The Vibrant Settlements Programme would provide border villages with tourist infrastructure and services.
  • States should be encouraged to establish a Unity Mall for the marketing and sale of their own ODOPs (One District, One Product), GI products, and handicrafts, as well as those of all other states.
  • 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. This credit public infrastructure will be governed by a new legislative framework that will be developed in conjunction with the RBI.
  • In cooperation with the general public and regulated firms, financial sector regulators should conduct a thorough assessment of the current laws. There would also be established deadlines for deciding applications under certain regulations.
  • The following actions will be implemented to improve commercial operations in GIFT IFSC.
  • Giving IFSCA authority under the SEZ Act to prevent double regulation.
  • establishing a single-window IT system for IFSCA, SEZ authorities, GSTN, RBI, SEBI, and IRDAI registration and approval.
  • allowing international banks’ IFSC Banking Units to finance acquisitions.
  • Establishing an EXIM Bank subsidiary for trade financing.
  • Modifying the IFSCA Act to include statutory provisions for arbitration, supplementary services, and to prevent conflicting SEZ Act regulation
  • Admitting offshore derivatives as legitimate contracts.
  • Proposed changes to the Banking Regulation Act, the Banking Companies Act, and the Reserve of India Act in order to strengthen investor protection and improve bank governance.
  • The establishment of Data Embassies at GIFT IFSC will be eased for nations searching for digital continuity options.
  • SEBI will have the authority to establish, oversee, uphold, and enforce rules and regulations for instruction at the National Institute of Securities Markets as well as to acknowledge the awarding of degrees, diplomas, and certificates.
  • To make it simple for investors to recover unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority, an integrated IT site will be built.
  • allowing foreign banks’ IFSC Banking Units to finance acquisitions
  • Establishing an EXIM Bank subsidiary for trade financing.
  • Modifying the IFSCA Act to include statutory provisions for arbitration, supplementary services, and to prevent conflicting SEZ Act regulation
  • Admitting offshore derivatives as legitimate contracts.
  • Proposed changes to the Banking Regulation Act, the Banking Companies Act, and the Reserve of India Act in order to strengthen investor protection and improve bank governance.
  • The establishment of Data Embassies at GIFT IFSC will be eased nations searching for digital continuity options.
  • SEBI will have the authority to establish, oversee, uphold, and enforce rules and regulations for instruction at the National Institute of Securities Markets as well as to acknowledge the awarding of degrees, diplomas, and certificates.
  • To make it simple for investors to recover unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority, an integrated IT site will be built.
  • Mahila Samman Savings Certificate, a one-time new small savings programme, will be introduced to honor Azadi Ka Amrit Mahotsav. For a two-year period (until March 2025), it will provide deposit facilities up to Rs 2 lakh in the name of women or girls at a fixed interest rate of 7.5% with the option of partial withdrawal.
  • The monthly income account scheme’s maximum deposit amount would increase from Rs 4.5 lakh to Rs 9 lakh for single accounts and from Rs 9 lakh to Rs 15 lakh for joint accounts.
  • The state capital budget must use the entire fifty-year, interest-free loan by 2023–2024. A portion of the loan is dependent on States raising their actual capital expenditure, while a portion of the outlay is dependent on States taking out certain loans.
  • States are permitted a fiscal deficit of 3.5% of the GSDP, of which 0.5% is related to changes in the power sector.
• Updated Projections 2022–2023:
  • The total revenue received other than borrowings is Rs 24.3 lakh crore, of which Rs 20.9 lakh crore comes from net tax revenue.
  • The total amount spent is Rs 41.9 lakh crore, of which approximately Rs 7.3 lakh crore is allocated to capital expenditures.
  • According to the Budget Estimate, the fiscal deficit is 6.4% of GDP.

• Budget projections for 2023–24:
  • Estimates place the entire income (other than borrowings) at 27.2 lakh crore and the total outlay at 45 lakh crore.
  • The expected net tax revenue is Rs 23.3 lakh crore.
  • 5.9% of GDP is thought to be the fiscal deficit.
  • The expected net market borrowings from dated securities for the budget deficit in 2023–24 is Rs 11.8 lakh crore.
  • The expected gross market borrowings total Rs 15.4 lakh crore.

UNION BUDGET DIRECT TAXES

• The goals of direct tax proposals are to preserve continuity and stability in taxation, further simplify and rationalize numerous regulations to ease the cost of compliance, encourage the spirit of entrepreneurship, and give citizens tax relief.
• The Income Tax Department works tirelessly to enhance taxpayer services by making compliance simple and straightforward.
• To further enhance taxpayer services, there are proposals to introduce a new Common IT Return Form for the benefit of taxpayers and to reinforce the grievance redressal process.
• In the new tax system, the Personal Income Tax Rebate Limit will rise from the present Rs. 5 lahks to Rs. 7 lahks. People in the new tax system who earn up to Rs. 7 lahks do not have to pay any taxes.
• By reducing the number of income slabs to five and raising the threshold for tax exemption to Rs. 3 lahks, the tax structure in the new personal income tax system, which was implemented in 2020 with six income slabs, will alter. With the new system, all taxpayers will receive significant relief.

New tax rates

• Extension of the standard deduction benefit to salaried individuals of Rs. 50,000 and the family pension deduction benefit of Rs. 15,000 under the new tax regime.
• The highest surcharge rate will drop from 37% to 25% under the new tax system. The maximum personal income tax rate will thus be decreased to 39%.
• Non-government salaried personnel will be able to retire with a maximum tax exemption of Rs. 25 lakh on their leave.
• Making the new income tax system the default tax system. However, citizens will still be able to choose to benefit from the previous tax system.
• There are proposed higher thresholds for smaller businesses and specific professionals to use the presumed taxation benefit. The increased limit will only be applicable if the total cash sum of all monies received throughout the year does not exceed 5% of total gross receipts or turnover.
• 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.
• The 15% tax rate currently offered to new manufacturing enterprises will be extended to new cooperatives that start manufacturing operations up until 31.3.2024.
• The ability to deduct payments given to sugarcane growers prior to the assessment year 2016–17 has been granted to sugar cooperatives. They were anticipating a respite of approximately Rs. 10,000 crore from this.
• A greater cap of Rs. 2 lakh per member is made available for cash loans from and deposits to Primary Agricultural Cooperative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs).
• The TDS on cash withdrawal would have a greater cap of Rs. 3 crore for cooperative organisations.
• The date of incorporation for start-ups seeking income tax incentives will move up from 31.03.23 to 31.3.24.
• A proposal to extend the benefit of loss carryover from seven to ten years after incorporation for start-ups changing their shareholding.
• To properly target tax breaks and exemptions, the deduction from capital gains on investments in residential properties under sections 54 and 54F will be capped at Rs. 10 crore.
• proposal to cap the income tax exemption on the payouts from extremely valuable insurance policies. Only those life insurance plans with aggregate premiums of up to Rs. 5 lakh will have their income exempted in cases where the total premium for life insurance policies (other than ULIP) issued on or after 1 April 2023 is greater than Rs.
• It is recommended that the income of authorities, boards, and commissions established by Union or State statutes for housing, the development of cities, towns, and villages, and the regulation of, or the regulation and development of, an activity or topic be exempt from income tax.
• For TDS to be removed and taxability with regard to online gambling to be explained, there must be a minimum threshold of Rs. 10,000/-. TDS and taxability on net wins at the time of withdrawal or at the conclusion of the financial year are proposed.
• Exchanges of physical gold for electronic gold receipts and vice versa are not considered capital gains.
• In non-PAN circumstances, the TDS rate on the taxable component of EPF withdrawal would be lowered from 30% to 20%.
• Market Linked Debenture income will be taxed.
• An effort to decrease the number of appeals pending at the Commissioner level involves the deployment of around 100 Joint Commissioners to handle minor appeals.
• more prudence in choosing which appeal cases to review for examination of returns already received this year.
• Tax benefits for money moving to GIFT City’s IFSC have been extended till 31.03.2025.
• Beginning on April 1, 2023, some acts of omission by liquidators
• Losses from strategic divestitures, including those of IDBI Bank, may be carried forward.
• To provide Agniveer Fund EEE status. The Agniveers enrolled in the Agnipath Scheme, 2022 are proposed to get their payout from the Agniveer Corpus Fund tax-free. It is proposed to allow the Agniveer to deduct his or the Central Government’s contribution to his Seva Nidhi account when calculating total income.

UNION BUDGET INDIRECT TAXES

• There are now 13 instead of 21 basic customs duty rates for items other than textiles and agriculture.
• Simple adjustments to some commodities’ fundamental customs duties, cesses, and surcharges, such as toys, bicycles, cars, and naphtha.
• GST-paid compressed biogas that is mixed with compressed natural gas is free from excise taxes.
• Customs duty exemption on vehicles, specific 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 specified capital goods/machinery for the manufacture of the lithium-ion cell for use in batteries of electrically operated vehicles (EVs).
• Customs duty on camera lenses and the components used to make them for cellular mobile phones has been decreased to zero, while the concessionary duty on lithium-ion cells for batteries has been extended for an additional year.
• On portions of TV panel open cells, the basic customs duty was cut to 2.5%.
• Electric kitchen chimneys now have a basic customs tax of 15% instead of 7.5%.
• Basic customs duty on heat coils used to make electric kitchen chimneys has been cut from 20% to 15%.
• Denatured ethyl alcohol is exempt from the general customs charge and is employed in the chemical industry.
• Acid-grade fluorspar, which contains more than 97% calcium fluoride by weight, now has a basic customs charge of 2.5% instead of 5%.
• Crude glycerin now has a basic customs charge of 2.5% instead of 7.5% when used to make epichlorohydrin.
• Duty reductions on essential components used in home production of shrimp feed.
• The basic customs charge on seeds used to produce lab-grown diamonds has been decreased.
• Increased taxes were imposed on dore-made goods as well as gold and platinum bars.
• Silver Dore, bars, and other items now carry a higher import duty.
• Basic Customs Duty Exemption for Nickel Cathode, Ferrous Scrap, and Raw Materials for CRGO Steel Manufacturing Persisted.
• Continued is the 2.5% BCD concession on copper scrap.
• Compound rubber now has a basic customs duty rate of 25% rather than 10% or $30 per kilogram, whichever is lesser.
• The National Calamity Contingent Duty (NCCD) on a certain brand of cigarettes has increased by roughly 16%.

We have also provided information on manufacturing and exports from the Union Budget for 2023–24. the following link to learn more: exports and manufacturing

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Sources: pib.gov.in/