Budget 2023 Dashboard: New Income Tax Regime Is The Default Tax Regime; Big Relief For Middle Class In Other Announcements

Key Updates:

• Income rebate limit increased to Rs 7 lakh from Rs 5 lakh in new tax regime

• New income tax regime to be the default tax regime. Citizens can avail the old tax regime, however.

• Nirmala Sitharaman proposes to reduce highest surcharge rate from 37 percent to 25 percent.

• Aiming to get the fiscal deficit below 4.5% of GDP by 2025-26, says Finance Minister.

• Nirmala Sitharaman : We are reducing number of basic customs duty rates from 21 to 13.

• The maximum deposit for senior citizen saving scheme to be enhanced for Rs 15 lakh to Rs 30 lakh.

Other announcements

• Pradhan Mantri Garib Kalyan Ann Yojana to continue for another year. More than 800 million people are set to benefit from free food grains.

• Economic agenda focuses on three things - facilitating ample opportunity for citizens, especially the youth, providing a strong impetus to growth and job creation and third stabilising the macro economy in the wake of Covid-19 and the Russia-Ukraine war.

• EPFO membership has more than doubled, indicating greater formalisation of the economy.

• Going forward the government will focus on Inclusive Development, Reaching Last Mile, Infrastructure Investment, Unleashing Potential, Green Growth, Youth Power, Financial Sector. 

• The government will launch a sub scheme for PM Sampada Yojyna to target invest of Rs 6,000 crore to target fisherman and other small entrepreneurs.  

• Government to focus on eradicating Sickle Cell Anemia, Sitharaman promises more assistance for research and development in the pharma industry. 

• PM Vishwakarma Kaushal Samman - a package of assistance for traditional artisans and craftspeople has been envisioned, will enable them to improve quality, scale and reach of their products, integrating with MSME value chain in the long run. 

• More push for agri-startups; an agriculture accelerator fund to encourage agritech startups by young entrepreneurs in rural areas. Fund will focus on bringing innovative solutions for challenges faced by farmers due to climate change. 

• The government will launch the Atmanirbhar Clean Plant Programme to improve availability of disease-free quality planting material for high-value horticultural crops at an outlay of Rs 2,200 crore.

• Indian Institute of Millet Research will be supported as a centre of excellence. Further, the government has also initiated computerisation for 63,000 primary agricultural credit societies with an investment of Rs 2,516 crore.

• More housing for all under Pradhan Mantri Awas Yojana: Outlay being enhanced by 66% to over Rs 79,000 crore.

• More CapEx: Nirmala Sitharaman says effective capex will be Rs 13.7 lakh crore, forming 4.5% of the GDP.

• Ease of Doing Business: More than 39,000 compliances reduced to enhance ease of doing business and over 3400 legal provision decriminalised

• Karnataka mentioned in Budget 2023: Rs. 5,000 Crore outlay for water management of upper-Bhadra basin, to mitigate issues in drought-prone Central Karnataka region. 

• National Data Governance policy, to unleash innovation, will be brought out to enable to access to anonymised data. Read this story from December 2019 to know why this could be a huge move.

• Connecting India: Capital outlay of Rs 2.40 lakh crore will be provided for railways; close to nine times of the outlay in the last year of UPA-2 under Dr. Manmohan Singh

• Big Infrastructure Push: 50 more airports, heliports, water aerodromes, and advanced landing zones to be revitalised. Hundred important transport infra projects for steel, ports, fertiliser, coal, foodgrain sectors have been identified with an investment of Rs 75,000 crore.

• PAN will be used as a common identifier for all Digital Systems of specified government agencies, says FM Nirmala Sitharaman. To aid the cause of business establishments

• PM Pranam to be launched to incentivise states and UT to promote alternative fertilisers and balanced use of chemical fertilisers.

• Government to allocate Rs 19,700 crore to the National Hydrogen Mission. The aim is to reach hydrogen production capacity of 5 metric million tonnes by 2030.

• Nirmala Sitharaman : 30 Skill India International centres will be setup across different states.

• Reflection of the Modi years: 10th largest economy to 5th largest in last 8 years. 11.7 Crore toilets through Swacch Bharat. 9.7 Crore gas connections in Ujjwala. 220 Crore vaccinations. Over 45 Crore Jan Dhan Accounts.

• Powering MSMEs: Revamped credit guarantee scheme to take effect from April 1, 2023, through the infusion of Rs 9,000 crore in the corpus. This will enable additional collateral-free credit of Rs 2 lakh crore to MSMEs recovering from the pandemic disruption.

• Boosting Tourism: 50 tourist selected destinations to be developed as a whole package for domestic and international tourism: FM Nirmala Sitharaman

• Fiscal Deficit to be estimated at 5.9 per cent of the GDP for FY24.

• A National Digital Library for children and adolescents will be set up for facilitating the availability of quality books across geographies, languages, genres and levels and device-agnostic accessibility and will boost online learning.

• The government will set up a National Financial Information Registry to serve as a central repository of financial and ancillary information.

• One-time new small savings scheme 'Mahila Samman Saving Certificate' to be made available for 2 years upto March 2025, with deposit facility of upto Rs 2 lakh in name of women, with 2 year tenor, with 7.5% fixed rate & partial withdrawal option.

  
  Key updates from the Economic Survey released yesterday.

A Tough Year For Global Economy

Focussing on Western economies after two years of the Covid-19 pandemic, and amidst the global slowdown ushered by the Russia-Ukraine war last year, the document highlights several indicators.

One of the consequences of the Russia-Ukraine crisis has been the price rise in foodgrains and inflation on the energy front.

India, The Lone Bright Spot In A World Headed Towards Recession

As per the Economic Survey 2023, India’s economy is being challenged by the hike in interest rates, widening current account deficit, and a slowdown in exports due to muted demand in the West. 

Yet, India’s economy is looking set to bounce back after three years of the pandemic.

Braving The Inflation Storm

In FY23, rural inflation remained higher than urban inflation, further posing a challenge for the local governments.

While food inflation hit rural India, fuel inflation was more severe in the urban parts of the country.

By the end of 2022, however, both food and fuel inflation, for both regions, were within manageable levels. 

Har Ghar Jal: A Reality Three Years Later

One of the biggest success stories has been the penetration of the Jal Jeevan Mission. Announced in the budget of 2019, the programme has grown leaps and bounds since its inception, has documented in the survey.

India's Industries Bounce Back

While the pandemic disrupted demand, manufacturing, and production, the unexpected war last year resulted in the rise of commodity prices, thus putting pressure on transportation costs, investments, and so forth. Consequently, the demand suffered.

However, industries in India have fared well in FY23, compared to the previous financial year. 

Swarajya’s Editorial Director R Jagganathan had already lined up five imperatives for the budget of 2023-24. 

These include fiscal deficit targeting in a more flexible manner, rationalising the capital gains taxation regime, incentivising the taxpayers, tax bracket indexation, and the elephant in the room since 2014; privatisation. (Read on).