New Delhi: Finance Minister Nirmala Sitharaman presented the last complete budget of the second Narendra Modi government in Parliament. Ahead of the 2024 general elections, the budget has included several popular schemes.
The main attraction of the budget is the relaxation in the income tax threshold for the middle class. Accordingly, the taxable limit has been increased from five lakhs to seven lakhs.
Henceforth, those with an annual income of up to 7 lakhs will not have to pay tax. But the main drawback is that it benefits those who have adopted the new tax system. There is no relief for those who followed the old way allocation to defence ministry.
Seven priorities have been made in this budget. The priority objectives are inclusive development, agricultural development, youth welfare, economic stability, achievement of goals, ensuring infrastructure and utilization of potential.
The Union Finance Minister highlighted that the current year’s economic growth is estimated to be at 7%, “highest among all the major economies.” Finally, with regards to the fiscal deficit, she retained it to the target of 6.4% in the revised estimate for FY2022-23 and reduced it to 5.9% for the next fiscal. Fiscal deficit would be brought down to below 4.5% by 2025-26, Ms. Sitharaman said.
Major announcements:
New Income Tax slabs announced:
> Finance Minister Nirmala Sitharaman upped the rebate limit for paying income taxes to Rs 7 lakh/annum. This would be facilitated under the new tax regime which would be made the new default regime.
> The income slabs under the new personal income tax regime have been revised from six to five. The tax exemption limit has been increased to Rs 3 lakh. Sitharaman stated that this was 9 times more than the outlay accorded in 2013-14.
Railways accorded its highest-ever capital outlay
The recently announced budget increased the capital outlay for railways to its highest ever at ₹2.40 lakh crore. Ms Sitharaman stated that this was 9 times more than the outlay accorded in 2013-14.
New investment scheme for women and girls:
The Mahila Samman Savings Patra Scheme was announced as part of the Azadi Ka Amrit Mahotsav. The duration of the project is two years. You can invest up to Rs.2 lakh. Interest up to 7.5 percent.
Agriculture credit target raised:
> Agriculture credit target would be raised to ₹20 lakh crore with a focus on animal husbandry and fisheries.
> Setting up an Agriculture Accelerator Fund to encourage agri-startups by young entrepreneurs in rural areas.
“The fund will aim at bringing innovative and affordable solutions for challenges faced by farmers. It will also bring in modern technologies to transform agricultural practices, increase productivity and profitability,” the finance minister stated.
For micro, small and medium enterprises:
> PM Vishwakarma Kaushal Samman (PM VIKAS): The first-of-its-kind package assistance endeavours to improve the quality of, scale and reach of the products made by traditional artisans and craftspeople. Components of the scheme would not provide for financial support but also access to advanced skill training, knowledge of modern digital techniques and efficient green technologies, digital payments and social security.
> Vivad se Vishwas I: If MSMEs failed to execute contracts during the pandemic period, 95% of the forfeited amount relating to bid or performance security would be returned to them by the government or its undertakings.
> Credit Guarantee: The scheme for MSMEs has been revamped with an infusion of ₹9,000 crore in the corpus. It will be enforced from April 1, 2023. This would enable an additional collateral-free guaranteed credit of Rs 2 lakh crore. The cost of credit would be reduced by about 1 per-cent, the finance minister informed.
Green energy:
> The budget provided ₹35,000 crore for priority capital investments towards achieving energy transition and net-zero objectives as well as energy security by the Ministry of Petroleum and Natural gas.
Allocation for Defence:
A total of Rs 1.62 lakh crore has been set aside for capital expenditure that includes purchasing new weapons, aircraft, warships and other military hardware. For 2022-23, the budgetary allocation for capital outlay was Rs 1.52 lakh crore but the revised estimate showed the expenditure at Rs 1.50 lakh crore. According to 2023-24 budget documents, an allocation of Rs 2,70,120 crore has been made for revenue expenditure that includes expenses on payment of salaries and maintenance of establishments. The budgetary allocation of revenue expenditure in 2022-23 was Rs 2,39,000 crore. In the budget for 2023-24, the capital outlay for the Ministry of Defence (Civil) has been pegged at Rs 8,774 crore while an amount of Rs 13,837 crore has been set aside under capital outlay
Deposit limit for Senior Citizen Savings Scheme doubled:
Finance Minister Nirmala Sitharaman on Wednesday proposed to double the deposit limit for Senior Citizen Savings Scheme to Rs 30 lakh and Monthly Income Account Scheme to Rs 9 lakh. In her Budget Speech, the minister also announced a new small savings scheme for women. "The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs 15 lakh to Rs 30 lakh," the minister said in her 87-minute long speech. She also proposed that the maximum deposit limit for Monthly Income Account Scheme will be enhanced from Rs 4.5 lakh to Rs 9 lakh for a single account and from Rs 9 lakh to Rs 15 lakh for a joint account.
Expensive in the budget:
Gold
silver
Diamond
clothing
Cigarette
Electric kitchen chimney
Price drops:
Camera lens
Lithium cell
TV components
Mobile phone
Heating coil
Electric vehicles.
Announcing its last full budget before the 2024 elections, the NDA government focused on a slew of measures that expanded Capital Expenditure spending and tied in various priorities including Green Growth, Youth Power and Inclusive Development. This was also accompanied by major tax announcements for the salaried class, with changes in tax slabs and a clear intention to shift to the new tax regime.