Union Budget 2023

Nirmala Sitharaman, the finance minister, unveiled the budget for the upcoming fiscal year on February 1st, 2023. The new budget acts as a road map for a democratic and inclusive economy. Seven major themes are outlined in the budget: green growth, youth empowerment, the financial sector, inclusive development, assisting marginalised areas, infrastructure investment, and releasing latent potential.

What’s Cheaper and What’s More Expensive – At a Glance

Here is the budget 2023 summary, highlighting pionts on what’s cheaper and what’s more expensive:

CHEAPER:

Duty cut on certain inputs for mobile manufacturing.
Customs duty on TV panel parts reduced to 2.5%.
Customs duty on shrimp feed to boost exports.
Cut in basic customs duty on lab-grown diamond seeds.
In the context of capital gains tax, deductions are limited to 10 crores for residential home investments.
Customs tax relief on camera lenses and continued reduced duty on lithium-ion batteries.
Decrease in fish lipid oil price for aquatic feed.

EXPENSIVE:

Basic customs duty increased on articles made from gold bars.
Customs duty hike on kitchen items.
16% increase in cigarette taxes, first in almost 3 years.
Compound rubber's import levy raised from 10% to 25%.
Customs duty on fully imported luxury cars and electric vehicles raised from 60% to 70%.
Imported bicycles and toys have become more expensive.

Top 10 Highlights of the Indian Union Budget 2023-2024 and Takeaways

Here are the top 10 budget highlights for 2023:

1. Revised Direct Tax Regime

Simplified income tax slabs in 2023.
No income tax up to Rs 7 lakh p.a.

2. Surcharge Relief to HNIs

Surcharge reduced to 25%
Effective tax rates down to 39%.

3. Infrastructure Development

Capex increases to Rs 10 lakh crore.
Rs 1.10 lakh crore for roads, railways, airports, ports, and highways.
Focus on job creation and economic stimulation.

4. Boosting Agriculture and Rural Economy

Rs. 2.83 lakh crore allocation.
Initiatives for farmer support, rural employment, and food production.
Rs 2 lakh cr for free food grains under the PM scheme.

5. Empowering Women

Rs. 28,600 crores for women-centric schemes.
Focus on Pradhan Mantri Mahila Shakti Kendra and Beti Bachao Beti Padhao.

6. Encouraging Entrepreneurship

Tax incentives for startups.
Increased access to financing.
Use of PAN for digital systems.

7. Boosting Healthcare

Rs. 64,180 crores allocation.
Focus on affordable healthcare in rural areas.
Aim to eradicate sickle cell anaemia by 2047.

8. Promoting Digitalization

Rs. 3,000 crores for digitalization.
New institution for digital infrastructure.
Incentives for digital payments.

9. Improving Education

Rs. 93,224 crores allocation.
National Digital Library for small and young learners.

10. Green Growth

Emphasis on 'green growth' strategy.
Adoption of green fuel, energy, and building practices.
Focus on reducing carbon intensity and creating green job opportunities.

How Does the Union Budget 2023 Affect You

1. Economy And The Budget

The budget allocates INR 10 lakh crore for Capital Expenditure (CapEx), representing 3.3% of GDP. The effective capex is expected to reach INR 13.7 lakh crore, 4.5% of GDP. Measures such as an INR 9,000 crore infusion for MSMEs, INR 2 lakh crore credit guarantee, reduced credit costs, and the establishment of a National Financial Information Registry are planned.

2. Budget and Income Tax 2023

The new tax regime includes changes such as an increased rebate limit of INR 7 lakh, reduced tax slabs to five, and extended standard deduction benefits. Taxpayers can choose between the new and old regimes, with the reduced highest surcharge of 25%. Other changes involve various deductions, taxation policies, and enhanced limits for presumptive taxation.

3. Budget and Indirect Taxes

The government promotes Green Growth with excise duty exemption on compressed biogas, reduced customs duty on mobile phone parts and TV panel components, and changes in duties for kitchen chimneys and precious metal imports.

4. Budget and Youth

The budget announced the "National Apprenticeship Promotion Scheme" for 47 lakh youth, including Pradhan Mantri Kaushal Vikas Yojana 4.0 emphasising on-the-job training, digital ecosystem expansion for skill training, and recruitment of teachers for tribal students in Eklavya Model Residential Schools.

5. Budget and Future

Government to establish AI centres of excellence, enable 5G-based app development in engineering labs, create a national digital library for children, revive 50 air infrastructure sites, and increase allocation for renewable energy. It also includes vehicle pricing changes, lab-grown diamonds, compressed gas, textiles, fish lipid oil, and electronic parts.

The Final Word

The Union Budget 2023 aims to establish India as a forward-thinking nation. The new tax limits could improve people’s spending power and boost the economy in the upcoming financial year. Further, the focus on educating and empowering the youth will help create a young and vibrant population hungry to make India an economic superpower.

Frequently Asked Questions

1. What is the purpose of the Union Budget?

Ans: The Union Budget serves several purposes. It outlines the government’s fiscal policy, including revenue collection measures and expenditure plans. It allocates funds for various sectors, such as health, education, infrastructure, defence, etc. The budget aims to achieve economic growth, control inflation, and address socio-economic challenges.

2. How does the Union Budget impact the common people?

Ans: The Union Budget can significantly impact the common people in various ways. It determines tax rates, exemptions, and policies that affect individuals’ income and spending. The budget also influences government spending on welfare schemes, infrastructure development, healthcare, education, and other sectors directly impacting people’s lives.

Key Points and Highlights of the General Budget 2023

Contents

Categories

Recent Blogs