On February 1, 2023, Finance Minister Nirmala Sitharaman introduced the Union Budget 2023. This is the fifth union budget presented by Modi Govt 2.0. It also lays the groundwork for the government’s economic goals for the following fiscal year. It is regarded as Amrit Kaal’s first budget (Golden age). With a focus on tax reduction for people, infrastructure development, and small business support.
The prime objective
The fundamental goal of India’s Union budget for 2023 is to rebuild the economy and promote development while maintaining balanced budgets. The budget lists seven main measures (Saptarishi-7 objectives) that will surely have a big economic impact.
- Inclusive Growth
- Getting to the Finish Line
- Youth Power
- Infrastructure & Investment
- Unleashing the potential
- Financial Sector
Budget Key points
Updates on Income Taxes
- To start with one of the most noteworthy elements of the Union budget 2023 is the new income tax regime. Individuals have received huge tax cuts in the Union Budget for 2023-24. The new tax system includes the following amended tax brackets:
|Upto 3 Lakhs||Nil|
|3,00,001 – 6,00,000||5%|
|6,00,001 – 9,00,000||10%|
|9,00,001 – 12,00,000||15%|
|12,00,001 – 15,00,000||20%|
It also includes tax relief for taxable income up to INR 7 lakhs. This implies that no tax would be levied on income up to Rs. 7 lacks
Made-in-India smartphones, TVs to get cheaper: Budget 2023
The government wants to encourage smartphone and television manufacturing in India by rewarding companies. Finance Minister Nirmala Sitharaman said in the Union Budget 2023 that the government intends to help smartphone and television manufacturers by reducing customs duties on some key components.
Sitharaman said in her budget speech that production of cell phones in India has increased from 5.8 crore units worth around 18,900 rupees in 2014-15 to 31 crore units worth more than 2,75,000 rupees in the last fiscal. To further boost production, the government will reduce duties on some parts as well as on the phone’s camera components. The duty exemption for lithium-ion batteries is also to be extended for another year.
The government wants to promote the manufacture of television sets by reducing the basic customs duty on open cell parts from TV to 2.5 percent.
Customs fees for gold and silver will increase
Finance Minister Nirmala Sitharaman, while presenting the Union Budget on Wednesday, announced an increase in basic customs duty on products made from gold bars
“Customs duties on dore and bars of gold and platinum were increased earlier this fiscal. I now propose to increase the duties on articles made therefrom to enhance the duty differential. I also propose to increase the import duty on silver dore, bars and articles to align them with that on gold and platinum,” said Sitharaman in her Budget speech.
Customs duty on kitchen chimney, toys hiked: Budget 2023
The budget, which was submitted in Parliament on Wednesday, increased the basic customs tax on kitchen chimneys to 15%, bicycles from 30% to 35%, and toys and components of toys (excluding electronic toy parts) from 60% to 70%, raising the prices of imported goods.
During her budget address on Wednesday, Sitharaman suggested reducing the number of Basic Customs Duty (BCD) rates on commodities other than textiles and agricultural from 21% to 13%.
Railway Budget 2023
Finance Minister Nirmala Sitharaman said the budget for rail transport is nine times higher than 2013-2014, with spending of 2.40 lakh crore for fiscal year 2023-24, compared with 1.40 lakh crore in FY 22-23.
Railroad Minister Ashwini Vaishnaw stated that the full potential of the railroad sector has not been realised in the past due to inadequate funding.“The current outlay will be beneficial for 800 crore passengers who annually travel by railways,” Mr. Vaishnaw said.
Budget 2023: FM aims to end manual scavenging
To stop manual garbage disposal, Finance Minister Nirmala Sitharaman said on Wednesday at the presentation of the 2023 budget that all cities and towns will have the option to switch garbage disposal from manholes to machines
Since 2017, up to 400 individuals have perished while cleaning sewers and septic tanks, according to Minister of State for Social Justice and Empowerment Ramdas Athawale, who briefed the Lok Sabha in December 2022.
Education Budget 2023
The finance minister also announced the establishment of 157 new nursing institutions in strategic locations. FM said key industry players would collaborate to conduct interdisciplinary research and develop innovative applications and scalable solutions in agriculture, health and sustainable cities.
The government will hire 38,800 teachers and support staff over the next three years for 740 Eklavya model schools that support local students
The Indian Institute of Millet Research is to be promoted as a centre of excellence, according to FM Nirmala Sitharaman in Parliament. Artificial intelligence, data science, machine learning and other cutting-edge courses are to be introduced.
Increase in Capital Expenditure
India will prioritise economic development and job creation, Finance Minister Nirmala Sitharaman said Wednesday as she presented the government’s last comprehensive budget to Parliament before next year’s general election. She said capital investment had been increased by 33% to Rs 10 lakh crore or 3.3% of GDP. This is the third consecutive year that capital expenditure has been increased. The amount is higher than last year’s budget of Rs 7.5 billion and is the highest in history
The PM Awaas Yojana budget has been raised by 66% to Rs 79,000 crore. According to Sitharaman’s budget address, effective capex will be Rs 13.7 lakh crore, or 4.5% of GDP.
Budget 2023 to support India’s startup
The Finance Minister indicated that the government will establish an Agriculture Accelerator Fund (AAF) to promote the establishment of agribusinesses by young entrepreneurs in rural areas.
To allow inclusive, farmer-centric solutions, a digital public infrastructure for agriculture will be built
Eligible startups founded before March 31, 2023 have received a tax break for three consecutive years out of ten years after incorporation.
Budget For Green Growth
“Pollution Control,” which was intended to provide financial support to the bodies responsible for funding NCAP, saw steady growth-from 406 million rupees in 2021-22 to 600 million rupees in 2022-23 and 756 million rupees in 2023-24, an increase of 26% in the current year.
The funds will be distributed to several states in order to enhance their air quality monitoring systems and implement other associated steps to keep track of various pollutants throughout the year.
Budget 2023-24 Expectations for the Insurance Sector
- Budget for 2023-24 may not introduce any major changes to the tax system, other than fine-tuning the same existing indirect and direct taxation regimes
- Health insurance providers emphasised the importance of facilitating access to healthcare financing in terms of insurance affordability and simplicity.
- Guidelines include lowering the current GST rate on health insurance.
- The insurance industry proposes raising the FDI limit to 100%.
Cigarettes will cost more as the budget proposes an increase in tax.
Nirmala Sitharaman, Finance Minister, announced a 16% hike in National Calamity Contingent Duty (NCCD) on cigarettes on Wednesday.
Experts believe that a significant increase in cigarette taxes and stricter rules will not only get the most out of human capital by improving residents’ health but will also assist Prime Minister Narendra Modi to achieve his aim of a five trillion dollar economy by 2025.
Other important suggestions in the Finance Bill include the following:
- Tax incentives for money transferring to IFSC, GIFT City are being extended until March 31, 2025.
- Section 276A of the Income Tax Act provides for decriminalisation.
- Allowing losses on strategic disinvestment, particularly those of IDBI Bank
- Agniveer Fund has been granted EEE status.
Budget 2023- What Gets Cheaper
- Camera lenses for phones, laptops, and DSLRs
- TV panel components
- Batteries made with lithium ion
- Denatured ethyl alcohol
- Diamond seeds are used in the production of diamonds.
Budget 2023- What Gets Costlier
- Articles made of gold and platinum.
- Items made of silver.
- Copper scrap
- Imported electric kitchen chimney