India’s 2023-24 Union Budget: Key Takeaways and Impacts
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The 2023-24 Union Budget, presented by Finance Minister Nirmala Sitharaman, marks the beginning of the Budget session in the Parliament. With the release of the Economic Survey 2023, the government has outlined its financial priorities for the coming fiscal year. This budget highlights the key economic and financial initiatives to boost the country’s growth and development.
2023-24 Union Budget Highlights
- National data governance policy to be introduced, promoting innovation and research by start-ups and academia by allowing access to anonymized data.
- Entrepreneurship is key to economic development, government has taken measures for start-ups, yielding show results.
- India ranks 3rd globally for start-up ecosystem, and 2nd for innovation quality among middle-income countries.
- Incorporation date for income tax benefits for start-ups has been extended to 31.03.24.
- Carry forward losses on change of shareholding for start-ups extended from 7 to 10 years.
- Finance Minister Nirmala Sitharaman has announced the expansion of the Government digital certificate depository Digilocker services for the fintech sector.
- This is a boost for fintech startups as so far the DPI only allows individuals to store and share their certificates, such as academic records, driving licence, PAN cards.
- Documentation availability will be the focus for the DigitLocker expansion for the fintech sector; the fintech sector has been facilitated by digital services, PM Jan Dhan Yojana, Indian Stack and UPI,” Sitharaman said.
- India’s economic growth is expected to be at 7%, the highest among major economies.
- Indian economy has become a lot more formalized with EPFO membership doubling.
- India’s per capita income has increased to Rs 1.97 lakh crore, says FM Sitharaman.
- The government has enhanced capital expenditure (capex) outlay by 33% to Rs 10 lakh crore, which would be 3.3% of GDP. The amount is almost 3 times the outlay that was made by the government in 2020.
- 50-year interest-free loans will continue for states, announces FM Sitharaman in the Budget speech.
- Capital investment outlay is being increased steeply for the third year in a row to Rs 10 lakh crore. The increased capital outlay for infrastructure to crowd in private investment.
- As many as 47.8 crore Jan Dhan accounts have been opened so far.
- The revised estimate for 2022-23 fiscal deficit at 5.9% of GDP
- Total receipts or receipts other than borrowing is Rs 24.3 lakh crore, of which net tax receipts are Rs 20.9 lakh crore. The revised estimate of the total expenditure is Rs 41.9 lakh crore, of which the capital expenditure is about Rs 7.3 lakh crore.
- States to be allowed 3.5% of GDP as fiscal deficit.
- Gold, silver and diamonds to get expensive.
- Customs on kitchen chimneys to go down.
- Cigarettes will get more expensive.
- The government has enhanced income tax exemption limit up to Rs 7 lakh under the new tax regime.
- The income tax returns processing period has been reduced by 16 days, says the finance minister.
- New I-T return form are being introduced for easier filing of returns.
- Benefit of lower tax rate of 15% to new cooperative societies.
- In the Union Budget 2023, Nirmala Sitharaman announced that people earning over Rs 15 lakh in a year will be subject to 30% tax.
- The government has proposed to reduce the highest surcharge rate from 37% to 25% under new tax regime.
Ease of Doing Business
- More than 39,000 compliances have been reduced, and more than 3,400 legal provisions have been de-criminalised to improve the ease of doing business.
- National Data Governance policy will be introduced, which will enable access to anonymised data.
In conclusion, the India Union Budget 2023-24 highlights a comprehensive approach towards the development and growth of the Indian economy. The government’s emphasis on the expansion of infrastructure, the formalization of the economy, and the facilitation of entrepreneurship are commendable.
With the increase in capital expenditure, the boost in fintech sector, and the emphasis on the per capita income, the country is headed towards a bright future. The budget presents a roadmap for India to take advantage of the global economic scenario and emerge as a leader in the world economic order. The measures proposed in the budget are expected to provide the much-needed push for the country to attain new heights of growth and prosperity.