UNION BUDGET 2023-24
69th BPSC Prelims
UNION BUDGET 2023-24
The Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman presented the Union Budget
2023-24 in Parliament on 01 Feb 2023.
Introduction: Budget Estimates 2023-24:
▪ Finance Minister Nirmala Sitharaman became the first woman ▪ Total receipts other than borrowings is
FM to present the Budget for the fourth time in a row. estimated at Rs 27.2 lakh crores.
▪ In the 75th year of India’s Independence, the World has ▪ Total expenditure is estimated at Rs 45 lakh
recognized the Indian Economy as a ‘bright star’ as the
crore.
Economic Growth is estimated at 7%, which is the highest
▪ The net tax receipts are estimated at Rs 23.3
among all major economies, in spite of the massive global
slowdown caused by COVID-19 and Russia-Ukraine War. lakh crore.
▪ Four opportunities can be transformative during Amrit Kaal - ▪ The fiscal deficit is estimated to be 5.9% of
1. Tourism 2. Green Growth GDP.
3. Economic Empowerment of women 4. PM VIKAS ▪ To finance the fiscal deficit in 2023-24, the net
▪ Part A - The macroeconomic part of the budget where various market borrowings from dated securities
schemes and priorities of government are announced, and are estimated at Rs 11.8 lakh crore.
allocations are made to several sectors. ▪ The gross market borrowings are estimated
▪ Part B - Deals with Finance Bill, which contains taxation
at Rs 15.4 lakh crore.
proposals such as income tax revisions and indirect taxes.
PART-A PRIORITY 1: INCLUSIVE DEVELOPMENT
▪ Seven priorities of the budget ‘Saptarishi’ are
Agriculture And Cooperatives
inclusive development, reaching the last mile,
▪ More Credit to Agriculture Sector: 186 lakh crore in
infrastructure and investment, unleashing the
FY22
potential, green growth, youth power and financial
▪ Agriculture Accelerator Fund to encourage Start-Ups
sector.
in rural areas.
▪ Atmanirbhar Bharat Horticulture Clean Plant
Program to boost production of high value
horticultural crops at an outlay of 2,200 crore.
▪ Agriculture Credit:
→ Rs.20 Lakh crore credit for Animal Husbandry,
Dairy and Fishing sector.
→ New sub-scheme of PM Matsya Sampada Yojana
with targeted investment of 6,000 crore.
▪ Additional storage capacity for farm produce
▪ Support to making India a Global Hub for Millets:
'Shree Anna'. For this Indian Institute of Millet
Research, Hyderabad will be supported as the Centre
of Excellence.
▪ Computerisation of 63,000 Primary Agricultural
Credit Societies and enabling them to become
multipurpose PACS.
▪ Promotion of cooperative-based economic
development model especially for small and
marginal farmers, and other marginalised sections.
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UNION BUDGET 2023-24
▪ Also aim is to facilitate setting up cooperative ▪ Bharat Shared Repository of Inscriptions (Bharat
societies in uncovered panchayats and villages in the SHRI): It will be set up in a digital epigraphy museum,
next 5 years. with digitization of one lakh ancient inscriptions in
the first stage.
Health, Education and Skilling ▪ Support for poor prisoners: For poor persons who
▪ Nursing Colleges: 157 new nursing colleges co- are in prisons and unable to afford the penalty or the
location with the existing 157 medical colleges bail amount, required financial support will be
established since 2014. provided.
▪ Sickle Cell Anaemia Elimination Mission: Mission
to eliminate Sickle Cell Anaemia by 2047 will be PRIORITY 3: INFRASTRUCTURE & INVESTMENT
launched.
▪ Focuses on awareness creation, universal screening Investment
of 7 crore people in the age group of 0-40 years in ▪ Capital Investment as driver of growth and jobs:
affected tribal areas. Capital investment outlay is being increased by 33
▪ Multidisciplinary courses for medical devices: To per cent to ₹10 lakh crore which would be 3.3% of
ensure availability of skilled manpower for futuristic GDP.
medical technologies, high-end manufacturing and ▪ Effective Capital Expenditure : It is budgeted at Rs
research. 13.7 lakh crore, which will be 4.5 per cent of GDP.
▪ Pharma Innovation: A new programme to promote ▪ Support to State Governments for Capital
research and innovation in pharmaceuticals will be Investment: Continue the 50-year interest free loan
taken up through centres of excellence. to state governments for one more year, with a
significantly enhanced outlay of ₹1.3 lakh crore.
Accessing Education and Skilling ▪ Enhancing opportunities for private investment in
▪ Teachers’ Training: The District Institutes of Infrastructure: Establishing new Infrastructure
Education and Training will be developed as vibrant Finance Secretariat.
institutes of excellence for this purpose. → More private investment in infrastructure,
▪ National Digital Library for Children and including railways, roads, urban infrastructure
Adolescents and power.
▪ Enhanced Education Expenditure : 2.9% of GDP in
FY23 Ensuring Last Mile Connectivity:
▪ Harmonized Master List of Infrastructure: It will be
PRIORITY 2: REACHING THE LAST MILE reviewed by an expert committee to become suitable
for Amrit Kaal.
▪ Aspirational Districts and Blocks Programme: It
▪ Railways: A capital outlay of ₹2.40 lakh crore is the
covers 500 blocks for saturation of essential
highest ever outlay.
government services.
▪ Logistics: 100 critical transport infrastructure
▪ Pradhan Mantri PVTG (Particularly Vulnerable
projects, for last and first mile connectivity for ports,
Tribal Group) Development Mission:
coal, steel, fertilizer, and food grains sectors have
→ An amount of ₹15,000 crore will be made
been identified and they will be taken up on priority
available to implement the Mission in the next
with investment of Rs 75,000 crore, including Rs
three years under the Development Action Plan
15,000 crore from private sources.
for the Scheduled Tribes.
▪ Regional Connectivity: 50 additional airports,
→ Eklavya Model Residential Schools: In the next
heliports, water aerodromes and advance landing
three years, centre will recruit 38,800 teachers
grounds will be revived for improving regional air
and support staff for the 740 Eklavya Model
connectivity.
Residential Schools, serving 3.5 lakh tribal
▪ Coastal Shipping: To be promoted through PPP
students.
model.
▪ Water for Drought Prone Region: For Upper Bhadra
Project, central assistance of ₹5,300 crore will be
given. Urban Development
▪ PM Awas Yojana: The outlay for PM Awas Yojana is ▪ Sustainable Cities of Tomorrow: States and cities
being enhanced by 66% to over Rs 79,000 crore. will be encouraged to undertake urban planning
reforms and actions.
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UNION BUDGET 2023-24
▪ Urban Infrastructure Development Fund (UIDF): ▪ Entity Digi Locker : To be setup for businesses for
→ Will be established through use of priority sector secure online storing and sharing of documents.
lending shortfall, which will be managed by the ▪ 5G Services: 100 labs for developing applications
National Housing Bank. using 5G services will be set up in engineering
→ Will be used by public agencies to create urban institutions.
infrastructure in Tier 2 and Tier 3 cities. ▪ Lab Grown Diamonds: It is a technology-and
▪ Urban Sanitation: 100% mechanical desludging of innovation-driven emerging sector with high
septic tanks and sewers to transition from man- hole employment potential.
to machine-hole mode. → A research and development grant will be
→ Enhanced focus will be provided for scientific provided to one of the IITs for five years.
management of dry and wet waste.
PRIORITY 5: GREEN GROWTH
PRIORITY 4: UNLEASHING THE POTENTIAL
Moving Forwards to Achieve the Climate Goals
Good Governance ▪ Green Credit Programme : To be launched to
▪ For enhancing ease of doing business, more than incentivize sustainable actions.
39,000 compliances have been reduced and more ▪ PM-PRANAM : to incentivize States/UTs to promote
than 3,400 legal provisions have been alternative fertilizers. (PM-PRANAM : PM Programme for
decriminalized. Restoration, Awareness, Nourishment and Amelioration of
▪ Jan Vishwas Bill : To amend 42 Central Acts. Mother Earth)
▪ For realizing the vision of “Make A-I in India and ▪ National Green Hydrogen Mission : With an outlay
Make A-I work for India”, 3 centers of excellence for of Rs 19,700 crores, will facilitate -
Artificial Intelligence will be set-up in top educational → Transition of the economy to low carbon intensity,
institutions. → Reduce dependence on fossil fuel imports,
→ With aim to galvanize an effective A-I ecosystem → Make the country assume technology and market
and nurture quality human resources in the field. leadership in this sunrise sector.
▪ National Data Governance Policy : To unleash The target is to reach an annual production of 5 MMT
innovation and research by start-ups and academia. by 2030.
It will enable access to anonymized data. ▪ Rs 35,000 crore for priority capital investments
▪ Simplification of Know Your Customer (KYC) towards energy transition and net zero objectives,
process: Adopting a ‘risk-based’ instead of ‘one size and energy security by Ministry of Petroleum &
fits all’ approach. Natural Gas.
▪ One stop solution for identity and address ▪ Inter-state transmission system : For evacuation
updating: By using DigiLocker service and Aadhaar and grid integration of 13 GW renewable energy from
as foundational identity. Ladakh.
▪ Common Business Identifier: The PAN (Permanent → It will be constructed with investment of Rs
Account Number) will be used as the common 20,700 crore including central support of Rs 8,300
identifier for all digital systems of specified crore.
government agencies. ▪ GOBARdhan scheme: 500 new ‘waste to wealth’
▪ Unified Filing Process: For obviating the need for plants under GOBARdhan (Galvanizing Organic Bio-
separate submission of same information to different Agro Resources Dhan) scheme will be established for
government agencies. promoting circular economy at total investment of Rs
10,000 crore.
Towards Transparent and Accountable Administration → 200 compressed biogas (CBG) plants, including
▪ Phase 3 of E-Courts to be launched for efficient 75 plants in urban areas.
administration of justice. → 300 community or cluster-based plants.
▪ Vivad se Vishwas I : For less stringent contract ▪ 5 per cent CBG mandate will be introduced for all
execution for MSMES organizations marketing natural and biogas and for
▪ Vivad se Vishwas II : For easier settlement of collection of biomass and distribution of bio-manure,
contractual disputes of Govt and Govt undertakings appropriate fiscal support will be provided.
▪ "Input Based' to 'Result Based' Financing for better
allocation of scarce resources.
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UNION BUDGET 2023-24
▪ Amrit Dharohar: Promote local communities unique ▪ National Financial Information Registry : It will be
conservation style for wetland. set up to serve as the central repository of financial
→ Will be implemented in next three years to and ancillary information. This will facilitate efficient
encourage optimal use of wetlands. flow of credit, promote financial inclusion, and foster
▪ MISHTI ((Mangrove Initiative for Shoreline Habitats & financial stability.
Tangible Incomes): To be taken up for Mangrove ▪ Central Processing Centre : Will be setup for faster
plantation along coastline response to companies through centralized handling
▪ Bhartiya Prakritik Kheti Bio-Input Resource Centres: of various forms filed with field offices under the
For facilitating one crore farmers to adopt natural Companies Act.
farming, 10,000 Bio-Input Resource Centres will be ▪ Mahila Samman Bachat Patras: One-time new
set-up over the next 3 years. small savings scheme, Mahila Samman Savings
▪ Battery Energy Storage Systems with capacity of Certificate for 2-year period with deposit facility of up
4,000 MWH will be supported with Viability Gap to Rs 2 lakh at fixed interest rate of 7.5 per cent with
Funding. partial withdrawal option.
▪ Benefits for Senior Citizens: Maximum deposit limit
PRIORITY 6: YOUTH POWER for Senior Citizen Savings Scheme will be enhanced
from Rs 15 lakh to Rs 30 lakh.
▪ Pradhan Mantri Kaushal Vikas Yojana 4.0: To skill → Also, the maximum deposit limit for Monthly
youth for international opportunities, 30 Skill India Income Account Scheme will be enhanced from
International Centres will be set up across different Rs 4.5 lakh to Rs 9 lakh for single account and
States. from Rs 9 lakh to Rs 15 lakh for joint account.
▪ Unified Skill India Digital Platform: For enabling ▪ GIFT IFSC: Several initiatives to promote business
demand-based formal skilling, activities in GIFT IFSC
→ Linking with employers including MSMEs, ▪ Fiscal Management:
→ Facilitating access to entrepreneurship schemes. → 50-year interest free loan to States: It has to be
▪ National Apprenticeship Promotion Scheme: To spent on capital expenditure within 2023-24. The
provide stipend support to 47 lakh youth in three loan will be partly conditional.
years, Direct Benefit Transfer under a pan-India → Fiscal Deficit of States: States will be allowed a
National Apprenticeship Promotion Scheme will be fiscal deficit of 3.5% of GSDP of which 0.5% will
rolled out. be tied to power sector reforms.
▪ Boosting Tourism: At least 50 destinations will be → Government has adhered to this path, and
selected through challenge mode and developed as reiterated to bring the fiscal deficit below 4.5 per
complete package for domestic and foreign tourists. cent of GDP by 2025-26.
→ Sector specific skilling and entrepreneurship
development will be dovetailed to achieve the PART-B
objectives of the ‘Dekho Apna Desh’ initiative. Budget 2023-24 provides major relief in the personal
→ Under the Vibrant Villages Programme, tourism income tax. The indirect tax proposals aim to promote
infrastructure and amenities will also be exports enhance domestic value addition, encourage
facilitated in border villages. green energy and mobility.
▪ Setting up of Unity Mall in state: In state capital or Personal Income Tax : Five major announcements
most prominent tourism centre or the financial relating to the personal income tax.
capital. ▪ The rebate limit in the new tax regime has been
→ For promotion and sale of their own ODOPs (one increased to 7 lakhs, meaning that persons in the
district, one product), GI products and other new tax regime with income up to 7 lakhs will not
handicraft products. have to pay any tax.
▪ The tax structure in the new personal tax regime has
PRIORITY 7: FINANCIAL SECTOR been changed by reducing number of slabs to five
and increasing the tax exemption limit to 3 lakhs.
▪ Credit Guarantee for MSMEs : This will enable ▪ Salaried individual will get standard deduction of
additional collateral-free guaranteed credit of Rs 2 50,000 and pensioner 15,000 as per the proposal.
lakh crore. Each salaried person with an income of 15.5 lakh or
→ Cost of the credit will be reduced by about 1%. more will thus gain 52,500, from the above proposals.
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UNION BUDGET 2023-24
▪ The highest surcharge rate in personal income tax ▪ Co-operatives Sector
has been reduced from 37% to 25% in the new tax → Benefit of concessional tax rate of 15% to new co-
regime for income above ₹2 crore. This would result operatives that commence manufacturing by 31st
in maximum tax rate of personal income tax come March, 2024.
down to 39% which was earlier 42.74%. → Sugar co-operatives can claim payments made to
▪ The limit of tax exemption on leave encashment on sugarcane farmers for the period prior to
retirement of non-government salaried employees assessment year 2016-17 as expenditure.
has been increased from 3 lakh to 25 lakh. → TDS limit on cash withdrawals is increased to ₹3
▪ The new income tax regime has been made the crores for co-operatives societies.
default tax regime. However, the citizens will → Higher limit of ₹2 lakh per member for cash
continue to have the option to avail the benefit of the deposits and loans by Primary Agricultural Co-
old tax regime. operative Societies (PACS) and Primary Co-
operative Agriculture and Rural Development
Banks (PCARDBs)
▪ Start-ups
→ Date of incorporation for income tax benefits to
start-ups to be extended to 31st March 2024. Time
limit for carry forward of losses on change of
shareholding of start-ups increased from 7 years
of incorporation to 10 years.
▪ Reducing pendency of appeals
→ 100 Joint Commissioners for disposal of small
appeals to be deploy.
→ Better Targeting of Tax Concessions
→ To cap deduction from capital gains on
investment in residential house to 10 Cr.
▪ Improving Compliance and Tax Administration
→ Reduction in the minimum time period required to
be provided by the transfer pricing officer to
assessee for production of documents and
information from 30 days to 10 days.
▪ Rationalization
→ Removing the minimum threshold of ₹10,000/-
for TDS and clarifying taxability relating to online
gaming.
▪ A next-generation common IT return form for
→ Conversion of gold into electronic gold receipt
taxpayer convenience.
and vice versa will not be treated as capital gain.
▪ Better targeting of tax concessions : For better
TDS rate to be reduced from 30% to 20% on
targeting of tax concessions and exemptions,
taxable portion of EPF withdrawal in non-PAN
deduction from capital gains on investment in
cases. Taxation on income from Market Linked
residential house has been capped at ₹ 10 crore.
Debentures.
▪ Proposals relating to MSMEs :
▪ EEE status to Agniveer Fund
→ Currently micro enterprises with turnover up to Rs
▪ Others
2 crore and certain professionals with turnover of
→ Extension of period of tax benefits to funds
up to Rs 50 lakh can avail the benefit of
relocating to IFSC, GIFT City till 31st March 2025.
presumptive taxation.
→ Allowing carry forward of losses on strategic
→ Budget proposed to enhance limits of
disinvestment including that of IDBI Bank.
presumptive taxation to ₹3 crores for Micro
Enterprises and 75 lakh for professionals with
cash payment less than 5%.
→ Any payment made to MSME shall be allowed as
expenditure only when payment is actually made.
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UNION BUDGET 2023-24
On the expenditure side, the biggest outlay is:
▪ Interest payments - 20 paise
▪ States' share of taxes and duties - 18 paise
▪ Central sector schemes - 17 paise
▪ Centrally sponsored schemes - 09 paise
▪ Finance Commission and other transfers - 09 paise
▪ Subsidies - 09 paise
▪ Defence - 08 paise
▪ Pension - 04 paise
For every rupee in the government coffer:
▪ Borrowings and other liabilities - 34 paise
▪ Goods & Services Tax & other taxes - 17 paise
▪ Income Tax - 15 paise
▪ Corporation tax - 15 paise
▪ Union Excise Duties - 07 paise
▪ Non-tax revenue like disinvestment - 06 paise
▪ Customs - 04 paise
▪ Non-debt capital receipts - 02 paise
Therefore, from Direct and indirect taxes - 58 paise
Indirect Tax Proposals
▪ The indirect tax proposals emphasized on ▪ To exempt basic customs duty on chemicals and
simplification of tax structure with fewer tax rates so Petrochemicals.
as to help in reducing compliance burden and ▪ To reduce basic customs duty on acid grade fluorspar
improving tax administration. and crude glycerin to 2.5%.
▪ The number of basic customs duty rates on goods, ▪ Marine products: To reduce duty on key inputs for
other than textiles and agriculture, has been reduced domestic manufacture of shrimp feed.
from 21 to 13. ▪ Lab Grown Diamonds: To reduce basic customs
▪ There are minor changes in the basic customs duties, duty on seeds used in their manufacturing.
cesses and surcharges on items including toys, ▪ Precious Metals: To increase customs duties on
bicycles, automobiles and naphtha. articles made from gold and platinum.
▪ Green Mobility: To exempt excise duty on GST-paid → To increase import duty on silver dore, bars and
compressed biogas. articles
▪ Electronics: To provide relief in customs duty on ▪ Compounded Rubber: To increase basic customs
import of certain parts of mobile phones duty rate on compounded rubber from 10% to 25%.
→ To reduce basic customs duty on parts of open ▪ Cigarettes: National Calamity Contingent Duty
cells of TV panels to 2.5% (NCCD) on specified cigarettes to be revised upwards
▪ Electricals: To increase basic customs duty on by about 16%.
electric kitchen chimney from 7.5% to 15%.
→ To reduce basic customs duty on chimney heat
coils from 20% to 15% Chemicals and
Petrochemicals:
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