Small businesses to common citizen: 5 key Budget proposals explained

Budget gives Rs 2.40 trillion to Railways: the highest-ever outlay for the national transporter

Focus on agriculture and tourism; relief for small businesses; support for digitisation of the economy: Finance Minister Nirmala Sitharaman’s Budget on Wednesday had something for every sector.

Here are five takeaways on what Budget 2023-24 promises for the economy.

Capital investment outlay hiked by 33%

The Budget doubled down on driving investment in the economy. The allocation for capital expenditure is pegged at Rs 10 trillion 2023-24, up from Rs 7.5 trillion in 2022-23. The Budget also extended the facility of interest-free loan to states for capex.

Big relief for MSMEs

Sitharaman announced that a credit guarantee scheme for hit micro, small and medium enterprises (MSMEs), a sector devastated in the pandemic, will get an infusion of Rs 9,000 crore. This will enable collateral of Rs 2 trillion loans to MSMEs. The credit scheme, which will take effect from April 1 this year, is expected to boost funds for MSMEs.

Highest ever outlay for Railways, revival of ports

The Budget gives Rs 2.40 trillion to the Indian Railways: the highest-ever outlay for the national transporter and 9 times more from 2013-14.

Sitharaman also announced 50 additional airports, water aerodromes, and reviving landing grounds for regional air connectivity. The proposal should offer an additional push to the regional connectivity scheme, UDAAN.

For the common citizen

The Budget announced that the new Income Tax regime would be the default. It increased the Income Tax rebate limit from Rs 5 lakh to Rs 7 lakh under the regime. “Currently, those with an income of Rs 5 lakh do not pay any Income Tax and I propose to increase the rebate limit to Rs 7 lakh in the new tax regime,” the Finance Minister said while presenting the Budget.

Digitisation push

By proposing to establish a Centre for Excellence for Artificial Intelligence and a national data governance policy, the Budget promised to strengthen India’s digital capabilities. Also notable was Sitharaman’s promise to establish a digitised national library and the establishment of sustainable cities with a fully mechanised ecosystem of desludging and waste management.

Here is what some experts said about the Budget

Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co.

This Union Budget 2023 encapsulates a people-centric agenda at its forefront. The impetus appears to be on sustainable economic development, unleashing the true potential of youth by facilitating opportunities, strengthening macro-economic stability, and focusing on untapped sectors such as tourism, green growth etc.

The FM in her speech also proposes to introduce a unified filing process before various ministries and reduce compliances– which will go a long way in furthering the long standing policy of the Government-  ‘Ease of doing business’. The FM has also proposed certain changes in the Customs Duty rates with a view to encourage the domestic market for instance duty rates on inputs for TV panel, camera lens for mobile phones etc. NCCD on cigarettes has been increased by 16%.

Rumki Majumdar, economist, Deloitte India

It is great to see that the seven priorities revolve around the people-centric agenda. With an emphasis on job creation (especially for the youth), and skill and education (with a focus on technology-related areas), this budget is aiming towards creating opportunities for a young, vibrant, and aspirational India.

A 33% jump in capex spending suggests that the government means business and it is willing to do whatever it takes to improve efficiency and competitiveness at par with its competing peers. This effort to build on the previous efforts will likely pull more investors and start a virtuous cycle of investments.

Sanjay Kumar, Partner, Deloitte India

There is attention to MSMEs. Two clear proposals are that the payments to MSMEs are covered under Section 43B. There is also enhancement in presumptive taxation to Rs. 3 crores. More of these details can be indicated when we see the print.

There is also a further allocation of Rs. 9000 crores in the revamped credit guarantee scheme. This will enable at least Rs. 2 lakh crore of additional collateral free guarantee.