UNION BUDGET 2023 -24

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KEY FEATURES OF UNION BUDGET 2023
• While presenting the union budget 2023 finance minister Nirmala Sita
Raman said “and I quote I hope to build on the foundation of previous
budget and offer blueprint for India at 100 .she laid out seven priorities of
the budget and one of them included reaching the last mile

• For the health sector the finance minister announced that 157 new nursing
colleges would be established
• A new program to promote research in pharmaceuticals would be
launched
• A joint public and private medical research would be encouraged through
select ICMR labs
• The government would also roll out a mission to eliminate sickle cell
anemia by 2047
• For education sector she said a national digital library would be set up for
children and adolescents and states would be encouraged to set up
physical libraries at panchayat and ward levels
• More teachers will be recruited for a clubwear model residential schools
• On energy transition she said green growth efforts would help in reducing
the carbon intensity of the economy and present large green job
opportunities
• For women a new small saving schemes was proposed with a two -year
tenure it would come with a fixed rate of interest of 7 .5%

The Union Budget 2023 focuses on seven key areas to drive inclusive growth
and development in India. These priority areas are:
1. Inclusive development
 2. Reaching the last mile
3. Infrastructure and investment
4. Unleashing potential
5. Green growth
6. Youth power
7. The financial sector.

The Indian government has recently proposed changes to the tax slabs
under the new regime in the 2023 Budget announcement by the Finance
Minister Nirmala Sitharaman. Under the new proposal, taxpayers with
an annual income up to Rs 3 lakh are exempt from paying taxes, while
those with an income between Rs 3 lakh and Rs 6 lakh will be taxed at
5%. Those with an income between Rs 6 lakh and Rs 9 lakh will be taxed
at 10%, those between Rs 9 lakh and Rs 12 lakh at 15%, those between
Rs 12 lakh and Rs 15 lakh at 20%, and those with an income over Rs 15
lakh at 30%. The rebate under Section 87A, which helps reduce the
income tax liability, has also been extended to the new tax regime and
has been increased to Rs 7 lakh for taxpayers to claim. If the total
income is up to Rs 7 lakh after Chapter VIA deductions, the taxpayer can
claim the rebate under Section 87A and the income tax liability will
become nil.

NEW PROPOSED TAX SLAB FOR FY24

INCOME SLAB TAX UNDER NEW TAX REGIME
0-3 LAKH 0%
3-6 LAKH 5%
6-9 LAKH 10%
9-12 LAKH 15%
12-15 LAKH 20%
ABOVE 15 LAKH 30%
KEY BUDGET HIGHLIGHTS
• The budget reduced the tax burden for individuals opting for the new tax
regime.
• No tax on income up to 7 lakh a year in new tax regime .
• Govt proposes to reduce highest surcharge rate from 37% to 25 % in the
new tax regime.
• Govt.to double the deposit limit for the senior citizen savings scheme up
to Rs 30 lakh and monthly income account Scheme to 9 lakh.
• PAN will be used as a common identifier for all digital systems of
specified gov agencies.
• New coopereatives that commence manufacturing till march ,2024 to
get lower tax rate of 15%.
• Revamped credit guarantee for MSMEs to take effect from April 1,2023
with infusion of Rs 9000 crore in corpus.
• Scope of services in DigiLocker to be expanded.
• Govt moots amendments to banking regulation act to improve
governance in banks
• Govt intends to bring fiscal deficit below 4.5% of GDP by 2025 -26
The budget aims to increase investment in infrastructure with a capital
investment outlay increase of 33% to INR 10 lakh crore. This represents 3% of
GDP and is the third year in a row of steep increases. Additionally, the
government has made efforts to reduce business compliances and
decriminalize legal provisions to ease doing business and promote trust-based
governance.

The priority area of "inclusive development" focuses on reaching all segments

of the population and reducing inequalities. "Reaching the last mile" aims to
provide better access to essential services to remote and rural areas.
"Infrastructure and investment" emphasizes the importance of investment in
infrastructure for economic growth and job creation. "Unleashing potential"
involves enabling the growth of businesses, startups and entrepreneurs.
"Green growth" promotes sustainability and eco-friendly initiatives. "Youth
power" focuses on providing opportunities and resources for the development
of young people. Finally, the "Financial sector" prioritizes reforms and
improvements in the financial sector to enhance its stability and support the
growth of the economy.
Overall, the "Amrit kaal" initiative aims to improve the lives of citizens,
enhance productivity, and encourage investment, through a combination of
public investment in infrastructure and a focus on energy transition and
climate action.
Vision for Amrit Kaal
1. Opportunities for the citizens with focus on the youth
2. Growth and job creation
3. Strong and stable macro-economic environment

Human resource sector

Job creation:The budget focuses on professional balance and does not prioritize
political agendas. As a result, the budget provides opportunities for growth,
empowerment, and skill development in the field of human resources. This, in turn,
could lead to a reduction in unemployment. In other words, the budget is seen as
supportive of job creation and the development of human capital, which can help
to address the problem of unemployment.
The budget as having a comprehensive and forward-looking perspective. The
building of 50 airports is expected to generate immediate job openings.
Additionally, investment in power, roads, and ports is expected to provide job
opportunities in those sectors.

Upskilling: The budget has a focus on upskilling and reskilling of government

employees through the "Karm Yogi" initiative. This emphasis on skills
development is seen as a positive change and a first from any government. As a
result, there will be a lot of opportunities for HR professionals in the private
sector to support this initiative and drive employability. The HR professionals
will play a crucial role in helping organizations build their business, develop a
talent pipeline, and create job opportunities. Anil Gaur, group-CPO of Akums
Pharmaceuticals, expresses excitement about this focus on skills development,
which he believes will have a significant impact on the employment landscape.

The National Education Policy is considered a positive move because it will

place a greater emphasis on developing skills, which in turn will create job and
livelihood opportunities. Establishing Centers of Excellence for Artificial
Intelligence in leading educational institutions will also play a crucial role in
preparing the workforce for the future. If these initiatives are effectively
implemented, they will have a transformative impact on the Indian economy
and position India as a global hub for talent. Binu Philip, CHRO of Greater
India Zone at Schneider Electric, believes that the government's focus on
developing skills, creating jobs, and preparing young people to become future
leaders is a forward-thinking approach. Parineeta Cecil Lakra, Country People
and Culture Manager at IKEA India, also views the increase in the Income Tax
rebate limit as a positive step in the right direction.
Tech and innovation : The Budget 2023 has placed a significant emphasis on
technology and innovation, which has been well received by experts. This
emphasis includes the creation of three centers of excellence for artificial
intelligence (AI) in top educational institutions, training in fields such as
machine learning and robotics, and the implementation of a national data
governance framework.

Harshvendra Soin, Group CPO & Head Marketing of Tech Mahindra, believes
that the emphasis on upskilling the youth in cutting-edge technologies such as
AI, the Internet of Things, robotics, and drones will equip them with the skills
needed to embrace Industry 4.0 and drive technological innovations and
startups. Amit Sharma, CHRO of Volvo, also noted the increased focus on
talent development, citing the PM Kaushal Vikas program which offers courses
in fields such as medicine, robotics, mechatronics, IoT, and teacher training.
This program will not only help build a fully capable workforce but also align
the talent with their respective industries.

In addition to upskilling, the scheme focuses on bridging the talent gap through
apprenticeship programs and on-the-job training. The allocation of resources
towards in-demand careers, such as nursing, ensures a steady supply of skilled
medical professionals, according to Soin.
Contract and labour:The Union Budget 2023 has addressed the issue of faster
settlement of contractual disputes, which will benefit the manufacturing sector
where HR is responsible for managing contract labor. This is seen as a positive
move for the MSME (Micro, Small, and Medium Enterprises) sector, which will
receive a much-needed boost. This, in turn, will require increased work from
HR professionals. The budget highlights the government's priorities for human
resources development, women's empowerment, and sustainability, which are
all important aspects of the first budget of the Amrit Kaal era.

Finance sector
The Finance Minister Nirmala Sitharaman in Budget 2023 has proposed
changes to the angel tax provision, which is a part of Section 56(2) of the
Income Tax law. This provision imposes tax on the amount received by a
privately held company when it issues shares at a price higher than fair market
value (FMV). The revisions proposed in the Budget aim to expand the specific
anti-abuse provisions and bring non-resident investors under the scope of
Section 56(2) of the Income Tax Act, 1961. According to Amit Agarwal, Par
Development and stability: The Union Budget 2023 has placed an emphasis on
job creation, women's empowerment, and serving marginalized groups. This
focus on development and stability is expected to contribute to the resilience of
the country. Additionally, the budget offers incentives for startups in terms of
tax exemptions, as well as increased emphasis on research and digitization. This
means that the budget has something to offer for people working in various
settings, including startups, corporations, and entrepreneurs. Overall, the budget
provides a comprehensive outlook on human resource development and
sustainability.

The Budget 2023 by Finance Minister Nirmala Sitharaman has proposed a

number of measures aimed at improving the financial sector in India. These
measures include the revamping of the credit guarantee scheme for MSMEs,
setting up of a national financial information registry, conducting a
comprehensive review of existing regulations by financial sector regulators,
continued support for digital public infrastructure, and additional measures to
improve governance and investor protection in the banking sector and securities
market.
The proposals in the budget also aim to simplify and rationalise direct tax
provisions to reduce the compliance burden and provide tax relief to citizens.
The indirect tax proposals aim to promote exports, boost domestic
manufacturing, enhance domestic value addition, encourage green energy and
mobility, and reduce compliance burden through fewer tax rates and improved
tax administration. Overall, the budget proposals aim to maintain stability in
taxation and promote entrepreneurship while ensuring investor protection and
capacity building in the financial sector.
The Union Budget 2023 was presented at a challenging time for the global
economy, with a range of economic and political uncertainties affecting many
countries. Despite India's recent economic success, there is a growing concern
about the potential for a slowdown, as the country is not immune to the wider
economic headwinds. Despite efforts by central banks and governments around
the world, there are still persistent challenges, such as slowing growth and high
inflation, that are affecting the global economy. These macroeconomic factors
highlight the importance of the government's decisions and policies in the
Union Budget 2023, as they will play a critical role in determining the country's
economic future.
• Setting up of national financial information registry: to enable the
efficient lending .promote financial inclusion and enhance
financial stability
• Setting up of a central data processing centre :for faster handling of
administrative work under the companies Act

• Credit guarantee scheme for MSMEs :expanded corpus under a

revamped scheme to enable additional collateral free guaranteed
credit of Rs 2 lakh crore

• Mahila Samman Bachat Patra :one-time new small savings scheme

for a 2 year period with a deposit facility of up to Rs 2 lakh for
women

• Benefits for Senior citizens :enhanced maximum deposit limit for

senior citizens scheme from 15 to 30 lakh
Marketing sector
Kartik Sharma, the Group CEO of Omnicom Media Group (India), believes that
the Union Budget 2023 is growth-oriented, future-focused, and abundant with
reforms that cover all aspects of the economy. He considers the budget to be
progressive and one that will widen India's horizons and further strengthen its
economic position globally. Sharma highlights the strong focus on capital
expenditure (Capex) in the budget as a clear commitment by the government to
boost infrastructure and the overall economy. He also mentions the positive
relief on the personal tax front as a friendly move for the common man, and the
increase in the taxation slabs as an attempt to move people to the new tax
regime, expected to benefit middle-class citizens. The budget is also seen as
giving impetus to the digital economy and transformation, with new frontiers of
innovation like Artificial Intelligence (AI) propelled front and center to be
applied across various sectors. Sharma also highlights the heightened focus on
upskilling the nation's youth in new-age skills and courses like AI, Robotics,
IoT, and more. He believes that as companies earmark their Capex, advertisers
will have their eyes set on these new policies, resulting in an expected growth of
the AdEx for the year.
Namit Puri, Managing Director and Partner-Retail and FMCG at BCG India,
highlights that the recent budget addresses the issue of inflation and its impact
on consumption. Despite India's strong economic performance and consumer
confidence, inflation has affected consumer spending, leading to a slowdown in
consumption volumes for the FMCG sector. The increase in costs of key raw
materials has resulted in an 8-10% price hike and has had a greater impact on
urban consumption which grew by only 1-2% while rural demand has remained
flat or declined.

In Puri's view, the budget tackles the challenge of inflation by implementing

prudent policies, making supply-side interventions, and changing the tax
structure. These measures aim to alleviate the impact of inflation and put more
money into the hands of consumers to revive spending. Additionally, the budget
also focuses on reviving rural demand by increasing disposable income,
allocating more funds to farms, and boosting rural infrastructure and
connectivity. This, according to Puri, will create long-term jobs and help to
boost the economy.
He also notes that India remains a net importer of various items, including
consumer electronics and components, and that the government's sustained
focus on encouraging start-ups and local manufacturing through the Production
Linked Incentive (PLI) scheme is a step in the right direction towards making
Indian companies more competitive globally.

The government's recent measures to support the growth of the Micro, Small,
and Medium Enterprises (MSME) sector are expected to have a positive impact
on the sector. According to the Economic Survey 2022-2023, credit growth to
the MSME sector has been high, averaging over 30.6% from January to
November 2022. The budget presented for 2023-2024 includes a revamped
credit guarantee for MSMEs, which will be implemented from April 1, 2023,
with an investment of Rs 9,000 crore in the corpus. This scheme will provide
additional collateral-free guaranteed credit of Rs 2 lakh crore and reduce the
cost of credit by 1%, which is expected to have a positive impact on the sector.
These measures are expected to increase the marketing budget of MSMEs,
helping them grow and recover from the blow they suffered during the
pandemic. Overall, the retail market views these measures as a positive sign for
the MSME sector.

Analytics sector
The 2023 Union Budget prioritizes inclusive development, technology and
investment. The focus on digitalization, including setting up of digital libraries,
a one-stop KYC system, and promoting PAN as a common identifier, is
expected to create more jobs in the tech sector and position India as a global
technology leader. The budget aims to reduce the compliance burden and
improve the ease of doing business, while also recognizing the IT/ITES SEZs'
contribution to foreign exchange earnings. The budget provides strong support
for infrastructure, technology and entrepreneurship, fueling growth for the tech
industry. The expected passage of the DESH bill is also expected to increase
exports by optimizing infrastructure utilization.

A look at the key takeaways from the union budget 2023

 • The new tax regime is set to become the default tax regime for
the country
• Those earning income of up to Rs 70000 will not have to pay
any tax
• The budget has earmarked Rs 9000 crores for infusion in the
MSME segment
• The budget also emphasizes the transition to green energy which
will be facilitated by Rs 35000 crores and priority capital
• Specific cigarettes are getting a 16 % hike which eventually
make them more expensive
• A massive fund infusion has been announced for the railway
sector for the upcoming fiscal year ,with a record Rs 2,40000
crores been sat aside for capital outlay in the railway segment

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