On February 1, the Indian Finance Minister Nirmala Sitharaman presented the Union Budget 2023 in Parliament. The Government’s vision of Amrit Kaal, focusing on Youth power, Citizen Welfare, and creating a strong and stable Macroeconomic environment, are the cornerstones of the Union Budget. 

The seven priorities termed the ‘Spatarishi’ have been the guiding force behind FM Sitharaman making some big announcements while presenting a Budget that seeks to build for the future. The Government considers that the Budget is the first one during the emerging Amrit Kaal phase to make a new beginning and provide a foundation to fulfill the objective of a developed India. The Budget comes when global headwinds slow down the economy, and specific sectors need attention.FM Nirmala Sitharaman has created carefully crafted schemes for different segments, including the middle class.

Sitharaman said that the Union Budget 2023-24 will be inclusive and benefit everyone, especially youth, women, and the backward classes such as scheduled tribes, scheduled castes, and farmers.

Spatarishi – the seven priority areas of Amrit Kaal

The seven priorities of Spatarishi include Inclusive Development, Infrastructure and Investment, Reaching the Last mile, Unleashing the Potential, Green Growth, Financial Sector, and Youth Power. 

Inclusive Development 

The Government specializes in the Agriculture sector to take forward the inclusive development agenda by taking several measures.  

  • Digital public infrastructure open-source solutions that ensure digital inclusion can improve the lives of citizens. Building an accessible, inclusive, and informative solution for farmers can address the urgent challenges the agrarian population faces. 
  • Setting up an Agriculture Accelerator fund for encouraging innovative start-ups in rural areas. The fund will encourage youth talent that will help increase productivity and profitability by adapting new technologies.
  • Launching the Atmanirbhar Bharat Horticulture Clean Plant Program with an outlay of Rs.2,200 crore to boost the production of high-value horticultural plants by increasing the availability of disease-free plant material.  
  • Setting up widely available storage capacity allows farmers to store their harvest and choose appropriate times of sale to boost their earnings.
  • Extending 20 lakh-crore agricultural credit, a hike of 11%, for the Animal Husbandry, Dairy, and Fisheries sectors. To encourage the activities of fishermen, fish vendors, and micro and small enterprises, a new sub-scheme of Pradhan Mantri Matsya Sampada Yojana will be launched with a targeted investment of Rs.6,000 crore. It will help to expand the market and improve value chain efficiencies.
  • India is already the largest producer and second-largest exporter of Millets or Shree Anna to become the global hub through extended support to IIMR (Indian Institute of Millets Research), Hyderabad, for promoting research. 
  • Launching of Sickle Cell Anemia elimination Mission to eliminate sickle cell anemia by 2047. The Mission will entail universal screening of 7 crore people in the affected tribal areas in the age group of 0-40 years and generate awareness through collaborative efforts of the States and the Union government.
  • Established 157 new Nursing Colleges in the core locations of the existing 157 medical colleges since 2014.
  • Encouraging joint public and private Medical Research with collaboration from selected ICMR labs.
  • The Government will launch a New Program to promote pharmaceutical research through centers of excellence. 

 Infrastructure and Investment 

The Government will offer incentives to encourage investment in infrastructure and productive capacity that would lead to enhanced growth and employment through the following initiatives.  

  • The central Government will continue the scheme of granting 50-year interest-free loans to state governments to incentivize investments in infrastructure. 
  • Capital investment outlay to go up to Rs. 10 lakh crore, an increase of 33.4% and constituting 3.3% of GDP against the current Capex to GDP ratio of 2.7%.
  • Identify one hundred transport infrastructure projects for creating end-to-end connectivity for the coal, steel, ports, and fertilizer sectors.
  • Establishing Urban Infrastructure Development Fund for creating urban infrastructure in Tier-2 and Tier-3 cities.

 Reaching the last mile 

Intending to reach the last mile to improve the lives of vulnerable tribal groups, the Union government has formed the ministries of Fisheries, AYUSH, Animal Husbandry and Dairy, Jal Shakti and Cooperation, and Skill Development. Some of the notable initiatives include –

  • Launching of Pradhan Mantri Particularly Vulnerable Tribal Groups (PVTG) Development Mission.
  • In drought-prone regions of Karnataka, financial assistance will be provided for sustainable micro irrigation.
  • Recruiting more teachers for Eklavya Model Residential Schools.

Setting up Bharat SHRI (Bharat Shared Repository of Inscriptions) 

  • For the digitization of one lakh ancient scripts that would find a place in a digital epigraphy museum.

Unleashing the potential 

Intending to provide a transparent and accountable administration that works for the welfare and betterment of the common citizen, FM Sitharaman explained the constituting elements for unleashing the potential. It includes the following measures that the Government intends to take.

  • Making and implementing capacity-building plans for civil servants by the Center, States, and Union Territories is one of the goals of Mission Karmayogi. iGOT Karmayogi, an online integrated training platform, provides continuous learning opportunities for all government employees to upgrade their skills and encourage a people-centric approach.  
  • To realize the vision of ‘Make AI in India and Make AI work for India,’ the Government will set up three centers of excellence for Artificial Intelligence in top educational institutions. The Government will launch a National Data Governance Policy to boost innovation and research by academia and start-ups. 
  • The Know Your Customer (KYC) process will become simpler by replacing the one-size-fits-all approach with a risk-based approach.
  • The Permanent Account Number (PAN) allotted to businesses will be considered the common identifier for all digitized systems of government agencies. 
  • The State Support Mission of NITI Aayog will continue for three years to facilitate collective efforts toward national priorities.
  • With an outlay of Rs.7,000 crore, the Government will launch Phase 3 of the E-Court projects.
  • Setting up an Entity Digilocker for use by Businesses of all sizes including MSMEs and charitable trusts. 
  • Setting up one hundred labs in engineering institutions for developing 5 G-based applications to realize a new range of business models, opportunities, and employment potential.
  • Lab-grown Diamonds, or LGD, are an emerging sector driven by technology and innovation with high employment potential. Research and Development grants will be provided to IITs for five years to encourage the production of indigenous LGD seeds and machines that should reduce import dependence.

Green Growth

In pursuance of PM Narendra Modi’s vision for ‘LiFE’ (Lifestyle for Environment), FM Niramala Sitharaman announced several initiatives to usher in green industrial and economic transition for achieving net-zero carbon emission by 2070.

  • The recently launched Rs. 19,700 crore National Green Hydrogen Mission will facilitate the economy’s transition to low carbon intensity by reducing dependence on fossil fuel imports and help the country acquire technology to assume the leadership position in the upcoming market sector. India targets to produce 5MMT green hydrogen annually. 
  • The Budget has allocated RS.35,000 crore for the Ministry of Petroleum & Natural Gas toward priority capital investments for realizing net zero objectives, energy transition, and energy security. 
  • To drive the economy on the path of sustainable development, 4,000 MWH Battery Energy Storage Systems will be supported with Viability group Funding along with the formulation of a detailed framework for Pumped Storage Projects.
  • Construction of the inter-state transmission system for evacuation and grid integration of 13GW renewable energy from Ladakh for an investment of Rs.20,700 crore with central support of RS.8,300 crore.
  • The Government will notify a Green Credit program under the Environment (Protection) Act. The aim is to incentivize responsive and environmentally sustainable actions by individuals, companies, and local bodies to mobilize additional resources for such activities. 
  • A new PM-PRANAM (Program for Restoration, Awareness, Nourishment, and Amelioration of Mother Earth) will be launched to promote the balanced use of chemical and alternative fertilizers. 
  • To promote a circular economy, under the GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme, the Government will establish 500 new ‘waste to wealth’ plants. Besides 200 compressed bio-gas (CBG) plants, of which 75 are in urban areas, there will be another 300 cluster or community-based plants for an investment of Rs.10,000 crore. 
  • Over the next three years, the Government will help one crore farmers to adopt natural farming by setting up 10,000 Bhartiya Prakritik Kheti Bio-Input Resource Centers. It will help to create a national network for pesticide and micro-fertilizer manufacturing. 
  • The Government will take up the ‘Mangrove Initiative for Shoreline Habitats and Tangible Incomes’ or MISHTI projects on salt pan lands and along coastlines by converging the CAMPA fund, MGNREGS fund, and other sources.
  • The Government will promote the unique conservation value of wetlands through the Amrit Dharohar scheme to be implemented over the next three years. It will enhance bio-diversity, generate opportunities for eco-tourism, enhance carbon stock, encourage optimal use of wetlands, and generate income opportunities for local communities.
  • Promoting coastal shipping because of energy efficiency and lower transport cost for both freight and passengers through PPP mode with gap funding for viability is on the cards.
  • Further to the vehicle scrapping policy of Budget 2021-22, the Government has allotted funds to scrap old Central Government vehicles and will support the States in replacing ambulances and old vehicles. 

Financial Sector


FM Nirmala Sitharaman announced several measures and schemes for the Financial Sector.

  • A National Financial Information Registry that will serve as the central repository of financial and related information will facilitate efficient credit flow, foster financial stability and promote financial inclusion. The Government will introduce a new legislative framework to govern this credit public infrastructure to be designed in consultation with the Reserve Bank of India (RBI).
  • To speed up the pace of administrative work under the Companies Act, the Government will set up a Central Data Processing Center. 
  • Revamping the Credit Guarantee Scheme for MSMEs by infusing RS.9,000 crore coupled with a reduction of interest rate by 1% will enable additional guarantee credit of Rs.2 lakh crore without any collateral. 
  • Introduction of ‘Mahila Samman Bachat Patra,’ a new one-time small savings scheme that will be made available till 2025 and will carry a fixed interest rate of 7.5% for girls/ women. The scheme of Rs.2 Lakh allows partial withdrawal.

Benefits for Senior citizens include increasing the limit of deposits in the Senior Citizen Savings Scheme (SCSS) to Rs.30 lakhs from Rs.15 lakhs. 

  • The maximum deposit in Post Office Monthly Income Account Scheme (POMIS) will be Rs.9 lakhs from the earlier Rs.4.5 lakhs. For joint holding, the investment limit is now Rs.15 lakhs from the earlier Rs. 9 lakhs. The rate of interest payable is 7.1%.
  • GIFT IFSC received a major boost in the Budget as Fm Niramala Sitharaman indicated that to avoid dual regulation; the International Financial Services Centers Authority will get more power under the SEZ Act. Moreover, for registration and approval of SEZ, IFSCA, RBI, GSTN, IRDAI, and SEBI, there will be a single-window IT system. 
  • The Government will create more trained professionals in the Securities Markets by awarding educational certificates.

 Youth Power

The Government has proposed several programs to help youths prosperby giving them access tosoftware, emerging technologies, anddata sectors and equipping them with the necessary skills.

  • Launching of Pradhan Mantri Kaushal Vikas Yojana (PMKVY) 4.0 signals further scope of empowering youths by acquiring new skills such as coding, Robotics, AI, 3D printing, etc. Over the next three years, lakhs of youths will receive skill training under the scheme.
  • For the promotion and sale of handicrafts, GI, and ODOP (one-district-one-product), the Government proposes encouraging states to set up Unity Malls in the State capitals and prominent economic and tourism centers. The malls will promote and sell products from other States, too. 
  • The Government will set up at least 50 new Tourist destinations chosen through a challenge mode and develop these as complete packages for domestic and foreign tourists. 

Simplifying Personal Income Tax

The Budget simplifies Personal Income Tax by raising the income limit for a rebate of income tax from Rs. 5 lahks to Rs.7 lakh in the new Tax regime. The slabs have been revised, and rates on tax have been reduced from a maximum of 42.7% to 39%. 

The highlights of the new proposals include the following –

  • The exemption limit for income tax was raised to Rs.3 lakh.
  • To make the new tax regime more attractive for the salaried class and pensioners, the Budget proposes extending the standard deduction benefits.  
  • Exemption limit for Leave cash encashment on retirement for private sector salaried employees increased to Rs.25 lakh.
  • For income above Rs.5 crore, the highest surcharge rate will be reduced from 37% to 25%.

Under the new income tax regime, the tax rates will be as under:

Rs.0- 3 Lakh – nil

Rs.3-6 lakh – 5%

Rs.6-9 lakh – 10%

Rs.9-12 lakh – 15%

Rs.12-15 lakh – 20%

Above Rs.15 lakh – 30%

Simplifying Tax Benefits for Industry

  • Limits enhanced for micro-enterprises and professionals to allow them to avail of benefits of presumptive taxation; 90% of receipts to be non-cash.
  • Deduction on payments made to MSMEs will be allowable only after payment.
  • New cooperatives that are commencing manufacturing on 31st march 2024 can avail of 15% corporate tax benefits. 
  • For deposits and loans in cash by PACs (Primary Agricultural Cooperative Societies) and PCARDBs (Primary Cooperative Agriculture and Rural Development Banks), the limit per member has been raised to Rs. 2 lahks. 
  • TDS for cash withdrawals by cooperative societies have gone up to Rs. 3 crores against Rs. 1 crore.
  • Start-ups are eligible for an extension of the date of incorporation by one year for income-tax benefits.
  • On the change of shareholding of start-ups, the benefit of carrying forward losses will now be ten years instead of 7 years. 
  • Income of authorities, commissions, and boards set up in certain sectors by the Union or State statutes to be exempted from income tax.
  • Extension of period of tax benefits to funds relocating to IFSC, GIFT City extended till March 31, 2025

Fiscal Management

The fiscal deficit is the difference between the Government’s total revenue and expenditure, and it indicates the total borrowings of the Government. The Finance Minister has set a target of reaching a fiscal deficit of 4.5% of the GDP by 2025-26, for which the target set for 2023-24 is 5.9% of the GDP, which is much below the 6.4% budgeted for 2022-23. 

  • To maintain the boost in Capital Expenditure (CAPEX), the Central Government will continue the scheme of granting 50-year interest-free loans to state governments with the stipulation of spending the money within 2023-24.
  • The Union government has made it conditional for the States to increase Capital Expenditure spending by linking a part of the outlay to States undertaking several reforms.
  • The fiscal deficit of States has been fixed at 3.5% of GSDP, of which 0.5% is tied to Power Sector reforms.

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