Budget FY23-24: The Seven Priorities to Drive Long-Term Growth
The Union Budget 2023 highlighted the need to transact to new realty and be future-ready for new opportunities. The budget touched all the key sectors, like Manufacturing, Services, and Agriculture, by emphasizing seven priorities set by the government. The budget delivery was growth-oriented, with substantial allocation in the capital expenditure (Capex) to drive the growth. Most importantly, the current budget maintained its commitment to fiscal consolidation without impacting development.
Macro Highlights
- Domestic GDP: GDP growth in current fiscal is projected at 7% and 6-6.5% in the next fiscal year
- Deficits: Fiscal deficit is targeted at 5.9% of GDP for FY24, sticks to the fiscal glide path
- Borrowings:Gross market borrowing seen at Rs 15.43 lakh cr in FY24; while the net net borrowing is seen at Rs. 11.8 lakh crore
- Expenditure: The total expenditure for FY23 is revised to Rs 41.9 lakh crore
Key Announcement from FY23 Budget
The per capita income doubled to Rs 1.97 lakh in last 9 years, while the Indian economy has increased in size from being 10th to 5th largest globally
The budget allocated Rs 2.4 lakh crore for railways in FY24, which is highest allocation for railways and it is nearly nine times over FY14 allocations.
The allocation for National Green Hydrogen mission will be Rs 19,700 crore tol facilitate the transition of the economy to low carbon intensity
Revamped credit guarantee for MSMEs to take effect from Apr 1, 2023 with infusion of Rs 9,000 crore in corpus
Maximum deposit limit for Senior Citizen Savings Scheme hiked to Rs 30 lakh from Rs 15 lakh
Seven Priorities in Current Budget:
- Inclusive Development
- Reaching the Last Mile
- Infrastructure and Investment
- Unleashing the potential
- Green Growth
- Youth Power
- Financial Sector
Inclusive Development: Focused on Agriculture and Rural Region
The agricultural credit target will be increased to Rs 20 lakh crores with a focus on animal husbandry, dairy and fisheries
An Agriculture Accelerator Fund will be set up to encourage agri-startups by young entrepreneurs
Initiated computerization for 63,000 primary agricultural credit societies with an investment of Rs 2,516 crore
An outlay of Rs 6,000 crore under Fisheries to boost the activities of fishermen
10,000 bio input resource centres will be set up
Infrastructure and Investment: Massive Push in Capex Allocation
Capital Expenditure increased by 33% to Rs 10 lakh crore, which is about 3.3% of GDP
Government to spend Rs 10,000 crore per year for urban infra development fund
100 critical transport infra projects for steel, ports, fertiliser, coal, foodgrain sectors have been identified with an investment of Rs75,000 crore including Rs 15,000 crore from private sources
Under Housing, an outlay of over Rs. 79,000 crore allocated for PM Awaas Yojana
Railway also gets the boost in this budget with an allocation of Rs. 2.4 lakh crore in FY24
Government build to 50 additional airports, helipods, water aero drones, advanced landing grounds to be revived to improve regional air connectivity
Green Growth: Transition to Sunrise Opportunities
The budget allocated Rs. 35,000 crore as a priority capital for the energy transition
India aims to reach 5 MMT green hydrogen production in the next 7 years
To set up National Green Hydrogen mission with an outlay of Rs 19,700 crore which will facilitate the transition of the economy to low carbon intensity
Government to support setting up of battery energy storage of 4,000 MwH
The budget allocated Rs 20,700 cr. for renewal energy plan in Ladakh.
Youth Power: Skills, Education, and Digital/Technology
Government to set-up 30 Skill India International Centres across different States to skill the youth for international opportunities
National Digital library will be set up for children and adolescents
Three centres of excellence for artificial intelligence to be set up in top educational institutions.
157 new nursing colleges will be established in colocation with the existing 157 medical colleges established since 2014.
Eklavaya Model Residential Schools to be set up in the next 3 years. The Centre will recruit 38,800 teachers and support staff for 740 schools serving 3.5 lakh tribal students.
Scope of services in DigiLocker to be expanded
100 labs for developing applications to use 5G services to be set up in engineering institutions
Phase 3 of E-courts projects to be launched with outlay of Rs 7,000 crore
Saving schemes
Maximum deposit limit for Senior Citizen Savings Scheme to be enhanced to Rs 30 lakh from Rs 15 lakh
Monthly Income Scheme limit doubled to Rs 9 lakh and Rs 15 lakh for joint accounts
One-time new saving scheme Mahila Samman Saving Certificate for women to be made available for 2 years up to 2025.
Announcement on Indirect Taxes
With aim to promote value addition in the manufacturing of TVs, customs duty on open cells of TV panels will be reduced to 2.5%
16% increase in NCCD on certain cigarettes
Basic customs duty on crude, glycerine is proposed to be reduced to 2.5%.
Proposed to increase import duty on silver bars to align it with gold, platinum
New cooperatives that commence manufacturing till March, 2024 to get lower tax rate of 15%
Announcement on Direct Tax
| New Slabs under new tax regime | Rate % |
|---|---|
| Rs. 0-3 lakh | Nil |
| Rs. 3-6 lakh | 5% |
| Rs. 6.9 lakhs | 10% |
| Rs. 9-12 lakhs | 15% |
| Rs. 12-15 lakhs | 20% |
| More than 15 lakhs | 30% |
No changes in the old tax regime
No tax on income up to Rs 7 lakh a year in new tax regime
An individual with annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes
Govt proposes to increase income tax rebate limit from Rs 5 lakh to Rs 7 lakh in new tax regime
