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Home » 2023 Union Budget Key Points: Increased Expenditures, Small Saving Incentives, Decreased Customs Taxes

2023 Union Budget Key Points: Increased Expenditures, Small Saving Incentives, Decreased Customs Taxes

Here is the latest Union Budget presented by Finance Minister Nirmala Sitharaman. This is her fifth and final budget of the Modi 2.0 government. She referred to it as the “first Budget of ‘Amrit Kaal'”, highlighting that India’s economy is growing faster than other major economies.

The goal of the 2023-2024 Union Budget is to support economic growth, despite global concerns about the impact of the Covid-19 pandemic and the Russia-Ukraine war. In her speech, the finance minister emphasized that India’s economy is on a positive path and moving towards a bright future, despite these challenges.

Highlights of the Union Budget 2023

  • Saptrishi: The seven priorities of the Budget were outlined as inclusive development, reaching the last mile, infrastructure development, potential, green growth, youth power, and finance sector.
  • Increased Tax Exemption Limit: The government has enhanced the income tax exemption limit to up to Rs 7 lakh for those who opt for the new tax regime.
  • Reduced Surcharge: The highest surcharge rate has been reduced from 37% to 25% for those who choose the new tax regime.
  • New Income Tax Regime: No tax for income up to Rs 3 lakh 5% tax on Rs 3-6 lakh, Highest tax rate of 30% on income above Rs 15 lakh
  • Tax Savings for Individuals: An individual with an annual income of Rs 9 lakh will have to pay only Rs 45,000.
  • Building a Strong Foundation: The first budget of ‘Amrit Kaal’ aims to build a strong foundation for a developed India, as stated by PM Modi in his address on the Union Budget 2023.
  • Fiscal Target:The fiscal deficit target for the upcoming financial year 2023-24 has been set at 5.9% of GDP. The Revised Fiscal Deficit Target for the Current Year is 6.4% of GDP.
  • Increased Capital Expenditure: The capital expenditure outlay has been increased by 33% to Rs 10 lakh crore, which is 3.3% of GDP – almost three times the outlay made in 2020.
  • Defence Budget:
    1. The defence budget has been increased to Rs 5.94 lakh crore for 2023-24.
    2. An amount of Rs 1.62 lakh crore has been allocated for capital expenditure, which includes the purchase of new weapons systems, aircraft, warships, and other military equipment.
  • Infrastructure Development: The allocation for infrastructure development has been increased to Rs 10 lakh crore, which is 3.3% of the GDP.
  • PM Awaz Yojana: The outlay for PM Awaz Yojana has been increased by 66% to over Rs 79,000 crore.
  • Simplification of KYC Process: The Know Your Customer (KYC) process will be simplified by adopting a risk-based system.
  • Tax Proposals for Industry:
    a. A cut in customs duty on lab-grown diamonds has been proposed.
    b. Higher import duties have been proposed on silver dores.
    c. Duties on items made from gold and platinum have been increased.
    d. Custom duty exemption has been extended to EV batteries.
  • Eklavya Model Schools: In the next three years, the government will employ 38,800 teachers and support staff for 740 Eklavya model schools supporting tribal students.
  • Women’s Savings Scheme: A new small savings scheme has been announced for women – the Mahila Savings Certificate for 2 years up to March 2025.
  • Increase in Per Capita Income: India’s per capita income has increased to Rs 1.97 lakh crore
  • Allocation for EVMs: Nearly Rs 1,900 crore has been allocated in the Union Budget for the Union Law Ministry to buy electronic voting machines ahead of the 2024 Lok Sabha polls
    Increased Deposit Limit for Senior Citizen Savings Scheme: The deposit limit for Senior Citizen Savings Scheme has been proposed to be doubled to Rs 30 lakh.
  • Fiscal Deficit for States: The states have been allowed a fiscal deficit of 3.5% of GSDP, of which 0.5% is tied to power sector reforms.
  • Promotion of Domestic Tourism: The government will launch the ‘Dekho Apna Desh’ initiative to promote domestic tourism. 50 destinations will be developed as complete tourist packages.
  • Formalisation of Economy: The economy has become a lot more formalized, as reflected by the doubling of EPFO membership to 27 crore and Rs 7,400 crore digital payments of Rs 126 lakh crore through UPI in 2022.
  • Digital Library for Children and Adolescents: The government will set up a digital library for children and adolescents to facilitate access to quality books.
  • Increased Agriculture Credit Target: The agriculture credit target will be increased to Rs 20 lakh crore, with a focus on animal husbandry, dairy, and fisheries.
  • India’s Mission for ‘Amrit Kaal’: India’s mission for ‘Amrit Kaal’ includes a technology-driven and knowledge-based economy.
  • Focus on Facilitating Opportunities: The center’s economic agenda is focused on facilitating opportunities, providing a strong impetus to job creation, and strengthening macroeconomic stability.
  • Improved Quality of Life for Citizens: The government’s efforts since 2014 have ensured a better quality of life for citizens of the country.
  • Green Growth Efforts: Green growth efforts will help reduce carbon intensity and create green job opportunities.
  • India’s Economic Prospects : Finance Minister Nirmala Sitharaman announced that despite the negative impact of the Covid-19 pandemic and the Russia-Ukraine war on the global economy, India’s economy is projected to grow at a rate of 7%, which is the highest among major economies.
  • Recognition of India’s 75th Independence Anniversary: Nirmala Sitharaman mentioned that the world is recognizing India’s 75th Independence Anniversary as a “bright star.”
  • Budget Approval by the Union Cabinet : Before the presentation of the budget for the 2023-24 fiscal year, the Union Cabinet, led by Prime Minister Narendra Modi, gave its approval.
  • President’s Meeting: Finance Minister Nirmala Sitharaman had a meeting with President Droupadi Murmu at Rashtrapati Bhawan before presenting the budget.
  • Unique Budget Presentation Method :Nirmala Sitharaman decided to present the budget using a digital tablet, which was wrapped in a traditional “bahi-khata” style pouch. The tablet was carefully kept in a red cover, which was embellished with a golden national emblem.

These were some of the major highlights from the Union Budget 2023 presented by Finance Minister Nirmala Sitharaman.

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