Finance Minister Nirmala Sitharaman is going to present the Union Budget 2023-24 today (Wednesday, February 1) at 11 am, her fifth and the government’s last full Budget before the general elections of 2024. The Union Budget is a big financial document of the country that reveals the projected receivables and payables of the government. Here are key things to watch out for in the Budget 2023:
Fiscal Deficit
Fiscal deficit is one of the important metrics among markets and policymakers to follow. It shows the health of the government’s finances and its dependency on the borrowing. According to the latest data available, India’s fiscal deficit during April-December 2022 stood at Rs 9.93 lakh crore, or 59.8 per cent of the full-financial year target. In the corresponding period last year, the deficit had stood at 50.4 per cent of the full-FY22 target. The fiscal deficit is the difference between expenditure and revenue of the government.
Disinvestment Target
The government’s disinvestment target in this year’s Budget is also a key watch out for. The budgeted disinvestment target for the current financial year 2022-23 is Rs 65,000 crore. Out of this, the government has so far raised around Rs 31,000 crore from divesting its equities in the central public sector enterprises. The government in the past four years has consistently missed the budgetary target.
The current financial year saw India’s mega IPO, LIC IPO. Now, there is a pending privatisation of two state-owned banks and one general insurance company.
Income Tax Provisions
Individuals expect income tax relaxation in the Budget 2023. There is an expectation that the government might give relief to individual taxpayers by raising tax exemption or rebate limits. There are also demands of raising the deductions limit under Section 80C in the Union Budget 2023-23, compared with Rs 1.5 lakh currently.
Capital Expenditure
In the previous Budget 2022, capital expenditure got a boost to support the pandemic-hit economy. Finance minister Nirmala Sitharaman, as per reports, might unveil big spending plans for crowding in private investment for the financial year 2023-24. The government is expected to continue with its plan to ramp up capital expenditure in the upcoming Budget 2023-24 with a special focus on states’ spending on capital assets.
LTCG
The government is likely to change its capital gains tax structure in the Budget 2023-24 to bring parity in various asset classes, like equity, debt and immovable property, to tax them uniformly, according to reports. Asset classes currently are not taxed uniformly and have different holding periods for levying capital gains tax, which needs to be aligned.
Borrowing
The government’s net and gross borrowing are likely to remain higher at over Rs 12 lakh crore and Rs 15.1 lakh crore, respectively, in FY24. This is because capital investments and spending on rural schemes are expected to increase.
Rural Schemes
As is the last full Budget before the general elections of 2024, the government is expected to announce measures to boost agriculture, rural infrastructure and rural income through schemes.
Millets
The Union Budget might announce a special fund or a scheme for millets as India prepares to steer the celebration of International Millet Year 2023 and promote the cultivation and consumption of nutri-cereals. The government sponsored the proposal for the International Year of Millets (IYM) 2023, which was accepted by the United Nations General Assembly (UNGA).
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