The Union Finance Minister Nirmala Sitharaman presented the Union Budget 2023-24 in the Lok Sabha on February 1, 2023 in New Delhi. Photo Credit: PTI
Announcing its last full budget before the 2024 elections, the NDA government focused on a number of measures, expanding capital expenditure spending and adding to various priorities green growthYouth power and inclusive development. Along with this there were big tax announcements for the salaried class, changes in tax slabs and a clear intention to shift to the new tax regime.
The Union Finance Minister highlighted that the current year’s economic growth is estimated to be 7%, which is “highest among all major economies”. Finally, with regard to fiscal deficit, it retained it at the target of 6.4% in the revised estimate for FY2022-23 and reduced it to 5.9% for the next fiscal., Fiscal deficit to be brought down to below 4.5% by 2025-26Ms. Sitharaman said.
Here are the highlights of today’s budget speech:
Major Announcements:
> Finance Minister Nirmala Sitharaman took the lead Exemption limit for income tax payment Rs 7 lakh per annum, This will be facilitated under the new tax regime which will be made the new default regime.
> Under the new personal income tax regime, income slabs have been revised from six to five. The tax exemption limit has been increased to Rs 3 lakh.
New applicable tax rates include no tax on income up to ₹3 lakh, 5% on ₹3-6 lakh, 10% on ₹6-9 lakh, 15% on ₹9-12 lakh, 20 on ₹12-15 % lakh and 30% for ₹ 15 lakh and above.
Income Tax Announcements in Union Budget 2023-24
> Railways provided its highest ever capital outlay: recently announced The budget increased the capital outlay for the Railways to an all-time high of Rs 2.40 lakh crore. Ms Sitharaman said this was 9 times more than the outlay given in 2013-14.
Fiscal deficit:
> Fiscal deficit is estimated to be 5.9% of GDP in the financial year 2023-24.
“In my Budget speech for 2021-22, I had announced that we plan to continue the path of fiscal consolidation, with a fairly steady decline over the period to bring the fiscal deficit below 4.5 per cent by 2025-26 ,” adding, “We have followed this path, and I reiterate my intention to bring down the fiscal deficit to below 4.5 per cent of GDP by 2025-26.”
> Net borrowing to finance fiscal deficit is estimated at Rs 11.8 lakh crore. According to the Finance Minister, the remaining funding is expected to come from small savings and other sources.
money investment:
> Capital investment outlay grew by 33% for the third consecutive year to ₹10 lakh crore. This is 3.3% of GDP.
“This substantial growth in recent years is central to the government’s efforts to drive growth potential and job creation, crowd in private investment and provide a cushion against global headwinds.”
agriculture:
> Agriculture credit target to be raised to ₹20 lakh crore with focus on animal husbandry and fisheries.
> Setting up a Agri Accelerator Fund to encourage agri-startups by young entrepreneurs in rural areas.
“The objective of the fund is to bring innovative and cost-effective solutions to the challenges faced by farmers. It will also bring in modern technologies to transform farming practices, increase productivity and profitability,” said the Finance Minister.
For Micro, Small and Medium Enterprises:
, PM Vishwakarma Kaushal Samman (PM Vikas), The first of its kind, Package Assistance seeks to improve the quality, scale and accessibility of products made by traditional artisans and craftsmen. The components of the scheme will not provide financial assistance but advanced skill training, knowledge of modern digital technologies and access to efficient green technologies, digital payments and social security.
, Controversy to Faith, If the MSMEs failed to execute the contracts during the pandemic period, 95% of the forfeited amount relating to bid or performance security would be returned to them by the government or its undertakings.
> Credit Guarantee: The scheme for MSMEs has been revamped with an infusion of ₹9,000 crore in the corpus. It will be implemented from April 1, 2023. This will enable additional collateral-free guaranteed credit of Rs 2 lakh crore.
The Finance Minister informed that the cost of credit will come down by about 1 percent.
green energy:
> ₹35,000 crore provided by the Ministry of Petroleum and Natural Gas in the budget for priority capital investment towards achieving energy transition and net-zero objectives as well as energy security.