The Budget for 2023-24 kept its focus on expanding Capex showing that the Modi government’s priorities are building roads, highways, and railway lines. The middle class has been given some relief in terms of tweaks in the new income tax regime clearly pointing out that the government wants a shift towards the new regime from the older one. The FM stuck to the fiscal deficit roadmap in the Budget with a target of 5.9% in FY 24 and adhering to the target for the current year.
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No tax on income up to Rs 7 lakh, standard deduction allowed under new tax regime
Finance minister Nirmala Sitharaman on Wednesday announced no tax for those with annual income of up to Rs 7 lakh under the new tax regime but made no changes for those who continue in the old regime that provides for tax exemptions and deductions on investments and expenses such as HRA.
In what is being seen as push for salaried class taxpayer to switch to new tax regime where no exemptions on investments is provided, the finance minister in her budget for 2023-24 allowed a standard deduction of Rs 50,000 under the new regime.
The old tax regime provides for a similar deduction and no tax on income up to Rs 5 lakh.
Also, the basic exemption limit has been raised to Rs 3 lakh from Rs 2.5 lakh. A Rs 2.5 lakh basic exemption limit is prescribed in old tax regime.
The move will lead to a saving of Rs 33,800 for those earning up to Rs 7 lakh annually and opting for new tax regime. Those with income up to Rs 10 lakh would save Rs 23,400 and Rs 49,400 saving would accrue to those earning up to Rs 15 lakh.
For high salary people, Sitharaman also reduced surcharge from 37 per cent to 25 per cent for high net worth individuals with income above Rs 2 crore.
This would translate into a saving of around Rs 20 lakh for those having a salary income of about Rs 5.5 crore.
In her Budget speech, Sitharaman said currently individuals with total income of up to Rs 5 lakh do not pay any tax due to rebate.
“It is proposed to increase the rebate for the resident individual under the new regime so that they do not pay tax if their total income is up to Rs 7 lakh,” Sitharaman said, adding that the number of slabs would be reduced to five.
Under the revamped new tax regime, no tax would be levied for income up to Rs 3 lakh. Income between Rs 3-6 lakh would be taxed at 5 per cent; Rs 6-9 lakh at 10 per cent, Rs 9-12 lakh at 15 per cent, Rs 12-15 lakh at 20 per cent and income of Rs 15 lakh and above will be taxed at 30 per cent.
“I propose to extend the benefit of standard deduction to the new tax regime. Each salaried person with an income of Rs 15.5 lakh or more will thus stand to benefit by Rs 52,500,” Sitharaman said.
Deloitte India Partner Neeru Ahuja said that the tweaks made in the new tax regime clearly indicates that government wants salaried class to shift to the new regime, under which exemptions cannot be claimed.
“Usually salaried individuals save to claim benefit of tax deductions. The tweaks in the new tax regime in Budget are aimed at getting people out of that mindset. The government is indicating that the new tax regime is here to stay and may be the only option going forward,” Ahuja said.
The government in Budget 2020-21 brought in an optional income tax regime, under which individuals and Hindu Undivided Families (HUFs) were to be taxed at lower rates if they did not avail specified exemptions and deductions, like house rent allowance (HRA), interest on home loan, investments made under Section 80C, 80D and 80CCD. Under this, total income up to Rs 2.5 lakh was tax exempt.
Currently, a 5 per cent tax is levied on total income between Rs 2.5 lakh and Rs 5 lakh, 10 per cent on Rs 5 lakh to Rs 7.5 lakh, 15 per cent on Rs 7.5 lakh to Rs 10 lakh, 20 per cent on Rs 10 lakh to Rs 12.5 lakh, 25 per cent on Rs 12.5 lakh to Rs 15 lakh, and 30 per cent on above Rs 15 lakh.
The scheme, however, has not gained traction as in several cases it resulted in higher tax burden.
With effect from April 1, these slabs will be modified as per the Budget announcement.
Govt to borrow record Rs 15.4 lakh crore in FY24 to bridge revenue gap
The government plans to borrow a record Rs 15.4 lakh crore from dated securities in FY24 to meet its expenditure requirement to prop up the economy.
This is higher than the total borrowing of Rs 14.21 lakh crore for the current financial year ending March 31, 2023.
Finance Minister Nirmala Sitharaman while presenting the Budget on Wednesday said the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore to finance the fiscal deficit in 2023-24.
“The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at Rs 15.4 lakh crore,” she said.
The government has raised Rs 12.93 lakh crore till January 27, which is 91 per cent of the overall borrowing target of Rs 14.21 lakh crore estimated for 2022-23.
The indebtedness of the Centre and state governments together is equal to 83 per cent of the annual gross domestic product (GDP).
The finance minister retained the fiscal deficit target at 6.4 per cent despite an increase in the subsidy bill.
“Coming to 2023-24, the total receipts other than borrowings and the total expenditure are estimated at Rs 27.2 lakh crore and Rs 45 lakh crore, respectively. The net tax receipts are estimated at Rs 23.3 lakh crore,” she said.
She pegged the fiscal deficit at 5.9 per cent of GDP for FY24.
“In my Budget Speech for 2021-22, I had announced that we plan to continue the path of fiscal consolidation, reaching a fiscal deficit below 4.5 per cent by 2025-26 with a fairly steady decline over the period. We have adhered to this path, and I reiterate my intention to bring the fiscal deficit below 4.5 per cent of GDP by 2025-26,” she said.
Sitharaman had pegged gross market borrowing through dated securities for 2022-23 at Rs 14,95,000 crore.
However, the government in September 2022 decided to cut the gross borrowing to Rs 14.21 lakh crore during FY23. The gross borrowing for 2021-22 was Rs 12,05,500 crore.
With regard to the net borrowing, the government estimated a record Rs 11.6 lakh crore raising from the market in 2022-23.
This was nearly Rs 2 lakh crore higher than the current year’s Budget estimate of Rs 9.7 lakh crore.
The total market borrowings of the government for 2022-23 are estimated at Rs 11,58,719 crore, according to the previous Budget document.
The Revised Estimates for the same for 2021-22 are Rs 8,75,771 crore against the Budget Estimates of Rs 9,67,708 crore.
Infrastructure development capex hiked by 33 pc to Rs 10 lakh crore for 2023-24
Finance Minister Nirmala Sitharaman on Wednesday announced hiking the capital expenditure by 33 per cent to Rs 10 lakh crore for infrastructure development for 2023-24 and will be at 3.3 per cent of the GDP.
Presenting the Budget for 2023-24, she said the newly established infrastructure finance secretariat will assist in attracting more private investment.
An expert committee will also be set up to make infrastructure classification and financing framework suitable for Amrit Kaal, she added.
On October 13 last year, Prime Minister Narendra Modi had launched the Gati Shakti – National Master Plan, aimed at developing an integrated infrastructure to reduce logistics costs.
All logistics and connectivity infrastructure projects, entailing an investment of over Rs 500 crore, are routed through the NPG, constituted under the PM Gati Shakti initiative.
She also informed that the PM Particularly Vulnerable Tribal Groups (PVTGs) scheme would benefit 3.5 lakh tribals.
Rs 5.94 lakh crore allocated to Defence Ministry in Union Budget
The defence budget was increased to Rs 5.94 lakh crore for 2023-24 from last year’s allocation of Rs 5.25 lakh crore.
In the Union Budget presented in Parliament by Finance Minister Nirmala Sitharaman on Wednesday, a total of Rs 1.62 lakh crore has been set aside for capital expenditure that includes purchasing new weapons, aircraft, warships and other military hardware.
For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore but the revised estimate showed the expenditure at Rs 1.50 lakh crore.
According to 2023-24 budget documents, an allocation of Rs 2,70,120 crore has been made for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments.
The budgetary allocation of revenue expenditure in 2022-23 was Rs 2,39,000 crore.
In the budget for 2023-24, the capital outlay for the Ministry of Defence (Civil) has been pegged at Rs 8,774 crore while an amount of Rs 13,837 crore has been set aside under capital outlay.
A separate amount of Rs 1,38,205 crore has been allocated for defence pensions.
The total revenue expenditure including the pension outlay has been estimated at Rs 4,22,162 crore.
According to the budget papers, the total size of the defence budget is Rs 5,93,537.64 crore.
66% hike in Pradhan Mantri Aawas Yojana outlay to Rs 79,000 crore
Finance Minister Nirmala Sitharaman on Wednesday announced a 66 per cent hike in the Pradhan Mantri Aawas Yojana (PMAY) outlay to Rs 79,000 crore.
Presenting the Union Budget 2023-24, she said states and cities will be encouraged to take up urban planning.
She also said that the Union government will create Urban Infrastructure Development Fund on the lines of Rural Infrastructure Development Fund and it will be managed by the National Housing Bank.
The central government will spend Rs 10,000 crore per year for urban infrastructure development fund.
All cities and towns will be enabled for 100 per cent transition of sewers and septic tanks from manhole to machine hole mode, the minister added.
Highest-ever capital outlay of Rs 2.40 lakh crore for railways
The capital outlay for the railways has been increased to the highest-ever Rs 2.40 lakh crore in the Union Budget for 2023-24, Finance Minister Nirmala Sitharaman said on Wednesday.
Presenting the budget in Lok Sabha, Sitharaman said the outlay for the railways is nine times the amount provided in 2013-2014.
She said 100 critical transport infrastructure projects for last- and first-mile connectivity for coal, fertiliser and food grain sectors have been identified and will be taken up on a priority basis with investment of Rs 75,000 crore, including Rs 15,000 crore from private sources, she said.
Budget papers showed that the net revenue expenditure of the railways is placed at Rs 2,65,000 crore in the Budget Estimate (BE) 2023-24 as against Rs 2,42,892.77 crore in Revised Estimate (RE) 2022-23.
Reimbursement of losses on operation of strategic lines has been kept at Rs 487.51 crore in BE 2023-24 as against Rs 2,461.90 crore in RE 2022-23. An amount of Rs 780 crore has been provided in BE 2023-24 towards debt servicing of market borrowings for national projects.
The total outlay provided for capital expenditure in the Budget Estimate 2023-24 of Rs 2,60,200 crore includes Rs 2,40,000 crore from general revenues, Rs 200 crore from Nirbhaya Fund, Rs 3,000 crore from internal resource and Rs 17,000 crore from internal and extra budgetary resources.
The total receipt of the railways comprising revenues from passenger, goods, other coaching, sundry other heads and Railway Recruitment Boards have been placed at Rs 2,65,000 crore in BE 2023-24 as against Rs 2,42,892.77 crore of RE 2022-23.
Goods revenue in 2021-22 (actuals), BE 2022-23, RE 2022-23 and BE 2023-24 are Rs 1,41,096.39 crore, Rs 1,65,000 crore, Rs 1,65,000 crore and Rs 1,79,500 crore respectively. Customer amenities includes integration of metro station with railway station projects costing Rs 500 crore in BE 2023-24.
The allocation for rolling stock for the railways has almost doubled from Rs 15,157.86 crore in RE 2022-23 to Rs 37,581 crore in 2023-24.
With increased passenger expectations, the railways is planning to refurbish more than 1,000 coaches of premier trains such as Rajdhani, Shatabdi, Duronto, Humsafar and Tejas. The interiors of these coaches will be improved with a modern look and for enhanced passenger comfort.
With high speed Vande Bharat trains set to hit the tracks, the allocation for track renewal has been increased from Rs 15,388.05 crore in RE 2022-23 to Rs 17,296.84 crore this year.
The railways was allocated Rs 1.4 lakh crore in the Union Budget for 2022-23, of which Rs 1.37 lakh crore was earmarked for capital expenditure and Rs 3,267 lakh crore for revenue expenditure.
PAN will be used for common identifier for all digital systems of specified govt agencies
Finance Minister Nirmala Sitharaman on Wednesday said Permanent Account Number (PAN) will be used for common identifier for all digital systems of specified government agencies.
The move would help in further promoting ease of doing business in the country.
PAN is a 10-digit alphanumeric number allotted by the income tax department to a person, firm or entity.
She also said that if MSMEs fail to execute contract, 95 per cent of performance security will be returned to small business as part of Vivad Se Vishwas scheme.
Vivad Se Vishwas scheme provides for settlement of disputed tax, interests, penalty or fees in relation to an assessment or reassessment order on payment of 100 per cent of the disputed tax and 25 per cent of the disputed penalty or interest or fee.
She also said that Phase-III of e-courts will be launched.
State support mission of Niti Aayog will be continued for three years, the finance minister said.
47.8 crore Jan Dhan accounts opened
As many as 47.8 crore Jan Dhan accounts have been opened so far, a scheme which was launched in 2014 as a national mission for financial inclusion.
Finance Minister Nirmala Sitharaman on Wednesday said the National Rural Livelihood Mission has achieved remarkable success by mobilising rural women into 1 lakh SHGs (self help groups).
She said that 47.8 crore JanDhan accounts have been opened.
The Jan Dhan Yojana was announced by Prime Minister Narendra Modi in his Independence Day address in 2014, and it was launched on August 28 in the same year.
Pradhan Mantri Jan Dhan Yojana (PMJDY) is the national mission for financial inclusion to ensure access to financial services — savings and deposit accounts, remittance, credit, insurance and pension in an affordable manner.
She also informed that 9.6 crore LPG connections and 220 crore Covid vaccines for 102 crore people have been given.
On tourism, the minister in her Budget speech said that there is a large potential in the tourism sector and promotion of tourism needs to be taken up in mission mode.
Green growth efforts would also help reduce carbon intensity and create green job opportunities, Sitharaman added.
38,800 teachers will be hired for Ekalavya Model Residential Schools
As many as 38,800 teachers will be hired for Ekalavya Model Residential Schools, Finance Minister Nirmala Sitharaman said on Wednesday.
Presenting the last last full Budget of the second term of the BJP-led NDA government ahead of the general elections in 2024, she said a national digital library for children and adolescents will be set up for facilitating quality books.
She also said the Centre will provide Rs 5,300 crore assistance to drought-prone central region of Karnataka.
Further, the PM Awas Yojana outlay has been hiked by 66 per cent to Rs 79,000 crore, she added.
Sitharaman also announced an increased capital outlay for infrastructure to spur private investment.
States, cities will be encouraged to take up urban planning
Finance minister Nirmala Sitharaman on Wednesday said that states and cities will be encouraged to take up urban planning.
She said that all cities and towns will be enabled for 100 per cent transition of sewers and septic tanks from manhole to machine hole mode.
Cities will also be encouraged to increase creditworthiness for municipal bonds, the minister said.
The government had launched the Smart Cities Mission on 25 June 2015. Hundred smart cities had been selected through four rounds of competition from January 2016 to June 2018.
Financial support for poor in prisons and unable to afford penalty, bail amount
Finance Minister Nirmala Sitharaman on Wednesday said financial support will be provided to poor persons who are in prison and are unable to afford penalty and bail amounts.
The minister said this during her Budget speech in the Lok Sabha.
“Support for poor persons who are in prisons and are unable to afford penalty or bail amount, required financial support will be provided,” she said.
Addressing the inaugural session of the joint conference of chief ministers and chief justices of high courts here last year, Prime Minister Narendra Modi had appealed to them to give priority to cases related to undertrial prisoners languishing in jails and release them, as per law, based on human sensitivities.
In every district there is a committee headed by the district judge, so that these cases can be reviewed and wherever possible, such prisoners may be released on bail, the prime minister said.
Govt to bring National Data Governance policy
The government will bring a National Data Governance policy, which will simplify the KYC process while anonymising individual data, Finance Minister Nirmala Sitharaman said on Wednesday.
Presenting the Union Budget 2023-24, Sitharaman said three centres of excellence for artificial intelligence would be set up in top educational institutions.
The government would also create Urban Infrastructure Development Fund on the lines of Rural Infrastructure Development Fund to be managed by NHB (National Housing Bank).
The finance minister also said to enhance ease of doing business, more than 39,000 compliances have been reduced and over 3,400 legal provisions decriminalised.
New programme to promote research in pharma
Finance Minister Nirmala Sitharaman on Wednesday announced launch of a new programme to promote research in pharmaceuticals with a view to promoting growth of the sector.
She also said facilities in select ICMR (Indian Council of Medical Research) labs will be made available for research by public and private medical faculties.
The domestic pharma industry had demanded that Budget 2023-24 should help fuel innovation and R&D, which will set the pace for propelling the pharmaceutical industry.
The Organisation of Pharmaceutical Producers of India had demanded that the government encourage the transition to a discovery-oriented and science-driven approach by offering fiscal incentives and supportive policies in order for the life sciences sector to truly contribute to the vision of Aatmanirbhar Bharat.
Charu Sehgal, Partner, Deloitte India said,” The announcement of providing investment and setting up centres of excellence to promote research and development in pharma is much needed and will help India move up the value chain in the life sciences sector.”_
The focus on providing skilled manpower availability for high-end research and manufacturing in the medical technology sector will help India become more self reliant and reduce the current high dependence on imports, Sehgal added.
Mission to eliminate sickle cell anaemia by 2047 will be launched
The government will launch a mission to eliminate sickle cell anaemia by 2047, Finance Minister Nirmala Sitharaman announced in the Union Budget for 2023-24 on Wednesday.
On the health front, she further said that 157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014.
“A mission to eliminate sickle cell anaemia by 2047 will be launched. It will entail awareness creation, universal screening of seven crore people in the age group of 0-40 years in affected tribal areas and counselling through collaborative efforts of central ministries and state governments,” Sitharaman said, presenting the budget in Lok Sabha.
The finance minister said facilities in select Indian Council of Medical Research (ICMR) laboratories will be made available for research by public and private medical college faculty members and private sector research and development teams for encouraging collaborative research and innovation.
Made cash transfer of Rs 2.2 lakh cr under PM-KISAN scheme
The government made cash transfer of Rs 2.2 lakh crore under the PM-KISAN scheme, Finance Minister Nirmala Sitharaman said on Wednesday.
Presenting the last full Budget of the second term of the BJP-led NDA government ahead of the general elections in 2024, she said the mission of the government is to achieve knowledge-driven economy.
She further said Indian economy has become more formalised as witnessed by significant enhancement in digital payments.
Institutional credit in agriculture sector grew as much as Rs 18.6 lakh crore in FY22 from Rs 15.8 lakh crore in FY21.
Initiatives such as PM-KISAN, PM-Fasal Bima Yojana and forming agriculture infrastructure fund have provided much needed support to the sector.
At the same time the role of digital infrastructure in socio-economic development has gathered increased importance and India positioned itself strongly as a knowledge hub.
The focus of digital India programme rests on providing high speed internet as a core utility to citizens for delivering services, creating unique digital identity, providing shareable private space on public cloud (digitally store certificate and documents).
Govt to launch Rs 2,200-crore Aatmanirbhar clean plant programme
The government will launch a Rs 2,200-crore Aatmanirbhar clean plant programme, Finance Minister Nirmala Sitharaman said on Wednesday.
Presenting the Budget for 2023-24, she said an agriculture accelerator fund will also be set up to encourage agri-startups in rural areas.
She further said to enhance yield of extra long staple cotton, the government will adopt a cluster-based and value-chain approach.
The government will also support Hyderabad-based millet institute as a centre of excellence.
At the behest of the government, United Nations declared 2023 as the International Year of Millets, with an aim to create awaren
Govt to bring another dispute resolution scheme Vivad Se Vishwas-2
The government will bring another dispute resolution scheme under Vivad Se Vishwas-2 to settle commercial disputes, finance minister Nirmala Sitharaman said on Wednesday.
Presenting the Budget 2023-24, she also said a one stop solution for reconciliation and updating of identity of individuals would be established.
The Vivad Se Vishwas scheme provides for settlement of disputed tax, disputed interests, disputed penalty or disputed fees in relation to an assessment or reassessment order on payment of 100 per cent of the disputed tax and 25 per cent of the disputed penalty or interest or fee.
Sitharaman further said as many as 100 labs will be set up for developing applications for 5G services in engineering institutions.
It is pertinent to mention that with telcos in the midst of 5G deployments, Indian market is poised for dramatically improved speeds and lag-free videos, where applications would range from connected ambulances to cloud gaming.
The fifth generation or 5G network would allow downloading full-length high-quality video or movie to mobile and other devices in a matter of seconds (even in crowded areas, or at mega events).
Superfast speeds (about 10 times faster than 4G), low latency connectivity, enabling billions of connected devices to share data in real time, promises to unleash more-immersive entertainment, 3D hologram calling, metaverse experiences, and redefine educational applications, even the manner in which people play or watch sports.
In her Budget speech, Sitharaman also said the government will provide R&D grant to one of the IITs to encourage indigenous production of lab-grown diamonds in a bid to reduce imports.
She further said adding customs duty on lab grown diamonds wold to be reduced.
Govt targeting 5 MT of green hydrogen production by 2030
The government is targeting 5 million tonnes (MT) of green hydrogen production by 2030, Finance Minister Nirmala Sitharaman announced on Wednesday in her Budget speech.
She also said that the Budget provides for Rs 35,000 crore for priority capital investment towards energy transition and net zero objectives.
The government would support setting up of battery energy storage of 4,000 MwH, she said, adding green credit programme will be also notified under the Environment Protection Act.
With a vision to make India an energy-independent nation and to de-carbonise critical sectors, the government approved the National Green Hydrogen Mission on January 4, 2023, with an initial outlay of Rs 19,744 crore.
The mission will facilitate demand creation, production, utilisation and export of green hydrogen, and mobilisation of over Rs 8 lakh crore of investments by 2030.
The economic survey tabled in Parliament on Tuesday stated that from the emerging global momentum on green hydrogen, India can situate this decarbonisation opportunity not just within the context of a low-carbon economy but also as an enabler of energy security and economic development for the nation.
The minister further said that the government would spend Rs 10,000 crore per year on urban infrastructure development funds.
This would be along the lines of the Rural Infrastructure Development Fund; to be managed by NHB (National Housing Bank).
Phase III of eCourts Project to be launched
The phase three of the eCourts Project with an outlay of Rs 7,000 crore will be launched for efficient administration of justice, Finance Minister Nirmala Sitharaman said on Wednesday.
The finance minister made the announcement in her budget speech in Lok Sabha.
The phase three of the eCourts Project envisions a judicial system that is more accessible, efficient and equitable for every individual who seeks justice, or is part of the delivery of justice, in India, according to details available on the website of the Department of Justice in the Union law Ministry.
“It envisions an infrastructure for the judicial system that is natively digital. It does not merely digitise paper-based processes, it transforms processes for a digital environment. Phase III will enable any litigant or lawyer to file a case from anywhere, at any time, without having to go to multiple windows in the premises of any specific court,” according to the executive summary of a draft document put in the public domain by the department.
“For efficient administration of justice, Phase III of eCourts Project will be launched with an outlay of Rs 7000 crore,” Sitharaman said.
Law Minister Kiren Rijiju had recently indicated that the phase three of the project was in the offing.
PM-PRANAM will be launched to incentivise states to promote alternative fertilisers
Finance minister Nirmala Sitharaman on Wednesday announced that Pradhan Mantri-Promotion of Alternate Nutrients for Agriculture Management Yojana (PM-PRANAM) will be launched to incentivise states to promote alternative fertilisers.
The move would help to encourage states to reduce use of fertilisers.
She said that 30 Skill India international centres will be be set up and Pradhan Mantri Kaushal Vikas Yojna 4.0 will also be launched to skill lakhs of youth.
The government in 2021 launched the third phase of its flagship skilling scheme Pradhan Mantri Kaushal Vikas Yojana to empower the country’s youth with employable skills by making over 300 skill courses available to them.
State governments, she said, will be encouraged to set up Unity Mall for promotion and sale of ‘one district one product’ items and GI (Geographical indications) products.
The minister added that the government would select 50 destinations through ‘challenge mode’ to promote tourism in the country.
The government is also allocating adequate funds for scrapping old polluting vehicles of government.
The vehicle scrappage policy will come into effect from April 1. The government has said that the policy will help phase out unfit and polluting vehicles and promote a circular economy.
Govt to launch revamped credit guarantee scheme worth Rs 9,000 cr for MSMEs
A revamped credit guarantee scheme for MSMEs with an outlay of Rs 9,000 crore will be launched from April 1, Finance Minister Nirmala Sitharaman said on Wednesday.
In her Budget 2023-24 presentation, she also said the Centre will launch the ‘Dekho Apna Desh’ initiative to promote domestic tourism.
Further, the government will set up National Financial Information Registry for facilitating the efficient flow of credit and fostering financial stability.
Sitharaman also informed that financial sector regulators will be asked to carry out a comprehensive review of existing regulations.
An integrated IT portal will be launched for reclaiming unclaimed shares and dividends, she said, adding the government would also set up a single window system for registrations and approvals in IFSC Gift City.
A Central Processing Centre would also be set up for faster response to companies filing forms under the Companies Act, Sitharaman said.
She also said a one-time new small saving scheme Mahila Samman Saving Certificate will be made available for two years up to 2025.
Promotion of tourism to be taken up on mission mode with active participation of states, others
Promotion of tourism will be taken up on a “mission mode” with active participation of states, convergence of government programmes, and public-private-partnerships, Finance Minister Nirmala Sitharaman announced in the Union Budget for 2023-24 on Wednesday.
In her speech, she also emphasised that 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 the youth in particular,” she said.
“Promotion of tourism will be taken up on mission mode with active participation of states, convergence of government programmes, and public-private-partnerships,” the minister added.
Fiscal deficit to be brought down to below 4.5 pc by 2025-26
Fiscal deficit would be brought down to below 4.5 per cent by 2025-26, Finance Minister Nirmala Sitharaman said on Wednesday.
She also said that tax receipts for the next fiscal are budgeted at Rs 23.3 lakh crore and states would be allowed 3.5 per cent of GDP as fiscal deficit.
To finance the fiscal deficit in 2023-24, net market borrowing from dated securities is estimated at Rs 11.8 lakh crore, Sitharaman said while presenting the Union Budget for 2023-24 in the Lok Sabha.
She retained the fiscal deficit target of 6.4 per cent in the revised estimate for FY2022-23 and reduced it to 5.9 per cent for the next fiscal. The government had pegged the fiscal deficit at at 6.4 per cent of the GDP for the current financial year.
The fiscal deficit or the gap between expenditure and revenue for 2022-23 is estimated to be Rs 16,61,196 crore. The country’s fiscal deficit was projected higher at 6.9 per cent for 2021-22 as against 6.8 per cent estimated earlier.
The Revised Estimates for 2021-22 indicate a fiscal deficit of Rs 15,91,089 crore as against the Budget Estimates of Rs 15,06,812 crore.
The minister also announced a new savings scheme, Mahila Samman Savings Certificate, for two years to 2025 with a maximum deposit limit of Rs 2 lakh and an interest rate of 7.5 per cent.
She added that 50-year interest-free loans to state governments have to be spent on capital expenditure within 2023-24.
The minister announced that monthly income scheme limit would be doubled to Rs 9 lakh and Rs 15 lakh for joint accounts. The finance minister said that indirect tax proposals would boost green mobility and electric vehicles (EVs).
FM provides Rs 35,000 crore outlay to achieve energy transition, net zero objectives
Finance minister Nirmala Sitharaman on Wednesday provided an outlay of Rs 35,000 crore to achieve energy transition and net zero objectives and listed green growth among seven priorities of the government.
“I come to the fifth priority — green growth. Prime minister has given vision for LiFE, or lifestyle for environment. To spur a movement for environmentally conscious lifestyle, India is moving firmly for the panchamrit, the net zero carbon emission by 2070, usher in green industrial and economic transition. This budget builds on our focus on green growth,” the finance minister said in her budget speech in Lok Sabha on Wednesday.
For energy transition, she told the House that this budget provides for Rs 35,000 crore for priority capital investment towards energy transition and net zero objectives and an energy security by ministry of petroleum and natural gas.
Earlier in November, 2021, Prime Minister Narendra Modi had pledged to achieve net zero carbon emissions by 2070 under the Paris Agreement at the United Nations climate conference COP26 in Glasgow, United Kingdom.
Modi had presented India’s national statement at the Glasgow summit, listing out five commitments of India to combat climate change. He had also raised the Nationally Determined Contribution (NDC) of achieving 450 giga watt non-fossil energy capacity to 500 giga watt by 2030.
She also spoke about the recently launched National Green Hydrogen Mission with an outlay of Rs 19,700 crore, which will facilitate transition of economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country adopt technology and market leadership in this sector.
“Our target is to reach an annual (green hydrogen) production of five MMT by 2030,” she said.
She told that the House that government will provide viability gap funding for 4,000 MWh battery energy storage systems.
“To steer the economy on sustainable development path, battery energy storage systems with a capacity of 4,000 MWh will be supported with viability gap funding,” she said.
She also informed the House that a detailed framework for pumped storage projects will be formulated.
About the renewable energy evacuation, she said that the inter state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with an investment of Rs 20,700 crore, including the central government support of Rs 8,300 crore.
About green credit programme for encouraging behavioural change, she said a green credit programme will be notified under the Environmental Protection Act. This will intensify environmentally sustainable and responsive actions by companies, individuals and local bodies.
According Jimit Devani, Partner, Deloitte India, the outlay of Rs 35,000 crore is “a rocket ship” provided by the finance minister as the country heads for its net zero goal.
“A promising step in the right direction. FM provides various fiscal benefits to pump energy transition, battery energy storage via viability gap funding, renewable energy evacuation, green credit programme, biogas plant (Gobardhan scheme), biomass and natural farming,” Devani said.
In January, 2022, the Union Cabinet had approved the National Green Hydrogen Mission with an initial outlay of Rs 19,744 crore, including an outlay of Rs 17,490 crore for the SIGHT programme, Rs 1,466 crore for pilot projects, Rs 400 crore for R&D, and Rs 388 crore towards other mission components.
The Ministry of New & Renewable Energy has been entrusted with the task of formulating the scheme guidelines for implementation of the respective components.
The mission is aimed at development of green hydrogen production capacity of at least 5 MMT (Million Metric Tonne) per annum with an associated renewable energy capacity addition of about 125 GW in the country by 2030 and to bring investment of over Rs 8 lakh crore in total investments.
It will also help creation of over six lakh jobs. The mission is also aimed at cumulative reduction in fossil fuel imports worth over Rs 1 lakh crore. It will help in abatement of nearly 50 MMT of annual greenhouse gas emissions.
Customs duty on import of certain inputs for mobile phone manufacturing to be cut
Finance Minister Nirmala Sitharaman on Wednesday announced a cut in customs duty on the import of certain inputs for mobile phone manufacturing.
In her Budget 2023-24 speech, she said India’s mobile phone output rose from 5.8 crore units in 2014-15 to 31 crore units last fiscal.
Her announcement comes at a time when India has aggressively positioned itself as an electronics powerhouse to the world, as global players look for a China plus 1 strategy.
In fact, India has emerged as the world’s second-largest mobile phone manufacturer backed by the Centre’s enabling policies, various incentive schemes, and a resolve to provide the industry with a competitive environment.
Sitharaman also announced that customs duty on parts of open cells of TV panels would be cut to 2.5 per cent, while customs duty on kitchen electric chimney has been increased to 15 per cent from 7.5 per cent.
However, she said the government would continue with a concessional basic customs duty of 2.5 per cent on copper scrap.
The finance minister also announced a hike in basic customs duty on articles made from gold bars while increasing the tax on cigarettes by 16 per cent.
The government would also reduce customs duty on shrimp feed to promote exports, she said.
Further, she said the government proposes to increase the limit for presumptive taxation for MSMEs and certain professionals to Rs 3 crore and Rs 75 lakh, respectively.
3 centres of excellence for AI, 100 labs in engineering colleges for developing 5G applications
Three centres of excellence for artificial intelligence in top educational institutions and 100 labs in engineering institutions for developing applications using 5G services will be set up, Union Finance Minister Nirmala Sitharaman announced on Wednesday.
The finance minister made the announcement in her budget speech in Lok Sabha.
“Three centres of excellence for artificial intelligence will be set up in top educational institutions. Leading industry players will partner in conducting interdisciplinary research, developing cutting edge applications and scalable problem solutions in the areas of agriculture, health, sustainable cities,” she said.
Sitharaman said that a total of 100 labs will be set up in engineering institutions in collaboration with various authorities, regulators, banks and other business for developing applications using 5G services.
“To realise the new range of opportunities, business models and employment potential, the labs will cover, among others, applications such as smart classrooms, precision farming, intelligent transport systems and healthcare applications,” she said.
The finance minister announced that to address learning loss incurred during the pandemic years, a national digital library for children and adolescents will be set up for facilitating availability of quality books across geographies, languages and genres.
As many as 38,000 teachers and support staff to be recruited in the next three years for 740 Eklavya Model Residential Schools serving 3.5 lakh tribal students, she said.
Sitharaman also announced that teachers training will be re-envisioned through innovative pedagogy, curriculum transaction, continuous professional development dipstick survey and ICT implementation.
“Lab grown diamonds is a technology and innovation driven, energy driven sector with high employment potential. To encourage indigenous production of such diamonds, a research grant will be provided to one of the IITs for five years,” she said.
GOBARdhan scheme to promote circular economy with investment of Rs 10,000 cr
Finance Minister Nirmala Sitharaman on Wednesday said 500 new waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme will be established for promoting circular economy.
These will include 200 compressed biogas (CBG) plants, including 75 plants in urban areas, and 300 community or cluster-based plants at total investment of Rs 10,000 crore.
Presenting the Union Budget for 2023-24, she also said the government will facilitate 1 crore farmers to adopt natural farming.
Besides, the government will take up mangrove plantation along the coastline under the new MISHTI scheme, she added.
Sitharaman also said the government would promote conservation values through a scheme to encourage optimal use of wetlands.
Further, a green credit programme will be notified to incentivise environmentally sustainable and responsible actions by companies, she said.
Gaurav Kedia, Chairman, Indian Biogas Association said the Budget prioritizes the adoption of green fuel, energy, and building practices to reduce carbon intensity and create new green job opportunities.
“The 7 main priorities, referred to as “Saptrishi,” aim to drive sustainable and environment-friendly economic development. The government’s commitment to this “green growth” approach is a step towards building a cleaner and more prosperous future for all Indians,” he added.
Allocated adequate funds to scrap old vehicles owned by central govt
Finance minister Nirmala Sitharaman on Wednesday said that she has allocated adequate funds to scrap old vehicles owned by central government, and states will also be supported in replacing old vehicles and ambulances.
Presenting the Budget for 2023-24, she said replacing old polluting vehicles is an important part of greening the economy.
The minister also said that coastal shipping will be promoted as the energy efficient and lower cost mode of transport, both for passengers and freight, through PPP mode with viability gap funding.
Recently, Union minister Nitin Gadkari had said more than nine lakh vehicles, owned by central and state governments, transport corporations and public sector undertakings, that are older than 15 years will go off the road from April 1 and new vehicles will replace them.
According to a recent notification by the road transport and highways ministry, from April 1, all vehicles owned by central and state governments, including buses owned by transport corporations and public sector undertakings, that are older than 15 years will be de-registered and scrapped.
The rule shall not apply to the special purpose vehicles (armoured and other specialised vehicles) used for operational purposes for the defence of the country and for the maintenance of law and order and internal security, the notification had said.
Startups incorporated till March 2024 to get income tax benefits
The government on Wednesday proposed to extend income tax benefits to startups incorporated till March 2024.
Finance Minister Nirmala Sitharaman also said that the government proposes to increase the benefit of carrying forward losses for startups to 10 years.
“I propose to extend the date of incorporation for income tax benefits to startups from March 31, 2023, to March 31, 2024. I further propose to provide the benefit of carry forward of losses on change of shareholding of startups from seven years of incorporation to ten years,” she announced.
Sugar cooperatives can claim payments prior to 2016-17 made to sugarcane farmers as expenditure, the minister added.
New cooperatives that commence manufacturing activity till March 2024 would also attract a lower tax rate of 15 per cent, she said in the Budget speech.
To promote domestic manufacturing, she said the government proposed to reduce basic customs duty on seeds used in the manufacturing of lab-grown diamonds.
The government would provide a higher limit of Rs 2 lakh per member for cash deposits and loans by Primary Agricultural Credit Societies, she added.
Govt to continue 50-year interest-free loans to states for another year
Finance Minister Nirmala Sitharaman on Wednesday announced that the Centre will continue 50-year interest-free loans to state governments for one more year.
She also said the enhanced capex of Rs 10 lakh crore for infrastructure development is at 3.3 per cent of the GDP.
Presenting the Budget for 2023-24, she said the newly established infrastructure finance secretariat will assist in attracting more private investment.
An expert committee will also be set up to make infrastructure classification and financing framework suitable for Amrit Kaal, she added.
On October 13 last year, Prime Minister Narendra Modi had launched the Gati Shakti – National Master Plan, aimed at developing integrated infrastructure to reduce logistics costs.
All logistics and connectivity infrastructure projects, entailing investment of over Rs 500 crore, are routed through the NPG, constituted under the PM Gati Shakti initiative.
She also informed that the PM Particularly Vulnerable Tribal Groups (PVTGs) scheme would benefit 3.5 lakh tribals.
Govt to cut import duty on raw material for lab-grown diamonds
The government on Wednesday proposed a cut in import duty on seeds used to make lab-grown diamonds with a view to boosting domestic manufacturing.
In her budget speech, Finance Minister Nirmala Sitharaman said that India is a global leader in the cutting and polishing of natural diamonds, contributing about three-fourths of the global turnover by value.
“With the depletion in deposits of natural diamonds, the industry is moving towards Lab Grown Diamonds (LGDs) and it holds huge promise. To seize this opportunity, I propose to reduce basic customs duty on seeds used in their manufacture,” she said.
Gem and jewellery exporters had demanded a cut in the import duty.
The industry stated that the conventional source of rough diamonds across the world faces threats of deposit depletion, which also contribute to the exponential increase in the cost of extraction. Industries have thus found lab-grown diamonds to be a profitable alternative.
These lab-grown or man-made diamonds are grown inside a lab using cutting-edge technologies under specific parameters.
They have a similar physical appearance, chemical composition and optical qualities as natural diamonds.
An LGD is produced using a seed, which is a crucial raw material.
“It was a mixed budget for the gems and jewellery industry as the finance minister did acknowledge the potential of the LGDs for exports, and to create employment,” Kama Jewelry fonder and Managing Director Colin Shah said.
Govt doubles deposit limit for Senior Citizen Savings Scheme to Rs 30 lakh
Finance Minister Nirmala Sitharaman on Wednesday proposed to double the deposit limit for Senior Citizen Savings Scheme to Rs 30 lakh and Monthly Income Account Scheme to Rs 9 lakh.
In her Budget Speech, the minister also announced a new small savings scheme for women.
“The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs 15 lakh to Rs 30 lakh,” the minister said in her 87-minute long speech.
She also proposed that the maximum deposit limit for Monthly Income Account Scheme will be enhanced from Rs 4.5 lakh to Rs 9 lakh for a single account and from Rs 9 lakh to Rs 15 lakh for a joint account.
Announcing a new ‘Azadi Ka Amrit Mahotsav Mahila Samman Bachat Patra’, Sitharaman said a one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available for a two-year period up to March 2025.
“This will offer deposit facility up to Rs 2 lakh in the name of women or girls for a tenor of 2 years at fixed interest rate of 7.5 per cent with partial withdrawal option,” she said.
The minister also announced to that an integrated IT portal will be established for investors to reclaim unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority with ease.
Sitharaman announces new savings scheme for women with 7.5% fixed interest rate for 2 years
Union Finance Minister Nirmala Sitharaman Wednesday announced a ‘Mahila Samman Saving Certificate’ with a fixed interest rate of 7.5 per cent for two years.
The deposit can be made in the name of a woman or a girl child. The maximum deposit amount has been kept at Rs 2 lakh and the scheme will have a partial withdrawal facility as well.
“One-time new small saving under ‘Mahila Samman Saving Patra’. The deposit facility for the women and girls will be for a period of two years with a rate of interest of 7.5 per cent,” Sitharaman announced.
She also said that for the economic empowerment of women under the Deendayal Antyodaya Yojana National Rural Livelihood Mission, 81 lakh self-help groups have been created by mobilising rural women.
“We will enable these groups to reach the next stage of economic empowerment through the formation of large producer enterprises or collectives with each having several thousand members,” she said.
Financial assistance of more than Rs 2.25 lakh crore has been provided to small farmers under PM-Kisan Samman Nidhi. About three crore women farmers have been provided Rs 54,000 crore under the scheme, the finance minister said.
Sitharaman also announced enhancing the maximum amount of money that can be invested in the senior citizen saving scheme (SCSS) to Rs 30 lakh compared to Rs 15 lakh now.
The postal monthly income scheme also saw an enhancement of limit. In a single name, Rs 9 lakh can be invested as compared to Rs 4.5 lakh now.
The enhancement of limits has come as a solace for investors looking for regular income in times of high inflation. The schemes are backed by a sovereign and hence do not carry credit risk.
Govt to revive 50 airports, heliports, water aerodromes, advanced landing grounds
The government on Wednesday said 50 additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity in the country.
The announcement was made by finance minister Nirmala Sitharaman while presenting the Union Budget for 2023-24.
Over the past few years, the government has been taking various initiatives, especially the UDAN (Ude Desh ka Aam Naagrik) scheme, to boost the regional air connectivity.
“Fifty additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity,” Sitharaman said in her Budget speech.
Besides, she said that 100 critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertiliser, and food grains sectors have been identified.
“They will be taken up on priority with investment of Rs 75,000 crore, including Rs 15,000 crore from private sources,” she added.
UDAN flights have transported almost close to 1.15 crore people in the last six years.
In her first address to the joint sitting of Parliament on Tuesday, President Droupadi Murmu said the country’s aviation sector is growing rapidly.
“Up to 2014, the number of airports in the country was 74, it has now increased to 147. Today India has become the third-largest aviation market in the world. The UDAN Yojana has played an important role in this regard,” she had said.
Bharat Shared Repository of Inscriptions, Amrit Dharohar scheme for wetlands
Bharat Shared Repository of Inscriptions will be set up in a digital epigraphy museum with the digitisation of one lakh ancient inscriptions in the first stage, Finance Minister Nirmala Sitharaman announced on Wednesday in her Budget speech.
She also said that the Amrit Dharohar scheme will be implemented over the next three years to encourage the optimal use of wetlands and enhance biodiversity.
In her Budget speech, Sitharaman asserted that India has made significant progress in many sustainable development goals.
The 2030 agenda for sustainable development was adopted by all United Nations member states in 2015. It provides a shared blueprint for peace and prosperity for people and the planet.
“Wetlands are vital ecosystems which sustain biological diversity. In his latest ‘Mann Ki Baat’, the Prime Minister has talked about, and I quote that ‘now, the total number of Ramsar sites has increased to 275, whereas before 2014, there were only 26’,” Sitharaman said.
“Local communities have always been at the forefront of conservation efforts for wetlands. The government will promote their unique conservation values through the Amrit Dharohar, a scheme that will be implemented over the next three years to encourage optimal use of wetlands and enhance biodiversity, carbon stock, eco-tourism opportunities and income generations for local communities,” she said.
Sitharaman also spoke about the government’s vision for the preservation of India’s ancient inscriptions.
“Bharat Shared Repository of Inscriptions will be set up in a digital epigraphy museum with the digitisation of one lakh ancient inscriptions in the first stage,” she added.
FM proposes ‘risk-based’ KYC instead of current ‘one size fits all’ approach
The government on Wednesday proposed to simplify the KYC procedure by adopting a ‘risk-based’ rather than the ‘one size fits all’ approach currently in practice.
In her Budget Speech, finance minister Nirmala Sitharaman also proposed to introduce a ‘one stop solution’ for identity and address updating through the DigiLocker service.
Another significant announcement made by the minister relates to use of PAN as common identifier for business establishments for digital systems of government agencies.
“The KYC process will be simplified adopting a ‘risk-based’ instead of ‘one size fits all’ approach,” Sitharaman said as she presented the last full budget before the 2024 general elections.
The financial sector regulators will also be encouraged to have a KYC (Know Your Customer) system fully amenable to meet the needs of Digital India.
She also announced a one stop solution, for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators and regulated entities, will be established using DigiLocker service and Aadhaar as foundational identity.
Sitharaman further said for the business establishments required to have a Permanent Account Number, the PAN will be used as the common identifier for all digital systems of specified government agencies.
“This will bring ease of doing business; and it will be facilitated through a legal mandate,” she said.
For obviating the need for separate submission of same information to different government agencies, the minister proposed to set up a system of ‘Unified Filing Process’.
Such filing of information or return in simplified forms on a common portal will be shared with other agencies as per filer’s choice.
Farm credit target raised by 11 pc to Rs 20 lakh cr for FY24
The government on Wednesday announced 11 per cent hike in agriculture credit target to Rs 20 lakh crore for next fiscal year with focus on animal husbandry, dairy and fisheries.
The agricultural credit target is Rs 18 lakh crore for the current 2022-23 fiscal. Among other big ticket announcements, Finance Minister Nirmala Sitharaman in her Budget speech said the government will launch ‘Aatmanirbhar Clean Plant Programme’ to boost availability of disease-free, quality planting material for high value horticultural crops at an outlay of Rs 2,200 crore.
A new sub-scheme of Pradhan Mantri Matsya Sampada Yojana will be launched with targeted investment of Rs 6,000 crore to further enable activities of fishermen, fish vendors, and micro and small enterprises, improve value chain efficiencies, and expand the market, she said. “The agriculture credit target will be increased to Rs 20 lakh crore with focus on animal husbandry, dairy and fisheries,” the FM said.
Fully imported cars, including EVs, to cost more
Fully imported cars, including electric vehicles will cost more with Finance Minister Nirmala Sitharaman announcing hike in customs duty in the Union Budget 2023-24.
Customs duty on vehicles in completely built units (CBUs) costing less than USD 40,000 or with engine capacity less than 3,000 cc for petrol-run vehicles and less than 2,500 cc for diesel-run vehicles has been raised from 60 per cent to 70 per cent, as per the Budget document.
Similarly, customs duty on electrically operated vehicles in CBU form, other than with cost, insurance and freight (CIF) value of more than USD 40,000, has also been raised to 70 per cent from 60 per cent.
The Budget also outlined that customs duty on vehicles, including electric vehicles, in semi-Knocked down (SKD) form will rise to 35 per cent from 30 per cent earlier.
Already, cars imported as CBUs with CIF more than USD 40,000 or with engine capacity more than 3,000 cc for petrol-run vehicles and more than 2,500 cc for diesel-run vehicles attract 100 per cent customs duty.
“The Government has proposed to increase the duties on completely built units (CBUs) to 70 per cent from 60 per cent earlier.
“This is unlikely to have a material impact as most of the luxury cars are now assembled in India, barring the top-end variants. Nonetheless, an increase in customs duty will further aim to promote domestic manufacturing going ahead,” Icra Senior Vice President & Group Head Corporate Ratings Shamsher Dewan said.
On the other hand, Sitharaman proposed “to further provide impetus to green mobility, customs duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in electric vehicles.
The Finance Minister also noted that replacing old polluting vehicles is an important part of “greening the country’s economy”.
“In furtherance of the vehicle scrapping policy mentioned in Budget 2021-22, I have allocated adequate funds to scrap old vehicles of the Central Government,” she said.
States will also be supported in replacing old vehicles and ambulances, Sitharaman added.
“Multiple proposals in the Union Budget are seen favourable for the automotive sector. A sharp 33 per cent increase in capital investment outlay, identification of critical transport projects for first and last-mile connectivity, and relaxation in personal tax rates shall aid the demand for the auto sector,” Dewan stated.
Thrust on green energy continues with specific budgetary allocation for old vehicle scrappage, energy transition, and viability gap funding for battery storage solutions with 4000 MWh, he added.
Customs duty exemption on the import of capital assets for manufacturing lithium-ion cells for batteries used in electric vehicles shall facilitate EV ecosystem development and aid faster penetration, Dewan said.
“An increase in the duty rates on compounded rubber from 10 per cent to Rs 25 (or) 30 per kg, whichever is less, is a challenge for tyre industry, which significantly depends on imported rubber,” he added.
