The 2023 Union Budget of India

On February 1st (Wednesday), Finance Minister Nirmala Sitharaman delivered the Union Budget 2023. According to the finance minister, the total growth of the Indian economy from a global viewpoint was the goal of the Union Budget 2023–24. Additionally, she stated that the Budget recommendations for the 2023–24 fiscal year are based on the idea of a successful and inclusive India, in which all regions and people, particularly our young, women, farmers, OBCs, Scheduled Castes, and Scheduled Tribes, share in the benefits of growth. Let's have a quick overview of the Budget 2023.

Budget 2023 Key Highlights:

Fiscal Position:

FM Nirmala Sitharaman projected the fiscal deficit for 2023–24 as being substantially below the 6.4% budgeted for 2022–23, at 5.9% of GDP. The fiscal deficit for 2021–22 was 6.7%, less than the 6.9% projected in the revised budget. To increase capital spending to support growth while lowering its budget deficit to less than 6% of GDP for the first time since the fiscal year ended in March 2020.

Capital Expenditure:

The Centre increased funding for infrastructure development and set aside Rs 10 lakh crore for capital expenses for the fiscal year 2023–2024. This is a lot more than the fiscal 2022–23 allocation of Rs. 7.5 lakh crore, of which only over 60% had been spent as of the end of December.

The amount spent on capital investments is sharply rising by 33% to Rs 10 lakh crore. This represents 3.3% of the GDP. In her Budget statement for 2023–24, Finance Minister Nirmala Sitharaman stated that the expenditure would be approximately three times the outlay made in 2019.

Additionally, she stated that the funding for interest-free loans to state governments for 50 years has increased from Rs 1 lakh crore to Rs 1.3 lakh crore to focus on infrastructure development.

Banking:

Nirmala Sitharaman, the finance minister, suggested several changes to the Banking Regulation Act, the Banking Companies Act, and the Reserve Bank of India Act to strengthen investor protection and improve bank governance. The finance minister stated in her Budget speech that financial sector reforms and creative technology use had resulted in widespread financial inclusion, improved and quicker service delivery, simple access to credit, and participation in financial markets.

All digital systems of the designated government agencies will be given a uniform identity called a Permanent Account Number (PAN). The action would aid in promoting the ease of doing business in the nation. The income tax agency assigns PANs, which are 10-digit alphanumeric numbers, to individuals, businesses, and other entities.

MSMEs:

FM announced a Rs 9,000-crore corpus for a new loan guarantee plan to reduce stress for small enterprises. The updated credit guarantee plan will go into force on April 1, 2023, according to Sitharaman.

In Parliament, the Finance Minister stated, "I am pleased to announce that the revised MSMEs credit guarantee programme will go into operation on April 1, 2023, with an investment of Rs 9,000 crore into the corpus."

Sitharaman highlighted that this will offer collateral for loans to MSMEs of Rs 2 lakh crore while releasing the Union Budget. This is predicted to boost financing flow to the struggling and underfunded MSME sector.

Digitization:

Nirmala Sitharaman stated that a one-stop solution for the reconciliation and updating of the identity and address documents maintained by various governmental entities, regulators, and regulated entities will be established using the DigiLocker service and Aadhaar as foundational identity documents. As part of the government's Digital India plan, the Ministry of Electronics and IT (MeitY) created the cloud document storage app DigiLocker. Since they are kept in DigiLocker, people can avoid carrying their physical IDs and documents. The storage wallet is usable for KYC and other types of verification. The DigiLocker facility can now be used to update documents without physically going to the offices of the government.

To realize a new variety of options, business models, and employment potential in the high-speed 5G internet, the Budget has suggested establishing up to 100 labs in engineering colleges. These labs will create programmes for intelligent transportation systems, precise farming, and smart classrooms.

Nirmala Sitharaman allotted 7,000 crores for the start of Phase III of the eCourts Project, which aims to provide effective judicial administration. This will guarantee "Ease of Justice" and enhance the delivery of justice even further.

With the release of the Union Budget 2023, the government is launching a torrent of brand-new chances in robotics and artificial intelligence (AI), which is expected to usher in a new age for professionals. Three Centres of Excellence (CoEs) for AI will be established in prestigious educational institutions, according to Finance Minister Nirmala Sitharaman, who spoke about the budget in front of Parliament on Wednesday. This is to realize the vision of "Make AI in India and Make AI work for India."

Skill Training & Education:

The Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 and the establishment of 30 Skill India International Centres are two ideas in the Budget 2023 that are intended to boost job creation by encouraging commercial and industrial expansion, which would ultimately result in more jobs.

Nirmala Sitharaman, the union finance minister, stated that a national digital library will be established for kids and teenagers to make high-quality books more accessible across platforms and geographies, languages, genres, and levels. The National Book Trust, Children's Book Trust, and other sources will be urged to donate and replenish non-curricular titles in regional languages and English to these physical libraries to foster a culture of reading and make up for learning loss during the pandemic.

Healthcare:

The finance minister, also disclosed a proposal to co-locate 157 new nursing institutions with the 157 medical colleges already in place since 2014. By a plan backed by the federal government, the 157 medical colleges were built alongside district or referral hospitals throughout three phases, covering 39 aspirational districts.

Additionally, declared a goal to end sickle cell disease by 2047. Seven crore people in the impacted tribal areas will be screened universally and will receive counseling and information as part of the initiative.

The government wants to raise healthcare spending to 2.5% of the GDP by 2025, however, as of right now, it only accounts for 2.1% of the GDP.

Agriculture and Tribal Welfare:

Finance Minister Nirmala Sitharaman announced that an Agriculture Accelerator Fund will be established to support agri-startups by young entrepreneurs in rural areas. The fund's goal is to provide farmers with creative, cost-effective solutions to their problems. Modern technologies will also be introduced, changing farming practices and enhancing production and profitability.

An open-source, open-standard, and interoperable platform for digital public infrastructure in agriculture will be developed. Greater access to agricultural inputs, loans, and insurance as well as assistance with crop estimate and market knowledge, will allow inclusive, farmer-centric solutions. The minister claims that it would aid in the expansion of the agri-tech sector and start-up businesses active in the sector. To support agri-startups by young business people in rural regions, an agricultural accelerator fund will be established, and the agriculture credit objective would rise to Rs 20 lakh crore.

Clean Energy:

India is making rapid progress toward achieving its Net-Zero goals by 2070, according to a statement made by Finance Minister Nirmala Sitharaman on Wednesday. The National Green Hydrogen Mission, which has been allocated Rs 19,700 crore, would help the economy transition to a low-carbon intensity and green economy, the finance minister said in her budget address.

Cheaper v/s Costlier:

What Gets Cheaper	What Gets Costlier
Customs Duty on some open-cell TV panel components have been reduced to 2.5%	The cigarette tax has been increased by 16%.
The government wants to lower the import taxes on several materials used to make mobile phones.	Compound rubber now has a basic import charge of 25%, up from 10%.
The government will lower the basic customs tax on the seeds used to make lab-grown diamonds.	The customs duties on items manufactured from gold bars have increased.
The government will lower import taxes on shrimp feed to encourage exports.	The customs charge for the kitchen-electric chimney is 15% instead of 7.5%.

The Common Man Takeaways:

Changes to the personal tax code announced by the FM specify that income below ₹7 lakh per year is not taxed. The middle class is relieved by this announcement.

Senior folks also have a lot to be excited about because the maximum limit for their savings plan increased from ₹15 lakh to ₹30 lakh. Also, the deposit limits for the monthly income account plan increased, which have gone from ₹4.5 lakh to ₹9 lakh for single accounts and ₹9 lakh to ₹15 lakh for joint accounts.

There is good news for women as well, where a new Mahila Samman Savings Certificate will be introduced with an ₹2 lakh investment cap for two years ending in March 2025. Also, Investing in these certificates will yield a 7.5% interest rate with the option of a partial withdrawal.