Table of contents:
- Introduction: Union Budget 2023
- Union Budget 2023-24: Key highlights and updates
- Income tax rebate increased to Rs. 7 lakhs
- Maximum deposit limit for Senior Citizens Savings Scheme went from Rs. 15 lakhs to Rs. 30 lakhs
- Credit guarantee for MSMEs – revamped scheme from 1st April 2023 with Rs.9000 crore infusion
- 38,800 teachers and support staff to be recruited for 740 Eklavya Model Residential Schools
- Min. 50 destinations to be selected and developed as a complete package for domestic and foreign tourists
- Economic growth expected to be at 7% despite slowdown; highest among major economies
- Entity DigiLockers to be set up to facilitate secure online storing and sharing of documents with the business ecosystem
- Digital Payments recorded 76% in transaction volume and 91% in transaction value
- 3 AI centres for excellence to be set up in top educational institutes in India
- India hosts the G20 summit for 2023: What can it mean for us
Introduction: Union Budget 2023
On February 1, 2023, Finance Minister Nirmala Sitharaman delivered the final full-fledged Union Budget of the Modi government before the 2024 Lok Sabha elections.
She introduced the budget as “the first budget of Amrit Kaal” at the beginning of her speech and used the phrase “Amrit Kaal” several times during her speech.
Amrit Kaal finds its roots in Vedic astrology and refers to the golden era. The government has laid emphasis on ‘Amrit Kaal’ saying that the foreseeable future would be very prosperous for India with economic growth and social justice. It will also signal a self-reliant and better future.
“Our vision for the ‘Amrit Kaal’ includes a technology-driven and knowledge-based economy, with strong public finances and a robust financial sector. To achieve this ‘jan-bhaagidari’ (public participation) through ‘sabka saath, sabka prayas’ ( collective efforts by all) is essential,” Sitharaman said.
The Indian government is also actively promoting digital payments under its “Digital India” initiative, to drive financial inclusion and reduce cash transactions. It has implemented several measures to encourage the adoption of online payment gateway and UPI.
Keeping in mind the primary theme/goal of this year’s budget, let’s now look at some of the key announcements and updates in the 2023 budget as presented by FM Nirmala Sitharaman.
Therefore, it’s advisable to refer to the latest information from official sources or news channels to stay updated on India’s current view and regulations regarding online payments and UPI.
Remember, a good payment gateway supports all kinds of payment methods, but it’s essential your payment system gets the best payment gateway support best payment gateway support
Union Budget 2023-24: Key Highlights and Updates
1. Income tax rebate increased to Rs. 7 lakhs
FM Nirmala Sitharaman has proposed a new tax regime that will boost the income tax rebate limit from ₹5 lakhs to ₹7 lakhs.
In both the old and new tax regimes, people with income up to Rs. 5 lakhs currently do not pay any income tax. The FM has suggested extending the refund limit in the new tax system to Rs. 7 lakhs. People under the new tax system will not be required to pay any tax on income up to Rs. 7 lakhs.
2. Maximum deposit limit for Senior Citizens Savings Scheme went from Rs. 15 lakhs to Rs. 30 lakhs
In the Budget for 2023, the Senior Citizen Savings Scheme (SCSS) investment limit was raised from Rs 15 lakh to Rs 30 lakh.
The government increased the interest rate on the Senior Citizen Savings Scheme (SCSS) to 8% for the quarter ending March 31, 2023.
The Finance Minister also announced a new small savings scheme for women.
3. Credit guarantee for MSMEs – revamped scheme from 1st April 2023 with Rs.9000 crore infusion
Credit guarantee schemes for MSMEs were already in place through the government and were significantly expanded during the Covid era.
The budget announced an update to the current guarantee schemes as well as a new allocation of Rs 9000 crore in the capital with a 1% reduction in the cost of credit.
The industry will be able to access an additional Rs 2 lakh crore in credit, and the smaller businesses, which are still struggling to recover from the stress of Covid stress, will receive relief.
4. 38,800 teachers and support staff to be recruited for 740 Eklavya Model Residential Schools
For 740 residential schools using the Eklavya Model, the Center will hire 38,800 teachers and other staff to educate 3.5 lakh tribal students.
The Scheduled Castes, Scheduled Tribes, OBCs, women, and members of the disadvantaged classes will profit enormously from this.
The construction of a national digital library and other information resources for kids will also give them access to high-quality books, boosting their educational experience and developing our nation.
5. Min. 50 destinations to be selected and developed as a complete package for domestic and foreign tourists
FM Nirmala Sitharaman announced that at least 50 destinations will be chosen and developed as part of a comprehensive tourism package for both domestic and foreign tourists.
These locations would be chosen through a challenge mode using an integrated and creative strategy, with both local and international travellers as the main focus of tourism growth.
To improve the tourist experience, the finance minister also suggested creating an app that would make all necessary information about the tourist destination available easily.
6. Economic growth expected to be at 7% despite slowdown; highest among major economies
India’s economic growth is anticipated to fall to 6.5% in the fiscal year beginning in April, according to a World Bank report. As per the report, the annual average retail inflation will be 7.1%.
India will remain the fastest-growing major economy in the world in FY24 despite slowing growth, thanks to solid domestic demand and an increase in capital expenditure amid persisting political and economic uncertainties from abroad.
7. Entity DigiLockers to be set up to facilitate secure online storing and sharing of documents with the business ecosystem
DigiLocker, a secure cloud-based platform for document and certificate storage, sharing, and verification, was introduced in 2015.
With the approval of the user, it functions as a secure document exchange platform similar to a payment gateway between a trusted issuer and a trusted requester/verifier.
According to Finance Minister Nirmala Sitharaman’s announcement in her budget address for 2023–2024, the KYC procedure will be made simpler by expanding DigiLocker services.
A new digital public infrastructure (DPI) for agriculture was also announced by her.
8. Digital Payments recorded 76% in transaction volume and 91% in transaction value
This is a strong indicator of not only an increase in the number of transactions but also an increase in the average value of each transaction.
The growth in digital payments has been a significant trend in recent years. This trend is likely driven by the convenience and efficiency that digital payments offer, as well as a growing preference for cashless transactions.
This is likely to have far-reaching consequences for the financial industry, as well as the wider economy, as digital payments become the norm and traditional methods of payment become less common.
9. 3 AI centres for excellence to be set up in top educational institutes in India
During her budget statement in the Lok Sabha, FM Nirmala Sitharaman announced the establishment of 100 labs in engineering universities and three centres of excellence for artificial intelligence in leading educational institutions.
In order to build applications employing 5G services, Sitharaman stated that those 100 labs would be established in engineering colleges in partnership with various authorities, regulators, banks, and other businesses.
India hosts the G20 summit for 2023: What can it mean for us
As India prepares to host the G20 summit, the country has a unique opportunity to play a leading role in shaping the future of the global economy.
The G20 is a forum for the world’s largest economies to come together and address issues of global concern, and hosting this summit provides India with the platform to showcase its vision for the world and to play a more prominent role in shaping the international economic order.
By hosting the G20, India has the opportunity to present its views on key global economic issues, such as trade, investment, and financial stability.
The country can use this platform to advocate for a more equitable and sustainable world order, where all nations have an equal opportunity to grow and prosper.
India can also use this opportunity to highlight its own achievements in the economic and social spheres and to promote its role as a leader in the developing world.
Furthermore, hosting the G20 summit will provide India with a valuable opportunity to deepen its relationships with other major economies and build stronger links with the global financial and business communities.
By leveraging this opportunity, India can take a step towards fulfilling its vision of becoming a major economic power and playing a more influential role in shaping the future of the world.
In conclusion, the Union Budget 2023 presented by FM Nirmala Sitharaman has emphasized on creating a more inclusive and sustainable future for the country. With a focus on job creation, infrastructure development, and improving the quality of life for citizens, this budget sets the foundation for a strong and resilient economy.
The new tax regime, which aims to simplify the compliance process and reduce the burden on taxpayers, is expected to provide a much-needed boost to the middle class.
The increased allocation of funds towards healthcare and education will also help improve the overall standard of living in the country.
While some of the measures may take time to show results, the overall direction of the budget appears positive and aligned with the needs of the people.
It will be interesting to see how the government plans to implement these proposals and how they will impact the economy in the long term.
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