The Finance Minister of India, Nirmala Sitharaman on the 1st of February, 2023 released the budget details for the year 2023-24. As per Article 112 of the Indian Constitution, provisions relating to the Annual Budget in India is laid down. Defined as the Annual Financial Statement, the Union Budget of India is presented by the Minister of Finance every year on the first day of February. The event witnessed and appreciated a significant growth in the economy of India in the 75th auspicious year of its independence. Keeping in mind the major drawback caused by the Covid-19 pandemic, the aim of the Ministers is to overcome all hurdles for a much more developed nation.

What is the Budget for the 2023-24?

The Budget of 2023-24 covered most of the parts and was mainly focused on the following criteria. The policies were laid down on 7 rules areas-

Inclusive Development 

• The Agriculture Sector

1. A digital public infrastructure for agriculture will be created to support solutions that are open to all farmers.
2. Agri-start-ups by young businesspeople in rural areas will be encouraged through the establishment of an agriculture accelerator fund.
3. Cotton Crop Productivity- Through Public Private Partnerships, a cluster-based and value-chain approach will be used to increase the production of extra-long staple cotton.
4. Horticulture Clean Plant Program- the introduction of the Atmanirbhar Clean Plant Program to increase the accessibility of high-quality, disease-free planting material
5. Aim at making India the National and International hub for millets with the aid and support to the Indian Institute of Millet Research, Hyderabad.
6. Agriculture Credit increased to 20 Lakh Crore with an emphasis on the Dairy, Fishery and Animal Husbandry Sector.
7. Aid to small farmers by the Government by initiating 63,000 Primary Agricultural Credit Societies (PACS) to promote economic development. 
8. Storage facilities provided to farmers to keep their produce and renumeration shall be paid depending upon its sale.

• The Health Sector 

1. An initiative to eliminate Sickle Cell Anaemia by 2047 is launched by creating awareness and testing over 7 Crore people in the affected areas.
2. Alongside the 157 medical colleges that have already been established since 2014, 157 new nursing colleges will be established.
3. The promotion of medical research and development
4. A new program to support pharmaceutical research and innovation
5. Medical device-specific multiple disciplines courses will be promoted.

• Fishery

1. The Launch of a new PM Matsya Sam pada Yojana sub-plan with a 6,000-crore investment goal.

• Education and Skills

1. Adoption of cutting-edge teaching methods and ICT tools.
2. The creation of a National Digital Library for kids and teenagers.

The last Mile

• The launch of Pradhan Mantri PVTG Development Mission 
• The objective is to provide PVTG communities with the fundamental amenities.
• In the next three years, the government will hire 38,800 teachers and support personnel for the 740 Eklavya Model Residential Schools, which are home to 3.5 lakh indigenous students nationwide.
• To address the issues in the central Karnataka region, which is prone to drought, the Upper Bhadra Project has received funding of 5,300 crore.
• More than 79,000 crores have been allocated for the PM Awas Yojana, a 66% increase.
• The Archaeological Survey of India is establishing the Bharat Shared Repository of Inscriptions (BharatSHRI), a digital epigraphy museum, in Hyderabad (ASI).

Infrastructure

• Capital investment outlay increased by 33%.
• Support to State Governments for Capital Investment with an increased outlay of ₹1.3 lakh crores.
• More private investment in infrastructure will be attracted thanks to the recently established Infrastructure Finance Secretariat.
• For the purpose of enhancing regional aviation connectivity, 50 additional airports, heliports, aerodromes, and advanced landing grounds will be revived.
• The development of "sustainable cities of tomorrow" will be promoted by the states.
• Establishment of the Urban Infrastructure Development Fund (UIDF) 

Unleash Potential

• Mission Karmayogi has helped implement capacity-building plans for civil servants.
• Introduction to the iGOT Karmayogi, Government employees are provided learning opportunities.
• The Jan Vishwas Bill to amend 42 Acts to enhance the ease of doing business
• Centres of Excellence for Artificial Intelligence are to be constructed.
• Plans to create a national data governance policy to encourage entrepreneurship and academic research.
• The DigiLocker service will be set up as a one-stop shop for identification and address reconciliation and updating.
• In engineering institutions, 100 labs will be constructed for developing applications employing 5G services.
• Five-year R&D funds were given to one of the IITs to support the local manufacture of Lab Grown Diamonds (LGD) seeds and equipment.

Green Growth 

• Launch of the National Green Hydrogen Mission.
• Investments made by the Ministry of Petroleum & Natural Gas toward net zero and energy transformation goals.
• For battery energy storage systems with a capacity of 4,000 MWH, viability gap funding is available.
• A cross-state transmission network for the grid integration and evacuation of 13 GW of Ladakh's renewable energy.
• To encourage States and UTs to promote alternative fertilizers and balanced usage of chemical fertilizers, the PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth (PM-PRANAM) would be introduced.
• In accordance with the Galvanizing Organic Bio-Agro Resources Dhan (GOBARdhan) scheme, 500 new Waste-to-Wealth plants will be built.
• A national distributed micro-fertilizer and pesticide manufacturing network would be developed through the establishment of Bhartiya Prakritik Kheti Bio-Input Resource Centres.
• Mangrove Initiative for Shoreline Habitats & Tangible Incomes (MISHTI) 
• Over the following three years, the Amrit Dharohar project will be implemented in order to promote the best possible use of wetlands and enhance biodiversity.
• Allocating enough money to phase out obsolete cars.

Youth Power

• Young people will receive stipend support through the National Apprenticeship Promotion Scheme in 3 years using the DBT mechanism.

Tourism

• States will be urged to build Unity Malls in their major tourist hubs and capital cities to promote ODOPs (one area, one product) and GI goods.

Financial Sector

• Central Processing Centre for faster response to companies. 
• Mahila Samman Bachat Patra is a brand-new little savings program specifically for women.

Personal Income Taxes

• In both the old and new tax systems, persons with income up to 5 lakhs do not now pay any income tax. In the new tax system, the rebate cap has been raised to 7 lakhs. People under the new tax system will not be compelled to pay any tax if their income is less than Rs. 7 lakhs. 
• A new system of personal income taxation with six income tiers beginning at 2.5 lakh. By decreasing the number of tax slabs to five and raising the threshold for tax exemption to 3 lakhs, I propose to alter the tax system under this regime. These are the new tax rates:

1. The new tax system received a standard deduction from the Salaried Class and pensioners. Thus, each salaried individual making at least Rs. 15.5 lakh will stand to gain Rs. 52,500.
2. Reduction of the highest surcharge rate from 37 per cent to 25 per cent.
3. In 2002, when the maximum basic wage in the government was 30,000/pm, the limit of "3 lakh" for tax exemption on leave encashment at retirement of non-government salaried employees was last set. The ceiling has now been raised to Rs. 25 lakhs in accordance with increases in government pay.

Sector wise allocations of Funds

Major Highlights of the Union Budget

Who All Benefitted From The Budget 2023-24?

• Agriculture

The farm industry, which makes up roughly 19% of the GDP, has seen a rise in spending from the government. The budget suggests creating an agriculture accelerator fund to finance start-up farms and investing 22 billion rupees in high-value horticulture.

• Tourism 

India will choose 50 locations to boost domestic tourism in an effort to take advantage of the spike in demand for travel. Additionally, it will create an app to direct visitors to food streets and provide security and physical and virtual connectivity to enhance their experience.

• Infrastructure

India has chosen to construct 50 extra airports, heliports, and aerodromes and has identified 100 new projects, both of which are essential to improving last-mile connectivity. A record capital spending of 2.4 trillion rupees will benefit the railways.

• Taxpayers

Under the new income tax system, people with incomes up to 700,000 rupees will not be required to pay taxes. While the maximum tax rate was lowered to 39%, the number of tax slabs increased. The middle class will have more money as a result, which might increase demand for goods and services.

• Metal/Cement

Steel mills and cement producers will benefit from the budget's increased capital spending and investments in housing, infrastructure, and railroads.

Electric Vehicles

India intends to encourage green mobility by removing import taxes from capital goods needed to produce the lithium-ion batteries used in electric vehicle batteries. This will help battery manufacturers. 

• Green Energy

A 350-billion-rupee investment was made on energy transition and carbon neutrality programs in the budget. Government funding will be made available for 4,000 megawatt-hour battery energy storage installations.

What Are The Sectors Affected?

• Cigarette Manufacturers

Cigarettes' net tax would rise from 0.07 to 0.12 per stick, resulting in a 1-3% price increase for cigarettes in different categories.

• Jewellers 

Despite demands from the bullion industry for the government to revoke the raise announced in July, jewellery stocks fell as a result. Additionally, the government raised the import fee for silver. Given that the nation imports practically all of the bullion it uses, a higher tax will result in higher prices for consumers.

• Oil Refineries

Indian Oil Corp., Bharat Petroleum Corp., and Hindustan Petroleum Corp. are likely to suffer losses as a result of the government's failure to provide compensation for losses incurred in maintaining a lid on diesel and gasoline prices. Companies and the oil ministry have made demands for a fiscal support to help partially offset the losses.

• Foreign Car Sellers and Manufacturers

Higher taxes will apply to imported vehicles, even electric ones. Customs duties on imported vehicles that cost more than $40,000 in fully assembled form have raised from 60% to 70%. Challenges would be faced by foreign automakers like BYD Co. and Mercedes Benz that rely on imported vehicles to serve the Indian market.

Conclusion

The Union Budget 2023-24 was the fourth budget presented under the Modi Government. The Budget aims to lay a futuristic 'Amrit Kaal' for women, youth, and marginalized communities, big public investment for infrastructure guided by PM Gati Shakti, productivity enhancement, energy transition, and climate action, and financing of investments.