Union Finance Minister Nirmala Sitharaman listed seven key priorities of the Union Budget 2023 on Wednesday and said they complement each other and act as the Saptarishi guiding the government through Amrit Kaal.
Amrit Kaal is the term coined by the Modi government to mark the 25-year period till 2047, when India will celebrate a century of freedom. It is the government’s roadmap for the next 25 years. The seven priorities are:
Highlighting the importance of inclusive development, Ms. Sitharaman said that the government’s policy of Sabka Saath Sabka Vikas has helped many sections including women, SCs, STs, OBCs and other underprivileged sections.
The Indian economy has undergone a transformative process of New Age reforms in the last eight years. These diverse policies converge towards improving the economy’s overall efficiency and lifting its potential growth.
To achieve the broader policy goal of unleashing the productive potential of the economy and its people, the reforms aimed at enhancing the ease of living and doing business at the fundamental level. The use of technology, in particular digital technology, undergirds the reforms. The economic energy and positive mindset that the reforms unleashed would have led to a sharp acceleration in growth.
Simplifying tax benefits for industry MSME
Enhanced limits for micro enterprises and professionals to avail benefits of presumptive taxation; 95% of receipts to be non cash deduction on payments made to MSMEs to be allowed only when payment is actually made.
Extending 15% corporate tax benefits to new co- operatives, commencing manufacturing till 31st March,2024.
Higher limit of 32 lakh per member for deposits & loans in cash by PACS and PCARDBS
Higher limit of 3 crore for TDS on cash withdrawal for co-operative societies
Extension of the date of incorporation by one year for income tax benefits to start-ups benefit of carry forward of losses on change of shareholding of start-ups from seven years of incorporation to ten years.
Income of authorities, boards and commissions set up by statutes of the Union or State to be exempted from income tax in certain sectors Extension of period of tax benefits to funds relocating to IFSC, GIFT City till 31st March, 2025
The interventions of the Government have been in line with the recommendations of the Committee on Doubling Farmers' Income, which had identified improvement in crop and livestock productivity, diversification towards higher value crops, better resource efficiency, enhanced cropping intensity, improvement in real prices received by farmers and shift from farm to non-farm occupations as being significant sources of growth.
Several policy measures, such as the Minimum Support Price (MSP) to secure the price at one and half times the all-India weighted average cost of production, schemes and price measures to focus on high-value added crops such as oilseed, incentives for crop diversification through price policy measures, improvements in agricultural marketing and by enhancing resource use efficiency etc. have been adopted.
While Indian agriculture has performed well, the sector needs re-orientation in the backdrop of certain challenges like adverse impacts of climate change, fragmented landholdings, sub-optimal farm mechanisation, low productivity, disguised unemployment, rising input costs, etc.
Infrastructure & Investment
Investments in infrastructure and productive capacity have a large multiplier impact on growth and employment. After the subdued period of the pandemic, private investments are growing again. The Budget takes the lead once again to ramp up the virtuous cycle of investment and job creation.
Capital investment outlay is being increased steeply for the third year in a row by 33% to 10 lakh crore, which would be 3.3 per cent of GDP. This will be almost three times the outlay in 2019-20.
This substantial increase in recent years is central to the government’s efforts to enhance growth potential and job creation, crowdin private investments, and provide a cushion against global headwinds.
The direct capital investment by the Centre is complemented by the provision made for creation of capital assets through Grants-in-Aid to States. The ‘Effective Capital Expenditure’ of the Centre is budgeted at 13.7 lakh crore, which will be 4.5 per cent of GDP
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- 14.
Hon’ble Prime Minister has given a vision for “LiFE”, or Lifestyle for Environment, to spur a movement of
environmentally conscious lifestyle. India is moving forward firmly for the ‘panchamrit’ and net-zero carbon emission by 2070 to usher in a green industrial and economic transition. This Budget builds on our focus on green growth.
Green Hydrogen Mission
The recently launched National Green Hydrogen Mission, with an outlay of 19,700 crores, will facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector. Our target is to reach an annual production of 5 MMT by 2030.
This Budget provides 35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by the Ministry of Petroleum & Natural Gas.
Renewable Energy Evacuation
The Inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with investment of ₹20,700 crore including central support of ₹8,300 crore.
Coastal shipping will be promoted as the energy efficient and lower cost mode of transport, both for passengers and freight, through PPP mode with viability gap funding.
With an integrated and innovative approach, at least 50 destinations will be selected through challenge mode. In addition to aspects such as physical connectivity, virtual connectivity, tourist guides, high standards for food streets and tourists’ security, all the relevant aspects would be made available on an App to enhance tourist experience.
Every destination would be developed as a complete package. The focus of development of tourism would be on domestic as well as foreign tourists.
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.
Here mentioned are few of the sectors that are going to be beneficiaries of the Union Budget 2023-24. Stay connected for more updates on the similar fronts.
Shuchi Nahar is a Certified Research Analyst. She can be found on Twitter at @shuchi_nahar
Note: This article is for informational purposes only. Please speak to a SEBI-registered investment advisor before making any investment related investment-related decision.