Union Budget 2023 – Key Highlights

The Union Budget 2023 is likely to emphasize on capital expenditure and focus on the manufacturing sector in-lieu with the post-pandemic fiscal consolidation.

The finance minister will attempt to hike capital expenditure from the current 2.9% GDP to nearly 3.5%. She might also rationalize personal income-tax rates to uplift demand.

We have covered this in detail here: Union Budget 2023: Stock Market Expectations

Our Finance Minister, Smt Nirmala Sitharaman will announce Union Budget 2023 by 11 AM today.

The Economic Survey, the perspective & basis document for the budget was released yesterday. Below are few highlights

1. India GDP is projected to grow by 7% in FY23,ahead of RBI’s prediction of 6.8%
2. The economic survey stated, “India’s inflation did not creep too far above its tolerance range compared to several advanced nations ”

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President Droupadi Murmu opened the budget session with Amrit Kaal theme. Amrit Kaal is a period of 100 years of Independence and the making of a developed India. 

The Finance Minister has listed welfare achievements of an insurance cover of Rs. 46 Cr, a cash Transfer of Rs. 11.4 Cr to farmers and 11.7 Cr washrooms under Swach Bharath, and 200 Cr vaccinations.

Macroeconomic stability, aspirations of the young population, and job creation have emerged as key focus themes

The world has recognized India as a bright star for its remarkable growth this year - a 7% growth rate which is the highest among all major economies, even amid the massive global slowdown caused by the pandemic and the war.

India's remarkable growth serves as a beacon of hope for the world and is a testament to the resilience and strength of our economy.

This union budget focuses on technological development, infrastructure, green growth, and youth power.

Inclusive Development: Improved credit access to farmers and an agricultural start-up fund for encouraging start-up founders.

Sab ka Saath, Sab ka Vikas continues to propel inclusive growth

Collaboration between the public and private sectors for increasing disease-free plants distribution and emerge as millet hub for ensuring food security and the welfare of farmers.

The Centre will provide free grains to all priority households until December ’23 and will take on the entire expenditure of Rs 2 lakh crore.

FM announced that seven new nursing colleges will be opened in four locations across the country.

The Government of India has announced the Atmanirbhar Clean Plant Programme with an outlay of Rs. 2,200 Cr. This initiative will help improve the availability of disease-free and high-quality planting material for high-value horticultural crops, thus boosting India’s agricultural productivity. The program will provide significant support to the farmers, enabling them to produce superior-quality harvests and maximize their income.

1. Inclusive development
2. Ensuring green growth
3. Boosting the financial sector
4. Reaching the last mile connectivity
5. Capital Investment
6. Unleashing the Youth potential
7. Youth Aspirations & Employement

50 Year interest-free loans for state governments to extended for another year

Drive more private investments into railways & infrastructure and will the finance framework will be reviewed by 3rd parties

Sustainable cities for tomorrow: To undertake urban planning to encourage cities into sustainable cities - enhance availability.

The government projected sharp increase in capital expenditure by 33%, i.e 10 Lakh crores - This will be spent on urban infrastructure to create jobs, will also act us a cushion against the global slowdown

FM announced a major initiative to bolster the fisheries sector, with the launch of the Sub-Scheme under the Prime Minister Matsya Sampada Yojana, with a planned outlay of Rs. 6,000 crore.

Unleash start-up ecosystem to accelerate reconciliation of accounts & identity establishments

Academia & startups will be encouraged to pursue Artificial intelligence and Make AI in India to create governance data

Lab Grown Diamond

FM Nirmala Sitaraman announced that to stimulate indigenous production of LGD seeds and machines and reduce import dependency, a research and development grant of five years duration will be provided to one of the IITs. In addition, to lower the cost of production of these seeds, a proposal will be presented in Part B of her speech to review the rate of the custom duty of these LGD seeds. This important move is aimed at reducing overall dependence on imports and boosting domestic production.

The Government of India, in an effort to make up for the learning loss caused by the pandemic, is proposing to set up a national digital library for children and adolescents. This ambitious project, proposed by Finance Minister Nirmala Sitharaman, will provide an opportunity to bridge the digital divide and provide access to world-class learning content for all.

1. PAN will be utilized as a common business identifier
2. The scope of documents under Digi locker will be expanded
3. Expanded credit access to MSME to generate employment opportunities
4. Provided Relief for MSME's that failed to execute contracts during COVID by forfeiting 95% of bids/performance securities
5. The Govt plans to reduce the number of submissions of the same information to different government agencies by implementing a unified filing process
6. Fintech services in India have been positively impacted by our digital public infrastructure including Aadhaar, PM Jan Dhan Yojana, Video KYC, India Stack and UPI. To enable more Fintech innovative services, the scope of documents available in DigiLocker for individuals will be expanded.

The Eklavaya Model Residential Schools will be taking giant leaps towards bridging the education gap in India in the next three years. By recruiting 38,800 teachers and support staff for 740 schools, this Centre will serve more than 3.5 lakh tribal students. This is a commendable effort by FM Nirmala Sitharaman to empower the tribal communities and provide access to quality education for all.

Finance Minister Nirmala Sitharaman today announced an investment of Rs 75,000 crore to modernize and revitalize 50 additional airports, heliports, water aerodromes, and advanced landing zones across the country. 100 crucial projects of transport infrastructure for the steel, ports, fertilizer, coal, and foodgrain sectors have been identified with private sources contributing Rs 15,000 crore. The projects are expected to unlock immense economic opportunities and provide a massive boost to the transportation sector.

50  destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism.

1 crore farmers to get support from 10000 bio input centers to accelerate natural farming

The government has announced the launch of a National Data Governance Policy. This policy will enable Startups and Academia to gain access to anonymized data to drive creative insights and initiatives. This policy, in the words of FM Nirmala Sitharaman, will unleash innovation and research from New India's start ups.

FM announced the launch of 100 labs, designed to facilitate the development of apps using 5G services in engineering institutions. These labs will unlock a vast range of opportunities, including new business models and employment potential. Specifically, the labs will focus on developing apps such as Smart Classrooms, Precision Farming, Intelligent Transportation Systems, and Healthcare.

Tax slab rationalisation is announced under new regime with new slabs as shown below:

Processing time for ITR reduced from 93 days to 60 days.

Integrated IT portal will be established for to reclaim unclaimed shares and unpaid dividends.