BUDGET 2023 - Beginning of AMRIT KAAL
Yesterday, our Finance Minister(FM) Nirmala Sitharaman tabled the Union Budget 2023-24 which was the first budget in Amrit Kaal.
Wondering what is Amrit Kaal? During the 75th Independence Day celebrations in 2021, Prime Minister (PM) Narendra Modi used the phrase "Amrit Kaal" for the first time. He outlined a new plan for India's future for the next 25 years using Amrit Kaal.
This was the last full-fledged Budget before the general elections next year and hence it needed to be focusing for taxpayers and the economy, FM announced major changes in tax slabs under the new tax regime and a big hike in allocation for railways and capital expenditure.
The budget had major announcements in following segments:
Fiscal Data: Fiscal Deficit targeted to be below 4.5 per cent by 2025-26.Fiscal deficit target of 6.4% retained in the Revised Estimate for FY23; reduced to 5.9% for FY24. Gross market borrowing seen at Rs 15.43 lakh crore in FY24. Net market borrowing in FY24 seen at Rs 11.8 lakh crore. FY24 net tax receipts seen at Rs 23.3 lakh crore.
Income Tax payers No changes in the old tax regime but, the new tax regime became the default tax regime. However, citizens can opt for the old tax regime. A Rs 50,000 standard deduction to taxpayers has been introduced under the new regime. No tax on income up to Rs 7.5 lakh a year in new tax regime (with inclusion of standard deduction). An individual with annual income of Rs 9 lakh will have to pay only Rs 45,000 in taxes. Income of Rs 15 lakh will fetch Rs 1.5 lakh tax, down from Rs 1.87 lakh. Govt proposes to reduce the highest surcharge rate from 37% to 25% in new tax regime. Tax exemption removed in insurance policies with premium over Rs 5 lakh
Railways gets massive boost: An outlay of Rs 2.4 lakh crore provided for railways in FY24. It's the highest ever highest ever allocation for Railways and is nearly nine times over FY14 allocations.
Capex hiked 33%: Rs 10 lakh crore capital investment, a steep hike of 33 percent for the third year in a row, to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds. Effective capital expenditure of center to be - Rs 13.7 lakh crore. Capital investment outlay to be 3.3% of GDP in FY24. Effective capital expenditure of Centre at Rs 13.7 lakh in FY24
Tourism: The country offers an immense attraction for domestic as well as foreign tourists. The promotion of tourism will be taken up on mission mode with th active participation of states, the convergence of Govt programs & public-private partnerships. 50 tourist destinations will be selected through challenge mode to be developed as a whole package for domestic and international tourism.
Defense Budget hiked by 13%: The defense budget increased to Rs 5.94 lakh crore from last year's Rs 5.25 lakh crore. Rs 1.62 lakh crore set aside for capital expenditure including purchases of new weapons, aircraft, warships and other military hardware.
Clean Energy: National Green Hydrogen mission with an outlay of Rs 19,700 crore will facilitate the transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports and make the country assume technology and market leadership. Rs 35,000 crores priority capital for the energy transition. Green credit programme will be notified under the Environment Protection Act. Battery storage to get viability gap funding. Govt to support setting up of battery energy storage of 4,000 MwH
Aviation: 50 additional airports, helipods, water aero drones, advanced landing grounds will be revived to improve regional air connectivity
Agriculture: Rs 20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries. For Fisheries sub-scheme to launch under PM Mastya Sampada Yojna with outlay of Rs 6,000 crore to further enable activities of fishermen. Over the next 3 years, one crore farmers will get assistance to adopt natural farming.
This budget is based on the foundation of last year budget and with a vision of next 25 years of India’s growth story. Markets reaction is mild on the budget but all policies and plans laid out for different sectors will turn out great for Indian Companies in long run.