The big budget day is here, and the finance minister of India, Nirmala Sitharaman, started announcing the budget by calling it the “First budget of Amrit Kaal”.
Sitharaman started her Budget speech at 11 am, the last full Budget of the Modi government in its second term. Like the previous two Union Budgets, Union Budget 2023-24 is also presented in paperless form.
This year’s Budget holds much significance as the country is scheduled to have the next Lok Sabha election in April-May 2024.
FM announced that 50 additional airports, helipads, water aero drones, and advanced landing grounds will be revived to improve regional air connectivity in the country.
Also, FM said that the Centre will recruit 38,000 teachers and support staff for the 740 models Eklavya Model Residential Schools serving 3.4 lakh tribal students.
Budget announced 157 new nursing colleges will be set up across the country to give a boost to the health sector. She also focussed on the training of teachers and said that teachers’ training will be reenvisioned through innovative pedagogy, curriculum transaction, continuous professional development dipstick survey and iCT implementation.
The finance minister also said that the Centre will recruit 38,000 teachers and support staff for the 740 models Eklavya Model Residential Schools serving 3.4 lakh tribal students.
“A national digital library for Children and adolescents will be created to facilitate the availability of quality books across geographies, languages genres and levels, and device-agnostic accessibility. States will be urged to set up physical libraries at Panchayat and all levels to provide infrastructure for accessing the National Digital Library resources,” said the Finance Minister.
The minister also said that a dedicated multidisciplinary course on medical devices will be supported in the institutions to ensure the availability of skilled manpower for futuristic medical technologies and high-end manufacturing and research. A new programme to promote research and innovation in pharmaceuticals will be introduced.
Pradhan Mantri Kaushal Vikash Yojana 4.0 will be launched soon, said the Finance Minister. In the PM Kaushal Vikaas Yoajna 4.0, industry partnership, an alignment of courses with the needs of the industry will be emphasised.
The scheme will also cover new age courses for industry 4.0 like coding, AI, robotics, mechatronics IoT, 3D printing drones and other soft skills to skill the youth for international opportunities, 30 skill India international centres will be set up across different states to provide skills for foreign employment.
Along with that, the outlay for Prime Minister Awas Yojana (PMAY) has been enhanced by 66 per cent to over Rs 79,000 crores. This is a significant increase considering Sitharaman, in the Budget 2022-23, had proposed an allocation of Rs 48,000 crore for the Housing for All initiative of the government.
The government, last year, had promised that 80 lakh houses will be completed for the identified eligible rural and urban beneficiaries of PMAY. Also, PMAY- Urban (PMAY-U), a flagship Mission of the Government of India launched in 2015, is being implemented by the Ministry of Housing and Urban Affairs (MoHUA) and aims to provide housing for all including slum dwellers.
According to government data, out of the overall target of 2.95 crore houses, a target of 2.92 crore houses had been allocated to States/Union Territories UTs), out of which, 2.49 crore houses have been sanctioned to beneficiaries by various States/UTs and 2.10 crore houses have been completed as on December 07, 2022.
For the agriculture sector, which is said to be the backbone of the Indian economy, the government has proposed to increase the credit target to Rs 20 lakh crore with a focus on animal husbandry, dairy and fisheries.
The country’s agriculture sector has been growing at an average annual growth rate of 4.6 per cent in the last six years, FM told. The government will also launch a sub-scheme of the existing PM Matsya scheme to improve value chain efficiencies, she said.
Moreover, the government proposes to increase capital expenditure outlay by 33 per cent to Rs 10 lakh crore in 2023-24, which would be 3.3 per cent of the GDP, said FM.
The government pegged the fiscal deficit target for 2023-24 at 5.9 per cent of gross domestic product (GDP). FM further said that the government intends to bring the fiscal deficit below 4.5 per cent of GDP by the financial year 2025-26.
Overall, the government proposed to increase capital expenditure outlay by 33 per cent to Rs 10 lakh crore in 2023-24, which would be 3.3 per cent of the GDP, said Sitharaman.
“Further, the proposed capital outlay of about Rs 2.40 lakh crore is being pegged for railways,” Sitharaman said adding that this budgeted outlay for the railways is the highest ever and nine times what it was in 2013.
However, the main highlight of the budget is the increase in the income tax rebate limit from Rs 5 lakh to Rs 7 lakh stating that the new tax regime will now be the default tax regime.
FM also proposed to change the tax structure in this regime by reducing the number of tax slabs to 5 and increasing the tax exemption limit to Rs 3 lakh.
On personal income tax, the FM announced that “Tax for income of Rs 0-Rs 3 lakh is nil, for income above Rs 3 lakh and up to Rs 5 lakh will be taxed at 5 per cent, for income of above Rs 6 lakh and up to Rs 9 lakh will be taxed at 10 per cent and for income above Rs 12 lakh and up to Rs 15 lakh to be taxed at 20 per cent and above 15 lahks at Rs 30 per cent.”
For pensioners, the finance minister announced extending the benefit of the standard deduction to the new tax regime. Each salaried person with an income of Rs. 15.5 lahks or more will benefit by Rs. 52,500.
Sitharaman, while presenting the budget said, “A person earning Rs 9 lakh a year will now be paying just Rs 45,000 instead of Rs. 60,000 currently. Similarly, a person earning Rs 15 lakh will now pay only 10 per cent of this as tax.”
The finance minister also said, “The limit of Rs 3 lakh for tax exemption on leave encashment on government salaried employees. That was set in 2002 when government salaries were lower and are now being raised to Rs 25 lakh.”
The budget session of the Parliament began on Tuesday with President’s address, subsequently tabling the Economic Survey for 2022-23. The formal exercise to prepare the annual Budget for the next financial year (2023-24) commenced on October 10.
The Economic Survey noted India’s GDP is expected to grow in the range of 6 to 6.8 per cent in the coming financial year 2023-24. This is in comparison to the estimated 7 per cent this fiscal and 8.7 per cent in 2021-22.