Summary of Union Budget 2023-24 | SSC CGL Tier 2 - Study Material, Online Tests, Previous Year PDF Download

Introduction

The Union Budget is India's annual financial statement that is typically presented in February. The 2023-24 budget was presented by Finance Minister Nirmala Sitharaman on February 1, 2023. She highlighted that the Indian economy is facing challenges but is progressing towards a prosperous future.

Objective

The Union Budget 2023 is the first in the "Amrut Kal" period and aims to ensure that the benefits of development reach all parts of society, according to the finance minister. In the 75th year of India's independence, the country's economy has been recognized globally as a shining example, even amidst a global slowdown due to Covid-19. The finance minister predicts a GDP growth rate of 7% in the fiscal year 2023.

Important Highlights of Budget 2023-24 

The Union Finance Minister Nirmala Sitharaman on the 1st of February 2023 presented the last full-fledged Budget of the current government before the next Lok Sabha elections due in 2024.

• The Union Budget 2023-24 aims to build on the foundation laid in the previous Budget, and formulates a blueprint for India@100.
• The government through the Budget 2022-23 has envisioned laying a strong foundation to steer the Indian economy towards Amrit Kaal.
  • Amrit Kaal is the term coined by the government to mark the 25-year period till 2047 when India will celebrate 100 years of Independence.
• Vision for Amrit Kaal: The government’s vision for Amrit Kaal is to create a technology-driven and knowledge-based economy with strong public finances, and a robust financial sector.
• In order to achieve this vision, the focus has been laid on:
  • Creating opportunities for citizens, particularly the youth to fulfil their aspirations.
  • Providing a strong impetus to growth and employment generation.
  • Improving and strengthening macroeconomic stability.

• The Union Finance Minister has listed seven key priorities which would complement each other and act as the “Saptarishi” guiding the government through the Amrit Kaal. They include:
  • Inclusive Development
  • Reaching the Last Mile 
  • Infrastructure and Investment 
  • Unleashing the Potential 
  • Green Growth 
  • Youth Power 
  • Financial Sector 

Union Budget 2023-24: Top Economic Indicators

Provisions of Union Budget 2023-24

Seven Key Priorities

The Budget has adopted seven key priorities, working together as guiding principles to lead India through the "Amrit Kaal".

• Inclusive Development
• Reaching the Last Mile
• Infrastructure and Investment
• Unleashing the Potential
• Green Growth
• Youth Power
• Financial Sector

Inclusive Development

The government's philosophy of "Sabka Saath Sabka Vikas" has led to inclusive development, specifically benefiting farmers, women, youth, OBCs, Scheduled Castes, Scheduled Tribes, people with disabilities, and economically weaker sections, with a priority for the underprivileged. The budget also continues to focus on the regions of Jammu & Kashmir, Ladakh and the North-East. This budget builds on these previous efforts.

• ENHANCING THE PRODUCTIVITY OF COTTON CROP
  • To improve the productivity of extra-long staple cotton, a cluster-based approach that involves public-private partnerships will be adopted. This will involve collaboration among farmers, the government, and industries for input supplies, extension services, and market connections.
• DIGITAL PUBLIC INFRASTRUCTURE FOR AGRICULTURE
  • A digital public infrastructure for agriculture will be developed as an open-source, open-standard, and interoperable resource for the public. This will facilitate inclusive, farmer-focused solutions through access to information services for crop planning and health, improved access to farm inputs, credit, and insurance, crop estimation assistance, market intelligence, and support for the growth of the agriculture technology industry and start-ups.
• AGRICULTURE ACCELERATOR FUND
  • An Agriculture Accelerator Fund will be established to support young entrepreneurs in rural areas who are starting agriculture-related businesses. The fund will focus on providing innovative and affordable solutions for the challenges faced by farmers, bringing modern technology to improve agricultural practices, and increasing productivity and profitability. 
• GLOBAL HUB FOR MILLETS: ‘SHREE ANNA’
  • According to the Honorable Prime Minister, India is at the forefront of promoting the consumption of millets, which helps improve nutrition, food security, and farmers' well-being. India is the largest producer and second largest exporter of "Shree Anna", which includes various types of millets such as jowar, ragi, bajra, kuttu, ramdana, kangni, kutki, kodo, cheena, and sama. These millets have numerous health benefits and have been an important part of the Indian diet for centuries. To make India a hub for "Shree Anna", the Indian Institute of Millet Research in Hyderabad will be supported as a Center of Excellence for sharing best practices, research, and technology on the international level.
• AGRICULTURE CREDIT
  • The target for agriculture credit will be raised to 20 lakh crore, with a focus on animal husbandry, dairy, and fisheries. A new sub-scheme called PM Matsya Sampada Yojana, with a targeted investment of 6,000 crores, will be introduced to support the activities of fishermen, fish vendors, and small and micro enterprises, enhance value chain efficiencies, and expand the market.

Reaching the Last Mile

The government has established separate ministries for AYUSH, Fisheries, Animal Husbandry and Dairying, Skill Development, Jal Shakti, and Cooperation, to better achieve the goal of reaching remote areas.

• ASPIRATIONAL DISTRICTS AND BLOCKS PROGRAMME
  • Continuing from the success of the Aspirational Districts Program, the government recently started the Aspirational Blocks Program to provide essential government services in 500 blocks across various sectors such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure.
• PRADHAN MANTRI PVTG DEVELOPMENT MISSION
  • A new mission called Pradhan Mantri PVTG Development Mission will be established to improve the conditions of particularly vulnerable tribal groups (PVTGs). This mission aims to provide basic necessities such as safe housing, access to clean water, education, healthcare, connectivity, and livelihood opportunities to the PVTG families and their habitats. To achieve this goal, the government will allocate 15,000 crores over the next three years under the Development Action Plan for Scheduled Tribes. 
• PM AWAS YOJANA
  • The allocation for the Prime Minister's Housing Scheme will be increased by 66 percent to over 79,000 crore. A digital epigraphy museum named "Bharat Shared Repository of Inscriptions" will be established with the digitization of 100,000 ancient inscriptions in the first phase.

Infrastructure & Investment

Investment in infrastructure and productive capacity have significant effects on growth and employment. The private sector is once again increasing investment after the decline caused by the pandemic. This budget aims to restart the positive cycle of investment and job creation by taking the lead.

• CAPITAL INVESTMENT AS DRIVER OF GROWTH AND JOBS
  • The government has planned to significantly increase its capital investment by 33% to 10 lakh crore, equivalent to 3.3% of the GDP. This threefold increase from 2019-20 will play a crucial role in boosting growth, job creation, attracting private investments, and protecting the country from any adverse effects of global economic conditions.
• SUPPORT TO STATE GOVERNMENTS FOR CAPITAL INVESTMENT
  • It has been decided to continue the 50-year interest-free loan to state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions, with a significantly enhanced outlay of ` 1.3 lakh crore.
• RAILWAYS
  • A capital outlay of ` 2.40 lakh crore has been provided for the Railways. This highest-ever outlay is about 9 times the outlay made in 2013
• LOGISTICS
  • One hundred critical transport infrastructure projects, for last and first-mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified. They will be taken up on priority with an investment of 75,000 crore, including ` 15,000 crore from private sources
• URBAN INFRASTRUCTURE DEVELOPMENT FUND
  • An Urban Infrastructure Development Fund (UIDF) will be established similar to the Rural Infrastructure Development Fund (RIDF) through the utilization of priority sector lending shortfall. The National Housing Bank will manage the UIDF, and public agencies can use it to develop urban infrastructure in Tier 2 and Tier 3 cities. The states will be encouraged to utilize resources from the grants of the 15th Finance Commission and existing programs and to impose appropriate user fees when accessing the UIDF. The government intends to make available INR 10,000 crore annually for this purpose.

Unleashing the Potential

The Prime Minister stated that good governance is crucial for a nation's advancement and that the government is dedicated to implementing transparent and responsible administration that works towards improving the lives of citizens.

• MISSION KARMAYOGI
  • Mission Karmayogi aims to enhance the capacity of civil servants by providing training through the creation and implementation of capacity-building plans by the central and state governments and Union Territories. The government has also introduced an online training platform, iGOT Karmayogi, to offer ongoing learning opportunities for government employees to develop their skills and adopt a people-focused approach.
• CENTRES OF EXCELLENCE FOR ARTIFICIAL INTELLIGENCE
  • To achieve the goal of creating and utilizing Artificial Intelligence (AI) in India, the government is establishing three AI Centers of Excellence in top educational institutions. These centres will be supported by leading industries and will focus on conducting research and developing practical solutions using AI in the areas of agriculture, health, and sustainable cities. This will foster the growth of a thriving AI ecosystem and create a skilled workforce in this field.
• SIMPLIFICATION OF KNOW YOUR CUSTOMER (KYC) PROCESS
  • The process of verifying customer identity (KYC) will be made simpler by implementing a risk-based approach instead of a blanket approach. The regulators in the financial sector will be motivated to establish a KYC system that is compatible with the requirements of the Digital India initiative.
• VIVAD SE VISHWAS I – RELIEF FOR MSMES
  • Under the Vivad Se Vishwas scheme, the government will return 95% of the forfeited amount from contracts not executed by MSMEs during the Covid period, as a relief measure for these small businesses.
• VIVAD SE VISHWAS II – SETTLING CONTRACTUAL DISPUTES
  • VIVAD SE VISHWAS II is aimed at resolving contractual disputes between the government and its agencies. A voluntary settlement program with standardized terms will be established to address cases in which an arbitral award is being contested in court. The settlement terms offered will vary depending on the stage of the dispute.

Green Growth

The Prime Minister has outlined a vision for a sustainable lifestyle, with the goal of promoting environmental awareness and reducing carbon emissions by 2070. This budget emphasizes green growth and the shift towards a low-carbon economy.

• GREEN HYDROGEN MISSION
  • The National Green Hydrogen Mission, which has a budget of `19,700 crore, aims to support the shift to a low-carbon economy, decrease reliance on fossil fuel imports, and establish technology and market dominance in the emerging hydrogen sector. The goal is to achieve 5 million metric tons of production each year by 2030.
• ENERGY TRANSITION
  • The budget has allocated ` 35,000 crore for energy transition and achieving energy security objectives, through priority capital investments by the Ministry of Petroleum & Natural Gas.
• GREEN CREDIT PROGRAMME
  • A Green Credit Program will be established under the Environment Protection Act to motivate individuals, companies, and local organizations to take environmentally responsible actions. This program will incentivize these actions and help in generating additional resources for such initiatives.
• PM-PRANAM
  • The PM-PRANAM program, "Programme for the Restoration, Awareness, Nourishment, and Improvement of Mother Earth" will be launched to encourage states and union territories to promote the use of alternative fertilizers and balanced use of chemical fertilizers.
• AMRIT DHAROHAR
  • The Prime Minister recently mentioned in his address "Mann Ki Baat" that the number of Ramsar sites in India has increased to 75, up from 26 before 2014. The government plans to launch a program called "Amrit Dharohar" to support the conservation of wetlands over the next three years. The scheme aims to optimize the use of these ecosystems, increase biodiversity, store more carbon, create eco-tourism opportunities, and improve income for local communities who have always been key players in conservation efforts.

Youth Power

To boost the potential of young people and aid them in achieving their aspirations, the government has established the National Education Policy with a focus on developing practical skills. Additionally, economic policies have been implemented to encourage job creation on a large scale and support business ventures, all with the goal of empowering the youth.

• PRADHAN MANTRI KAUSHAL VIKAS YOJANA 4.0
  • The government is launching Pradhan Mantri Kaushal Vikas Yojana 4.0, a scheme aimed at providing training to millions of young people over the next three years. The program will emphasize on-the-job training, partnerships with industries, and courses that align with the demands of the industry. It will also offer new, cutting-edge courses such as coding, AI, robotics, mechatronics, Internet of Things (IoT), 3D printing, drones, and soft skills. To skill youth for international opportunities, 30 Skill India International Centers will be established in different states and the program will be supported by the Skill India Digital Platform.
• NATIONAL APPRENTICESHIP PROMOTION SCHEME
  • The government will launch a nationwide National Apprenticeship Promotion Scheme which will provide financial support in the form of stipends to 47 million young people over three years. The program will use Direct Benefit Transfer.

Financial Sector

Our reforms in the financial sector and innovative use of technology have led to financial inclusion at scale, better and faster service delivery, ease of access to credit and participation in financial markets. This Budget proposes to further these measures. 

FINANCIAL SECTOR REGULATIONS

• To meet the demands of the present time and ensure effective regulation in the financial sector, public consultation will be incorporated into the regulation-making process and issuing of subsidiary directions where feasible. To simplify, ease, and reduce the cost of compliance, financial sector regulators will be asked to conduct a comprehensive review of current regulations and take into account suggestions from the public and regulated entities. Specific time frames for deciding on applications under various regulations will also be established.
• DIGITAL PAYMENTS
  • Digital payments continue to find wide acceptance. In 2022, they show increase of 76 per cent in transactions and 91 per cent in value. Fiscal support for this digital public infrastructure will continue in 2023-24.
• SENIOR CITIZENS
  • The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs.15 lakh to Rs. 30 lakh. The maximum deposit limit for Monthly Income Account Scheme will be enhanced from Rs. 4.5 lakh to Rs. 9 lakh for single account and from ` 9 lakh to ` 15 lakh for joint account.

Revised Estimates 2022-23

• The total receipts other than borrowings is Rs 24.3 lakh crore, of which the net tax receipts are Rs 20.9 lakh crore.

• The total expenditure is Rs 41.9 lakh crore, of which the capital expenditure is about Rs 7.3 lakh crore.

• The fiscal deficit is 6.4 per cent of GDP, adhering to the Budget Estimate.

Budget Estimates 2023-24

• The total receipts other than borrowings is estimated at Rs 27.2 lakh crore and the total expenditure is estimated at Rs 45 lakh crore.

• The net tax receipts are estimated at Rs 23.3 lakh crore.

• The fiscal deficit is estimated to be 5.9 per cent of GDP.

• To finance the fiscal deficit in 2023-24, the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore.

• The gross market borrowings are estimated at Rs 15.4 lakh crore.

Budget at a Glance

Personal income tax slabs revised

• Among the key Provisions of the Union Budget 2023-24 were major changes introduced to the personal income tax structure in the country.
• The tax rebate limit increased to Rs 7 lakh from Rs 5 lakh in the new tax regime.
• FM further announced that the new Income Tax regime would become the default tax regime in India

Change in Tax Rates

• Proposal to extend the benefit of standard deduction of Rs. 50,000 to salaried individual, and deduction from family pension up to Rs. 15,000, in the new tax regime.
• Highest surcharge rate to reduce from 37 per cent to 25 per cent in the new tax regime. This to further result in reduction of the maximum personal income tax rate to 39 per cent.
• The limit for tax exemption on leave encashment on retirement of non-government salaried employees to increase to Rs. 25 lakh.
• The new income tax regime to be made the default tax regime. However, citizens will continue to have the option to avail the benefit of the old tax regime.
• Enhanced limits for micro enterprises and certain professionals for availing the benefit of presumptive taxation proposed. Increased limit to apply only in case the amount or aggregate of the amounts received during the year, in cash, does not exceed five per cent of the total gross receipts/turnover.
• Deduction for expenditure incurred on payments made to MSMEs to be allowed only when payment is actually made in order to support MSMEs in timely receipt of payments.
• New co-operatives that commence manufacturing activities till 31.3.2024 to get the benefit of a lower tax rate of 15 per cent, as presently available to new manufacturing companies.
• Opportunity provided to sugar co-operatives to claim payments made to sugarcane farmers for the period prior to assessment year 2016-17 as expenditure. This expected to provide them a relief of almost Rs. 10,000 crore.
• A higher limit of Rs. 3 crore for TDS on cash withdrawal to be provided to co-operative societies.
• Date of incorporation for income tax benefits to start-ups to be extended from 31.03.23 to 31.3.24.
• Proposal to provide the benefit of carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years.
• Deduction from capital gains on investment in residential house under sections 54 and 54F to be capped at Rs. 10 crore for better targeting of tax concessions and exemptions.
• Proposal to limit income tax exemption from proceeds of insurance policies with very high value. Where aggregate of premium for life insurance policies (other than ULIP) issued on or after 1st April, 2023 is above Rs. 5 lakh, income from only those policies with aggregate premium up to Rs. 5 lakh shall be exempt.
• Minimum threshold of Rs. 10,000/- for TDS to be removed and taxability relating to online gaming to be clarified. Proposal to provide for TDS and taxability on net winnings at the time of withdrawal or at the end of the financial year.
• Conversion of gold into electronic gold receipt and vice versa not to be treated as capital gain.
• TDS rate to be reduced from 30 per cent to 20 per cent on taxable portion of EPF withdrawal in non-PAN cases.
• Income from Market Linked Debentures to be taxed..
• Certain acts of omission of liquidators under section 276A of the Income Tax Act will be decriminalized from 1st April, 2023.
• Carry forward of losses on strategic disinvestment including that of IDBI Bank to be allowed.
• Agniveer Fund to be provided EEE status. The payment received from the Agniveer Corpus Fund by the Agniveers enrolled in Agnipath Scheme, 2022 proposed to be exempt from taxes. Deduction in the computation of total income is proposed to be allowed to the Agniveer on the contribution made by him or the Central Government to his Seva Nidhi account.

Indirect Taxes

• The number of basic customs duty rates on goods, other than textiles and agriculture, reduced to 13 from 21.
•  Minor changes in the basic customs duties, cesses and surcharges on some items including toys, bicycles, automobiles and naphtha.
•  Excise duty exempted on GST-paid compressed biogas contained in blended compressed natural gas. 
• Customs Duty on specified capital goods/machinery for manufacture of the lithium-ion cell for use in the battery of electrically operated vehicles (EVs) extended to 31.03.2024
• Basic customs duty on electric kitchen chimneys increased to 15 per cent from 7.5 per cent.
• National Calamity Contingent Duty (NCCD) on specified cigarettes revised upwards by about 16 per cent.

Changes in Custom Laws

• Customs Act, 1962 to be amended to specify a time limit of nine months from the date of applying to passing the final order by Settlement Commission. 
• Customs Tariff Act to be amended to clarify the intent and scope of provisions relating to Anti-Dumping Duty (ADD), Countervailing Duty (CVD), and Safeguard Measures. 
• CGST Act to be amended 
• to raise the minimum threshold of tax amount for launching prosecution under GST from one crore to two crore;
• to reduce the compounding amount from the present range of 50 to 150 per cent of tax amount to the range of 25 to 100 per cent; 
• decriminalise certain offences; 
• to restrict filing of returns/statements to a maximum period of three years from the due date of filing of the relevant return/statement; 
• and to enable unregistered suppliers and composition taxpayers to make intra-state supply of goods through E-Commerce Operators (ECOs)

Conclusion

The Indian Union Budget is a crucial element in shaping the country's economic and financial policies. The budget proposals, tax changes, and funding for different sectors reveal the government's priorities and plans for the next financial year. The recent 2023 Indian Union Budget emphasizes improving infrastructure, healthcare, education, and rural development. The budget aims to drive self-sufficient and inclusive growth with a focus on digital transformation and job creation. Though the budget has received mixed reviews from various interest groups, its effectiveness in impacting the Indian economy and the general public will only be determined through its implementation.