The Union Budget 2023–24 was unveiled on February 1 by Finance Minister, Smt. Nirmala Sitharaman amidst the impending global recession and declining economic development in India.
The Indian economy is on the right road and, despite difficulties, is moving toward a bright future, according to the Finance Minister. Accordingly, the Finance Minister presented a financially responsible budget to the Parliament, focusing more on the rural sector, social sector initiatives, infrastructure development, and the middle class.
In this blog, we will closely examine the most important announcements from the Budget for 2023 as well as other significant alterations and modifications made during the Budget.
The budget for 2023 is the inaugural one under "Amrit Kaal." According to our Finance Minister, the following seven priorities are included in the budget, and these goals work well together and serve as our "Saptarishi" as they lead us down the Amrit Kaal.
Please take note that the information in this blog has been sourced from the Finance Minister's speech in the Indian government's budget document. Here are the Budget's main highlights for 2023:
The New Income Tax system was established as the default tax system during the session, however, residents will still be able to make use of the previous tax system's advantages. Five significant announcements were made in this respect by the Finance Minister.
Above ₹15 Lakhs
The Senior Citizen Savings Scheme would increase its maximum deposit amount from ₹15 lakhs to ₹30 lakhs. The maximum deposit amount for the Monthly Income Account Scheme will also increase, going from ₹4.5 lakhs to ₹9 lakhs for single accounts and ₹9 lakhs to ₹15 lakhs for joint accounts.
Agriculture-related digital public infrastructure will be developed as a freely available, freely used, and interoperable public benefit. Through pertinent information services for crop planning and health, greater access to farm inputs, loans, and insurance, assistance for crop estimating, market intelligence, and support for the expansion of the agri-tech industry and start-ups, this would allow inclusive, farmer-centric solutions.
To support young entrepreneurs in rural regions who are starting agribusinesses, an Agriculture Accelerator Fund is to be created. The Fund's goal is to provide farmers with creative, cost-effective solutions to their problems.
Through Public-Private Partnerships, the government will use a cluster-based and value-chain strategy to increase the production of extra-long staple cotton.
With an investment of ₹2,200 crores, the government will introduce the Atma Nirbhar Clean Plant Program to increase the availability of disease-free, high-quality planting material for high-value horticultural crops.
The Indian Institute of Millet Research in Hyderabad will get funding as the Center of Excellence for exchanging best practices, research, and technology on a global scale in order to make India a center for "Shree Anna" worldwide.
The goal for agricultural financing would rise to ₹20 lakh crore, with an emphasis on dairy, fishery, and animal husbandry.
With a projected expenditure of ₹6,000 crores, the government is set to introduce a new sub-scheme of the PM Matsya Sampada Yojana.
The government is urging farmers to build their economies through cooperatives. In addition to the existing framework, the government will put into action a plan to set up a significant amount of decentralized storage. As a result, farmers will be able to keep their goods and sell them during profitable periods to earn a profit.
Alongside the 157 medical colleges that have already been operating since 2014, 157 new nursing colleges are also to be founded.
By 2047, a mission will be begun to tackle Sickle Cell Anaemia, which is said to involve raising awareness, universal screening of 7 crore persons in the age range of 0-40 years in the impacted tribal regions, and counseling.
Faculty from public and private medical colleges as well as R&D teams from the corporate sector are to have access to facilities in a few ICMR Labs to conduct research in an effort to promote joint research and innovation.
Through centers of excellence, a new initiative to encourage pharmaceutical research and innovation is to be implemented.
Medical device-specific transdisciplinary courses are to be sponsored in current institutions.
Through creative methodologies, curriculum change, ongoing professional development, and ICT deployment, the training of teachers are to be reimagined.
For the purpose of easing accessibility to high-quality books across platforms and languages, genres, and reading levels, a national digital library for kids and teens is to be established.
Based on the heels of the Aspirational Districts Program, the government recently introduced the Aspirational Blocks Program, which will cover 500 blocks and will ensure that all residents have access to basic infrastructure as well as health, nutrition, education, agriculture, and water resources.
The Pradhan Mantri PVTG Development Mission will be implemented to ameliorate the socioeconomic circumstances of the especially vulnerable tribal groups. By doing this, essential amenities including secure housing, access to clean water and sanitation, better health and nutrition, road and telecommunication connectivity, and chances for sustainable livelihoods would be provided to PVTG families and habitations.
38,800 teachers and support personnel will be hired by the center over the next 3 years to work in the 740 Eklavya Model Residential Schools that serve 3.5 lakhs of indigenous youngsters.
The Upper Bhadra Project would get federal funding of ₹5,300 crores to fully sequence micro irrigation and fill surface tanks with potable water in the drought-prone central area of Karnataka.
The PM Awas Yojana budget has been increased by 66% to more than ₹79,000 crores.
One lakh old inscriptions will be digitally preserved as part of the "Bharat SHRI," which will be housed in a museum of digital epigraphy.
Financial assistance will be given to inmates who are poor and unable to pay their fines or needed bond amount.
For the third year in a row, the amount spent on capital investments is being sharply raised by 33% to ₹10 lakh crore or 3.3% of GDP.
Budgeted at ₹13.7 lakh crore, or 4.5% of GDP, is the Center's Effective Capital Expenditure.
In order to encourage infrastructure investment and provide incentives for complementing policy initiatives, the FM agreed to extend the 50-year interest-free loan to state governments for an additional year with a considerably increased expenditure of ₹1.3 lakh crore.
The recently created Infrastructure Finance Secretariat will support all stakeholders in securing greater private investment in infrastructure, especially the heavily reliant public resources trains, roads, urban infrastructure, and power.
₹2.40 lakh crores have been allocated as a capital budget for the railways.
With a total investment of ₹75,000 crores, including ₹15,000 crores from private sources, the one hundred crucial transportation infrastructure projects that have been selected will be completed in order of importance.
To increase regional aviation connectivity, 50 more airports, heliports, water aerodromes, and advanced landing grounds are to be resurrected.
States and localities will be pushed to make urban planning changes and take other initiatives to make their cities "sustainable cities of tomorrow."
The Urban Infrastructure Development Fund (UIDF) will be created using the gap in financing to the prioritized sectors. It is anticipated that ₹10,000 crores would be made accessible annually for this objective.
All towns and cities will be able to switch from manhole to machine-hole mode for septic tanks and sewers by 100% mechanical desludging.
Plans for public servant capacity-building are being developed and put into action by the Center, States, and Union Territories as part of Mission Karmayogi.
Three centers of excellence for artificial intelligence are to be established in prestigious educational institutions
A National Data Governance Policy will be released, enabling access to anonymized data, to enable innovation and research by start-ups and academics.
The KYC procedure will be made simpler by using a "risk-based" strategy. The authorities of the financial industry will also be urged to develop a KYC system that is entirely compatible with Digital India's requirements.
The PAN will be used as the standard identification for all digital systems of the designated government agencies for commercial entities that are required to have one.
A mechanism called the "Unified Filing Process" would be put up to do away with the requirement for the separate filing of the same information to several government bodies.
Government and government undertakings would reimburse 95% of the forfeited sum related to bid or performance security to MSMEs in circumstances where they fail to fulfill contracts during the COVID term.
A voluntary settlement process with uniform conditions will be implemented to resolve contractual disputes involving the government and government undertakings where an arbitral judgment is being challenged in court.
For the next 3 years, the State Support Mission of NITI Aayog will support government initiatives to advance national goals.
With an investment of ₹7,000 crores, Phase 3 of the E-Courts project would be launched for the effective administration of justice.
The range of documents that are accessible to persons in DigiLocker will be increased in order to facilitate more innovative Fintech services.
An Entity DigiLocker will be created for usage by MSMEs, major businesses, and charitable trusts to securely store and share documents online whenever necessary.
In order to realize a new variety of options, economic models, and employment potential, engineering colleges will construct approximately 100 laboratories for creating applications employing 5G services.
An IIT will get a 5-year research and development funding to promote local production of LGD seeds and equipment and lessen reliance on imports.
The recently established National Green Hydrogen Mission, with a budget of ₹19,700 crores, aims to produce 5 MMT of green hydrogen yearly by 2030.
According to the FM, the budget allocates ₹35,000 crores for the Ministry of Petroleum & Natural Gas to make priority capital expenditures in order to achieve net zero targets and energy security goals.
Battery Energy Storage Systems with a capacity of 4,000 MWH are to be supported with 18 Viability Gap Funding, together with a comprehensive framework for Pumped Storage Projects, in order to guide the economy toward sustainable growth.
The construction of the interstate transmission line for the removal and grid integration of 13 GW of renewable energy from Ladakh will cost ₹20,700 crores, including ₹8,300 crores in federal funding.
A Green Credit Program will be announced in accordance with the Environment (Protection) Act in order to promote behavioral change for economic sustainability.
In order to encourage States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers, the "PM Programme for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth" will be introduced.
A total of 500 latest "waste to wealth" facilities will be built as part of the GOBARdhan Galvanizing Organic Bio-Agro Resources Dhan Scheme to advance the circular economy.
The government would assist 1 crore farmers in switching to natural farming within the next 3 years, wherein 10,000 Bio-Input Resource Centers will be established, resulting in the development of a dispersed national micro-fertilizer and pesticide production network.
MISHTI, via the fusion of MGNREGA, CAMPA Fund, and other sources, shall be taken up for mangrove plantation alongside the coastline and on salt pan areas, wherever possible.
Through Amrit Dharohar, a program that will be undertaken during the next 3 years to promote optimal use of wetlands and boost biodiversity, carbon stock, eco-tourism opportunities, and income production for local populations, the government will highlight their distinctive conservation characteristics.
Through the PPP method with viability gap finance, coastal shipping will be marketed as the more economical and energy-efficient form of transportation, both for people and freight.
The Finance Minister has allotted sufficient funding to scrap outdated cars owned by the Central Government in order to carry out the vehicle scrapping program that was specified in the budget for 2021–2022, and States will receive assistance in upgrading their ambulances and vehicles as well.
The government developed the National Education Policy, which puts an emphasis on skill development, established economic policies that promote mass job creation, and encouraged business possibilities in order to empower the youth and assist the "Amrit Peedhi" in realizing their aspirations.
Within the following 3 years, the Pradhan Mantri Kaushal Vikas Yojana (4.0) will be introduced to train thousands of young people. Additionally, 30 Skill India International Centers will be established throughout several States to prepare youngsters for possibilities abroad.
With the introduction of a single Skill India Digital portal, the digital environment for skilling will further develop. This platform will enable demand-based formal skilling, connect with employers, including MSMEs, and make access to entrepreneurship programs easier.
A pan-India National Apprenticeship Promotion Scheme would use Direct Benefit Transfer to give stipend assistance to 47 lakh youth over the course of 3 years.
Through the challenge mode, at least 50 locations will be chosen using an integrated and creative strategy. Each place would receive a full development package. To further the goals of the "Dekho Apna Desh" project, entrepreneurial development and sector-specific skills will be integrated. The Vibrant Settlements Program would also assist in the construction of tourist facilities and infrastructure in border villages.
States will be urged to establish a Unity Mall in their state capital, most significant tourist destination, or financial capital for the promotion and sale of their own ODOPs, GI products, and other handicraft products as well as to provide space for such products of all other states.
The Budget suggests expanding the policies currently in place in this sector.
The updated MSMEs plan would go into effect on April 1, 2023, with a corpus injection of ₹9,000 crores. This will provide for an extra ₹2 lakh crore of collateral-free guaranteed loans. Additionally, there will be a 1% decrease in the cost of the credit.
In order to ease effective credit flow, advance financial inclusion, and support financial stability, a national financial data registry will be established to act as the primary repository of financial and related information.
Public participation shall be incorporated into the process of creating regulations and issuing subsidiary directives as necessary and practical to satisfy the needs of Amrit Kaal and to support optimal regulation in the financial industry. Additionally, financial sector authorities will be asked to conduct an extensive assessment of current legislation in order to streamline, make compliance easier, and lower the cost of compliance.
There will be a number of actions made to improve business operations at GIFT IFSC. Additionally, the government will make it easier for nations looking for digital continuity solutions to build up their data embassies in the GIFT IFSC.
Certain changes to the Banking Regulation Act, the Banking Companies Act, and the Reserve Bank of India Act are suggested in order to improve bank governance and strengthen investor protection.
Norms and standards for education at the National Institute of Securities Markets shall be developed, regulated, maintained, and enforced by SEBI in order to increase the capability of officials and experts in the securities market.
A Central Processing Centre will be established to handle a variety of documents submitted to field offices under the Companies Act in order to respond to businesses more quickly.
An integrated IT site will be built to make it simple for investors to recover unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority.
In 2023–2024, financial support will still be provided for the digital public infrastructure.
Mahila Samman Savings Certificate, a one-time new modest savings program, will be made accessible for a 2-year period up until March 2025 as a way to commemorate Azadi Ka Amrit Mahotsav, which would provide a deposit facility of up to ₹2 lakhs for a 2-year term at a fixed interest rate of 7.5% with the possibility of partial withdrawal.
The fifty-year loan to the states is to be used entirely for capital expenditures by 2023–2024. The majority of this will be up to the states' discretion, but some of it will depend on them raising their real capital spending. Additionally, portions of the expenditure will be assigned to or tied to particular goals.
States will be permitted a budget deficit of 3.5% of the GSDP, of which 0.5% will be related to changes in the electricity sector.