CIVILSDAILY IAS

PEAK PERFORMANCE. UNLOCKED.

BUDGET
2023-2024

BOOKLET:
HIGHLIGHTS OF THE
UNION BUDGET
2023-2024

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Theoretical Aspects • T
 he deficit budget is used to finance planned development in
developing countries, and it is used as a stability tool to limit
business and economic swings in rich countries.
What is a Budget?
• A
 budget can be defined as an estimation of revenue and
expenses over a specified future period of time and is usually Surplus Budget
compiled and re-evaluated on a periodic basis. • W hen the year’s predicted revenues exceed planned expenditures,
• The government budget, also known as the Annual Financial the budget is called a surplus budget.
Statement of the nation, is the annual fiscal statement that • T otal Budgeted Receipts > Total Budgeted Expenditure
depicts the revenues and expenditures of the country for a • For instance, if the budget expenditure is Rs 2.4 lakh crores
financial year. and if budget receipts are Rs 2.8 lakh crores. Then it is called
a surplus budget.
• The government’s financial stability is demonstrated by
What are the Constitutional Provisions regarding the surplus budget. When there is too much inflation, the
Budget? government can pursue a surplus budget strategy, which
• A ccording to Article 112 of the Indian Constitution, the lowers aggregate demand.
Union Budget of a year is referred to as the Annual Financial
Statement (AFS).
• It is a statement of the estimated receipts and expenditures Zero-Based Budget
of the Government in a Financial Year (which begins on • “ Zero-based budgeting” is an approach to planning and
1st April of the current year and ends on 31st March of the preparing the budget from the beginning.
following year). • As the name suggests, it refers to planning and preparing the
budget from scratch or ‘zero bases’.
• Zero-based budgeting (ZBB) is basically a systematic cost
Overall, the Budget contains management process that prioritizes the efficient allocation of
• E stimates of revenue and capital receipts, income to fixed expenditure, variable expenses, and savings in
• W ays and means to raise the revenue, order to nullify the difference between income and expenditure.
• E stimates of expenditure, • A method of budgeting in which all expenses must be justified
• Details of the actual receipts and expenditure of the closing for each new period.
financial year and the reasons for any deficit/surplus in that
year, and
• The economic and financial policy of the coming year, i.e., Outcome Based Budget
taxation proposals, prospects of revenue, spending programme • O utcome-Based Budget is a process of budgeting done at micro
and introduction of new schemes/projects. levels that sets measurable physical targets to be allocated on
every planned project under various ministries.
• The outcome budget becomes a means to establish a linkage
Types of Budget between the fund spent by a government and the outcome
that follows.
• It works as the progress card on what various Ministries and
Balanced Budget departments have done within a particular year.
• A balanced budget is one in which the government’s predicted
• It measures quantitative and qualitative aspects of the budget.
revenue for the year is equal to its anticipated expenditure.
• I t makes the budget more accountable and transparent.
• T
 otal budget expenditure = Total budget receipts.
• For instance, if the budget expenditure is Rs 2 lakh crores
and if budget receipts are Rs 2 lakh crores. Then it is called a Gender Budget
balanced budget. • G
 ender Budget is not an accounting practice but rather a
continuous process of keeping a gender perspective in policy
formulation, implementation, and review.
Deficit Budget • It entails dividing the government budgets to establish
• A deficit budget is one in which expected government
its gender-differential impacts and ensuring that gender
spending exceeds expected revenue. The expected revenue
commitments are translated into budgetary commitments.
of the government is less than the proposed expenditure of
• It is an effective method for achieving gender equity to ensure
the government.
that development benefits reach women as much as men.
• The budget is said to be a deficit if expenditures surpass
revenue over time.
• T otal Budgeted Receipts < Total Budgeted Expenditure
• For instance, if the budget expenditure is Rs 2.4 lakh crores
and if budget receipts are Rs 2 lakh crores. Then it is called a
deficit budget.
• The shortfall is usually compensated by borrowing from the
public or pulling funds from the accrued reserve surplus.
• In certain ways, a deficit budget is a government liability since
it adds to the weight of debt or diminishes the government’s
reserve stock.
• When large sums of money are required for economic growth
and development in developing countries like India, and it is
not possible to generate these funds through taxation, deficit
budgeting is the only choice.

2 Budget 2023 - 2024

 • G lobal high-interest rate trends: A sustained high-interest rate
regime in the US will put pressure on Indian policymakers to
keep interest rates high at a time when they may want to
bother more about growth, given that the domestic inflation
trend is starting to ease a bit.
• Continued geopolitical uncertainty: Not only has the Ukraine
conflict not been resolved but there are early signs of growing
tensions between the US and China. The odds of conflict with
China over Taiwan “are very high”.
• Forthcoming elections: India is getting into a heavy political
season with several state elections in 2023 and the national
general election in early 2024.

How do we evaluate or judge a Union Budget?

It is true that Union Budgets tend to differ from one year to
another. However, here are five metrics on which any Union
Budget must come through.

(1) The Budget speech: Often more is less

• T he Budget Speech also is essentially an annual financial
statement.
• What the public needs to know is whether they will be taxed
more or less, whether the government will be able to make
its ends meet (and if not, then how much will it borrow from
the market) and, lastly, where will the government spend all
its money.
• FM delivered the longest Budget speech in Indian history. But
more often than not, a long speech suggests either too much
(Source: Economicsdiscussion.net) tinkering or a lack of clear focus.

FD= Total Expenditure- (Revenue Receipts+ Non-Debt Creating

(2) The Budget Assumptions: Credibility is the key
Capital Receipts)
• T he whole Budget is based on certain assumptions of economic
growth and revenue buoyancy.
Highlights of the Union Budget 2023-24 • But sometimes the government’s assumptions leave everyone
puzzled.
• For instance, in the full Budget for 2019-20 — the first Budget
Why is the Budget 2023-24 important? of the second government under PM Modi — FM Sitharaman
• G
 lobal recession: 2023 is expected to be a particularly challenging assumed a nominal GDP growth of 12%.
year from the perspective of economic growth because base • Assuming inflation to be at 4%, which is the RBI’s mandate,
effects will wear off and India’s true economic momentum is this suggested that the FM expected the real GDP to grow
likely to be revealed. by 8% in 2019-20.
• A
 ll eyes on India: The outlook of muted global growth, if not • However, there comes difference between Budget Estimate
an outright recession, further makes the year tough. (BE) and Revised Estimate (RE).
• The lofty assumption that the economy would grow at 8%
is often criticized.

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(3) Revenue deficit matters just as much as the • I n the run-up to the 2024 general elections, the PM Modi-led
fiscal deficit government has heightened the emphasis on ‘Amrit Kaal’,
• F iscal Deficit (read the amount of money the government saying that the coming period in India is going to be its most
borrows from the markets) is often the most talked about prosperous, with economic growth and social justice.
metric in any Union Budget. . • ‘Amrit Kaal’ also describes the hope for a better future, where
• India has a legislation — the Fiscal Responsibility and Budget India would be self-reliant and fulfil all of its humanitarian
Management (FRBM) Act — that stipulates the maximum level obligations.
of fiscal deficit allowed to any government — Union or state.
• In India’s case, it is not just the fiscal deficit that one should
look at. It is equally important to notice the revenue deficit.
• The original mandate of the FRBM Act was two-fold: a revenue
deficit of 0% (of GDP) and a fiscal deficit of 3% (of GDP).
• The salient point to understand here is that when the
government spends Rs 100 on capital expenditure the returns
to the economy are close to Rs 250 while when it spends Rs
100 on revenue matters, the returns to the economy are just
about Rs 100.
• In other words, by forcing the government to borrow only
for capital expenditure, the original FRBM Act helped boost
economic growth.
2. Panchamrit Goals
India has presented the following five nectar elements (Panchamrit)
(4) Revenue targets: Are they realistic and fair? of India’s climate action:
• A particular problem is that often the disinvestment target is • R each 500 GW Non-fossil energy capacityby 2030.
calculated at the very end of government’s revenue calculations • 50 per cent of its energy requirementsfrom renewable energy
— that is, after revenue assumptions from all other sources by 2030.
are already made. • Reduction of total projected carbon emissionsby one billion
• As such, there is a great temptation to stretch the disinvestment tonnes from now to 2030.
target depending on the gap that needs to be filled. • Reduction of the carbon intensityof the economy by 45 per
• This practice often leads to unrealistic disinvestment targets. cent by 2030, over 2005 levels.
• Secondly, when it comes to taxation, there is the question of • A chieving the target of net zero emissions by 2070.
fairness. Ideally, India should have a tax regime where the
taxation rises as one goes from poor to rich.
• GST is out of the Union Budget’s purview. But ideally the 3. Jan Bhagidari
government should work towards a tax system with low The concept of Jan Bhagidari (people’s participation) implies the
indirect taxes and progressively high direct taxes. role of the collective in implementing policies. Harnessing the
power of the people has been the central aspect of implementing
the PM Modi-led government’s policies in India.
(5) Expenditure: What are India’s top priorities?
• In allocating expenditure, the trick lies in figuring out the
country’s priorities. 4. LIFE
• Pakistan provides a stark example of a nation that prioritised its “LIFE – Lifestyle for the Environment”, PM Modi had proposed
military power over the health and education of its population. the one-word mass movement “LIFE” at the 26th session of the
• In India, out of every Rs 100 that the government spends, Conference of the Parties to the UN Framework Convention on
only Rs 2 goes towards public health. On education, too, the Climate Change at Glasgow last November.
government spends Rs 2. • A theme for COP27: “LIFE”, a global initiative launched by Prime
• It spends Rs 10 on defence. Rs 12 is spent on subsidies (food, Minister Narendra Modi, will be the theme of the India pavilion
fuel and fertilisers). And Rs 22 is spent on paying back the at the upcoming COP27 at Sharm-El-Sheikh in Egypt.
interest on past loans. • LIFE Movement: Subsequently, PM Modi launched ‘Lifestyle for
• The expenditure on health is alarming considering that India the Environment – LIFE Movement’ on 5 June on the occasion
not only has the largest pool of poor people in the world but of world environment day.
also the largest pool of malnourished children in the world. • W hat is the vision of LIFE: The vision of ‘LIFE’ is to live a lifestyle
that is in tune with our planet and does not harm it The people
who live such a lifestyle can be called “Pro-Planet people.”
Key terminologies involved in Budget
5. Saptarishi
1. Amrit Kaal Saptarishi or the ‘seven sages’ is a group of seven sages who direct
• I t was Prime Minister Narendra Modi who first used the term humanity and help build the foundation of Dharma. According
‘Amrit Kaal’ in 2021, during the 75th Independence Day to several beliefs, they are mind-born of Lord Brahma and live
celebrations. It comes from Vedic astrology and indicates a for a Manvantara. At the end of one Manvantara, they merge
sort of golden era. into Lord Brahma and a new Saptarishi is created for the next
Manvantara.

4 Budget 2023 - 2024

6. Sri Ann (Millets) 7. Net-Zero
Millets are coarse grains that are traditionally grown and consumed It means cutting greenhouse gas emissions to as close to zero
in the Indian subcontinent for over 5000 years. They have high as possible, with any remaining emissions re-absorbed from the
nutritional value and are rich in proteins, vitamins, minerals, atmosphere, by oceans and forests for instance. Put simply, net
and fibres. Unlike other cereals, millets require little water and zero refers to the balance between the amount of greenhouse
ground fertility. The sheer affordability of millets also tags them gas produced and the amount removed from the atmosphere.
as “poor man’s food grain”. The world is now noticing millets for
their enormous potential. 8. Silver economy
It is the system of production, distribution, and consumption of
goods and services aimed at using the purchasing potential of
older and aging people and satisfying their consumption, living,
and health needs. Initial estimations suggest that at present the
Silver Economy is worth approximately 73,082 crore rupees.

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9. Circular economy

of the estimates made during the course of the year are called
10. Particularly Vulnerable Tribal Groups (PVTGs) Revised Estimates. They need to be approved by the Parliament
• P VTGs are more vulnerable among the tribal groups. Due to
or through a Re-appropriation Order.
this factor, more developed and assertive tribal groups take
a major chunk of the tribal development funds because of
which PVTGs need more funds directed for their development. 14.Subvention
• PVTGs have some basic characteristics - they are mostly It refers to a grant or aid support by the government. The
homogenous, with a small population, relatively physically government may, for instance, ask financial institutions to grant
isolated, absence of written language, relatively simple loans to certain sectors below the market rates, like in the case
technology and a slower rate of change etc. of loans to farmers, etc.
• Among the 75 listed PVTG’s the highest number are found
in Odisha.
The Union Finance Minister has presented the Union
Budget 2023-24 in Parliament today. The highlights
11. Presumptive Tax Regime of the Budget are as follows:
• T he presumptive tax regime is a simplified way for filing tax
returns for smaller businesses and professionals.
• The concept of presumptive taxation is ‘what you declare in Major achievements discussed
the returns is treated as your income’. It takes away the burden • P er capita income: PCI has more than doubled to ₹1.97 lakh in
on the tax-payer to declare business-related expenditures, etc. around nine years.
• 5 th largest economy tag: Indian economy has increased in size
from being 10th to 5th largest in the world in the past nine
12. Budget Estimates years.
When the Union Budget is announced, the Finance Minister • Formalized employment: EPFO membership has more than
allocates funds for different tasks and ministries. These allocations doubled to 27 crore.
are Budget Estimates. They are called Estimates because they • D irect Benefit Transfer: Cash transfer of ₹2.2 lakh crore to over
are not the final commitment made by the government. They 11.4 crore farmers under PM Kisan Samman Nidhi.
denote the upper limit of the expenditure that the government • Digital transactions: 7,400 crore digital payments of ₹126 lakh
is willing to make for the said task/ministry/sector, etc. crore has taken place through UPI in 2022.
• Household toilets: 11.7 crore toilets constructed under Swachh
13. Revised Estimates Bharat Mission.
When the government announces Budget Estimates, it indicates • Insurance cover: For 44.6 crore persons under PM Suraksha
the maximum amount it is willing to spend on a particular aspect Bima and PM Jeevan Jyoti Yojana.
of the economy. However, as the year begins, some ministries/ • O thers: 9.6 crore LPG connections provided under Ujjwala;
tasks might need more funds than estimated. These reviews 220 crore covid vaccination of 102 crore persons; 47.8 crore
PM Jan Dhan bank accounts.

6 Budget 2023 - 2024

Part A: Major Announcements • Millet boost: To make India a global hub for ‘Shree Anna’, the
Indian Institute of Millet Research, Hyderabad will be supported
as the Centre of Excellence for sharing best practices, research
(1) Seven priorities of the budget ‘Saptarishi’ and technologies at the international level.
• T
 hese include inclusive development, reaching the last mile, • P RANAM Scheme: “PM Programme for Restoration, Awareness,
infrastructure and investment, unleashing the potential, green Nourishment and Amelioration of Mother Earth” (PM-PRANAM)
growth, youth power and financial sector. to be launched to incentivize States and Union Territories to
promote alternative fertilizers and balanced use of chemical
fertilizers.
(2) Welfare
• A nimal husbandry: 20 lakh crore agricultural credit targeted
• H ousing for all: Outlay for PM Awas Yojana is being enhanced
at animal husbandry, dairy and fisheries A new sub-scheme
by 66% to over Rs. 79,000 crore.
of PM Matsya Sampada Yojana with targeted investment
• S ilver Economy: The maximum deposit limit for Senior Citizen
of 6,000 crore to be launched to further enable activities of
Savings Scheme to be enhanced from Rs 15 lakh to Rs 30 lakh.
fishermen, fish vendors, and micro & small enterprises, improve
• Mahila Samman Savings Certificate: To commemorate Azadi
value chain efficiencies, and expand the market.
Ka Amrit Mahotsav, a one-time new small savings scheme,
• D igital public infrastructure for agriculture: It will be built as an
Mahila Samman Savings Certificate to be launched. It will
open source, open standard and inter operable public good
offer deposit facility upto Rs 2 lakh in the name of women or
to enable inclusive farmer centric solutions and support for
girls for tenure of 2 years (up to March 2025) at fixed interest
growth of agri-tech industry and start-ups.
rate of 7.5 per cent with partial withdrawal option.
• r elevant information services for crop planning and health
• improved access to farm inputs, credit, and insurance
(3) Industrial sector boost • h elp for crop estimation, market intelligence
• Entity DigiLocker: Entity DigiLocker will be setup for use by • s upport for growth of agri-tech industry and startups
MSMEs, large business and charitable trusts to store and share • APMC Storage: Massive decentralised storage capacity to be set
documents online securely. up to help farmers store their produce and realize remunerative
• PAN as business identifier: FM has said the Permanent Account prices through sale at appropriate times.
Number (PAN) will be made as a single business identifier for all • Atmanirbhar Clean Plant Program: This has been given an outlay
digital systems of all specified departments of the government. of 2200 crore to be launched to boost availability of disease-
• Credit facilitation for MSMEs: Revamped credit guarantee scheme free, quality planting material for high value horticultural crops.
for MSMEs to take effect from 1st April 2023 through infusion • Bio-Input Resource Centres: Centre to facilitate one crore farmers
of Rs 9,000 crore in the corpus. This scheme would enable to adopt natural farming over the next three years. For this,
additional collateral-free guaranteed credit of Rs 2 lakh crore 10,000 Bio-Input Resource Centres to be set-up, creating
and also reduce the cost of the credit by about 1 per cent. a national-level distributed micro-fertilizer and pesticide
• C entral Processing Centre: This is to be setup for faster response manufacturing network.
to companies through centralized handling of various forms
filed with field offices under the Companies Act.
• D iamond Industry: R & D grant for Lab Grown Diamonds (LGD)
(6) Health sector boost
• S ickle Cell Anaemia Elimination Mission: FM announced a mission
sector to encourage indigenous production of LGD seeds and
to eliminate sickle cell anemia by 2047, which will include
machines and to reduce import dependency.
universal screening of seven crore persons between the ages
• Unity Mall: States to be encouraged to set up a Unity Mall for
of 0 and 40 years in affected tribal areas.
promotion and sale of their own and also all others states’
• M
 edical research: Joint public and Private Medical research to be
ODOPs (One District, One Product), GI products and handicrafts.
encouraged via select ICMR labs for encouraging collaborative
research and innovation. New Programme to promote research
(4) Infrastructure push in Pharmaceuticals to be launched.
• N ew Infrastructure Finance Secretariat: It will be established to • M ore nursing colleges: 157 new nursing colleges to be established
enhance opportunities for private investment in infrastructure. in co-location with the existing 157 medical colleges established
• M assive outlays: Investment of Rs. 75,000 crore, including Rs. since 2014.
15,000 crore from private sources, for one hundred critical
transport infrastructure projects, for last and first mile connectivity
for ports, coal, steel, fertilizer, and food grains sectors.
(7) Rural Development
• Aspirational Blocks Programme covering 500 blocks: Launched
• H ighest ever outlay for Railways: Capital outlay of Rs. 2.40 lakh
for saturation of essential government services across multiple
crore has been provided for the Railways, which is the highest
domains such as health, nutrition, education, agriculture,
ever outlay and about nine times the outlay made in 2013-14.
water resources, financial inclusion, skill development, and
• Urban Infrastructure Development Fund (UIDF): It will be established
basic infrastructure.
through use of priority Sector Lending shortfall, which will be
• PVTG Development mission: FM announced the launch of a
managed by the national Housing Bank, and will be used by
national mission for vulnerable tribes with an outlay of Rs
public agencies to create urban infrastructure in Tier 2 and
15,000 crore. The mission aims to provide support to India’s
Tier 3 cities.
vulnerable tribes in areas of health, clean water and sanitation,
basic infrastructure, and sustainable livelihood opportunities,
(5) Agricultural boost among others.
• A
 griculture Accelerator Fund: It will be set-up to encourage agri-
startups by young entrepreneurs in rural areas.
(8) Higher Education
• D
 istrict Institutes of Education and Training to be developed as
vibrant institutes of excellence for Teachers’ Training.

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• N
 ational Digital Library for Children and Adolescents to be set-up • AI push: Three centres of excellence for Artificial Intelligence
for facilitating availability of quality books across geographies, to be set-up in top educational institutions to realise the vision
languages, genres and levels, and device agnostic accessibility. of “Make AI in India and Make AI work for India”.
• ‘Bharat Shared Repository of Inscriptions’ to be set up in a digital • 5G rollout: 100 labs to be setup for 5G services based application
epigraphy museum, with digitization of one lakh ancient development to realize a new range of opportunities, business
inscriptions in the first stage. models, and employment potential.
• Infra push for E-Courts: Phase-3 of the E-Courts project to
be launched with an outlay of Rs. 7,000 crore for efficient
(9) Finance Sector administration of justice.
• ‘ Effective Capital Expenditure’ of Centre: Rs. 13.7 lakh crore
• C ontinuation of 50-year interest free loan: Such loans for
state governments for one more year to spur investment in (14) Energy
infrastructure and to incentivize them for complementary • Mandatory Compress Biogas blend of 5%: 5 per cent compressed
policy actions. biogas mandate to be introduced for all organizations marketing
• N ational Financial Information Registry: To be set up to serve as natural and bio gas.
the central repository of financial and ancillary information • Green hydrogen: Annual production of 5 MMT under Green
for facilitating efficient flow of credit, promoting financial Hydrogen Mission to be targeted by 2030 to facilitate
inclusion, and fostering financial stability. A new legislative transition of the economy to low carbon intensity and to
framework to be designed in consultation with RBI to govern reduce dependence on fossil fuel imports.
this credit public infrastructure. • Battery storage: The government will support setting up of
battery storage capacity of 4,000 MWH in India with viability
gap funding.
(10) Urban development • R E pus in Ladakh: 20,700 crore outlay provided for renewable
• Sustainable cities of tomorrow: Encouragement to states and energy grid integration and evacuation from Ladakh.
cities to undertake urban planning reforms and actions to
transform our cities into ‘sustainable cities of tomorrow’.
• Mechanized sanitation work: Transition from manhole to machine- (15) Climate change mitigation
hole mode by enabling all cities and towns to undertake 100 • G OBARdhan Boost: 500 new ‘waste to wealth’ plants under
percent mechanical desludging of septic tanks and sewers. GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan)
scheme to be established for promoting circular economy at
total investment of Rs 10,000 crore.
(11) Skill development • ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’,
• iGOT Karmayogi: An integrated online training platform, MISHTI: To be taken up for mangrove plantation along the
launched to provide continuous learning opportunities for coastline and on salt pan lands, through convergence between
lakhs of government employees to upgrade their skills and MGNREGS, CAMPA Fund and other sources.
facilitate people-centric approach. • Green Credit Programme to be notified under the Environment
• U nified Skill India Digital platform: To be launched for enabling (Protection) Act to incentivize and mobilize additional resources
demand-based formal skilling, linking with employers including for environmentally sustainable and responsive actions.
MSMEs, and facilitating access to entrepreneurship schemes. • Amrit Dharohar scheme to be implemented over the next three
The Skill India digital platform will also prepare the younger years to encourage optimal use of wetlands, enhance bio-
generation for international jobs, and for this, 30 Skill Indian diversity, carbon stock, eco-tourism opportunities and income
International Centres will be set up across the nation. generation for local communities.
• N ational Apprenticeship Promotion Scheme: Direct Benefit Transfer • Net zero commitments: ₹35000 crore outlay for energy security,
under a pan-India National Apprenticeship Promotion Scheme energy transition and net zero objectives.
to be rolled out to provide stipend support to 47 lakh youth • Green credit programme: FM also says a green credit programme
in three years. will be notified under the Environment Protection Act.
• Tribal education: Centre to recruit 38,800 teachers and support
staff for the 740 Eklavya Model Residential Schools, serving
3.5 lakh tribal students over the next three years. (16) Tourism Boost
• P radhan Mantri Kaushal Vikas Yojana 4.0: It will be launched • M
 odel destinations: At least 50 destinations will be selected
to skill lakhs of youth within the next three years covering through challenge mode — physical, virtual connectivity,
new age courses for Industry 4.0 like coding, AI, robotics, tourism security, guides, would be made available on an app
mechatronics, IOT, 3D printing, drones, and soft skills. 30 Skill to enhance tourist experience.
India International Centres to be set up across different States • S ector specific skilling and entrepreneurship development: To
to skill youth for international opportunities. be dovetailed to achieve the objectives of the ‘Dekho Apna
Desh’ initiative.
• V
 ibrant Villages Programme: Border tourism infrastructure and
(12) Ease of Doing Business amenities to be facilitated in border villages.
• Jan Vishwas Bill: To amend 42 Central Acts have been introduced
to further trust-based governance.
• D ecriminalization of certain compliances: More than 39,000 (17) Others
compliances reduced and more than 3,400 legal provisions ISFC reforms: To enhance business activities in GIFT IFSC, the
decriminalized to enhance Ease of Doing Business. following measures to be taken-
• Delegating powers under the SEZ Act to IFSCA to avoid dual
regulation.
(13) IT push • Setting up a single window IT system for registration and
• N
 ational Data Governance Policy: To be brought out to unleash approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and IRDAI.
innovation and research by start-ups and academia.

8 Budget 2023 - 2024

• P ermitting acquisition financing by IFSC Banking Units of
foreign bank.
• Establishing a subsidiary of EXIM Bank for trade re-financing.
• Amending IFSCA Act for statutory provisions for arbitration,
ancillary services, and avoiding dual regulation under SEZ Act
• Recognizing offshore derivative instruments as valid contracts.

Part B: Estimates

Revised Estimates 2022-23 • Agniveer Fund to be provided EEE status: The payment received
• T he total receipts other than borrowings is Rs 24.3 lakh crore, from the Agniveer Corpus Fund by the Agniveers enrolled in
of which the net tax receipts are Rs 20.9 lakh crore. Agnipath Scheme, 2022 proposed to be exempt from taxes.
• The total expenditure is Rs 41.9 lakh crore, of which the capital Deduction in the computation of total income is proposed to
expenditure is about Rs 7.3 lakh crore. be allowed to the Agniveer on the contribution made by him
• The fiscal deficit is 6.4 per cent of GDP, adhering to the Budget or the Central Government to his Seva Nidhi account.
Estimate.
Other Tax Reforms:
Budget Estimates 2023-24
• T he total receipts other than borrowings is estimated at Rs
27.2 lakh crore and the total expenditure is estimated at Rs
1. Standard Deduction:
• T
 he new tax regime has proposed to increase the standard
45 lakh crore.
deduction for salaried individuals to 50,000 rupees and the
• T he net tax receipts are estimated at Rs 23.3 lakh crore.
deduction for family pension up to 15,000 rupees.
• T he 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. 2. MSMEs:
• The gross market borrowings are estimated at Rs 15.4 lakh crore. • T he limits for presumptive taxation have been increased for
micro-enterprises and certain professionals as long as the amount
received in cash does not exceed 5% of the total gross receipts/
Part C: Direct Taxes turnover.
• I ncreased Rebate limit of Personal Income Tax: To be increased
• The deduction for payments made to MSMEs will only be allowed
to Rs. 7 lakh from the current Rs. 5 lakh in the new tax regime.
when payment is actually made to support their timely receipt
Thus, persons in the new tax regime, with income up to Rs. 7
of payments.
lakh to not pay any tax.
• Tax slabs: Tax structure in new personal income tax regime,
introduced in 2020 with six income slabs, to change by reducing 3. Cooperatives:
the number of slabs to five and increasing the tax exemption • N ew manufacturing co-operatives that start manufacturing
limit to Rs. 3 lakh. before 31.3.2024 will have a lower tax rate of 15%.
• The limit for cash deposits and loans by Primary Agricultural
New Tax Regime (current) Tax Rates under the 2020 regime Co-operative Societies and Primary Co-operative Agriculture and
Rural Development Banks has been increased to 2 lakh rupees
Rs 0 to Rs 3 lakh – Exempt Income till Rs 2.5 lakh – Exempt per member.
• Tax Deduction at Source (TDS) on cash withdrawals for co-operative
Rs 3 to 6 lakh - 5% Rs 2.5 to Rs 5 lakh - 5% societies has been increased to 3 crore rupees.
Rs 6 to 9 lakh - 10% Rs 5 lakh to Rs 7.5 lakh - 15%
Startups:
Rs 9 to 12 lakh - 15% Rs 7.5 lakh to Rs 10 lakh - 20% • T
 he date for start-ups to receive income tax benefits has been
extended to 31.3.2024. The carry forward of losses for start-ups
Rs 12 to 15 lakh - 20% Above Rs 10 lakh - 30% has been increased from 7 years of incorporation to 10 years.

Above Rs 15 lakhs - 30% Online Gaming:

• Taxability on online gaming will be clarified with TDS and
taxability on net winnings at the time of withdrawal or at the
end of the financial year.

Gold:
• C
 onversion of gold into electronic gold receipt and vice versa
will not be treated as capital gains.

Exception from Income Tax:

• I ncome of authorities, boards and commissions set up by Union
or State laws for housing, town and village development, and
regulation, will be exempt from income tax.

www.civilsdaily.com 9
 • Agniveer Fund has been given Exempt-Exempt-Exempt (EEE)
status. Payments received by Agniveers enrolled in Agneepath
Scheme, 2022 will be exempt from taxes.
• Deduction in total income will be allowed for contributions to
the Agniveer Seva Nidhi account by the Agniveer or the Central
Government.

Common IT Return Form:

• T
 o improve taxpayer services, the government rolled out a
proposal for next-generation Common IT Return Form for taxpayer
convenience, along with plans to strengthen the grievance
redressal mechanism.

Part D: INDirect Taxes

• E V push: Customs Duty on specified capital goods/machinery for
manufacture of lithium-ion cell for use in battery of electrically
operated vehicle (EVs) extended to 31.03.2024
• Customs duty exemption is being extended to the import of
capital goods and machinery required for the manufacture of
lithium-ion cells for batteries used in electric vehicles.

Electronics manufacturing push

• C ustoms duty on camera lens and its inputs/parts for use in
manufacture of camera module of cellular mobile phone
reduced to zero and concessional duty on lithium-ion cells
for batteries extended for another year.
• Basic customs duty reduced on parts of open cells of TV panels Legislative Changes in Customs Laws
to 2.5 per cent. • Customs Act, 1962: To be amended to specify a time limit of
• Basic customs duty on electric kitchen chimney increased to nine months from date of filing application for passing final
15 per cent from 7.5 per cent. order by Settlement Commission.
• Basic customs duty on heat coil for manufacture of electric • C ustoms Tariff Act: To be amended to clarify the intent and
kitchen chimneys reduced to 15 per cent from 20 per cent. scope of provisions relating to Anti-Dumping Duty (ADD),
Countervailing Duty (CVD), and Safeguard Measures.

CGST Act to be amended

• T o 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;
• D ecriminalise 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).

Hits and misses of the Union Budget

Hits

(1) Benefits for the common man

• Income Tax benefits: The most awaited part of the budget Direct
Taxes- did not disappoint. The middle class happily welcomed
the proposal of a hiking rebate under section 87A from Rs. 5
lacks to Rs. 7 lacks in the new tax regime.
• Reduced surcharges: Even the ultra-rich benefit from the proposal
​​ to reduce the highest surcharge rate from 37% to 25%.

10 Budget 2023 - 2024

(2) Saving schemes • P lus curbs on exemptions involving high-value insurance
• S enior citizens: The deposit limit for senior citizens’ savings policies announced in this budget will also impact large ticket
schemes doubled from Rs. 15 lakhs currently to Rs. 30 lakhs. policy sales.
• Women: One type of saving scheme for women has been • The exemption benefit has been a major factor in the insurance
introduced for deposits upto Rs.2 lakh at a 7.5% interest rate. industry’s growth in India. Huge chunks of policies are still sold
during the tax planning season of January to March.

(3) Huge infrastructure push

• Hike in outlay: The expected capital expenditure will be Rs. 10 (4) Boost for PLI scheme missing
lakh crore, up 33% year over year. Effective government capital • L ast year budget saw huge incentives for Production Linked
expenditures will total Rs. 13.7 lakh crore, or 4.5% of GDP, which Incentives Scheme.
is favorable for the capital goods and infrastructure sectors. • No new sectors were introduced as part of production-linked
incentives to boost manufacturing which was widely anticipated.

(4) Fiscal deficit target maintained

• T he government has maintained prudence and set the deficit (5) No rationalising of capital gains tax
target for the current fiscal year to be 5.9%, a reduction of 50 • T he capital gains tax regime was sought to be streamlined for
basis points from this year’s target of 6.4%. various periods of holding for long term and short term and
• This is highly significant considering the high level of expenditure different tax rates for different types of securities.
outlays. • For the sake of reviving market participation and volumes,
the stockbrokers association had requested to bring back
rebates on Securities Transaction Tax (STT) and Commodity
(5) Focus on the rural sector Transaction Tax (CTT) that were earlier allowed but are not
• A griculture: There was a major focus on rural development in considered in the budget.
this budget as the FM announced that the agricultural credit
target will be increased to Rs. 20 lakh crore with a focus on
animal husbandry, dairy, and fisheries. (6) No focus on job growth
• Rural housing: Allocation for PM AwasYojna increased by a • In terms of providing job security, an urban version of the
whopping 66% to over ₹ 79,000 crores which will enable the MGNREGA programme, that has been the need of the hour for
required infrastructure push as well as job creation. quite some time and advocated for by many policy economists,
failed to receive any attention or mention.
• Even MGNREGA’s own allocation for this year, announced at
(6) MSME support Rs 60,000 crore, is the lowest made in comparison to what
• W hile it was expected that the credit guarantee schemes was announced in all of previous years during this term of
brought in during the pandemic will be phased out, a revamp the Modi government.
of the schemes have been proposed in this budget.
• With an investment of Rs.9000 crore, a revised credit guarantee
scheme for MSMEs would go into effect on April 1, 2023. (7) Health outlay remains weak
• This will allow for an additional Rs. 2 lakh crore in collateral- • P oor health outlay: The share of funds tome health sector in the
free credit guarantees, which will allow for a 1% reduction overall Budget has marginally increased in FY24. It improved
in the cost of borrowing. from 1.85% in FY23 to 1.98% in FY24 of revised estimates.
• For MSMEs that are still recuperating from the effects of the • Out-of-pocket: The health outlay remained poor even as India
epidemic, this is wonderful news. has one of the highest out-of-pocket health expenditures
(OOPE) in the world. In India, out-of-pocket health expenditure
as a share of current health expenditure was 53.2% in 2019
Misses India’s OOPE was the highest among all live BRIGS countries.

(1) No change in deductions (8) Agri allocation stagnates

• A
 few expectations which were missed in the Budget were an • A llocation for agriculture remained stagnant in FY24, while
increase in Standard Deductions by salaried individuals and sowing declined due to climate issues.
an increase in deduction levels under 80C. • Grain offtake surged during COVID-19 resulting in low stocks
• As the government is pushing to make the New Tax Regime of rice and wheat in public godowns.
as the default regime, the old tax regime did not see any • In FY24 (BE), allocation to agriculture and allied activities
significant upgrades. remained stagnant at 3.2% of the total budget expenditure.
• In FY23 it formed 3.25% of total expenses. The share peaked
in FY20 at 4.2% and since then it has been declining
(2) Donation will not reduce tax liability
• N o increase in PM KISAAN allocation
• A
 dditional Re 1 over 7 lakhs may lead to ₹25,000 income tax
• M IS-PSS 100 percent reduction from 1500 crore to 1
outgo in the new tax regime, which a taxpayer can avoid using
Lakh rupees
the donation route available in the old tax regime.”

(3) Big blow for insurance companies Conclusion

• T he current government has chosen an inclusive approach while
• T
 his is a big negative for insurance companies as the incentive
presenting its last Union Budget before the general elections.
of getting deductions on insurance premiums will no longer
• The focus of the budget was on stabilizing macroeconomic
look attractive.
factors and providing a strong impetus for growth and job
• Insurance policies are often bought for tax planning which
creation.
will reduce in the future.

www.civilsdaily.com 11
• W ith a strong emphasis on infrastructure, health, agriculture, • T
 he government will provide an amount of Rs.15,000 crore to
and green initiatives, the budget has made bold and forward- implement this mission in the coming three years.
looking promises.
• If executed well, India is unquestionably set up for significant
growth and stability, with benefits for all citizens. Green Credit Programme
• T he Green Credit Programme will be launched under the
Environment (Protection) Act to encourage behavioural change.
Newly launched Initiatives in budget 2023-2024 • It will incentivise environmentally responsible and sustainable
actions by individuals, companies and local bodies and help
mobilise additional resources for such activities.
Finance Minister Nirmala Sitharaman’s budget
speech introduced many schemes and policies. They
are as under: Mahila Samman Bachat Patra
• P
 M VIshwakarma KAushal Samman (PM VIKAS) • M
 ahila Samman Savings Certificate, a one-time small savings
• A
 tmanirbhar Horticulture Clean Plant Programme scheme, will be available for two years, i.e. up to March 2025.
• P
 harma Innovation Programme • It will offer deposit facilities up to Rs.2 lakh in the name of
• A
 spirational Blocks Programme girls or women for two years at a fixed interest rate of 7.5%
• P
 radhan Mantri PVTG Development Mission with a partial withdrawal option.
• G
 reen Credit Programme
• M
 ahila Samman Bachat Patra
Mission to eliminate Sickle-cell Anaemia by 2047
• M
 ission to eliminate Sickle-cell Anaemia by 2047
• A
 mission will be launched to eliminate sickle cell anaemia
• P
 radhan Mantri Kaushal Vikas Yojana 4.0
by 2047.
• MISHTI (Mangrove Initiative for Shoreline Habitats & Tangible
• The mission will entail awareness creation, universal screening
Incomes)
of seven crore people in the 0-40 years age group in affected
• PM PRANAM (Prime Minister Programme for Restoration,
tribal areas and counselling through collaborative efforts of
Awareness, Nourishment and Amelioration of Mother Earth)
central ministries and state governments
• B hartiya Prakritik Kheti Bio-Input Resource Centres
• A mrit Dharohar
Pradhan Mantri Kaushal Vikas Yojana 4.0
• T he Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched
PM VIshwakarma KAushal Samman (PM VIKAS) to skill youth within three years.
• A
 rtisans are provided financial assistance under the PM
• The scheme will cover the new age courses for Industry 4.0,
VIshwakarma KAushal Samman scheme.
like AI, coding, mechatronics, robotics, IoT, drones, 3D printing
• The new scheme will enable artisans to improve their products’
and soft skills.
scale, quality and reach, integrating them with the MSMEs
• 30 Skill India International Centres will be set up to skill youth
value chain.
for international opportunities across different States.

Atmanirbhar Horticulture Clean Plant Programme MISHTI (Mangrove Initiative for Shoreline Habitats
• T
 he Atmanirbhar Clean Plant Programme will be launched
to boost the availability of quality and disease-free planting
& Tangible Incomes)
• M ISHTI is a new programme that will facilitate mangrove
material for high-value horticultural crops at an outlay of
plantation along India’s coastline and on salt pan lands.
Rs.2,200 crore.
• The programme will operate through “convergence between
MGNREGS, Campa Fund and other sources.
Pharma Innovation Programme • This new programme will aim at intensive afforestation of
• I n the Budget 2023, the Financial Minister proposed to launch coastal mangrove forests.
a new programme to promote innovation and research in • India has such forests on both its Eastern and Western coasts
pharmaceuticals, which will be taken up through centres of with the Sundarbans in Bengal being one of the largest
excellence. mangrove forests on the planet.

Aspirational Blocks Programme PM PRANAM (Prime Minister Programme for

• T
 he government has launched the Aspirational Blocks Programme, Restoration, Awareness, Nourishment and Amelioration
covering 500 blocks to provide essential government services of Mother Earth)
across multiple areas such as nutrition, health, agriculture, skill • T his programme will seek to incentivise states and union
development, education, financial inclusion, water resources territories promoting alternative fertilisers and the balanced
and basic infrastructure. use of chemical fertilisers.
• In September last year, the government planned to introduce
a new scheme to reduce the use of chemical fertilisers in the
Pradhan Mantri PVTG Development Mission country.
• T he Pradhan Mantri PVTG Development Mission will be
• The programme aims to ultimately bring down the government’s
launched to improve the socio-economic conditions of the
subsidy burden, which is estimated to reach Rs 2.25 lakh crore
Particularly Vulnerable Tribal Groups (PVTGs).
in 2022-23: 39 per cent higher than last year’s figure of Rs
• This mission will saturate PVTG habitations and families with
1.62 lakh crore.
basic facilities such as clean drinking water and sanitation, safe
housing, health and nutrition, road and telecom connectivity,
improved access to education and sustainable livelihood
opportunities.

12 Budget 2023 - 2024

Bhartiya Prakritik Kheti Bio-Input Resource Centres Amrit Dharohar
• T
 o further facilitate the adoption of “natural farming,” 10,000 • T
 his is a scheme that will be implemented over the next three
Bio-Input Resource Centres will be set-up, creating a national- years to encourage optimal use of wetlands, and enhance
level distributed micro-fertiliser and pesticide manufacturing bio-diversity, carbon stock, eco-tourism opportunities and
network. income generation for local communities.
• This will impact over 1 crore farmers over the next three years, • Amrit Dharohar will emphasise on the importance of wetlands
the finance minister said in her speech. and their preservation, with an outlook that is inclusive of local
communities as caretakers of the ecosystem.

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