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The Budget 2023-24 is in continuation of the blueprint drawn for India@100 pushing to fore the theme of “Vasudaiva Kutumbakam” that aims to address global challenges and foster sustainable & inclusive development. The journey during Amrit Kaal envisions a technology and knowledge driven society with strong public finances and a robust financial sector.

The Finance Minister, Nirmala Sitharaman has identified 7 priorities – Saptarishi to fulfil the priorities of providing ample opportunities, impetus for growth & job creation and strengthening macro stability

US$ 170 bn of overall capex while maintaining glide path of fiscal deficit

The high point of the budgetary proposals was the capital expenditure program of ~US$ 170 bn (INR 10 lac crore on infrastructure, INR 2.4 lac crore on Railway capex and INR 1.3 lac crore 50 year interest free loan for states capex) while maintaining the fiscal glide path to 4.5% of GDP by FY26 (5.9% for FY24). The upper limit of fiscal deficit for states has been set at 3.5% of GSDP (with 0.5% tied to power reforms).

Peak personal tax down to 39%, lower tax incidence to push for higher disposable income

For Individuals filing taxes in the “default” new regime, effective taxation has been lowered putting more disposal income in their hands. For individuals in the highest tax slab effective tax rate has been lowered to 39% (from 42.7%) due to reduction in the surcharge from 37% to 25%.

MSMEs charged with liquidity

• Vivaad se Vishwas I for waver of forfeit of contracts (upto 95%) executed during COVID,

• Enhanced turnover limits to INR 3 cr from INR 2 cr for presumptive taxation.

• Recognition of expenditure on payment (to MSMEs) from accrual accounting to cash basis. It will be allowed on accrual basis only if the payment is within the time mandated under the Micro, Small and Medium Enterprises Development Act.

• Revamped Credit Guarantee Scheme with infusion of INR 9000 cr in the corpus. This will enable additional collateral-free guaranteed credit of ` 2 lakh crore with a reduced credit cost by 1%.

Agri spending gets a big boost

Agriculture credit has been enhanced by 11.1% to INR 20 lac crore with a special focus on dairy, fisheries & animal husbandry with an additional sub scheme - Matsya Sampada of INR 6,000 cr focussed to expand the market for the fisheries value chain.

Other initiatives take to promote agricultural activites include

• As a special emphasis to promote millets, they have been branded as “Shree Anna.” There is also a special effort to make India a global hub for millets

• An Agriculture Accelerator Fund is proposed for encouraging agri startups in rural areas.

• Extra long staple cotton production has been given a boost via a PPP (collaboration of farmer, state & industry) input supplies, extension services, and market linkages.

• Outlay of 2200 crore to boost availability of disease-free, quality planting material

• Outlay of INR 2516 cr for computerization of Public Agriculture Credit Societies (PACS). There is also a plan to develop a massive decentralized storage capacity over the next five years.

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