Post Budget Quote by Dr Mousumi Bhattacharya, Associate Professor, IIM Shillong

The Union Budget of 2023, presented by Finance Minister Nirmala Sitharaman, adopted seven priorities that the government has set to guide India through Amrit Kal. The “Saptarishi” or the seven priorities include inclusive development, infrastructure and investment, reaching the last mile unleashing the potential, green growth, youth power and the financial sector. It is the last full Union Budget of the government before the next Lok Sabha election in 2024 where an attempt was made to address the concerns of the majority of the sectors with a special focus on green growth as India is shifting toward net zero carbon emissions by 2070. The budget will not only ensure self-reliance but also lay the path for sustainable growth of the Indian economy.

The revised new tax regime will not only reduce the number of tax slabs but also increase the basic exemption limit to Rs.3 lakh from Rs.2.5 lakh. The limit for rebate under section 87A has been raised to Rs 7 lakh. In order to boost consumption the personal income tax has been aligned to incentivise taxpayers to move to the new tax regime, wherein the tax slabs have been enhanced and rates have been lowered. Under the new tax regime the lower taxes will lead to higher disposable income at the lower end of the income tax brackets thereby enhancing consumption.

The outlay of Pradhan Mantri Awas Yojana has been enhanced by 66% to over Rs 79000 crore. This will lead to job creation in rural areas and enhance the consumption and also give a boost to the real estate sector. Urban Infrastructure Development Fund will facilitate the creation of urban infrastructure in Tier 2 and Tier 3 cities which will reduce the “metropolitan pressure” as a result of rapid urbanization. The growth of the Indian economy will depend on the performance of Tier 2, Tier 3 cities and the rural areas.

A new One-time new saving scheme Mahila Samman Saving Certificate for women, to be made available for two years up to 2025 with an interest rate of 7.5% and partial withdrawal option. This scheme will not will provide the right opportunity but will also be of additional help to women and girls of India. The budget enhanced the deposit limit for senior citizen savings scheme (SCSS) to Rs 30 lakh from Rs 15 lakh giving better options for retired and senior citizens to save. The government has already enhanced the interest rate of SCSS to 8% for the quarter ending 31.03.2023.The maximum deposit for monthly income account scheme which will be enhanced from Rs 4.5 lakh to Rs 9 lakh for single account holders and from Rs 9 lakh to Rs 15 lakh for joint account holders will help pensioners and old aged persons as they get more disposable income in hand. 

The Capex Outlay increased by 33.4 percent to Rs 10 lakh crore, which would be 3.3% of GDP. The highest ever capex of Rs 2.4 lakh crore for railways was also announced. This capex boost will create positive externalities and will boost export and make India globally competitive.In order to incentivise infrastructure investment 50 year interest-free loans to state governments are to be continued. This will help the states in undertaking various reforms and improve their finances. Various revamped credit guarantee for MSMEs will take effect from Apr 1, 2023 with an infusion of Rs 9,000 crore in corpus along with an additional collateral-free guaranteed credit of Rs 2 lakh crore which will help in reducing the cost of credit. States will also be encouraged to set up Unity Malls for the promotion of handicrafts, GI products to support the MSMEs in accessing the market and reaching a greater population.

The start up sector also got a boost through extension of the date of incorporation by one year for income tax benefit along with the benefit of carrying forward losses from the existing limit of 7 years to ten years from the date of incorporation of the firm. The government in order to cater to the requirements of the youth “‘Amrit Peedhi”, has introduced various skill development programmes covering new courses like coding, AI , Robotics , 3D printing etc. Skill development initiatives have also been taken in the areas of nursing and tourism.

In order to build Atmanirbhar Bharat the government has lowered the customs duties on several components used for manufacturing to be in sync with the global value chain. The government in order to focus on sustainable and inclusive growth along with promotion of circular economy have introduced various programmes like PM PRANAM, MISHTI, Amrit Dharohar scheme, Gobardhan scheme. The government to focus on the ease of doing business has decided upon PAN to be a common business identifier.