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Union Budget 2023

The Union Budget for 2023-24 was presented in Parliament. Some key highlights include: - Total expenditure is estimated to increase 7.5% to Rs. 45.03 lakh crore, with capital expenditure rising 37.4% to Rs. 10 lakh crore. - Receipts are expected to increase 11.7% to Rs. 27.16 lakh crore. - The fiscal deficit is targeted at 5.9% of GDP, lower than the revised estimate of 6.4% for 2022-23.

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103 views5 pages

Union Budget 2023

The Union Budget for 2023-24 was presented in Parliament. Some key highlights include: - Total expenditure is estimated to increase 7.5% to Rs. 45.03 lakh crore, with capital expenditure rising 37.4% to Rs. 10 lakh crore. - Receipts are expected to increase 11.7% to Rs. 27.16 lakh crore. - The fiscal deficit is targeted at 5.9% of GDP, lower than the revised estimate of 6.4% for 2022-23.

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Datta Creations
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UNION BUDGET 2023

In the 75th year of India’s Independence, the World has recognized the Indian
Economy as a ‘bright star’ as the Economic Growth is estimated at 7 percent,
which is the highest among all major economies, in spite of the massive global
slowdown caused by COVID-19 and Russia-Ukraine War. This was stated by
Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman,
while presenting the Union Budget 2023-24 in Parliament. She emphasized that
the Indian economy is on the right track, and despite a time of challenges,
heading towards a bright future.
Budget Highlights:
▪ Expenditure: The government proposes to spend Rs 45,03,097 crore in 2023-
24, which is an increase of 7.5% over the revised estimate of 2022-23. In 2022-
23, total expenditure is estimated to be 6.1% higher than the budget estimate.
▪ Receipts: The receipts (other than borrowings) in 2023-24 are expected to be
to Rs 27,16,281 crore, an increase of 11.7% over the revised estimate of 2022-
23. In 2022-23, total receipts (other than borrowings) are estimated to be 6.5%
higher than the budget estimates.
▪ GDP: The government has estimated a nominal GDP growth rate of 10.5% in
2023-24 (i.e., real growth plus inflation).
▪ Deficits: The revenue deficit in 2023-24 is targeted at 2.9% of GDP, which is
lower than the revised estimate of 4.1% in 2022-23. The fiscal deficit in 2023-
24 is targeted at 5.9% of GDP, lower than the revised estimate of 6.4% of GDP
in 2022-
23. While the revised estimate as a percentage of GDP was the same as the
budget estimate, in nominal terms, the fiscal deficit was higher by Rs 94,123
crore (an increase of 5.7%) in 2022-23. Interest expenditure at Rs 10,79,971
crore is estimated to be 41% of revenue receipts.
▪ Ministry allocations: Among the top 13 ministries with the highest allocations,
in 2023-24, the highest percentage increase in allocation is observed in the
Ministry of Railways (49%), followed by the Ministry of Jal Shakti (31%), and
the Ministry of Road Transport and Highways (25%).
Budget Vision:
Vision for Amrit Kaal – an empowered and inclusive economy. Sabka Sath -
Sabka Vikas
Priorities of this Budget:
Smt. Nirmala Sitharaman listed seven priorities of the Union Budget and said
that they complement each other and act as the ‘Saptarishi’ guiding us through
the Amrit Kaal. They are as follows: 1) Inclusive Development 2) Reaching the
Last Mile 3) Infrastructure and Investment 4) Unleashing the Potential 5) Green
Growth 6) Youth Power 7) Financial Sector

Budget estimates of 2023-24 as compared to revised estimates of 2022-23


▪ Total Expenditure: The government is estimated to spend Rs 45,03,097 crore
in 2023-24. This is an increase of 7.5% over the revised estimate of 2022-23.
Out of the total expenditure, revenue expenditure is estimated to be Rs
35,02,136 crore (1.2% increase), and capital expenditure is estimated to be Rs
10,00,961 crore (37.4% increase). The increase in capital expenditure is due to
an increase in capital outlay on transport (including railways, roads and bridges,
and inland water transport) by Rs 1,28,863 crore (36.1% increase). Expenditure
on total capital outlay is estimated to be Rs 8,37,127 crore in 2023-24, an
increase of 35% over the revised estimates for 2022-23.
▪ Total Receipts: Government receipts (excluding borrowings) are estimated to
be Rs 27,16,281 crore, an increase of 11.7% over the revised estimates of 2022-
23. The gap between these receipts and the expenditure will be plugged by
borrowings, budgeted to be Rs 17,86,816 crore, an increase of 1.8% over the
revised estimate of 2022-23.
▪ Transfer to states: The central government will transfer Rs 18,62,874 crore to
states and union territories in 2023-24, an increase of 8.9% over the revised
estimates of 2022-23. Transfer to states includes devolution of Rs 10,21,448
crore out of the divisible pool of central taxes, grants worth Rs 6,86,773 crore,
and special loans worth Rs 1.3 lakh crore for capital expenditure.
▪ Deficits: Revenue deficit is targeted at 2.9% of GDP, and fiscal deficit is
targeted at 5.9% of GDP in 2023-24. The target for primary deficit (which is
fiscal deficit excluding interest payments) in 2023-24 is 2.3% of GDP. The
revised estimate for the revenue deficit target has increased from the budgeted
estimate for 2022-23. The revised fiscal deficit target for 2022-23 has remained
the same, despite higher receipts. In 2022-23, the central government’s revenue
deficit is expected to be 4.1% of GDP against a budget estimate of 3.8% of
GDP.
▪ GDP growth estimate: The nominal GDP is estimated to grow at a rate of
10.5% in 2023-24.
▪ Changes in the new income tax regime: The number of tax slabs has been
reduced from six to five. Table 1 compares the current tax income structure with
the proposed income tax structure. The surcharge on the income when it
exceeds Rs 5 crore will be reduced from 37% to 25%. Currently, those with
income up to Rs 5 lakh can avail a rebate and not pay any taxs; this limit has
been raised to Rs 7 lakh. Further, the standard deduction will be available under
the new tax regime
▪ Changes in tax exemptions: The tax exemption for news agencies set up
solely for collecting and distributing news will be removed.
▪ Charitable trusts are required to apply 85% of their income within the year to
avail of income tax exemption. From April 2023, if a charitable trust donates to
another charitable trust, only 85% of such a donation would be considered as an
application of income.
▪ Presumptive taxation: The upper limit on turnover for MSMEs to be eligible
for presumptive taxation has been raised from Rs 2 crore to Rs 3 crore. The
upper limit on gross receipts for professionals eligible for presumptive taxation
has been raised from Rs 50 lakh to Rs 75 lakh.
▪ Co-operative societies: The income tax rate for new co-operative societies
engaged in manufacturing activities has been lowered from 22% to 15% (plus
10% surcharge).
▪ Capital gains: Capital gains from sale of residential property can be deducted
to the extent of purchase or construction of another residential property. The
deduction will be capped at Rs 10 crore.
▪ Life insurance: Income from investments in life insurance policies will be
taxable if premium of Rs 5 lakh has been paid in any year. The amount paid
upon the death of the policy holder will continue to be exempt from income tax.
▪ Online Games: Winnings from online games will be subject to 30% tax
deductible at source.
▪ Startups: Startups incorporated within a time-period and meeting other
conditions can deduct up to 100% of their profits; the end of this period has
been extended from March 31, 2023 to March 31, 2024. In addition, the period
within which losses of startups may be carried forward has been extended from
seven to ten years.
▪ Indirect Taxes: Customs duty on several items have been changed. On a few
items such as gold, platinum, and airplanes the amount of cess has been
increased with a corresponding decrease in customs duties.
▪ CGST: The CGST Act will be amended such that input tax credit will not be
available for goods and services purchased for use in activities related to
corporate social responsibility.

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