India's 2023 Budget: All the Highlights

The fifth budget under Modi 2.0 was unveiled on Wednesday by Union Finance Minister Nirmala Sitharaman. The Indian economy is on the right track and is poised for a bright future, according to Nirmala Sitharaman, who made this statement in the final comprehensive budget before the general elections next year. Sitharaman highlighted significant modifications to the tax slabs under the new tax regime as well as a significant increase in funding for railways and capital expenditures, which will greatly benefit taxpayers and the economy.

The following is a full reading of the numerous initiatives Finance Minister Sitharaman unveiled in the Budget 2023, broken down by sector:

Income taxes Payers:

The previous tax system has not changed.

The new tax system will take precedent over all others. The old tax system is still an option for citizens, though.

In the new tax law, there is no tax on income up to Rs 7.5 lakh per year (with inclusion of standard deduction)

In the new tax system, the government wants to lower the maximum surcharge rate from 37% to 25%.

New Tax Regimes and New Income Tax Slabs:

Rs 0-3 lakh: Nil

Rs 3-6 lakhs: 5%

Rs 6-9 lakhs: 10%

Rs 9-12 lakhs: 15%

Rs 12-15 lakhs: 20%

Rs Over 15 lakhs: 30%

Taxes for an individual making Rs 9 lakh a year will only be Rs 45,000: FM Sitharaman's 15 lakh rupee income will incur a 1.5 lakh rupee tax, down from 1.87 lakh.

A basic deduction of Rs 50,000 has been made available to taxpayers under the new system.

Payment from the Agniveer Corpus Fund received by Agniveers will be exempt.

Insurance policies with premiums over Rs. 5 lakh are no longer free from taxes.

The government wants to make sure that net wins from online games are taxed at the moment of withdrawal or at the end of the fiscal year by instituting TDS.

Tax-free leave encashment for non-government salaried workers has increased from Rs 3 lakh to Rs 25 lakh.

The TDS on cash withdrawal would have a greater cap of Rs 3 crore for cooperative organisations.

A new version of the Common IT Return Form will be released for the benefit of taxpayers.

Mechanism for resolving complaints should be strengthened.

In non-PAN circumstances, the TDS rate on the taxable component of EPF withdrawal would be lowered from 30% to 20%.

What gets cheaper and what's get costlier:

Cheaper:

Mobile phones

TV

Lab-grown diamonds

Shrimp feed

Machinery for lithium ion batteries

Raw materials for EV industry

Costlier:

Cigarettes

Silver

Compounded rubber

Imitation Jewellery

Articles made from gold bars

Imported bicycles and toys

Imported kitchen electric chimney

Imported luxury cars and EVs

Indirect Taxes:

16% tax hike on certain cigarettes

New cooperatives that commence manufacturing till March, 2024 to get lower tax rate of 15%

Basic customs duty on crude, glycerine reduced to 2.5%.

Import duty on silver bars hiked to align it with gold, platinum

Extend customs duty cut on imports of parts of mobile phones by 1 year

To promote TV manufacturing, customs duty on open cells of TV panels reduced to 2.5%

Relief provided on Customs Duty on import of certain parts & inputs like camera lens

Concessional duty on lithium-ion cells for batteries extended for another year

Number of basic custom duty rates on goods other than textiles and agriculture reduced from 21 to 13. As a result, there are minor changes in taxes on some items toys, bicycles, automobiles.

Saving schemes announcements :

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 March 2025.

It will offer deposit facility of up to Rs 2 lakh in the name of women or girls for tenure of 2 years at fixed interest rate of 7.5 per cent with partial withdrawal option.

Railways gets massive boost:

An outlay of Rs 2.4 lakh crore provided for railways in FY24.

It's the highest ever highest ever allocation for Railways and is nearly nine times over FY14 allocations. 

Defence Budget hiked by 13%:

Defence budget increased to Rs 5.94 lakh crore from last year's Rs 5.25 lakh crore.

Rs 1.62 lakh crore set aside for capital expenditure including purchases of new weapons, aircraft, warships and other military hardware.

For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore.

Capital budget of the Border Roads Organisation increased to Rs 5,000 crore.

Capital outlay for the Indian Air Force  was the highest at Rs 57,137.09 crore

Amount of Rs 52,804 crore was set aside as the capital outlay for the Indian Navy.

Capital outlay for the Army has been pegged at Rs 37,241 crore.

Allocation to Defence Research Development Organisation (DRDO) has been put at Rs 23,264 crore.

Fiscal position: Fiscal Deficit targeted to be below 4.5 per cent by 2025-26. Fiscal deficit target of 6.4% retained in the Revised Estimate for FY23; reduced to 5.9% for FY24 Gross market borrowing seen at Rs 15.43 lakh crore in FY24 Net market borrowing in FY24 seen at Rs 11.8 lakh crore FY23 net tax receipts revised estimate stands at Rs 20.9 lakh crore FY23 total expenditure revised estimate stands at Rs 41.9 lakh crore FY23 revised estimate of total receipts other than borrowing at Rs 24.3 lakh crore FY24 net tax receipts seen at Rs 23.3 lakh crore.

MSME

• Revamped credit guarantee for MSMEs to take effect from Apr 1, 2023 with infusion of Rs 9,000 crore in corpus
• The scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the cost of the credit by about 1 per cent.

Banking:

• Govt moots amendments to Banking Regulation Act to improve governance in banks

Jobs:

• Government will launch Pradhan Mantri Kaushal Vikas Yojana 4.0
• To skill the youth for international opportunities, 30 Skill India International Centres will be set up across different States.
• Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme to be rolled out to provide stipend support to 47 lakh youth in three years.

Clean Energy:

• Rs 35,000 crores priority capital for the energy transition
• Green credit programme will be notified under the Environment Protection Act
• Battery storage to get viability gap funding.
• Govt to support setting up of battery energy storage of 4,000 MwH
• National Green Hydrogen mission with an outlay of Rs 19,700 crore will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country assume technology and market leadership

Gems and Jewellery:

• To encourage the indigenous production of lab-grown diamonds, a research and development grant is to be provided to one of the IITs for five years
• Proposal to review customs duty of lab-grown diamonds to be included in Part-B of Budget document

Aviation:

• 50 additional airports, helipods, water aero drones, advanced landing grounds will be revived to improve regional air connectivity:

Ease of Doing Business:

• Govt to bring another dispute resolution scheme Vivad Se Vishwas-2 to settle commercial disputes
• PAN as common identifier for all digital systems of govt agencies
• One stop solution for reconciliation and updating identity maintained by various agencies to be established using digi locker and Aadhaar as foundational identity
• Central Processing Centre to be set up for faster response to companies filing forms under Companies Act
• For business establishments required to have Permanent Account Number, the PAN will be used as a common identifier for all Digital Systems of specified government agencies.
• More than 39,000 compliances have been reduced and over 3,400 legal provisions decriminalised to enhancing ease of doing business
• Jan Vishwas Bill to amend 42 Central Acts have been introduced to further trust-based governance.
• Finance Minister announces multiple measures to enhance business activity in GIFT City

Digital services

• Scope of services in DigiLocker to be expanded
• 100 labs for developing applications to use 5G services to be set up in engineering institutions
• Labs will cover smart classrooms, precision farming, and healthcare applications.
• Phase 3 of E-courts projects to be launched with outlay of Rs 7,000 crore
• Leading industry players will partner to developing, providing scalable options for health, agri and other sectors

Urban Development:

• Govt to spend Rs 10,000 crore per year for urban infra development fund
• Cities to be incentivised to improve creditworthiness for municipal bonds
• All cities and towns will be enabled for 100 per cent transition of sewers and septic tanks .

Health:

• Health sector has been allocated Rs 89,155 crore in the Union Budget
• Mission to eliminate sickle cell anaemia by 2047
• A new programme for research in pharmaceuticals will be formulated and the industry will be encouraged to invest in research.
• Out of Rs 89,155 crore, Rs 86,175 crore has been allocated to the Department of Health and Family Welfare, while Rs 2,980 crore to the Department of Health Research.
• budget allocation for the Pradhan Mantri Swasthya Suraksha Yojana for 2023-2024 is Rs 3,365 crore.
• Among these central sector schemes, the budget allocation for the National Health Mission has been increased from Rs 28,974.29 crore.
• Budget allocation for the AYUSH ministry has been increased from Rs 2,845.75 crore.
• The allocation for the National Digital Health Mission – NHM has been increased from Rs 140 crore to Rs 341.02 crore.
• For the National Tele Mental Health Programme, the budget allocation has been increased from Rs 121 crore to Rs 133.73 crore.
• The budget allocation for autonomous bodies goes up from Rs 10,348.17 crore in 2022-23 to Rs 17,322.55 crore in 2023-24.
• The allocation for ICMR has been increased from Rs 2,116.73 crore to Rs 2,359.58 crore.

Housing:

• Outlay for PM Awaas Yojana enhanced 66% to over Rs 79,000 crore

Interest-free loan to states to continue

• Centre to continue 50-year interest-free loan to state governments for one more year

Digital Library for Children, Adolescents Will Be Set Up:

• National Digital library will be set up for children and adolescents
• National Book Trust, Children’s Book Trust to replenish non-curricular titles in regional languages, English to digital libraries.
• States to be encouraged to set up physical libraries for them at panchayat and ward levels and provide infrastructure for accessing the National Digital Library resources

Education:

• 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.
• National Data Governance Policy to be brought out to unleash innovation and research by start-ups and academia.
• Grant for University Grants Commission (UGC) has been increased by Rs 459 crores (9.37 pc).

• Central Universities have been increased by 17.66%, Deemed University by 27%, support to IITs have been increased by 14%, and to NITs by 10.5% as compared to BE 2022-23.

Agriculture:

• An Agriculture Accelerator Fund will be set up to encourage agri-startups by young entrepreneurs
• Digital public infrastructure to be developed for the agriculture sector
• Rs 20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries
• Over the next 3 years, one crore farmers will get assistance to adopt natural farming.
• 10,000 bio input resource centres will be set up
• Fisheries: To launch sub-scheme under PM Mastya Sampada Yojna with outlay of Rs 6,000 crore to further enable activities of fishermen
• To make India a global hub for 'Shree Anna', the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
• Rs 2,516 crore for Computerisation of 63,000 credit societies
• In drought-prone central regions of Karnataka, central assistance of Rs 5,300 crore to be given to upper Badra project to provide sustainable micro-irrigation.
• 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme to be established for promoting circular economy at total investment of Rs 10,000 crore.
• 5 per cent compressed biogas mandate to be introduced for all organizations marketing natural and bio gas.

Tribal Welfare:

• Pradhan Mantri Primitive Vulnerable Tribal Group (PMPVTGS) mission is been launched to improve socio-economic condition on PMPVTGS
• Tribals to get Rs 15,000 crore over next three years for safe housing, sanitation, drinking water, and electricity.

Space

• Rs 12,544 crore allocated to the Department of Space
• IN-Space receives Rs 95 crore allocation against Rs 21 crore in the Revised Estimate. A large portion of the allocation, Rs 53 crore, has been earmarked for capital expenditure for INSPACe.
• Physical Research Laboratory has received an allocation of Rs 408.69 crore

Sports:

• Sports gets an allocation of Rs 3,397.32 crore, an increase of Rs 723.97 crore.
• The Rs 3,397.32 crore is the highest sports budget allocation ever in the country.
• 'Khelo India' has been allotted Rs 1,045 crore.
• Sports Authority of India gets Rs 785.52 crore for 2023-24.
• National Sports Federations receives a hike of Rs 325 crore.

Seven priorities of the Budget, 'Saptarishi':

1. Inclusive development.
2. Reaching the last mile.
3. Infrastructure and investment.
4. Unleashing the potential.
5. Green growth.
6. Youth power.
7. Financial sector.

Aims of Budget 2023 to include:
1. Facilitating ample opportunities for citizens, especially youth
2. Providing strong impetus to growth and job creation
3. Strengthening macro-economic stability
4. To aim for the empowerment of women in Budget 2023
5. To enable women self-help groups to reach next stage of economic empowerment
6. To help self-help groups with raw material supply, branding, marketing of products

Tourism:

• Promotion of tourism will be taken up on mission mode with active participation of states, the convergence of Govt programs & public-private partnerships.
• 50 tourist destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism
• States will be encouraged to set a ‘Unity Mall’ in State capital or the most popular tourist destination in the state for the promotion and sale of ‘One District, One product’ and GI products and other handicraft
• The country offers immense attraction for domestic as well as foreign tourists. There is a large potential to be tapped in tourism. The sector holds huge opportunities for jobs and entrepreneurship for youth in particular.
• Tourism infrastructure and amenities to be facilitated in border villages through the Vibrant Villages Programme.

PM Vishwa Karma Kaushal Samman:

• PM Vishwa Karma Kaushal Samman-package of assistance for traditional artisans and craftspeople has been conceptualised, will enable them to improve quality, scale & reach of their products, integrating with MSME value chain

Free food scheme to continue till 2024:

• Continuing our commitment to food security, we’re implementing from January 1, 2023, a scheme to supply free food grain to all Antyodaya and priority households for one year under PM Garib Kalyan Ann Yojana
• During the COVID pandemic, we ensured that nobody goes to bed hungry with a scheme to supply free foodgrains to over 80 crore persons for 28 months.
• Our vision for the Amrit Kaal includes a technology-driven and knowledge-based economy, with strong public finances and a robust financial sector. To achieve this 'janbhagidari' through 'sabka saath, sabka prayaas' is essential, FM said.
• India’s rising global profile is because of several accomplishments - Aadhaar, Cowin, UPI have contributed to improving India’s global profile. During pandemic, the government ensured no one went to bed hungry, " says Finance Minister
• Since 2014, the government has worked to ensure that all residents live better, more dignified lives. To Rs 1.97 lakh, the per capita income has more than doubled. The Indian economy has grown during the past nine years, moving up from 10th to 5th place globally: Sitharaman
• The fact that the membership of EPFO has doubled indicates that the economy has grown much more formalised.
• According to Niramala Sitharaman, the minister of finance, this is Amritkall's first budget.
• The Indian economy is on the right road and has a promising future. In the past nine years, India's economy has grown from being the 10th to the 5th biggest.
• In spite of the significant worldwide slowdown brought on by the epidemic and the war, the world has acknowledged India as a shining light; our growth for the current year is anticipated at 7%, making it the greatest among the major economies.
• India's G20 presidency presents us with a special chance to enhance India's position in the global economic order at this time of great global challenges: Nirmala Sitharaman, the minister of finance