Highlights on Economics Survey 2022.
The Budget Session of Parliament began at 11 am on 31 January, 2023. President of India Draupadi Murmu addressed both houses in a joint session. The Economic Survey was tabled with projections for economic growth for fiscal 2023-24. FM Nirmala Sitharaman tabled the Economic Survey in Parliament. As per the Economic Survey, India’s economy to grow 6.5% in 2023-24, compared to 7% this fiscal and 8.7% in 2021-22 The Economic Survey is prepared by the Department of Economic Affairs of the Ministry of Finance under the guidance of the Chief Economic Advisor (CEA). Dr V Anantha Nageswaran is the Chief Economic Advisor and he will be holding a press conference later in the day to explain the finer nuances of the Economic Survey 2023.
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Economic survey: Key highlights
1) India’s economic growth is projected to slow to 6.5 per cent in the fiscal year starting April but will remain the fastest growing major economy in the world.
2) India is the world’s third largest economy in PPP (purchasing power parity) terms and fifth largest in terms of exchange rate.
3) RBI’s projection of retail inflation at 6.8 per cent in the current fiscal is neither too high to deter private consumption, nor so low as to weaken inducement to invest.
Budget focuses on job creation, upliftment of youth
We made significant progress in sustainable goals. Also achieved many milestones in Swachh Bharat, PM Suraksha Bima Yojana, Direct benefit transfer, and Jan Dhan accounts
Highlights from FM’s speech
– Govt efforts since 2014 have ensured better quality of life for citizens of the country
– These times of global challenges give India unique opportunity to strengthen country’s role in world economic order
Some Highlights on Budget 2023.
= Direct tax proposals
– Average processing time for ITRs reduced from 93 days to 16 days
– We intend to roll out next-gen common IT Return forms and strengthen grievance redressal mechanism
– Increase income rebate to ₹7 lakh in the new tax regime
– Enhanced limit for 3 Cr and 75 lakhs for presumption taxations
-Higher TDS limit of Rs 3 Cr for cooperatives
-TDS reduced on EPF withdrawals
-100 joint commissioners to be appointed for disposal of small appeals
-Proposed to reduced higher surcharge rate from 37% to 25% in new tax regime
-Salaried class & Pensioner, Standard deduction will allow in new tax regime.
Union Finance Minister Nirmala Sitharaman has proposed a new tax regime, under which income tax rebate limit has been increased from ₹5 lakh to ₹7 lakh.
Rebate limit increased to ₹7 Lakh. Now no tax up-to ₹7 Lakh, in new tax scheme.
New tax exemption is 3 lakhs.
0-3 lakhs: Nil
3 lakhs-6 Lakhs: 5%
6 lakhs – 9 lakhs: 10%
9 Lakhs to 12 Lakh: 15%
12 Lakhs – 15 Lakhs: 20%
Above 15 lakhs @ 30%
New tax regime will be by default
Average processing time for ITRs reduced from 93 days to 16 days
Other Important financials highlights
- To reclaim unclaimed shares/ dividends, an integrated IT portal will be established.
- Certain amendments to be made to the Banking Regulation Act, Banking Companies Act and RBI Act to improve governance
- Maximum deposit scheme for senior citizens – ₹15 lakh to 30 lakhs
- FY2024 fiscal deficit target at 5.9% of GDP
- Fiscal Deficit target below 6.5% by 2025-26
- Basic custom duty rates to be reduced
–Custom duty exemptions to be provided for the manufacturing of lithium-ion batteries.
– Basic custom duty rates to be reduced from 21 to 13 except for textile
=Key announcements
– FY24 gross borrowing target at ₹15.43 lakh crore
– Fiscal deficit target for FY24 pegged at 5.9%
– Fiscal deficit for FY23 estimated at 6.4% of GDP
– Fiscal deficit glide path for FY26 is 4.5%
– Big push to ‘Make in India’. LI battery, mobile, tv, chimney manufacturing gets custom rebates
=No news on bank privatisation
More than an hour into the Budget 2023 speech, FM Nirmala Sitharaman has not touched up on any key banking sector reforms including the long-held promise of privatisation of public sector banks.
Non financials & General highlights
- 7 Cr household toilets under swachh bharat mission
- 6 Cr LPG ujjwala yojana
- Indian economy increased in size from 10th biggest to 5th biggest in 9 years
- Govt to recruit 38,800 teachers
- PM Awas yojana is being enhanced by 66% to over ₹79,000 crore
- Capital investment increased by 33% to ₹10 lakh crore. This is 3.3% of GDP
- Capital outlay of ₹40 lakh crore. this is 9 times the outlay made in 2013
- Finance Minister started her speech by saying, ‘this is the first budget of the Amrit Kal’
– Four transformative opportunities can be used be in Amrit Kaal for enhancing economic empowerment: FM
– Digital public infrastructure for agriculture will be built as open source, open standard and interoperable public good: FM
– Agri accelerator fund will be set up to encourage agri startups in rural areas: FM
– Govt to support Hyderabad-based millet institute (Agricultural research institute) as centre of excellence: FM
– National digital library for children adolescents for facilitating books across geography, literature, etc
– National Book Trust and children’s book trust will be encouraged to boost reading habits.
– Collaboration with NGOs who work in literacy will be part of this
- 39,000 compliances reduced, says FM
– more than 39,000 compliances reduced
– more than 3,000 legal provision decriminalised
- Relief for MSMEs: In cases of failure by MSMEs, 95% of forfeited amount will be returned to them by govt
- PAN to be used as common identifier for all digital systems of specified Govt agencies. Push to Ease of Doing Business.
- Scope of services in Digi locker to be expanded.
- 50-year interest free loan to state governments have been extended for one more years
- Lab grown diamonds, green growth
– 100 labs for 5G apps to be set up in engineering institutes
– Lab grown diamonds production to be encouraged via grant to an IIT
– Green growth: 35k cr for priority capital investment for Energy transition
- ₹35,000 Cr for energy transition investment
– Have an outlay of ₹35,000 Cr for energy transition investment
– over next 3 yrs, we facilitate 1 crore farmers to adopt natural farming
– PM PRANAM to incentivise state/ UTs to promote balance use of fertilisers
– GOBARDAN: to promote circular economy. 200 biogas plants will include at investment of ₹10,000 cr
- Credit guarantee for MSME, revamped scheme will take effect from April 1, 2023 with infusion of ₹9,000 crore corpus. Cost of Credit tp be reduced by 1%.
- NFIR to be designed in consultation with RBI’
-Permitting acquisition financing by IFSC units of foreign banks
-National Financial Information Registry to promote credit, facilitate inclusion. NFIR to be designed in consultation with RBI
- FM on health, education and skilling
– National digital library for children, adolescents
– Health, education and skilling
– New programme to promote R&D in pharma will be launched
– 157 nursing colleges will be established
– 57 medical colleges established since 2014
Miscellaneous
- The Centre will recruit 38,800 teachers and support staff for 740 Eklavya Model residential schools serving 3.5 lakh tribal students
- All cities and towns will be enabled for 100% mechanical de-sludging of septics tanks & sewers to transition from manhole to machine hole mode
- The outlay for Pradhan Mantri Awas Yojana is being enhanced by 66% to over ₹79,000 cr
- 50 additional airports, heliports, and advanced landings will be revived for improving air connectivity.
Mission Karma yogi:
1. To provide learning opportunities for govt employees.
2. For enhancing the ease of doing biz more than 39k compliances have been used.
Centres for Excellence AI: to make AI work for India 3 centres for excellence will be set up in top educational institutes.
- National data governance policy: access to anonymized data. KYC will be simplified.
RELIEF FOR MSMEs:
1. 95% of the forfeited amount will be returned to them by govt undertakings for contract failure during Covid.
2. ₹10,000 cr per year to be invested on Urban Infra Development fund.
- Settling contractual dispute: A voluntary settlement scheme will be used.
- Capital outlay of ₹4 lakh cr provided for Railways; highest-ever allocation since 2013-14
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