Budget 2023-24: The Most Significant Highlights

On February 1st, 2023, Finance Minister Nirmala Sitharaman took centre stage to unveil her 5th Union Budget, leaving a lasting impression with a speech that, surprisingly, was the shortest in recent history. Declaring the start of a new era - "Amrit Kaal" – thefinance minister set the tone for a budget centred around "Saptarshi" - seven key priorities that will steer the nation forward.

The Union Budget 2023 Offers Big Wins for Personal Income Tax Payers.Under the new tax regime, the highest income tax rate has been reduced from 42.74% to39%, with a decrease in the highest surcharge from 37% to 25%. This means lower taxes for individuals across the board. Here are the slab rates under the new regime

• Rs 0-3 lakh: Nil
• 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%

Note:

• Income Tax Rebate Limit Extended to Rs 7 Lakhs
• Leave Encashment Exemption in Private Companies Raised to Rs 25 Lakhs
• Maximum deposit limit for the Senior Citizen Savings Scheme is increased from Rs 15 lakh to Rs 30 lakh.

Finance Minister announced simplification of 39,000 business compliances and decriminalization of 3,400 legal provisions.

• PAN to serve as common business ID, National Data Governance Policy to simplify KYC while preserving privacy.
• Tax exemptions extended to GIFT City businesses until 2025.
• Rs 9,000 crore infusion into credit guarantee scheme for MSMEs.
• Increased presumptive taxation limits for MSMEs and startups.
• Startups benefit from 15% tax rate and extended incorporation date for IT benefits.
• Increased cash deposit/loan limits for co-op societies.
• Measures aim to reduce compliance costs and increase credit for MSMEs.

The government is on a mission to simplify indirect taxes like GST and Customs on various products. This is all part of their plan to not only increase exports and domestic manufacturing, but also to add more value to the economy and promote green energy and mobility. But let's be real, what we all really want to know is how the 2023 budget will affect our wallets. Will our favourite products go up in price or become more affordable? That's the million-dollar question!

What’s Cheaper

• Camera, lens of mobile phones
• Parts of open cells if TV panels
• Denaltured ethyl alcohol
• Domestic manufacture of shrimp
• Seeds used in the manufacture of
• Diamonds
• Raw material for EV industry

What’s Costlier

• Electric kitchen chimney
• Articles made of gold, platinum &imitation jewellery
• Silver doors, bars, articles
• Copper scrap
• Compounded rubber
• Cigarettes
• Imported bicycles & toys
• Electronic vehicle imports

Agriculture

A digital public infrastructure for agriculture will be created to support the growth of agri-tech startups, and a fund will be established to boost rural agri-startups.

Healthcare

157 new nursing colleges will be established and a Sickle Cell Anaemia mission will be launched.A program will be launched to promote research and innovation in pharmaceuticals.

Education

The government will set up a National Digital Library and recruit 38,800 teachers for Eklavya Model Residential Schools. The Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to upskill youth.

Infrastructure

Investment of Rs 75,000 crore to modernize 50 airports, heliports, water aerodromes, etc across the country. Private sources have also contributed Rs 15,000 crore to 100 transport infrastructure projects.

Woman Empowerment

The government introduced the Mahila Samman Savings Certificate for women empowerment, with a savings limit of up to 2 lakhs for two years with a 7.5% interest rate. Rural women were organized into 81 lakh self-help groups with government support for raw materials and marketing.

Budget 2023 has received mixed reviews from the public. On one hand, there are some great aspects of the budget, while on the other hand, there are some drawbacks that have raised eyebrows. Let's take a closer look at what's good and what's not so good in Budget 2023.

The Good:

• The capital investment has seen a huge boost, increasing by 33% to a whopping Rs 10 lakh crore, which is 3.3% of GDP.
• PMGKAY, a scheme to provide free food grain to those in need, has been extended for another year.
• The government is still on track to reduce the fiscal deficit to 4.5% of GDP by 2025-26.
• The AtmaNirbhar Clean Plant Programme has been launched, with a budget of Rs. 2,200 crores.

The Bad:

• The Department of Space budget has been reduced by 8% for 2023-24, from 13,700 crores to 12,543.91 crores.
• The MGNREGA scheme, which provides rural employment, has received a significant decrease in funding, with only 60,000 crores in the budget for 2023-24, 18% less than the current year’s budget and 33% less than the scheme’s revised estimates.
• Despite the government's desire to boost tourism, the budget allocation remains unchanged at Rs. 2,400 crores since last year.
• The allocation for the Census Survey and Statistics head has been cut from 3,676 crores to 1,565 crores in 2022-23.
• Life insurance policyholders will now have to pay tax on the maturity amount if the aggregate annual premium exceeds 5 lakhs.
• The government's plan to raise funds through disinvestment or privatization of state-owned enterprises is not mentioned separately in the Budget for 2023-24.

The 2023 budget in India focuses on economic growth through increased capital spending and fiscal prudence, which is expected to result in lower interest rates and encourage private sector investment. The budget emphasizes the importance of good economics over politics and includes measures aimed at women's empowerment, tax benefits, and improved savings options for citizens.

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.