Printing of currency is an essential activity for any country, and India is no exception. The Reserve Bank of India (RBI) is responsible for the printing of currency notes in India. In this blog, we will take a closer look at the process of printing currency notes in India and the various factors that influence the process. Printing currency in India is the responsibility of the Reserve Bank of India (RBI), which is the central bank of the country. The RBI was established in 1935 and is headquartered in Mumbai. The RBI is responsible for determining the amount of currency notes that need to be printed in India. The amount of currency notes that are printed is determined based on various factors, such as the demand for currency in circulation, the need for new notes, and the replacement of old and damaged notes. Once the amount of currency notes to be printed is determined, the RBI places an order with the two government-owned printing presses in Nashik and Dewas. History of currency pr...
The history of budget in India dates back to the colonial period when the British introduced the concept of budgeting in India. The first budget was presented in 1860, when James Wilson, the then Finance Member of the British Government, presented the budget for the financial year 1860-61.
In independent India, the first budget was presented by R.K. Shanmukham Chetty, the then Finance Minister, on November 26, 1947. The budget was an important event in post-independence India as it laid down the government's plans and policies for the development of the country.
In the initial years, the budget was considered as a simple document, primarily outlining the revenue and expenditure of the government. However, over the years, the budget has evolved and become more comprehensive, covering various sectors of the economy, such as agriculture, industry, infrastructure, and social sectors.
Budget is one of the most important financial instruments for any country, and India is no exception. The budget of India represents the government's vision for the country's economy, and it sets the tone for the entire financial year. In this blog, we will take a look at the budget of India, starting from history to an overview of the current year budget by finance minister of India.
The key developments in the history of the Indian budget was the introduction of the New Economic Policy in 1991. The policy aimed to liberalize the economy and create a market-oriented system. As a result, the budget became more focused on reforms and structural changes in the economy.
The budget also played a crucial role in the implementation of various social welfare schemes, such as the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), the Pradhan Mantri Jan Dhan Yojana (PMJDY), and the Right to Education (RTE) Act. These schemes aimed to uplift the socio-economic status of the marginalized sections of society and provide them with a better standard of living.
In recent years, the budget has become a major event in the Indian political and economic calendar. The budget presentation is attended by dignitaries, economists, and the media, and is widely discussed and analyzed for its impact on the economy and the common man.
The last budget of India for the financial year 2022-2023 was presented by the finance minister Nirmala Sitharaman on 1st February 2022. The budget focused on several key areas such as agriculture, infrastructure, healthcare, education, and digitalization. The government announced several measures aimed at boosting the country's economy, which had been hit hard by the COVID-19 pandemic.
Now we take overview of current year budget. The Union Budget 2023-24 was presented by the Union Minister for Finance & Corporate Affairs, Smt. Nirmala Sitharaman on February 1st 2023. Focusing mainly on the agriculture and education sectors, the 2023 budget also offered provisions for green growth and inclusive development of all parts of society. The Union Budget 2023-24 also gave a broad idea of India’s economy and achievements during COVID-19. It also proposed new allotments for almost every sector to promote growth and job creation. In the following article, we will look into some of the highlights of the Union Budget for the financial year 2023-24.
Some of the major key points are outline from Union Budget 2023-24.
India’s Fiscal Projection & Estimations
The fiscal deficit in the financial year 2023-2024 is estimated at 5.9% of the GDP.
India’s growth is estimated to be among the highest in major economies at 7%.
The estimated total expenditure in 2023-24 is Rs. 45,03,097 crore.
Total receipts in the financial year 2022-23, excluding borrowings, are estimated at Rs. 41,87,232 crores.
As per the budget, the Central Government’s capital expenditure in 2023-24 has been estimated at Rs. 13,70,949 crores.
Taxation Policy (Direct and Indirect Taxes)
Income generated above 15 lakhs per annum would be taxed at 30% under the revised tax slab structure.
Income generated up to Rs. 7 lakhs would not be taxed.
The limit for tax exemption upon the retirement of non-government salaried employees has been increased to 25 lakhs.
The budget proposed a cap deduction from capital gains on investment in a residential house at 10 crores.
Under the incentives for start-ups, the government has extended by one year the time of incorporation for qualifying start-ups to claim tax benefits.
The minimum TDS threshold of Rs. 10,000 has been eliminated to clarify taxability relating to online gaming.
Under the new tax regime, a reduction in the TDS rate to 20 percent on the taxable portion of EPF withdrawal in non-PAN cases has been proposed.
New co-operatives that start manufacturing activities before the year ends shall benefit from a lower tax rate of 15 percent.
The budget proposed a greater limit of Rs 2 lakh per member for cash deposits and cash loans for Primary Agricultural Co-operative Societies and Primary Co-operative Agriculture and Rural Development Banks.
A larger ceiling of Rs 3 crore is being offered to cooperative societies for TDS on cash withdrawals.
No excise duty would be charged on blended compressed natural gas.
No customs duty would be charged on the import of capital goods and machinery required to manufacture lithium-ion cells for batteries used in electric vehicles.
Goods excluding textiles and agriculture would face a reduction in the number of basic customs duty rates.
Toys, bicycles, automobiles, and naphtha would be charged a slightly higher custom duty than the previous year.
Relief in customs duty on importing certain parts of mobile phones such as camera lenses would be provided.
The basic customs duty on electric kitchen chimneys has been increased from 7.5 to 15 percent.
The custom duty on heat coils has been reduced from 20 percent to 15 percent.
The basic customs duty rate on compounded rubber has been increased from 10 to 25 percent.
The chemical and metal sectors would have reduced customs rates and simplified tariff structures.
A reduction in the basic customs duty on seeds used in manufacturing lab-grown diamonds have been proposed.
National Calamity Contingent Duty (NCCD) on particular cigarettes has been increased by around 16%.
Allocation of Budget
As per the budget, the effective capital expenditure is budgeted at Rs. 13.7 lakh crore, which will be 4.5 percent of GDP.
Capital investment outlay is raised by 33 percent to Rs 10 lakh crores, which will be 3.3 percent of GDP.
The budget of India’s fiscal deficit for the year 2022-23 has been estimated
at 6.4% of the total GDP.
Agriculture & Agriculture related Industry.
Focusing on animal husbandry, dairy, and fisheries, the agriculture loan objective would be enhanced to Rs. 20 lakh crores.
The budget made allotments for the agricultural digital public infrastructure to be developed as an open source, open standard, and interoperable public good. This would enable six inclusive, farmer-centric solutions through crop planning and health information services, increased access to agricultural inputs, loans, and insurance, assistance with crop estimating, market intelligence, and support for the growth of the agri-tech industry and start-ups.
The government set up The Agriculture Accelerator Fund to encourage young rural entrepreneurs to launch agribusinesses. The Fund will seek to provide innovative and cost-effective solutions to problems encountered by farmers. In addition, it will introduce cutting-edge technologies that will alter agricultural methods and boost production and profitability.
The budget also made room for the Atmanirbhar Clean Plant Program, which would increase disease-free, high-quality planting material for high-value horticulture crops at the cost of 2,200 crores.
Education & Development
The government formulated the National Education Policy, which focuses on developing skills to facilitate job creation at scale.
The government also made provisions to set up one hundred labs to develop applications using 5G services in engineering institutions. The labs will focus on applications such as smart classrooms, precision agriculture, intelligent transport systems, and health care.
The budget proposed the establishment of one hundred and fifty-seven new nursing colleges. Centers for developing AI will be set up in the top educational institutes.
Healthcare Allocation
The Union Budget 2023 plans to allocate Rs 88,956 crore to health expenditures, a 2.71 percent increase from the previous year.
The government has allocated funds with the mission to eliminate sickle cell anemia by the year 2047.
MSMEs & Business
An Entity DigiLocker will be available to MSMEs, corporations, and nonprofit organizations. This will be to securely keep and share documents online, as needed, with various authorities, regulators, banks, and other business entities.
The government would provide an additional collateral-free guaranteed credit of Rs 2 lakh crore and reduce the cost of the credit by about 1 percent.
Start-Ups Benefits
A National Data Governance Policy will be published to promote innovation and research by start-ups and academics. This will provide access to data that has been anonymized.
From seven to ten years after incorporation, start-ups will be able to carry forward losses upon a change in shareholding under the revised budget.
Transports & Infrastructure Railways, Roadways, Logistics
Under the new budget, the 50-year interest-free loan to state governments for one more year would be extended, with a significantly increased expenditure of Rs 1.3 lakh crores.
The Railways have been allocated 2.20 lakh in capital expenditures.
Fifty more airports, heliports, water aerodromes, and advanced landing grounds will be established.
10,000 crores will be provided to The Urban Infrastructure Development Fund (UIDF).
One hundred crucial transport infrastructure projects have been planned for last and first-mile connections for ports, coal, steel, fertilizer, and food grains sectors. They will be prioritized with an investment of 75,000 crores.
Green Growth and Energy
A Green Credit Programme will be established under the Environment (Protection) Act to encourage behavioral change. This will incentivize environmentally sustainable and responsible behavior on the part of businesses, individuals, and local organizations and assist mobilize additional resources for such initiatives.
In the fiscal year 2023-2024, several programs for green fuel, green energy, and green farming will be commenced. These green growth initiatives reduce the carbon intensity of the economy and create substantial green employment prospects.
Under the GOBARdhan scheme, 500 new “waste to wealth” factories will be developed. These would consist of 200 compressed biogas plants, 75 of which will be located in urban areas, and 300 community or cluster-based plants with a total investment of Rs. 10,000 crores. In due time, a 5% CBG requirement will be implemented for all companies marketing natural and biogas. Appropriate financial support will be provided for the collection and distribution of bio-mass and bio-manure.
The proposed Amrit Dharohar program will be implemented over the next three years to encourage the optimal use of wetlands, increase bio-diversity, carbon stock, ecotourism opportunities, and income generation for local communities, the government will promote the unique conservation values of wetlands.
10,000 Bio-Input Resource Centres will be established, creating a network of micro-fertilizer and pesticide production at the national level.
The ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’ (MISHTI) will be implemented for mangroves planted along the coastline and on saltpan lands.
The recently formed National Green Hydrogen Mission, with a budget of Rs 19,700 crores, would facilitate the transition to a low carbon intensity economy and reduce reliance on fossil fuel imports.
This budget allocates Rs. 35,000 crores to the Ministry of Petroleum & Natural Gas for priority capital investments towards energy transition, net-zero targets, and energy security.
The government also plans to strengthen the Inter-state transmission system for evacuation and grid integration of 13 GW of renewable energy from Ladakh. A budget of Rs. 20,700 crores, including Rs. 8,300 crores in federal funding, is allocated to this cause.
Basic Amenities and Housing Schemes
Allocation for the PMAY-G housing scheme for the rural poor has been increased by 12% to Rs. 54,487. The allocation for the urban has been reduced to Rs. 25,103 crores from previous years’ Rs. 28708 crores.
Under the Ujjwala housing scheme, the new houses under PMAY-G will have free cooking gas connections and universal electrification.
Under the PM Awas Yojana two housing schemes have been allocated Rs. 79,590.
Other Allocations
As per the budget, Rs 44.6 crores will be used as insurance cover for those who apply under the PM Suraksha Bima.
The government would be awarding a cash transfer of Rs. 2.2 lakh crore under PM Kisan Samman Nidhi to 11.4 crore farmers. This will help provide income support to farmers and promote agricultural development.
Rs. 2516 crore has been set aside for the computerization of 63,000 credit societies.
Funds have been allocated to scrap old vehicles and ambulances of the state Central Government in efforts to be more environmentally conscious.
Phase 3 of the E-Courts project would be implemented at the cost of 7,000 crores to improve the administration of justice.
The budget for the year 2023 has announced a new saving scheme for women called the Mahila Samman Savings Certificate. This scheme focuses on the upliftment of women and helps them become more financially independent.
In attempts to promote a healthier and cleaner lifestyle, The Swachh Bharat Mission will install 11.7 million household toilets.
To battle the ongoing fight against Covid, the government plans to give 220 crores Covid vaccinations to pensioners
To provide financial inclusivity and expand financial access to economically weaker regions of society, Rs. 47.8 crores will be allocated to PM Jan Dhan’s bank accounts.
In conclusion, the 2023-2024 union budget of India reflects the government's focus on improving the economy, boosting the livelihoods of farmers, improving the quality of education, and strengthening the public healthcare system, among other things.
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