Exploring The Impact Of Budget 2023: Highlights, Insights and more

The Union Budget 2023, presented by the Finance Minister Nirmala Sitharaman, has been a much-anticipated event in the financial world. The Budget is seen as a roadmap for the government’s economic policies and outlines its priorities for the year ahead.

This year’s Budget comes at a time when the country is facing multiple economic challenges, including the COVID-19 pandemic, a slowdown in the economy, and rising inflation. The government’s focus this year is on reviving the economy and boosting growth, while also addressing long-term structural issues.

The Budget 2023 focuses on infrastructure development, healthcare, and education, and aims to create a conducive environment for investment and job creation. The government has also announced several measures to support the micro, small, and medium enterprises (MSME) sector and to make the country a hub for electronics manufacturing. Overall, the Budget 2023 is a balanced one that takes into account the needs of various stakeholders and aims to put the country on a path of sustainable and inclusive growth. we are going to summarize the highlights of today’s budget in layman’s terms 

Highlights of Budget 2023 by the Financial Minister are as follows

• The Indian Government is set to increase the tax exemption limit from 5 lakhs to 7 lakhs per annum, as proposed by the Finance Minister in the new tax regime. This move is expected to benefit a large number of taxpayers and reduce their overall tax burden. The increased exemption limit will help individuals save more money and invest it for their future needs. This move will also help businesses to save on taxes and use the money for expanding their operations or investing in new projects. With this step, the Indian Government aims to provide relief to taxpayers and boost economic growth.

• In order to provide a more efficient process for disposing of small appeals, the government has decided to deploy 100 joint commissioners. This will help in reducing the backlog of cases and ensure that all appeals are disposed of quickly and efficiently.

• At the same time, the government has also extended the date for availing income tax benefits for start-ups. This will provide much-needed relief to start-ups that are struggling financially due to the pandemic. With this extension, start-ups can now avail of income tax benefits until March 2021, giving them more time to focus on their businesses.

• The government has recently announced a plan to provide Rs 10,000 crore in benefits to sugar cooperatives as part of its efforts to boost the rural economy. This move is expected to benefit thousands of farmers and workers employed in the sugar industry. The announcement also includes a 16% increase in the National Calamity Contingent Duty on certain cigarettes, which is expected to generate additional revenue for the government. These measures are likely to have a positive impact on the economy and provide much-needed relief to farmers and other stakeholders in the sugar industry.

• In order to reduce the cost of manufacturing, the government has announced a customs duty exemption on the manufacturing of CRGO Steel and Ferrous scrap. This will help in reducing the price of production and make it more affordable for businesses. Additionally, it will also help in reducing the customs duty on open cells of TV panels to 2.5%. This move will not only reduce costs but also benefit manufacturers who are looking to produce TVs in India. It is expected that this move will increase competition among manufacturers and ultimately benefit Indian consumers.

• The Indian government’s plan to provide 50-year interest free loans to states for capital expenditure by 2024 is a welcome move. This will enable states to invest in projects that bring long-term benefits, such as renewable energy plans. An outlay of Rs 20,700 crore for the Ladakh renewable energy plan has also been announced, which is expected to generate 1,000 MW of electricity from solar and wind sources. This will help reduce the environmental impact of traditional energy sources while also creating jobs and boosting economic development in the region. The 50-year loan scheme has immense potential to be used in similar projects across India and should be utilized effectively by state governments.

• The Mahila Sanman Saving Certificate is a unique financial product that will be available to women for two years. This certificate will provide a safe and secure deposit facility with a maximum limit of Rs 2 lakh. This certificate is designed to help women save money and manage their finances more effectively. It also provides an opportunity for women to invest in the long-term and reap the benefits of compounding interest over time. The Mahila Sanman Saving Certificate offers an attractive interest rate, making it an ideal investment option for women.

• Foreign bank IFSC units have the potential to revolutionize the way companies access financing. By allowing foreign banks to offer acqn financing, companies can now access finance from a wider range of sources and on more favorable terms. This not only helps them reduce costs but also opens up new opportunities for growth. Furthermore, this type of financing also allows companies to manage their cash flow better and make better decisions about their investments. With the help of foreign bank IFSC units, businesses can now easily access finance from international markets and take advantage of global opportunities.

• It is difficult to say for certain what the outcome of these efforts will be, as there are many factors that can influence the adoption of natural farming and the viability of battery energy storage projects. However, providing financial support through viability gap funding can be a useful way to incentivize farmers to adopt new practices and technologies, as it can help to cover some of the costs associated with making these changes. Additionally, educating farmers about the benefits of natural farming and the potential benefits of using battery energy storage can also be important in encouraging adoption.

• The government plans to promote coastal shipping by providing financial support through the Vessels for Gramin areas (VGF) scheme. This support is aimed at improving the movement of people and freight along the coast.

• The government has implemented a key policy of replacing old, polluting vehicles through a scrapping program. Additionally, 30 Skill India International Centers will be established to provide skill-based training. A corpus of RS 9000 crore has been allocated for the revamping of the credit guarantee scheme.

• The government plans to select 50 tourist destinations through a challenge mode and develop them as comprehensive packages for both domestic and international tourism.

• The government is planning to introduce a National Data Governance policy, set PAN as a common identifier for all specified government agencies’ digital systems, and provide MSMEs with 95% of the forfeited amount in case of contract failure during the COVID-19 pandemic. A Rs 7000 crore outlay has been allocated for the third phase of the e-Courts project.

• The government plans to establish 100 labs to develop 5G applications and encourage the production of lab-grown diamonds through grants to the Indian Institute of Technology (IIT).

• The government has allocated Rs 35,000 crore towards achieving the net-zero goal and energy transition. The target is to reach a production of 5 million metric tons of green hydrogen by 2030.

• The Indian economy is expected to grow at 7% in the current year, which is the highest among major economies. Finance Minister Nirmala Sitharaman has confirmed the advance estimate for the current fiscal growth of 7% and stated that India is a “bright star” in the world economy. After FM announced that the economy is expected at 7%, the Sensex touched the day’s high  

• FM get straight to the point at the beginning of her speech and indicated that the government will be spending Rs 2 lakh crore on free food grain for all priority households under PM Garib kalyan yojna 

• The finance minister’s focus on strengthening macroeconomic stability will soothe the nerves of the bond and forex markets. India’s external sector has emerged as an area of concern in 2022 and the going may be tough this year as well as the global economy slows. Experts, including those inside the government, have called for consolidating the fiscal deficit and ensuring that the current account deficit is brought back within the red line of 2.5-3 percent of GDP.

• The FM have conveyed that National Rural Livelihood Mission has achieved remarkable success by mobilizing rural women into 1 lakh SHGs.additionally she has stated that the per capita income has also increased to Rs 1.97 lakhs 

• Finance Minister Nirmala Sitharaman said that ‘green growth’ would be one of the priorities of the budget. “We are implementing many programs for green growth across various economic sectors…They will help reduce carbon intensity and create green jobs,” the FM said. The government hints at a more broad-based growth in green energy.

• Jet fuel price on Wednesday was hiked by 4 percent in line with firming international oil prices, however, petrol and diesel rates remained on freeze for a record 10th month. Aviation turbine fuel (ATF) price was increased by Rs 4,218 per kilolitre, or 3.9 percent, to Rs 1,12,356.77 per kl in the national capital, according to a price notification of state-owned fuel retailers. The increase follows three rounds of reduction since November.

• Capex outlay increased by 33% to Rs 10 lakh crore for FY24. At this level, public capex will be 3.3% of GDP. Equity indices are in the green so far. But bond markets are getting jittery as expenditure looks elevated so far. 10-year bond yield has climbed 2 basis points to 7.38% since the FM announced the hike in capex outlay. A lower fiscal deficit will cool bond markets.

• The government has outlined its priority. With a bumper increase in capex, PM Awaas Yajna outlay, and a hike in Railway capex the Modi government in its last full Budget has targeted job creation and infra development over populism.

• In order to improve the ease of doing business More than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized 

• This information suggests that the government is making investments in various sectors, including education, infrastructure, and housing. The National Digital Library for Children and Adolescents will aim to provide quality books for young readers, while the railway’s capex outlay of 2.40 crore is reportedly the highest ever. Additionally, the PM Awas Yojna outlay has been increased by 66% to 79,000 crore, indicating a focus on housing development.

• The Indian government has proposed the setting up of 157 government nursing colleges under a new budget.

• “To improve the social-economic condition of the Particularly Tribal Groups, the PMPBTG Development mission will be launched, to saturate PBTG habitations with basic facilities. Rs 15,000 cr to be made available to implement the scheme in next 3 years”.The outlay for PM Azaz Yojana is being increased by 66% to over Rs 79,000 crore

• The 9.6 crore LPG connections aim to provide clean cooking fuel to households. The allocation of 220 crores for COVID-19 vaccines for 102 crore people is aimed at ensuring widespread access to the vaccine to control the spread of the pandemic. The opening of 47.8 crore Jan Dhan accounts aims to increase financial inclusion by providing access to banking services to the underbanked population. The Atma Nirbhar Clean Plan, with a budget allocation of Rs. 2200 crore, is likely aimed at promoting clean energy initiatives and supporting the transition to a more sustainable energy mix in India.

• The agriculture credit target expanded to Rs 20 lakh crore. Decentralized storage capacity will be set up that will help farmers store their produce. The budget envisages India becoming a global hub for Sri Ann or Millet

Here are some insights by various Business leaders regarding Budget 2023

Varun Sridhar, CEO, Paytm Money, said, “Union Budget 2023 reflects the government’s focus on inclusive growth and digitisation. The stability of reforms will contribute to India’s growth story and will positively boost the morale of capital markets. From the simplification of KYC, cap on the maximum tax rate, to increasing the rebate on income tax and strengthening our infrastructural power — there are many welcome moves that will benefit Indians.”

Atul Banshal, Director Finance, Omaxe Ltd. quoted that “Despite a massive global slowdown due to the pandemic and war, the Indian economy continued to shine. To further strengthen it, the government has placed huge emphasis on infrastructural development and promoting youth power, along with other key development areas, in this budget. The increased tax rebate limit from Rs 5 lakh to Rs 7 lakh under the new tax regime will aid in increasing disposable income in the hands of the salaried class.

This is an encouraging move by the government to empower the aspirational middle-class consumer base. This, along with other measures, will help enable potential homebuyers to realise their dream of owning a home and go ahead with their property investments in the coming year. The budget’s main takeaway is the emphasis on capital investment and the 33 percent increase in its allocation.

An urban infrastructure fund would be established with the goal of improving infrastructure and creating jobs. This is likely to give a huge push to the real estate markets, particularly in tier 2 and 3 cities, which is our forte as well.”

Rohan Bhargava, Co-Founder, CashKaro, and EarnKaro, said, “It’s very reassuring to see a projected growth rate of 7% in FY23 in the Union Budget, despite the anticipated slowdown in the economy. We’re also happy that it is pragmatic and supportive of the startup sector which needs a deliberate boost to further innovate and help sustain the economy. Given that India is currently the third-largest startup ecosystem in the world, it’s heartening to see that the budget lays the necessary focus on a slew of measures to enhance the ease of doing business.

Measures such as the legislation of Permanent Account Number (PAN) to be used as a common identifier for all digital systems, will be a crucial step in creating a single source of truth for building corporate compliance. Furthermore, steps such as more than 39,000 compliances being reduced, over 3,400 legal provisions decriminalized, and a unified filing mechanism being introduced, are all significant towards simplifying the incorporation and operations of start-ups. We also welcome initiatives such as the extension of the date of incorporation for income tax benefits to startups, until March 31, ’24, as they bolster the economic stability of young businesses.”

Mr. Prateek Maheshwari, Co-Founder, PhysicsWallah, said the budget 2023 is progressive as it accelerates the government’s efforts for inclusive and sustainable development, and we are pleased that the Government has recognized the importance of a Technology-driven and skill-enhanced economy. It provides a strong impetus for growth and job creation. The National Digital Library for children, initiated by the honorable Finance Minister Nirmala Sitharaman, is a testament to the government’s commitment to modernizing and advancing the economy.

As AI becomes increasingly integrated into our lives, the skill enhancement initiative recognizes its significance as a necessary tool for future growth and success. As a helping hand to the government for making up for the learning loss during the pandemic. We are donating accessible high-yield competitive Test Prep MCQs along with solutions across all the categories, Videos, and Books for the learners, to the National Digital Library. An ed-tech commitment was one area in which the budget lacked our expectations.”

Mr. Sunil Kharbanda, Co-Founder & COO, Trezix, said, “The spirit of resilience has been proven by the 6.3 crore micro, small, and medium firms, which account for 30% of GDP and employ approximately 11 crore people. With sales in numerous industries throughout the MSME sector surpassing 90% of pre-pandemic levels, India’s small firms are rewriting history with enhanced import-export trade and driving business globally. The budget shows positivity and has reduced import duties on raw materials to support Make in India and MSMEs, enhancing competitiveness in global markets and leading to a rise in exports.”

Mr. Rohit Garg, CEO, and Co-Founder, SmartCoin, Said, “Continued boost in digitization and stronger digital public infrastructure as underlined by the new Union Budget will fillip economic growth, with positive implications for digital lending and expected growth in share for the fintech sector as a whole. The focus outlined on financial inclusion, financial literacy, and reaching the last mile will greatly benefit the players operating under this agenda.  It will also herald greater investor confidence in the industry. The new tax regime will ensure more cash in hand for the citizens.”

Deepak Sharma, co-founder and chief executive officer at MedLern, Said, “To start, the setting up of 157 nursing colleges and attached with the existing 157 medical colleges in the budget is definitely a welcome development. The announcement of training of teachers through innovative pedagogy, curriculum transaction, continuous professional development dipstick survey, and iCT implementation is particularly important since this is perhaps the first time that a budget has spoken of upskilling teachers and raising of the quality of teaching in general.

Under PM Kaushal Vikas Yojana, the coverage of new-age courses such as coding, AI, robotics, mechatronics, IOT, 3D printing, drones, etc would definitely elevate the quality of human resources capacity in the country in sync with the demands of the latest and increasingly technology-driven economy. However, although the fine print is yet to come out, given the deficit in health education in the country and the recent experience during the pandemic, we would have wished for some explicit policy and tax incentives for online and specialist medical learning and training providers in the form  of a range of financial and tax subsidies in the budget.”

Vivek Khurana, Founder, NEERCARE AGRO, Said,” The 2023 budget for the agriculture sector has the potential to revolutionize the industry. Investing in new technology, infrastructure, and resources for farmers, can create a secure and prosperous future for the agriculture sector. We are optimistic to see how the budget will support farmers and entrepreneurs in the agriculture industry, helping them to innovate and thrive. The budget has some amazing announcements, as the Honourable Finance Minister Nirmala Sitharaman said about setting up an agriculture accelerator fund to support agriculture startups in various parts of the country with a special focus on rural areas. We are assured it will help in bringing modern technology and help in increasing productivity. We also welcome the increased focus on agricultural export, with the setting up of the ‘Agricultural Export Facilitation Cell’, as this will help in increasing the level of exports and generate more jobs in the sector.”

Mr. Parag Khurana, Country Manager, Barracuda Networks India, said, “Cybersecurity has for long been a critical matter of concern, especially in light of rapid digitization. With the rollout of 5G and cloud migration, there has been a significant uptick in cyberattacks across the country. In 2022, we will see the rise of ransomware against critical infrastructure, with education (15%), municipalities (12%), healthcare (12%), infrastructure (8%), and financial (6%) being the five key targeted industries according to research. The Union Budget announcement today paints a favorable picture for the sector with the introduction of the National Data Governance policy which will help academia and start-ups gain access to anonymised data by the government.

Provisions like the establishment of three centers of excellence for Artificial Intelligence in top educational institutions noting that ‘Make AI in India’ and to ‘Make AI work for India’ will support the creation of a stronger technology infrastructure in the country. This will further boost the government’s vision of ‘Digital India’ and ‘Atma Nirbhar Bharat’. That being said, Budget 2023 amply highlights the greater focus that the government has placed on string digital infrastructure and technology at large. And, we are hopeful that today’s announcement will have an inherently positive effect on the sector.“

Piyush Somani, MD and Chairman, ESDS Software Solutions Ltd, said, “The Union Budget 2023-24 has put a lot of emphasis on Agritech, a fintech company, Co-operatives and future technologies like AI, ML, IoT and etc., signaling a positive push towards technologically advanced Digital India & a greener India. The government’s emphasis on digital infrastructure through 100 labs to facilitate apps employing 5G services will aid technology adoption that will help the country advance towards more digital applications like smart classrooms, precision farming, intelligent transport systems, and healthcare in order to realize new range of options, business models, and job potential.

The emphasis on the co-operative sector, Millets, and agriculture sector by facilitating Agri-based rural startups certainly will improve the livelihoods of farmers, increase food security and boost exports through open-source digital public infrastructure.  The national data governance policy to be released to encourage innovation and research by startups and academic institutions and will make it possible to obtain anonymous data. Overall, this budget focuses more on Capex spending from the government, while most of the technology-related announcements had no budget allocated at the moment. We need to wait for the next couple of months to see some budget getting allocated to technology-related initiatives.”

Mr. Ankit Kedia, Founder & Lead Investor, Capital A, Said,” We welcome the Union Budget 2023-2024’s strong emphasis on green growth and sustainability. This budget will be used to encourage investments in renewable energy sources, reduce carbon emissions, and increase energy efficiency. One of the key aspects of this is the launch of a Rs 2,200 crore Atma Nirbhar clean plan program. This is a clear indication of the government’s commitment to reducing India’s estimated total carbon emissions by 1 billion tonnes by the end of the decade. The government’s aspirations to achieve net-zero carbon emissions by 2070 and reduce the country’s carbon intensity by 45% by 2030 are also significant steps in this direction. The government plans to develop an integrated sustainable development system that includes measures such as electric vehicles, waste management systems, water conservation projects, and solar power plants. Furthermore, the budget also promises increased funding for research and development of clean technology solutions including green hydrogen production facilities. The government’s decision to exempt excise duty on GST-paid compressed biogas containment will give a boost to the green mobility sector. Also, custom duty exemption on the import of lithium-ion batteries will continue to focus on the transition to electric mobility. Overall this Budget will help India achieve its commitment to a low-carbon economy while achieving economic growth at the same time. It is expected that these initiatives will help create employment opportunities as well as attract foreign investment into India’s economy.

The Indian economy is on the right track according to Finance Minister Nirmala Sitharaman. The government has implemented various reforms and policies to drive the economy towards growth, including the implementation of a free food grain scheme, a boost to agriculture, investment in health education and skilling, and an increase in the outlay for the Pradhan Mantri Awas Yojana. Capital investment and job creation continue to be the government’s top priority, with an increase in capital investment outlay and a reduction in the fiscal deficit target.

The finance minister also announced changes in the new income tax regime and increased customs duty on certain items including cigarettes. The railway outlay was also increased nine times more than the total outlay in 2013-14. The PAN will become a common identifier for business establishments. The budget will lay the roadmap for Amrit Kaal, which will include technology-driven growth and a knowledge-based economy. The government’s efforts to invest in technology, knowledge, and infrastructure are also commendable and could lead to a bright future for India.