During the presentation of the 2023 Union Budget, India's Finance Minister Nirmala Sitharaman declared that the capital investment has increased for the third consecutive year by 33% to reach 10 lakh crores, equaling 3.3% of the country's GDP. The Minister's speech emphasized the importance of infrastructure and job creation, as this is the last full budget before the 2024 Lok Sabha elections under the Modi government.

 

The seven main areas of emphasis in this year's Union Budget are:

1. Inclusive growth,

2. Bridging the gap to reach remote areas,

3. Building infrastructure and promoting investment,

4. Unleashing potential,

5. Promoting environmental sustainability,

6. Empowering the youth, and

7. Strengthening the financial sector.

 

Income Tax: The new tax regime features the following tax brackets: 0-Rs. 3 lakh - exempt; Rs. 3-6 lakh - 5%; Rs. 6-9 lakh - 10%; Rs. 9-12 lakh - 15%; Rs. 12-15 lakh - 20%; Rs. 15 lakh and above - 30%. The number of brackets has been reduced from 6 to 5 and the tax exemption has increased to Rs 3 lakhs. The new tax structure will now be the default option. The income tax rebate has increased from Rs 5 lakh to Rs 7 lakh under the new tax regime.

 

The maximum deductions on capital gains from residential property investments will be set at INR 10 crore. Copper scrap will continue to have a reduced basic customs duty of 2.5%, while the customs duty on shrimp feed will be reduced. The presumptive taxation limit for MSMEs and certain professionals will be raised to INR 3 crore and INR 75 lakh, respectively.

 

The import duty on compounded rubber has been raised to 25% from 10%. The basic customs duty on gold bar-made articles has also been increased. The customs duty on kitchen electric chimneys has gone up to 15% from 7.5%. The budget proposes a 16% hike in duty, making cigarettes more expensive. The processing time for Income Tax Returns has been reduced to 16 days from 93 days. There will be a customs duty rebate for the manufacturing of lithium batteries, certain camera lens elements, mobile phones, and televisions.

 

The goal to reduce the deficit is set at 5.9% of the GDP. All companies selling natural gas in India are required to include 5% compressed biogas (CBG). A new program will be introduced to enhance the effective use of wetlands and there will be mangrove planting initiatives under the MISHTI scheme along the coastline. The fourth version of the Pradhan Mantri Kaushal Vikas Yojna will be introduced to develop skills in young people and 30 Skill India centers will be established internationally

 

These announcements refer to initiatives aimed at promoting environmentally sustainable and responsible actions in India. The PM-PRANAM scheme is meant to incentivise states to promote the use of alternative fertilisers. The Gowardhan Scheme is aimed at promoting a circular economy and has a total investment of Rs 10,000 crore. The green credit programme will incentivise companies to take environmentally sustainable actions. There is support for setting up battery energy storage of 4,000 MWh and Rs 35,000 crore has been set aside for priority capital investment towards energy transition and achieving net-zero emissions. Additionally, the 50-year interest-free loans provided to state governments have been extended for one more year.

 

The government has launched a national initiative for underprivileged tribal communities with a budget of INR 15,000 crore. The railway sector will receive a record high capital allocation of INR 2.4 lakh crore, as per the finance minister's statement. Urban development will be emphasized, particularly with regard to 100 crucial transportation infrastructure projects, and the transition from manual to automated sewer and septic tank systems. Karnataka, which is set to hold elections, has been granted INR 5,300 crore to address the drought crisis. The budget for PM Awaas Yojana has been increased by 66% to more than INR 79,000 crore. A National Digital Library for children and young adults will be established to make quality books accessible regardless of location, language, genre, level, and device.

 

The PM Matsya Sampada Yojana is introducing a new sub-scheme with a budget of Rs 6,000 crore for the fisheries sector. Capital investment has risen by 33% to 10 lakh crores, making up 3.3% of GDP, for the third year in a row. The government will launch a Rs 2,200 crore Aatmanirbhar clean plan program. The Hyderabad-based millet institute will be supported as a center of excellence by the government. A national cooperative database is being established to document cooperative societies. An agriculture accelerator fund is being established to support agricultural start-ups by young entrepreneurs. Digital infrastructure for agriculture will be developed as an open-source and inter-operable public good.

 

The government has initiated a program to provide food grains to Antyodaya and priority households starting January 1, 2023 for the next 12 months. The program, which offers free food grains to priority households, has been put into action as of January 1st. The finance minister claims that the Indian economy is making progress and is projected to have a 7% growth rate despite facing obstacles.