Union Budget 2023-24 Key highlights: Growth vision ?

This article is solely focused on the Union Budget for 2023-24. The budget emphasizes improving last and first mile connectivity to support better transportation and logistics. The budget includes provisions for upgrading and expanding the existing 157 medical colleges to improve healthcare education. The budget also allocates funds for the food and public distribution system to ensure food security and equitable distribution. The benefit of presumptive taxation includes reduced tax rates and simplified accounting requirements for eligible taxpayers. Funding for transport infrastructure projects will improve road networks and facilitate better transportation across the country. 

The budget plans to establish three Centres of Excellence to promote research and development in key sectors. The total outlay of the Union Budget 2023-24 is projected to be in the range of several lakh crore rupees. The conversion from lakh to rupees shows the scale of financial allocations in the budget. The National Housing Bank will oversee the implementation of several housing and urban development schemes.

Key Takeaways

• Union Budget 2023-24

• Different Taxes

Introduction to Union Budget 2023-2024

The Union Budget for 2023-24 includes significant provisions for various sectors, including healthcare and infrastructure. The total outlay of the Union Budget 2023-24 is projected to be in the range of several lakh crore rupees. The budget outlay for the fiscal year 2023-24 includes substantial allocations for capital expenditure and development projects. The fiscal deficit for 2023-24 is estimated to be managed carefully to ensure economic stability. The budget highlights a substantial increase in capital expenditure to boost infrastructure development and create jobs.

The new tax regime introduced in the Union Budget 2023-24 aims to simplify tax compliance and reduce tax burdens for individuals. The budget estimate for the upcoming fiscal year includes detailed projections for revenue and expenditure. The fiscal deficit in 2023-24 is expected to be within the limits set by the government to ensure fiscal prudence. The tax exemption limit has been adjusted in the Union Budget to provide greater relief for taxpayers and incentivize savings. Like the past few years, the Union Budget 2023 was announced by Union Finance Minister Nirmala Sitharaman in the Parliament on 1st February. Similar to the previous budgets, the budget 2023 aims at achieving the dream of Prime Minister Narendra Modi to double the farmers� income. NorthStar Academy takes a look at the budget with an attempt to present it for you in a simpler format.

Personal Tax

Union Budget 2023 has placed a greater emphasis on macroeconomics in an attempt to boost the growth momentum of the Indian economy. Though individual taxpayers might be left disappointed due to no changes in personal income tax slabs. Meanwhile, the government has ought to rationalise the surcharge by capping it at 15% on long term capital gains across all categories of assets. Amid the growing intensity in crypto trading and non fungible tokens (NFTs), the government has proposed to tax the income from transfer of such assets. The tax rate shall hover at 30 percent. Notably, there will be no deductions save the cost of acquisition of such virtual digital assets. This is a major sigh of relief for crypto enthusiasts as there were talks of banning Crypto in India.

Agriculture

Agriculture has been one of the key focus areas since the National Democratic Front (NDA) government came to power in 2014. This budget has reiterated the government�s resolve to double the farmers� income through a multi-pronged approach that is focused around easy access to finance, modern technologies and market place. It also emphasises the need for better farming practises including organic farming, drone technology and more. The budget includes support for national-level distributed micro-fertilizer and pesticide manufacturing to improve agricultural productivity. The government has strived to ensure financial inclusion of the farmers through efforts such as direct payment of Rs 2.37 lakh cr of MSP value to them. Other initiatives include setting up of a new NABARD fund to finance and fund agri startups. The government has also worked on linking bank accounts and post office accounts, providing financial aid to promote agro forestry along with a Rs 45000 cr allocation to promote scientific organic farming in north-east states. 

Besides, the government has placed special emphasis on enhancing rural infrastructure and connectivity with the markets to support farmers. This will enable them to command a better price for their agri produce. The focus on distributed micro-fertilizer and pesticide manufacturing aims to enhance the accessibility and efficiency of agricultural inputs. A new micro-fertilizer and pesticide manufacturing network will be established to support local farmers and agricultural enterprises. Efforts like deployment of Kisan drones to assess crops with ease, spraying of insecticides, and digitization of land records will greatly benefit the farmers in accessing new age technology. Notably, the above facilities will be provided to the farmers through public private partnership schemes and packages along with state governments. Besides, the state governments shall also revisit and revise the syllabus of agricultural universities in order to include organic and modern age farming. 

Digital Currency

There has been quite some talk around the growth of digital currencies including the ones not backed by any institution, i,e. Cryptocurrencies. In 2023-24, the Reserve Bank of India (RBI) will introduce digital rupee that will be powered by blockchain technology. It will be interesting to note the impact of this decision on the financial sector due to the fact that India already has one of the most successful consumer payment services in the form of UPI. 

Additionally, India�s fintech ecosystem has grown over the past couple of years and bears the potential to grow further manifold. Several fintech startups are constantly innovating to meet the changing consumer needs. India also has a successful bank network across its length and breadth. It will take some time to understand the impact of central bank digital currency (CBDC) on achieving cent per cent financial inclusion in the country. Current modes in the digital arena such as Jan Dhan, mobile payments and Aadhar are already a hit among Indian consumers.

Moreover, Blockchain technology will be tasked with the responsibility to solve classic trade-offs between security, scalability and decentralisation. However, CBDC has the potential to provide impetus to stable coins in the crypto era. Additionally, most of the crypto investors and enthusiasts were keen on the union budget 2023 announcements amid previous announcements that there could be a ban on the decentralised payment mechanism. However, the government has preferred to follow the idea of regulation instead of ban by imposing a 30% tax on the transfer of virtual digital assets.

The most recent budget has highly laid stress on investing in India with the growing hype around e-commerce startups. Besides, the announcement by the finance minister in the e-commerce domain also aims at spurring GDP growth, broad-based development themes across sectors, including but not limited to healthcare, education, infrastructure, Fin-tech, agriculture, etc. The budget has continued to strengthen the idea of Atma-nirbhar Bharat through its various announcements. The government has realised the importance of mental health of the citizens amid the Covid-19 pandemic. Hence, some key announcements were made about the same, including providing tele-mental health services on television, along with emphasis on supplementary education with 200 TV Channels. 

There has been enough emphasis laid on green energy. Sensing the need for reforms in the green energy sector, the government has provided a major boost to Electric Vehicle Start-ups. The union budget 2023 mentions that more charging stations for the electric vehicle ecosystem will be established along with a battery swapping policy. As seen previously, the government also announced the use of Kisan Drones to drive technology adoption in the Agri-sector. With several innovative technologies being introduced by nobel startups, it was thus imperative to have a decision to enable direct offshore listing by our Indian start-ups. Despite a committee being set up for the venture capital space, the startup sector is craving for much needed clarity on taxability of ESOPs, carry structures and more. 

Health Sciences

Understanding the growing need for health services and the current health scenario across the globe, the government has reiterated its conviction for a digital health ecosystem. This shall incorporate the provision of universal access to health facilities in India along with efforts to encourage pharma participation in the Sunrise sector. The previous budget saw the announcement of several schemes that dealt with the creation of ground level infrastructure. Similarly, the previous budget allocated the most health expenditures of the central Government. To sum it up, it was a neutral budget for the health sector, although void of any major introduction of new schemes. 

Infrastructure

The Union budget 2023 laid special emphasis on development of infrastructure with the help of public private partnership (PPP). Some examples could include the Gati Shakti implementation which is based on seven growth engines, along with a digital highway to enable data transfer swiftly between various modes. Besides, the government has announced the construction of 25000 km of highways, 100 Gati Shakti cargo terminals, launching 400 trains under Vande Bharat, four multi-modal logistics parks, among others.

Moreover, the government has also resolved to establish a string of Ropeway projects in high terrain regions, Ken-Betwa river interlinking project along with an expenditure of INR 60,000 crores for Har Ghar Nal Se Jal mission. The union budget 2023 saw an overall CAPEX increase of 35%. This is a clear message that infrastructure remains one of the key priorities for this government. Additionally, the emphasis on PPP mode is aimed at enhancing the interest of the private sector. An additional 1 lac crore of interest fee financial support has been extended to the states to implement Gati Shakti and construction of rural roads. 

Private Equity

The government, in its budget announcements, has informed the Parliament about the creation of an expert panel. This panel will be tasked to examine appropriate measures that are needed to scale up personal equity and venture capitalist funds. This panel is expected to further smoothen up the process of fund deployment by the alternative investment industry. This will further aid in the development of Indian private equity and venture capitalist industry which is expected to come up as a great pillar of the Indian economy. 

Retailer

The union budget 2023 has strategically decided to address the supply side issues to achieve the multiplier effect in the consumer retail sector. This is a shift from the traditional moves of giving a boost to the demand side to increase disposable income among the masses. The above decision could result in some inflationary reactions in the short run. However, this shall benefit in pushing up massive employment creation and enhancing disposable income by putting more money into the pockets of the consumers.

The government�s decision to rationalise import duties under the Make in India initiative will give a strong impetus to consumption. This will lead to sustainable growth for consumers, retail as well as the e-commerce sectors. The push to digitalization and fintech under Amrit Kaal is in sync with the digital ecommerce and startup revolution in India. Besides, the government has extended tax holiday eligibility timelines, which is seen as an attempt to recognize the contribution of the startup sector, although expectations around ESOP taxability are yet to be addressed. 

Conclusion

To sum it up, the highlights of the Union Budget 2023-24 include increased capital expenditure and new initiatives for national infrastructure projects. The total outlay for fiscal year 2023-24 is projected to be several lakh crore, focusing on key sectors like healthcare and education. The budget proposes enhanced funding for the Information Bureau to improve public communication and transparency. The budget 2023 aims to stimulate growth with a growing emphasis on infrastructure. It has also cleared the air around crypto currencies by taxing it, along with the announcement of introduction of digital currency by the RBI. The new budget includes provisions for the carry forward of losses to help businesses manage financial challenges.

The measures outlined in the Union Budget 2023-24 will take effect from April 2023, including changes in tax regulations and subsidies. The Union Minister presented the budget for 2023-24 in Parliament, highlighting key reforms and financial allocations. The Finance Minister delivered a speech on the Budget 2023-24 in Parliament today, outlining major initiatives and funding priorities. The budget addresses the priority sector lending shortfall by introducing measures to boost credit flow to underserved sectors. All in all, the budget had imprints of digitalization as the ultimate way forward. To know more about Finance related information do follow us on our social media handles.