Budget 2023 – Overview

NEW DELHI, 1 February – The Indian government presented a 45 trillion rupee expenditure budget. Beginning from April with the purpose of stimulating economic development and decreasing the fiscal deficit before the elections next year.

The aim is to have strong public finances and a robust financial sector for the benefit of all sections of society

Finance Minister Nirmala Sitaraman

Highlights of Budget

  • In 2023/24, nominal GDP (including real GDP and inflation) is expected to rise 10.5% year on year to 301.75 trillion rupees ($3.69 trillion).
  • India’s federal government plans a fiscal deficit of 5.9% of GDP in 2023/24, down from 6.4% in the current fiscal year.
  • Aims a budget deficit of 4.5% of GDP by 2025/26.
  • India expects economic growth of 6-6.8% in 2023/24, somewhat lower than the 7% projected in the current fiscal year.
Budget 2023 – An overview
  • The total government budget spending target has been lifted 7.5% to 45.03 trillion rupees for 2023/24, up from a projected 41.87 trillion rupees for the current fiscal year.
  • With retail inflation expected to be about 5% next fiscal year, real spending will climb by less than 3%.
  • Capital spending is expected to climb 33% to 10 trillion rupees in 2023/24.
  • Proposes to increase capital outlay for railroads by 48% to 2.4 trillion rupees in 2023/24 from revised 1.62 trillion rupees in 2022/23.
  • Proposes to increase road transport spending by 24.4% to 2.7 trillion rupees in 2023/24, up from revised 2.17 trillion rupees in 2022/23.
  • The education budget has been increased to 1.13 trillion rupees for 2023/24, up from 999 billion rupees in 2022/23.
  • The health budget has been increased to 889.5 billion rupees for 2023/24, up from 709.4 billion rupees in 2022/23.
  • Allocations for the rural job guarantee programme have been reduced to 600 billion rupees, down from the estimated 894 billion rupee outlays for 2022/23.
  • Increases budget funding for affordable housing to 790 billion rupees in 2023/24.
  • To contribute 350 billion rupees to the energy transition
  • Total revenue revenues are expected to be 26.32 trillion rupees in 2023/24, up from a revised 23.48 trillion rupees in 2022/23.
  • Total tax receipts are expected to rise 12% to 23.3 trillion rupees in 2023/24, up from the revised 23.48 trillion rupees.
  • The government intends to borrow 15.43 trillion rupees in 2023/24.
  • Net market borrowings are estimated to be 11.8 trillion rupees.
  • Estimates receipts from government stake sales in state-owned enterprises at 510 billion rupees in 2023/24, up from a revised 500 billion rupees in 2022/23.
  • Proposes a new income tax regime with a higher tax threshold limit.
  • Proposes lowering the maximum surcharge rate from 37.5% to 25% under the new income tax scheme.
  • Proposes increasing the personal income tax rebate maximum to 700,000 rupees.
  • To think about lowering customs duties on lab-grown diamonds.
  • Increase import tariffs on silver dores.
  • Increased tariffs on gold and platinum items. 
  • Increased customs taxes on compounded rubber.
  • Exemption from customs tax extended to EV batteries

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