Union Budget 2023 adopts 7 priorities, key highlights

Union Finance Minister presented the Union Budget for the fiscal year 2023-24 on Wednesday. As per the Finance Miniter Nirmala Sitharaman, the vision for the Amrit Kaal includes technology-driven and knowledge-based economy with strong public finances, and a robust financial sector. To achieve this, Jan Bhagidari through Sabka Saath Sabka Prayas is essential. The economic agenda for achieving this vision focuses on three things:

1. Opportunities for Citizens with focus on the Youth
2. Growth and Job Creation
3. Strong and stable Macro-Economic Environment.

The Finance Minister stated that the Budget of 2023-24 adopts 7 priorities and act as the ‘Saptarishis‘ guiding us through the Amrit Kaal. These Saptarishis are:

Inclusive development

Agriculture & Cooperatives

• The government announced an 11% hike in agriculture credit target to Rs. 20 lakh crore for next fiscal year.
• The government has also announced to provide a 2% interest subsidy to ensure farmers get short-term loans of up to Rs 3 lakh at effective rate of 7% per annum.
• The RBI has decided to raise the limit for collateral-free agriculture loans from the previous amount of Rs 1 lakh to Rs 1.6 lakh.

Health

• 157 New Nursing Colleges will be established.
• The Union health and family welfare ministry has been allocated ₹89,155 crore in the Union budget FY24 marking a rise of a meagre 12% when compared to the revised budget estimated for FY 23.
• For the upcoming financial year, Rs 86,175 crore has been allocated to the department of health and family welfare while Rs 2,980 crore has been allocated for the department of health research.
• In the ongoing fiscal, the budget spent on the department of health and family welfare is Rs 76, 370 while Rs 2,775 crore had been marked for the department of health research.

Education and Skilling

• A National Digital Library for children and adolescents will be set-up for facilitating availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility.
• Teachers’ training will be re-envisioned through innovative pedagogy, curriculum transaction, continuous professional development, dipstick surveys, and ICT implementation.

Reaching the Last Mile

• Pradhan Mantri PVTG Development Mission to be launched to improve socio-economic conditions of the particularly vulnerable tribal groups (PVTGs)
• Centre to recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students.
• In the drought prone central region of Karnataka, central assistance of ` 5,300 crore will be given to Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for drinking water.
• The outlay for PM Awas Yojana is being enhanced by 66 per cent to over 79,000 crore.

Infrastructure and Investment

• Capital investment outlay increased steeply for the third year in a row by 33 per cent to ` 10 lakh crore, which would be 3.3 per cent of GDP.
• Fifty additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity.
• Continuation of 50 year interest free loan to State Governments to incentivize infrastructure investment.
• Highest capital outlay of Rs. 2.4 lakh cr for Railways.

Unleashing Potential Trust Based Governance

• 3 specialized AI centers to be set up in educational institutes.
• National Data Governance Policy to be introduced to enable access for academia and start-up research.
• Mission Karmayogi: iGOT Karmayogi, an integrated online training development to provide continuous learning opportunities for government employees.
• To unleash innovation and research by start-ups and academia, a National Data Governance Policy will be brought out. This will enable access to anonymized data.
• For the business establishments required to have a Permanent Account Number (PAN), the PAN will be used as the common identifier for all digital systems of specified government agencies.
• In cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security, will be returned to them by government and government undertakings.
• For efficient administration of justice, Phase-3 of the E-Courts project will be launched with an outlay of Rs. 7,000 crore.
• 100 labs for developing applications using 5G services will be set up in engineering institutions to realise a new range of opportunities, business models, and employment potential.

Green Growth

• GOBARdhan: 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 ` 10,000 crore.
• PM-PRANAM: “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” will be launched to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.
• Green Credit Programme: To be notifies under FPA to incentivize sustainable actions.
• Sustainable Ecosystem development: Building on India’s success in afforestation, ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’, MISHTI, will be taken up for mangrove plantation along the coastline and on salt pan lands, wherever feasible, through convergence between MGNREGS, CAMPA Fund and other sources.
• 10,000 bio-inputs resource centres to facilitate farmers to adopt natural farming.
• Promotion of battery energy storage systems and coastal shipping for energy efficient transportation.
• Funds to be allocated for replacing old polluting vehicles.

Youth Power

• Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth within the next three years.  On-job training, industry partnership, and alignment of courses with needs of industry will be emphasized. The scheme will also cover new age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.
• To skill youth for international opportunities, 30 Skill India International Centres will be set up across different States.
• The digital ecosystem for skilling will be further expanded with the launch of a unified Skill India Digital platform for:
  • enabling demand-based formal skilling,
  • linking with employers including MSMEs, and
  • facilitating access to entrepreneurship schemes.
• States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for promotion and sale of their own ODOPs (one district, one product), GI products and other handicraft products, and for providing space for such products of all other States.

Financial Sector

• National Financial Information Registry: A national financial information registry will be set up to serve as the central repository of financial and ancillary information to further facilitate efficient flow of credit, promote financial inclusion, and foster financial stability.
• Credit Guarantee for MSME: Infusion of Rs. 9,000 crore in the corpus to enable additional collateral-free guaranteed credit of Rs. 2 lakh crore.
• Mahila Samman Bachat Patra: One-time new small savings scheme for a 2-year period with a deposit facility of up to Rs. 2 lakh for women.
• Benefits to Senior Citizens: Enhanced maximum deposit limit for senior citizens savings scheme from Rs. 15 lakh to Rs. 30 lakh.
• Initiatives to promote business activities in GIFT IFSC.
• Create more trained professionals in Securities Markets via award of educational certificates.

Fiscal Management

• 50 year interest free loans to states to be spent on Capital Expenditure within 2023-24.
• Fiscal Deficit of 3.5% of GDSP allowed for States (0.5% tied to Power sector reforms)
• Fiscal Consolidation: targeted deficit to be below 4.5% by 2025-26.
• Co-operation:
  • New co-operatives that commence manufacturing activities till 31.3.2024 shall get the benefit of a lower tax rate of 15 per cent, as is presently available to new manufacturing companies.
  • Secondly, finance minister proposed to provide opportunity to sugar co-operatives to claim payments made to sugarcane farmers for the period prior to assessment year 2016-17 as expenditure which  is expected to provide them with a relief of almost ` 10,000 crore.
  • Third, finance minister proposed providing a higher limit of ` 2 lakh per member for cash deposits to and loans in cash by Primary Agricultural Co-operative Societies (PACS) and Primary Co-operative Agriculture and Rural Development Banks (PCARDBs).
  • Similarly, a higher limit of ` 3 crore for TDS on cash withdrawal is being provided to co-operative societies.

Taxes

• Income tax rebate increased from Rs. 5 lakh to Rs. 7 lakh in the new regime.
• Exemption limit of income tax increased to Rs. 3 lakhs.
  • Under new tax regime, income of Rs 0-3 lakh is nil.
  • Income above Rs 3 lakh and up to Rs 5 lakh to be taxed at 5% under new regime.
  • Income of above Rs 6 lakh and up to Rs 9 lakh to be taxed at 10% under new regime.
  • Income above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20% under new regime.
  • Income above Rs 15 lakh to be taxed at Rs 30%.