The Union Budget 2023-24 can be summarised in three big takeaways. In essence Finance Minister Nirmala Sitharaman has stuck to the broader growth strategy that she unveiled in 2019-20.
This growth strategy had two prongs.
* One was to incentivise the private sector in the economy to invest in the productive capacity and thereby create jobs and push growth.
* The second part was about the government’s role in the economy. Here, the mantra has been minimum government. That in turn meant increasing the capital expenditure, on the one hand and raising more revenues via disinvestment on the other. In essence this was done to ensure that the government maintains fiscal prudence and doesn’t splurge money on populist schemes.
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In the latest Budget the FM has again stuck to the same strategy.
#1: Raising capital expenditure by the government
Capital expenditure is the money that is spent on building productive assets such as roads and bridges and ports. This has a greater return to the economy and every Rs 100 spent leads to Rs 250 gain for the economy. Revenue expenditure on the other hand returns less than Rs 100.
In the latest budget capital expenditure by the government has been raised to Rs 10 lakh crore — this is more than double the amount of money allocated when compared to 2020-21 (Rs 4.39 lakh crore).
#2: Fiscal Prudence
The FM has assured that the fiscal deficit (market borrowing by the govt ) will fall to 5.9% of the GDP, as promised in the glide path. This will have a salutary impact on the broader economy as it suggests that money will be available for private entrepreneurs to borrow.
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#3: New Personal Income Tax regime is now the default
This will be perhaps the most talked about decision of the Budget. Salaried Indians were expecting some relief on the income tax front. The FM seems to have provided it but in the so-called new personal income tax regime, which was introduced last year, but did not have many takers.
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The FM has used the incentives to popularise the income tax regime while also declaring that it will now be the default scheme. Until last year it was optional for people with the proviso that once you adopted it you could not go back to the old income tax regime.
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Union Budget 2023: All you need to know
Also ReadSensex, Nifty dip by 1%: What has triggered this sell-off?Bima Sugam: Is it a ‘UPI moment’ for insurance sector, and how will it be…EV subsidies: Will EU-China row lead to a tariffs war?How Basmati in India is reaping the rewards of research↗️ Finance Minister Nirmala Sitharaman’s Union Budget 2023 has some big takeaways↗️ First, what everyone has been looking forward to: changes in the new income tax regime. She has made the new tax regime more attractive. There are changes in the rebate limit and in tax slabs. What does this mean for the taxpayer?↗️ FM Sitharaman proposed a 33% increase in capital investment outlay, raising it to Rs 10 lakh crore. This is the biggest in the past decade. What does it mean?↗️ Some articles get cheaper and others get costlier due to changes in customs duty. Here is a list↗️ The capital outlay for the railways has been increased to the highest ever – Rs 2.40 lakh crore. The government is trying to create more jobs↗️ FM Sitharaman said the fiscal deficit will fall to 5.9% of the GDP. What does it mean for the stakeholders?↗️ The FM called it the ‘first Budget of Amrit Kaal’. PM Narendra Modi said it will build a strong foundation for a developed India. What did opposition leaders say?