The Union Budget ticks all the expected boxes viz. pump priming the economy with 33% higher CapEx allocation; pushing consumption by encouraging taxpayers to adopt the new tax regime with lower taxes and consume the additional money in hand rather than using savings to lower the tax burden in the old regime; and sticking to the fiscal consolidation path with the fiscal deficit target being brought down to 5.9%.
FM announced an increase in the income tax rebate limit from Rs 5 lakh to Rs 7 lakh stating that the new tax regime will now be the default tax regime. She also proposed to change the tax structure in this regime by reducing the number of tax slabs to 5 and increasing the tax exemption limit to Rs 3 lakh.
FM proposed to raise the capital expenditure target by 33% to Rs. 10 lakh crore for the next fiscal year starting April 1, which is 3.3% of the country’s economic output.
Finance minister Nirmala Sitharaman provided an outlay of Rs 35,000 crore to achieve energy transition and net zero objectives and listed green growth among seven priorities of the government.
Government said that a capital outlay of Rs 2.4 lakh crore has been provided for railways, which is highest-ever allocation since 2013-14. Finance minister Nirmala Sitharaman said that the capital outlay was fixed for 2023-24.
Government will target a budget deficit of 5.9% of GDP for 2023/24, compared to 6.4% for the current fiscal year.
