Capex bazooka, tax bonanza and jobs push ahead of 2024 elections - Budget 2023 in 10 points
3 min read . Updated: 01 Feb 2023, 02:41 PM IST
Premium- Below are key takeaways you should know from Budget 2023
In the Union Budget 2023-24, Finance Minister Nirmala Sitharaman announced a big ticket budget ahead of the general elections in 2024, which included raising the cap on income tax exemption and cutting rates, massive capital outlay in infrastructure, strengthening the startup ecosystem and more.
Here's your 10-point cheatsheet to this story
- Fiscal Deficit: While presenting the Modi government's last full budget in parliament, FM Sitharaman said that India will focus on economic growth and job creation and cut down fiscal deficit. The government will target a budget deficit of 5.9% of GDP for FY24 as compared to 6.4% for the current fiscal year. Fiscal deficit would be brought down to below 4.5 per cent by 2025-26, the FM added.
- Govt borrowing: The government targets gross borrowing of ₹15.43 lakh crore in 2023-24. The FM also said that tax receipts for the next fiscal are budgeted at ₹23.3 lakh crore and states would be allowed 3.5 per cent of GDP as fiscal deficit. To finance the fiscal deficit in 2023-24, net market borrowing from dated securities is estimated at ₹11.8 lakh crore, Sitharaman said.
- Tax Bonanza: India will forego ₹35,000 crore in revenue by raising the cap on income tax exemption and cutting rates, the finance Minister said. The government will lift the exemption bar to up to ₹700,000 a year from a previous threshold of ₹500,000 as it cut the maximum income tax rate to 39% and reduced the highest surcharge to 25% from 37%.
- Capex hiked: Sitharaman has announced hiking the capital expenditure by 33 per cent to ₹10 lakh crore for infrastructure development for 2023-24 and will be at 3.3 per cent of the GDP. Effective capital expenditure of the government will be ₹13.7 lakh crore. The effective capital expenditure of the government is at ₹13.7 lakh in FY24.
- Senior Citizen Savings Scheme: The government has proposed to double the deposit limit for Senior Citizen Savings Scheme to ₹30 lakh and Monthly Income Account Scheme to ₹9 lakh. In her Budget Speech, the minister also announced a new small savings scheme for women.
"The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from ₹15 lakh to ₹30 lakh," the minister said in her 87-minute long speech.
She also proposed that the maximum deposit limit for Monthly Income Account Scheme will be enhanced from ₹4.5 lakh to ₹9 lakh for a single account and from ₹9 lakh to ₹15 lakh for a joint account.
Announcing a new 'Azadi Ka Amrit Mahotsav Mahila Samman Bachat Patra', Sitharaman said a one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available for a two-year period up to March 2025.
- Divestment: The government expects to raise ₹51,000 crore from stake sales in various state-run companies, budget documents released today showed. The target for FY24 is at par with the revised mop-up estimate of ₹50,000 crore for FY23, the documents said.
Proceeds from divestment, monetisation and other similar transactions will be put into a 'National Investment Fund', which will be used for financing expenditure on infrastructure, education and health.
- Startups: The government has proposed to extend income tax benefits to startups incorporated till March 2024. Finance Minister Nirmala Sitharaman also said that the government proposes to increase the benefit of carrying forward losses for startups to 10 years. New cooperatives that commence manufacturing activity till March 2024 would also attract a lower tax rate of 15 per cent, she said in the Budget speech.
- Sebi to be empowered to enforce norms: To build capacity of functionaries and professionals in the securities market, the government on Wednesday proposed that Sebi will be allowed to develop, maintain and implement norms and standards for education in the National Institute of Securities Markets (NISM).
- Digital, E-courts: Scope of services in DigiLocker will be expanded, the FM said. Phase 3 of E-courts projects to be launched with outlay of ₹7,000 crore
- Import duty on raw material for lab-grown diamonds: The government on Wednesday proposed a cut in import duty on seeds used to make lab-grown diamonds with a view to boosting domestic manufacturing.
"With the depletion in deposits of natural diamonds, the industry is moving towards Lab Grown Diamonds (LGDs) and it holds huge promise. To seize this opportunity, I propose to reduce basic customs duty on seeds used in their manufacture," she said.
Gem and jewellery exporters had demanded a cut in the import duty.
