Union Budget 2023-24 Explained Live Updates
The government has increased the income tax rebate limit from Rs 5 lakh to Rs 7 lakh under the new tax regime. The new tax rates are as follows:
Rs 0 to Rs 3 lakh – no tax
Rs 3 to 6 lakh – 5%
Rs 6 to 9 lakh – 10%
Rs 9 to 12 lakh – 15%
Rs 12 to 15 lakh – 20%
Above Rs 15 lakhs – 30%
12:27 (IST) 01 FEB 2023. Budget announcements in brief
- Tax on cigarettes revised upwards by 16%. As the announcement is made, shares of ITC and Godfrey Philips dip by 5% and 7.3%, respectively
- For countries looking for digital continuity solutions, Govt encourages setting up data embassies in the IFSC Gift City
- 100 labs to be set up for 5G solutions across engineering colleges
- A National Financial Information repository to be set up, says FM
12:20 (IST) 01 FEB 2023. Big relief for MSMEs: Rs 9,000 crore for revamped Credit Guarantee Scheme
In a big relief to Covid-hit micro, small and medium enterprises (MSMEs), Finance Minister Nirmala Sitharaman has announced that the Credit Guarantee Scheme for MSMEs will be extended with an infusion of Rs 9000 crore. Sitharaman said this will enable collateral for Rs 2 lakh crore loans to MSMEs. This is expected to boost fund flow to the distressed and fund-starved MSME sector. The proposed scheme will take effect from April 1, 2023.
According to bankers, the scheme will give comfort to banks which are normally reluctant to lend to MSMEs in the absence of proper collateral.
The government’s Emergency Credit Line Guarantee Scheme (ECLGS) was earlier extended up to March 2023 from March 2022. Its guarantee cover was also expanded by Rs 50,000 crore to a total cover of Rs 5 lakh crore with the additional amount being earmarked exclusively for hospitality and related enterprises.
12:19 (IST) 01 FEB 2023. Fiscal deficit projected to come down to 4.5% in 2025-26
The Finance Minister has stayed on the path of fiscal consolidation, budgeting to bring the deficit down from 6.4 per cent of GDP in 2022-23 to 5.9 per cent in 2023-24. As per the glide path elaborated by Nirmala Sitharaman, the deficit is projected to come down to 4.5 per cent in 2025-26.
12:17 (IST) 01 FEB 2023. Relief for MSMEs to investment is green energy: Here are Budget announcements
Here are some other announcements in the Union Budget 2023:
- Credit Guarantee for MSME — Last year, it was revamped and the revamped scheme will take effect from April 2023 with infusion of Rs 9,000 crore in the corpus. This will lead to an additional Rs 2 lakh crore under the credit guarantee scheme. The cost of raising funds for MSMEs will come down.
- The FM has also proposed certain amendments in the banking Acts, RBI Acts to improve governance in the banking sector and enhance investors’ protection.
- The FM has announced an outlay of Rs 35,000 crore for energy transition investment.
- The government will support setting up of battery storage capacity of 4,000 MWH in India with viability gap funding. The aim is to touch green hydrogen production of 5 million tonnes by 2030.
- FM also says a green credit programme will be notified under the Environment Protection Act.
12:13 (IST) 01 FEB 2023. Stock markets hold on; Sensex remains above 60,000
As FM announced to keep fiscal deficit at 5.9 per cent for FY’24 down from 6.4 per cent in FY’23, the stock markets hold on. Sensex up 530 points at 60,080.
12:06 (IST) 01 FEB 2023. Budget proposes framework for access to anonymised data
National data governance framework will be brought out to enable access to anonymised data. Last year, MeitY had released a draft of this policy under which non-personal data housed with the Centre will be shared with Indian start-ups and researchers. Private companies will be “encouraged” to share such data with start-ups, the draft policy had said.
12:06 (IST) 01 FEB 2023. Budget 2023: Mission to eliminate sickle cell anemia by 2047
Finance Minister Nirmala Sitaraman announced a mission to eliminate sickle cell anemia by 2047, which will include universal screening of seven crore persons between the ages of 0 and 40 years in affected tribal areas. The mission will include awareness creation and counselling though collaborative efforts of central ministries and state governments. The announcement comes as India is racing towards elimination of infectious diseases, such as tuberculosis by 2025, kala azar by 2023, and lymphatic filariasis by 2027.
12:04 (IST) 01 FEB 2023. 50 destinations to be selected to boost tourism sector
At least 50 destinations will be selected through challenge mode — physical, virtual connectivity, tourism security, guides, would be made available on an app to enhance tourist experience. The focus on development of tourism will be both domestic and foreign tourists, a major service sector.
12:02 (IST) 01 FEB 2023. Govt to introduce 5% CBG mandate
The government plans to introduce a 5 per cent compressed biogas mandate for all entities marketing natural gas in India. This may mean that companies marketing natural gas in India will have to market compressed biogas, or CBG, to the extent of 5 per cent of their volumes.
The government has been pushing for increased production of CBG and its blending with natural gas, particularly in the transportation segment that uses compressed natural gas, or CNG, as a fuel.
12:00 (IST) 01 FEB 2023. In push for auto sales and EVs, Govt to support states in replacing old vehicles
After supporting the replacement of vehicles by the central government, states to also be supported in replacing old vehicles. This move is likely to give a push to auto sales and electric vehicles.
11:59 (IST) 01 FEB 2023. Budget 2023: Rs 7,000 crore outlay for Phase 3 of eCourts project
Finance Minister Nirmala Sitharaman announces phase three of the eCourts project, to be launched with an outlay of Rs 7,000 crore. According to a panel overseeing the eCourts project, the third phase envisions digital courts that “deliver justice as a service to all, beyond simply replicating offline processes digitally”.
11:55 (IST) 01 FEB 2023. PAN to be common business identifier, likely to ease compliance burder
Finance Minister Nirmala Sitharaman has said the Permanent Account Number (PAN) will be made as a single business identifier for all digital systems of all specified departments of the government. This is expected to ease the compliance burden of businesses.
Using the unique identifier PAN, the common information and documents could be auto-fetched across systems. An integrated system at the central and state level departments will provide relief to the user from repeated submission of documents, ensure the authenticity of the same and lead to quicker processing of requests.
Moreover, the Finance Minister also announced that more than 39,000 compliances have been reduced and 3,400 plus legal proceedings have been decriminalised to enhance the ease of doing business.
The Finance Minister says like Rural Infrastructure Development Fund (RIDF), Urban Infrastructure Development Fund will be set up for the use of priority sector lending shortfall. She proposes to set aside Rs 10,00 crore per annum for this purpose. It will be managed by National Housing Bank (NHB).
11:50 (IST) 01 FEB 2023. Indian markets back in the green after falling initially
The Budget’s continued focus on increasing capital expenditure and further push towards increased infrastructure has received a thumbs up from the stock markets. They have recovered ground after falling initially.
11:49 (IST) 01 FEB 2023. Thrust on capital expenditure to continue for FY24
The Finance Minister said the government will continue 50-year interest-free loans to state governments for one more year to aid infrastructure investment with an outlay of Rs 1.3 lakh crore. The thrust on capital expenditure will continue for FY24. Centre’s capital expenditure outlay for FY24 has been hiked to Rs 10 lakh crore, an increase of 33% year-on-year.
11:45 (IST) 01 FEB 2023. In highest-ever outlay, Govt proposes Rs 2.40 lakh crore for Indian Railways
Finance Minister Nirmala Sitharaman says Rs 2.40 lakh crore has been provided for the Indian Railways. This highest-ever outlay, she said, is 9 times the outlay made in 2013-14.
Roads and railways have been two sectors that have seen higher additional capital outlays over the last few budgets. They have been central to the government’s capex push.
FM also announces 50 additional airports, water aerodromes, landing grounds to be revived for regional air connectivity. This should offer additional push to the regional connectivity scheme, which started with the UDAAN scheme.
11:43 (IST) 01 FEB 2023. Budget 2023: FM hikes capital investment outlay by 33% to Rs 10 lakh crore for 2023-24
The Budget has doubled down on the government’s strategy to drive investment activity in the economy. The allocation for capital expenditure has been pegged at Rs 10 lakh crore in 2023-24, up from Rs 7.5 lakh crore in 2022-23. The Finance Minister has also extended the facility of an interest-free loan to states for capex.
Considering that states, put together, account for a sizeable share of public investments, this is an encouraging sign for investment activity. States will however need to ramp up their spending which, so far, has been rather subdued despite the enhanced fiscal space available to them.
11:38 (IST) 01 FEB 2023. National Digital Library to bridge losses due to pandemic, says FM Nirmala Sitharaman
In her speech, Finance Minister Nirmala Sitharaman announced that a national digital library for children and adolescents will be set up for providing access to quality books to children across the country. Agencies such as the National Book Trust and Children’s Book Trust will also be encouraged to provide and replenish rural libraries with non-curricular books on regional languages. This is aimed at bridging the learning loss suffered by children during the pandemic, Sitharaman said.
The announcement comes against the backdrop of findings in the latest Annual Status of Education Report (ASER) that the reading abilities of school children have reduced significantly during the pandemic years due to disruptions in the regular classroom teaching-learning process.
11:35 (IST) 01 FEB 2023. In Budget 2023, Rs 15,000 crore proposed for national mission for vulnerable tribes
The Finance Minister announces the launch of a national mission for vulnerable tribes with an outlay of Rs 15,000 crore. The mission aims to provide support to India’s vulnerable tribes in areas of health, clean water and sanitation, basic infrastructure, and sustainable livelihood opportunities, among others.
11:30 (IST) 01 FEB 2023, Budget 2023: Boost for agricultural activities in the hinterland
The Finance Minister says a National Cooperative database is being prepared, as well as plans to set up a massive de-centralised storage capacity. This will facilitate the setting up of fisheries, farm and dairy cooperative societies in uncovered villages over the next five years. This is aimed at offering a boost to allied agricultural activities in the hinterland.
11:28 (IST) 01 FEB 2023. Agricultural accelerator fund to catalyse start-up interest in sector
The FM announces an agricultural accelerator fund to be set up to fund start-ups by entrepreneurs in rural areas to develop affordable and innovative solutions for challenges faced by farmers. The objective is to bring modern technology to transform agricultural practices and enhance India’s agri production. The fund is to catalyse start-up interest in the sector.
There is no increase in PM-Kisan direct benefit transfer from the existing Rs 6,000 per year per farm household. The Modi government probably wants to keep the gunpowder dry closer to the elections, maybe towards December. Most schemes in agriculture don’t seem to have huge outlays yet. This could probably be in the interest of fiscal prudence, amid global monetary tightening and elevated interest rates.
11:23 (IST) 01 FEB 2023: FM sticks to 7% GDP growth, says India ‘bright star in world’s economy’
The Finance Minister sticks to the advance estimate for the current fiscal’s GDP growth of 7 per cent and says India is a bright star in the world economy. This is slightly higher than the 6.8 per cent estimated by the Reserve Bank of India in its December 2022 monetary policy. For the current financial year, the Economic Survey had also projected a growth rate of 7 per cent.
11:13 (IST) 01 FEB 2023 . Govt to implement scheme for free foodgrains for 1 year
Finance Minister Nirmala Sitharaman says the government is implementing a scheme to supply foodgrains from Jan 1, 2023, to all Antaodaya and priority households for the next one year. “During the Covid-19 pandemic, we ensured that nobody goes to bed hungry with a scheme to supply free foodgrains to over 80 crore persons for 28 months. We are implementing a scheme to supply foodgrains from Jan 1, 2023, to all Antaodaya and priority households for the next 1 year,” she says.
Economic Survey 2023: Here are the key takeaways
GDP growth: The Survey said India’s growth estimate for FY23 is higher than for almost all major economies. “Despite strong global headwinds and tighter domestic monetary policy, if India is still expected to grow between 6.5 and 7.0 per cent, and that too without the advantage of a base effect, it is a reflection of India’s underlying economic resilience; of its ability to recoup, renew and re-energise the growth drivers of the economy,” said the Survey.
Inflation: The RBI has projected headline inflation at 6.8% in FY23, outside its comfort zone of 2% to 6%. High inflation is seen as one big factor holding back demand among consumers. However, the Survey sounded optimistic about the inflation levels and trajectory, saying “it is not high enough to deter private consumption and also not so low as to weaken the inducement to invest.”
Unemployment: The Survey said “employment levels have risen in the current financial year”, and that “job creation appears to have moved into a higher orbit with the initial surge in exports, a strong release of the “pent-up” demand, and a swift rollout of the capex.”
It pointed to the Periodic Labour Force Survey (PLFS), which showed that urban unemployment rate for people aged 15 years and above declined from 9.8% in the quarter ending September 2021 to 7.2% one year later.
The Survey also underlined that the fall in unemployment rate is accompanied by an improvement in the labour force participation rate.