Income tax bonanza, capex push to green energy: Budget 2023 summarised

Feb 1, 2023

By: Rounak Jain

More money in the common man’s pockets

Finance minister Nirmala Sitharaman announced an upward revision in income tax slabs under the new regime to put more money in the common man’s pockets and give a boost to consumption. Apart from this, individuals earning below ₹7 lakh per annum will not have to pay any income tax now, as compared to ₹5 lakh per annum earlier.

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Work hard for a big leave encashment payday

The government has also encouraged people to work hard – those who do not encash their leaves will be able to enjoy a big payday when they retire, as the tax exemption limit on leave encashment has been increased from ₹3 lakh to ₹25 lakh for salaried non-government employees.

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Old tax regime gets sidelined

In yet another sign of the old tax regime being sidelined, the new tax regime will now be enabled by default for all taxpayers, even though they will have an option to switch to the old regime.

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Capex boost to fuel growth

The capital expenditure outlay has been increased significantly by 33 percent year-on-year to ₹10 lakh crore in FY24, or about 3.3 percent of the gross domestic product (GDP). This is a three-fold increase when compared to FY19, when the capex outlay was ₹3.1 lakh crore.

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More affordable houses for the poor

Outlay for the government’s affordable housing scheme for the poor, PM Awas Yojana, has been significantly increased by 66 percent year-on-year to ₹79,000 crore.

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Food subsidy bill slashed

The government announced an outlay of ₹1.97 lakh crore in FY24 under its food for poor programme, PM Garib Kalyan Anna Yojana. However, when compared to FY23, this is a 31 percent reduction from ₹2.87 lakh crore.

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Agri Accelerator Fund to boost tech adoption

The government announced a slew of measures for the agriculture sector, including a new Agri Accelerator Fund to encourage agri-tech startups to research and innovate in rural areas. The agriculture credit limit has also been increased to ₹20 lakh crore.

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Green growth

Promoting green growth and sustainable development, the government announced ₹35,000 crore priority capital to transition from fossil fuels to green energy. It includes ₹19,700 crore for the National Hydrogen Mission.

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Ease of doing business

The government also announced another measure to improve the ease of doing business, saying that the Permanent Account Number (PAN) will now be used as a common identifier in government’s digital systems for businesses.

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‘Force multiplier’ budget say experts

Experts welcomed the Budget, saying it is a “force multiplier” due to its focus on infrastructure investments whilst also offering some relief for the common man in the form of tax benefits.

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