A BUDGET LIKE NEVER BEFORE
On February 1st, 2023, India’s finance minister Nirmala Sitharaman presented the legislature with the country’s yearly budget. Even though this was the last comprehensive budget the administration will release before the general elections of 2024, it resisted the impulse to implement populist reforms.
This is “Amrit Kaal’s” first budget, and in light of the current state of the global economy, it may be seen as balanced. The vision of the prime minister is thoroughly portrayed.
FM focused particularly on the seven “Saptarishi” zones throughout her talk. The areas of attention for Saptarishi 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
Additionally, the budget predicts India’s economy to grow at a rate of 7%, the highest among all major economies.
In the budget, the fiscal deficit was also decreased, from 6.4% of GDP to 5.9%, with a further fall forecast for the next two years of 0.7% each year.
The FM also describes how the successful implementation of numerous programmes contributed to inclusive development, citing examples such as the
- 1. 11.7 crore household toilets installed as part of the Swachh Bharat Mission,
- 2. the 9.6 crore LPG connections provided by Ujjawala,
- 3. the 220 crore Covid vaccinations administered to 102 crore people,
- 4. the 47.8 crore Jan Dhan bank accounts, and the
- 5. insurance coverage provided to 44.6 crore people as part of the PM Suraksha Bima and PM Jeevan Jyoti
- 6. More than 11.4 crore farmers received cash transfers totaling 2.2 lakh crore under PM Kisan Samman Nidhi.
FM also suggested the implementation of a new programme, PM Matsya Sampada Yojana, with a budgeted expenditure of 6,000 crore in order to better facilitate the operations of fishermen, fish merchants, and micro & small businesses.
The PM Awas Yojana budget has grown by 66 percent to more than 79,000 cr.
Undoubtedly, the decision to increase capital investment by 33% to 10 Lakh Crore, or 3.3% of GDP, would lead to a major increase in employment opportunities.
The increased capital expenditure of 2.4 Lakh Crore that has been earmarked for the railway would boost the country’s rail infrastructure.
DIRECT TAXES
The Old Income Tax Regime and the New Income Tax Regime are the two existing Personal Income Tax schemes.
All of the deductions were benefits under the previous income tax system, including the Standard Deduction of $50,000, home loan interest, HRA, insurance premium, designated investment, and PF deduction.
Currently, the Old Scheme exempts from tax income up to 5 lakh rupees. For income beyond 5 lakhs, the exemption maximum is 2.5 lakhs.
Proposed budget amendments (From 1 April 2023)
Earlier Income Tax System
The previous income tax system has not changed.
A salaried worker will now be eligible for the standard deduction of $50,000 under the new income tax law, as opposed to the previous limit of $10,000.
For income up to 7 Lakhs annually, there is no tax.
According to FM, the new income tax system is now the default income tax system, although a person can choose the old tax system instead.
Thus, it is now possible to state with certainty that the government wants people to choose the new income tax system and actively discourages investment in tax-saving strategies.The new tax system will not assist people who are claiming bigger tax deductions, such as HRA or home loan interest, thus they will be the group who would be most affected.
CONCLUSION
Overall, it is a balanced budget, having in mind the state of the global economy at the moment.
Rural and community development are the main priorities of the budget.
