The seven priorities of the budget ‘Saptarishi’ include inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector. The budget continued emphasis on capital expenditure and commitment to longer-term fiscal sustainability.
- INCLUSIVE DEVELOPMENT
The government's policy of "Sabka Saath Sabka Vikas" has benefited various sections of society, including women, SCs, STs, OBCs, and other underprivileged groups. The budget will continue to build on those efforts.
- REACHING THE LAST MILE
Building on the success of the Aspirational District program, government launched, the budget proposed an outlay of Rs 15000 crores for the newly launched Pradhan Mantri PVTG (Primitive Vulnerable Tribal Group) over next 3 years to improve socio-economic conditions of the vulnerable tribal groups.
Outlay for PM Awaas Yojana was enhanced by 66% to over Rs 79,000 crores. And in the next three years, the centre plans to hire 38,800 teachers and support staff for 740 Eklavya Model Residential Schools, which will cater to 3.5 lakh tribal students.
- INFRASTRUCTURE & INVESTMENT
Proposed capital expenditure is increased by 33% to Rs 10 lakh crore. 50-year interest free loan to state governments will be extended for one more year resulting in an outflow of Rs 1.3 lakh crore.
Planned outlay of Rs 2.4 lakh crore towards railways. Fifty airports, heliports, water aerodromes, and advanced landing grounds will be revived to enhance regional air connectivity.
Urban Infrastructure Development Fund (UIDF) will be established with an outlay of Rs 10,000 crore per annum to create urban infrastructure in Tier 2 and Tier 3 cities.
- UNLEASHING THE POTENTIAL
During the Covid period, if MSMEs failed to fulfill their contracts, the government and its undertakings will refund 95% of the forfeited amount relating to bid or performance security.
KYC process will be streamlined and PAN card will be adopted as a single identifier. A National Data Governance Policy will be introduced, providing access to anonymized data for the purpose of research and innovation by startups and academia.
To improve the ease of doing business in India, 39,000 compliances have been reduced and 3,400 provisions have been decriminalised.
Three centres of excellence for Artificial Intelligence (AI) will be set-up in top educational institutions to achieve the vision of “Make AI in India and Make AI work for India”.
Unified filing process will eliminate the need for filing the same information with different government departments. People will now be allowed to voluntarily share the information with other government agencies over a common portal.
- GREEN GROWTH
Allocated Rs 19,700 crore for the National Green Hydrogen Mission, which will promote a shift to low carbon intensity in the economy, decrease reliance on fossil fuel imports and establish the country as a technology and market leader in this growing industry.
Introduced green credit program to encourage environmentally friendly behavior under the Environment Protection Act.
Allocated funds for scrapping old vehicles owned by the central government, and will also provide support to states in replacing their old vehicles and state ambulance
Allocated Rs 35,000 crores for crucial capital investments towards achieving energy transition, reaching net zero targets, and enhancing energy security.
Viability gap funding introduced for battery energy storage systems with a capacity of 4,000 MWh. And proposed construction of a transmission system of 13 GW renewable energy from Ladakh with a total investment of Rs 20,700 crore including central support of Rs 8,300 crore
- YOUTH POWER
The PM Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth, covering new-age courses. Also, National Apprenticeship Promotion Scheme to provide stipend to 47 lakh youth over next three years through Direct Benefit Transfer (DBT).
- FINANCIAL SECTOR
Revamp credit guarantee schemes for MSMEs with an infusion of Rs 9,000 crore. This will provide additional collateral-free guaranteed credit of Rs 2 lakh crore. Further, the cost of the credit will be reduced by nearly 1%
To improve business operations in GIFT IFSC, government will Implement a unified IT system for registration and approval from SEZ authorities, IFSCA, GSTN, SEBI,RBI and IRDAI.
Central Processing Center will be established to provide quicker responses to businesses through centralized handling of various forms under the Companies Act.
Integrated IT portal will be established which will help investors to reclaim unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority (IEPFA).
Mahila Sanman Savings Certificate- A one-time deposit scheme for women with a maximum deposit of Rs.2 lakh and a tenure of up to two years has been introduced. This scheme is valid till March 2025 and will fetch a fixed interest rate of 7.5%.
Senior Citizen Savings Scheme (SCSS) - The maximum investment limit has been raised from Rs.15 lakh to Rs.30 lakh, with an interest rate of 8% for the quarter ended 31st March, 2023.
Postal Monthly Income Scheme (POMIS) - Investors under this scheme too saw an increase in deposit limit from Rs.4.5 lakh to Rs.9 lakh for single accounts and Rs.9 to Rs.15 lakh for joint accounts.
The lower tax outgo is expected to boost consumption. Adherence to fiscal prudence with focus on capex is delivered in the budget. Promoting green energy sector and the Start-ups is noteworthy in the budget.
CHANGES IN INCOME TAX REGIME
The Government rationalized income tax slabs under the new tax regime. Further, the highest surcharge rate under the new regime is reduced to 25% from 37% previously. The rebate limit is increased to INR 7 Lakh from INR 5 Lakh under the new regime. Apart from that, the limit of presumptive tax was also increased– MSME from Rs2cr to 3cr; Professionals from Rs 50 Lakhs to Rs75 lakhs. Also, deduction u/s 54 and 54F in respect of capital invested in a residential house to be capped at Rs 10 cr.
Increased Rebate limit of Personal Income to Rs. 7 lakh from the current Rs. 5 lakh in the new tax regime. Thus, persons in the new tax regime, with income up to Rs. 7 lakh to not pay any tax. Tax structure in new personal income tax regime, introduced in 2020 with six income slabs, to change by reducing the number of slabs to five and increasing the tax exemption limit to Rs. 3 lakh.
GST CHANGES
Section 10 stands amended such that a taxpayer can opt into the composition scheme even if they are supplying goods through e-commerce operators where TCS is collected under Section 52.
Section 16 is amended for a condition that in cases where a recipient taxpayer fails to pay to their supplier invoice value including the GST within 180 days from the date of issue of invoice, then they must pay with interest computed under Section 50 on it.
Section 17(5) is revised to include another item under ineligible ITC- Expenditure on CSR initiative for corporates.
High sea sales and similar transactions neither supply of goods or services are considered exempt and hence ITC proportional to such sales cannot be claimed as per revised Section 17(3).
Sections 37, 39, 44, and 52 are amended to restrict taxpayers from filing GSTR-1 (return for outward supplies), GSTR-3B (summary returns), GSTR-9 (annual returns), and GSTR-8 (e-commerce operator) for a tax period after the expiry of three years from the due date.
The following offences have been decriminalised- Where a person fails to supply information that is required to be supplied under the CGST Act or Rules or supplies false information. In regard to the compounding of offences, the limits have been changed to 25% of the tax involved up to a maximum amount of 100% of the tax involved.
A new section 158A has been inserted in the CGST Act to allow businesses to now share GST data digitally with consent.
