The Finance Minister of India, Mrs. Nirmala Sitharaman, presented the Union Budget for the financial year 2023-24 on 1 February 2023 (Budget), which draws the blueprint for India @100, presenting a vision for ‘Amrit Kaal’ (the best and the most auspicious time), for an empowered and inclusive economy for a prosperous India.
Some key highlights of the Budget are:
- India’s economic growth is estimated at 7%, highest among all major economies, despite the massive global slowdown caused by COVID-19 and the Russian-Ukraine War.
- The Budget listed the following seven priorities which complement each other:
- Inclusive Development
- Reaching the Last Mile
- Infrastructure and Investment
- Unleashing the Potential
- Green Growth
- Youth Power
- Financial Sector
- With regard to above, the roadmap includes:
- Digital Public Infrastructure for Agriculture: Digital Public infrastructure for agriculture will be built as an open source, open standard and inter operable public good. This will enable inclusive, farmer-centric solutions through relevant information services for crop planning and health, improved access to farm inputs, credit, and insurance, help for crop estimation, market intelligence, and support for growth of agri-tech industry and start-ups;
- Agriculture Accelerator Fund: A fund to encourage agri-startups by young entrepreneurs in rural areas, which will aim at bringing innovative and affordable solutions for challenges faced by farmers;
- Agriculture Credit: The agriculture credit target will be increased to INR 20 trillion (approx. USD 244 billion) with focus on animal husbandry, dairy and fisheries. The Government will launch a new sub-scheme of PM Matsya Sampada Yojana with targeted investment of INR 60 billion (approx. USD 733 million) to further enable activities of fishermen, fish vendors, and micro and small enterprises, improve value chain efficiencies, and expand the market;
- Railways: One hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified and they will be taken up on priority with investment of INR 750 billion (approx. USD 9 billion), including INR 150 billion (approx. USD 1.8 billion) from private sources. Fifty additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity;
- Centres of Excellence for Artificial Intelligence: To realize the vision of “Make A-I in India and Make A-I work for India”, three centers of excellence for Artificial Intelligence will be set-up in top educational institutions;
- National Data Governance Policy: To unleash innovation and research by start-ups and academia, a National Data Governance Policy will be brought out, which will enable access to anonymized data;
- Green Growth and National Green Hydrogen Mission: A vision for ‘LiFE’ (Lifestyle for Environment), to spur a movement of environmentally conscious lifestyle. India is moving forward firmly for the ‘panchamrit’ and net-zero carbon emission by 2070 to usher in green industrial and economic transition. The National Green Hydrogen Mission will facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector. The target is to reach an annual production of 5 MMT by 2030;
- National Apprenticeship Promotion Scheme: To provide stipend support to 4.7 million youth in three years, Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme will be rolled out;
- Unity Mall: Setting up of Unity Mall in every state’s tourism centre or financial capital for promotion and sale of their own ODOPs (one district, one product), GI (geographical indication) products and other handicraft products, and for providing space for such products of all other States;
- Credit Guarantees for Micro, Small and Medium Enterprises (MSMEs): Revamping of the credit guarantee scheme for MSMEs which will take effect from 1 April 2023 through infusion of INR 90 billion (approx. USD 1.1 billion) in the corpus. This will enable additional collateral-free guaranteed credit of INR 2 trillion (approx. USD 24 billion). The cost of credit will be reduced by about 1%.
- Certain other key measures proposed include:
- Simplification of the direct tax structure by reducing the number of slabs to five and increasing the tax exemption limit;
- Reducing more than 39,000 compliances and decriminalizing more than 3,400 legal provisions to enhance ease of doing business and the introduction of Jan Vishwas Bill to amend 42 Central Acts;
- Setting up a National Financial Information Registry to serve as the central repository of financial and ancillary information, to be designed in consultation with the Reserve Bank of India;
- Setting up a new Infrastructure Finance Secretariat to enhance opportunities for private investment in infrastructure;
- Using the tax specific Permanent Account Number (PAN) as the common identifier for all digital systems of specified government agencies to further contribute to the ease of doing business;
- Delegating power under the Special Economic Zones Act to International Financial Services Centres Authority to avoid dual regulation;
- Launching Phase-3 of the E-Courts project with an outlay of INR 70 billion (approx. USD 856 million) for the more efficient administration of justice;
- Notification of a Green Credit Programme under the Environment (Protection) Act to incentivize and mobilize additional resources for environmentally sustainable and responsive actions;
- Launching a unified Skill India Digital platform for enabling demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes;
- Amendments proposed to the Banking Regulation Act, the Companies Act and the Reserve Bank of India Act to improve governance and enhance investors’ protection.
The Ministry of Finance, Government of India’s press release on the “Highlights of the Union Budget 2023-24” may be accessed at: https://pib.gov.in/PressReleasePage.aspx?PRID=1895315
Detailed particulars regarding the Budget may be accessed at: https://www.indiabudget.gov.in/ or https://static.pib.gov.in/WriteReadData/userfiles/file/ALLRELEASEENGLISH9GCJ.pdf.