Budget 2023-2024

Speech of
Nirmala Sitharaman
Minister of Finance

February 1, 2023

Hon’ble Speaker,
I present the Budget for 2023-24. This is the first Budget in Amrit
Kaal.

Introduction

1. This Budget hopes to build on the foundation laid in the previous

Budget, and the blueprint drawn for India@100. We envision a prosperous
and inclusive India, in which the fruits of development reach all regions and
citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and
Scheduled Tribes.
2. In the 75th year of our Independence, the world has recognised the
Indian economy as a ‘bright star’. Our current year’s economic growth is
estimated to be at 7 per cent. It is notable that this is the highest among all
the major economies. This is in spite of the massive slowdown globally
caused by Covid-19 and a war. The Indian economy is therefore on the right
track, and despite a time of challenges, heading towards a bright future.
3. Today as Indians stands with their head held high, and the world
appreciates India’s achievements and successes, we are sure that elders
who had fought for India’s independence, will with joy, bless us our
endeavors going forward.

Resilience amidst multiple crises

4. Our focus on wide-ranging reforms and sound policies, implemented

through Sabka Prayas resulting in Jan Bhagidari and targeted support to
those in need, helped us perform well in trying times. India’s rising global
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profile is because of several accomplishments: unique world class digital

public infrastructure, e.g., Aadhaar, Co-Win and UPI; Covid vaccination drive
in unparalleled scale and speed; proactive role in frontier areas such as
achieving the climate related goals, mission LiFE, and National Hydrogen
Mission.

5. During the Covid-19 pandemic, we ensured that no one goes to bed

hungry, with a scheme to supply free food grains to over 80 crore persons
for 28 months. Continuing our commitment to ensure food and nutritional
security, we are implementing, from 1st January 2023, a scheme to supply
free food grain to all Antyodaya and priority households for the next one
year, under PM Garib Kalyan Anna Yojana (PMGKAY). The entire
expenditure of about ` 2 lakh crore will be borne by the Central
Government.

G20 Presidency: Steering the global agenda through challenges

6. In these times of global challenges, the G20 Presidency gives us a

unique opportunity to strengthen India’s role in the world economic order.
With the theme of ‘Vasudhaiva Kutumbakam’, we are steering an
ambitious, people-centric agenda to address global challenges, and to
facilitate sustainable economic development.

Achievements since 2014: Leaving no one behind

7. The government’s efforts since 2014 have ensured for all citizens a
better quality of living and a life of dignity. The per capita income has more
than doubled to ` 1.97 lakh.

8. In these nine years, the Indian economy has increased in size from
being 10th to 5th largest in the world. We have significantly improved our
position as a well-governed and innovative country with a conducive
environment for business as reflected in several global indices. We have
made significant progress in many Sustainable Development Goals.
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9. The economy has become a lot more formalised as reflected in the

EPFO membership more than doubling to 27 crore, and 7,400 crore digital
payments of ` 126 lakh crore through UPI in 2022.

10. The efficient implementation of many schemes, with

universalisation of targeted benefits, has resulted in inclusive development.
Some of the schemes are:

i. 11.7 crore household toilets under Swachh Bharat Mission,

ii. 9.6 crore LPG connections under Ujjawala,

iii. 220 crore Covid vaccination of 102 crore persons,

iv. 47.8 crore PM Jan Dhan bank accounts,

v. Insurance cover for 44.6 crore persons under PM Suraksha

Bima and PM Jeevan Jyoti Yojana, and

vi. Cash transfer of ` 2.2 lakh crore to over 11.4 crore farmers
under PM Kisan Samman Nidhi.

Vision for Amrit Kaal – an empowered and inclusive economy

11. Our vision for the Amrit Kaal includes technology-driven and
knowledge-based economy with strong public finances, and a robust
financial sector. To achieve this, Jan Bhagidari through Sabka Saath Sabka
Prayas is essential.

12. The economic agenda for achieving this vision focuses on three
things: first, facilitating ample opportunities for citizens, especially the
youth, to fulfil their aspirations; second, providing strong impetus to growth
and job creation; and third, strengthening macro-economic stability.
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13. To service these focus areas in our journey to India@100, we believe

that the following four opportunities can be transformative during Amrit
Kaal.

1) Economic Empowerment of Women: Deendayal Antyodaya Yojana

National Rural Livelihood Mission has achieved remarkable success
by mobilizing rural women into 81 lakh Self Help Groups. We will
enable these groups to reach the next stage of economic
empowerment through formation of large producer enterprises or
collectives with each having several thousand members and
managed professionally. They will be helped with supply of raw
materials and for better design, quality, branding and marketing of
their products. Through supporting policies, they will be enabled to
scale up their operations to serve the large consumer markets, as
has been the case with several start-ups growing into ‘Unicorns’.

2) PM VIshwakarma KAushal Samman (PM VIKAS): For centuries,

traditional artisans and craftspeople, who work with their hands
using tools, have brought renown for India. They are generally
referred to as Vishwakarma. The art and handicraft created by them
represents the true spirit of Atmanirbhar Bharat. For the first time, a
package of assistance for them has been conceptualized. The new
scheme will enable them to improve the quality, scale and reach of
their products, integrating them with the MSME value chain. The
components of the scheme will include not only financial support
but also access to advanced skill training, knowledge of modern
digital techniques and efficient green technologies, brand
promotion, linkage with local and global markets, digital payments,
and social security. This will greatly benefit the Scheduled Castes,
Scheduled Tribes, OBCs, women and people belonging to the weaker
sections.
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3) Tourism: The country offers immense attraction for domestic as well

as foreign tourists. There is a large potential to be tapped in tourism.
The sector holds huge opportunities for jobs and entrepreneurship
for youth in particular. Promotion of tourism will be taken up on
mission mode, with active participation of states, convergence of
government programmes and public-private partnerships.

4) Green Growth: We are implementing many programmes for green

fuel, green energy, green farming, green mobility, green buildings,
and green equipment, and policies for efficient use of energy across
various economic sectors. These green growth efforts help in
reducing carbon intensity of the economy and provides for large-
scale green job opportunities.

Priorities of this Budget

14. The Budget adopts the following seven priorities. They complement
each other and act as the ‘Saptarishi’ guiding us through the Amrit Kaal.

1) Inclusive Development
2) Reaching the Last Mile
3) Infrastructure and Investment
4) Unleashing the Potential
5) Green Growth
6) Youth Power
7) Financial Sector

Priority 1: Inclusive Development

15. The Government’s philosophy of Sabka Saath Sabka Vikas has

facilitated inclusive development covering in specific, farmers, women,
youth, OBCs, Scheduled Castes, Scheduled Tribes, divyangjan and
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economically weaker sections, and overall priority for the underprivileged

(vanchiton ko variyata). There has also been a sustained focus on Jammu &
Kashmir, Ladakh and the North-East. This Budget builds on those efforts.

Agriculture and Cooperation

Digital Public Infrastructure for Agriculture

16. Digital public infrastructure for agriculture will be built as an open

source, open standard and inter operable public good. This will enable
inclusive, farmer-centric solutions through relevant information services for
crop planning and health, improved access to farm inputs, credit, and
insurance, help for crop estimation, market intelligence, and support for
growth of agri-tech industry and start-ups.

Agriculture Accelerator Fund

17. An Agriculture Accelerator Fund will be set-up to encourage agri-

startups by young entrepreneurs in rural areas. The Fund will aim at
bringing innovative and affordable solutions for challenges faced by
farmers. It will also bring in modern technologies to transform agricultural
practices, increase productivity and profitability.

Enhancing productivity of cotton crop

18. To enhance the productivity of extra-long staple cotton, we will

adopt a cluster-based and value chain approach through Public Private
Partnerships (PPP). This will mean collaboration between farmers, state and
industry for input supplies, extension services, and market linkages.

Atmanirbhar Horticulture Clean Plant Program

19. We will launch an Atmanirbhar Clean Plant Program to boost

availability of disease-free, quality planting material for high value
horticultural crops at an outlay of ` 2,200 crore.
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Global Hub for Millets: ‘Shree Anna’

20. “India is at the forefront of popularizing Millets, whose consumption

furthers nutrition, food security and welfare of farmers,” said Hon’ble Prime
Minister.

21. We are the largest producer and second largest exporter of ‘Shree
Anna’ in the world. We grow several types of 'Shree Anna' such as jowar,
ragi, bajra, kuttu, ramdana, kangni, kutki, kodo, cheena, and sama. These
have a number of health benefits, and have been an integral part of our
food for centuries. I acknowledge with pride the huge service done by small
farmers in contributing to the health of fellow citizens by growing these
‘Shree Anna’.

22. Now to make India a global hub for 'Shree Anna', the Indian Institute
of Millet Research, Hyderabad will be supported as the Centre of Excellence
for sharing best practices, research and technologies at the international
level.

Agriculture Credit

23. The agriculture credit target will be increased

to ` 20 lakh crore with focus on animal husbandry, dairy and fisheries.

Fisheries

24. We will launch a new sub-scheme of PM Matsya Sampada Yojana

with targeted investment of ` 6,000 crore to further enable activities of
fishermen, fish vendors, and micro & small enterprises, improve value chain
efficiencies, and expand the market.

Cooperation

25. For farmers, especially small and marginal farmers, and other
marginalised sections, the government is promoting cooperative-based
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economic development model. A new Ministry of Cooperation was formed

with a mandate to realise the vision of ‘Sahakar Se Samriddhi’. To realise
this vision, the government has already initiated computerisation of 63,000
Primary Agricultural Credit Societies (PACS) with an investment of ` 2,516
crore. In consultation with all stakeholders and states, model bye-laws for
PACS were formulated enabling them to become multipurpose PACS. A
national cooperative database is being prepared for country-wide mapping
of cooperative societies.

26. With this backdrop, we will implement a plan to set up massive

decentralised storage capacity. This will help farmers store their produce
and realize remunerative prices through sale at appropriate times. The
government will also facilitate setting up of a large number of multipurpose
cooperative societies, primary fishery societies and dairy cooperative
societies in uncovered panchayats and villages in the next 5 years.

Health, Education and Skilling

Medical & Nursing Colleges

27. One hundred and fifty-seven new nursing colleges will be

established in co-location with the existing 157 medical colleges established
since 2014.

Sickle Cell Anaemia Elimination Mission

28. A Mission to eliminate Sickle Cell Anaemia by 2047 will be launched.

It will entail awareness creation, universal screening of 7 crore people in the
age group of 0-40 years in affected tribal areas, and counselling through
collaborative efforts of central ministries and state governments.

Medical Research
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29. Facilities in select ICMR Labs will be made available for research by
public and private medical college faculty and private sector R&D teams for
encouraging collaborative research and innovation.

Pharma Innovation

30. A new programme to promote research and innovation in

pharmaceuticals will be taken up through centers of excellence. We shall
also encourage industry to invest in research and development in specific
priority areas.

Multidisciplinary courses for medical devices

31. Dedicated multidisciplinary courses for medical devices will be

supported in existing institutions to ensure availability of skilled manpower
for futuristic medical technologies, high-end manufacturing and research.

Teachers’ Training

32. Teachers’ training will be re-envisioned through innovative

pedagogy, curriculum transaction, continuous professional development,
dipstick surveys, and ICT implementation. The District Institutes of
Education and Training will be developed as vibrant institutes of excellence
for this purpose.

National Digital Library for Children and Adolescents

33. A National Digital Library for children and adolescents will be set-up
for facilitating availability of quality books across geographies, languages,
genres and levels, and device agnostic accessibility. States will be
encouraged to set up physical libraries for them at panchayat and ward
levels and provide infrastructure for accessing the National Digital Library
resources.
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34. Additionally, to build a culture of reading, and to make up for

pandemic-time learning loss, the National Book Trust, Children’s Book Trust
and other sources will be encouraged to provide and replenish non-
curricular titles in regional languages and English to these physical libraries.
Collaboration with NGOs that work in literacy will also be a part of this
initiative. To inculcate financial literacy, financial sector regulators and
organizations will be encouraged to provide age-appropriate reading
material to these libraries.

Priority 2: Reaching the Last Mile

35. Prime Minister Vajpayee’s government had formed the Ministry of

Tribal Affairs and the Department of Development of North-Eastern Region.
To provide a sharper focus to the objective of ‘reaching the last mile’, our
government has formed the ministries of AYUSH, Fisheries, Animal
Husbandry and Dairying, Skill Development, Jal Shakti and Cooperation.

Aspirational Districts and Blocks Programme

36. Building on the success of the Aspirational Districts Programme, the

Government has recently launched the Aspirational Blocks Programme
covering 500 blocks for saturation of essential government services across
multiple domains such as health, nutrition, education, agriculture, water
resources, financial inclusion, skill development, and basic infrastructure.

Pradhan Mantri PVTG Development Mission

37. To improve socio-economic conditions of the particularly vulnerable

tribal groups (PVTGs), Pradhan Mantri PVTG Development Mission will be
launched. This will saturate PVTG families and habitations with basic
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facilities such as safe housing, clean drinking water and sanitation,

improved access to education, health and nutrition, road and telecom
connectivity, and sustainable livelihood opportunities. An amount
of ` 15,000 crore will be made available to implement the Mission in the
next three years under the Development Action Plan for the Scheduled
Tribes.

Eklavya Model Residential Schools

38. In the next three years, centre will recruit 38,800 teachers and
support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh
tribal students.

Water for Drought Prone Region

39. In the drought prone central region of Karnataka, central assistance

of ` 5,300 crore will be given to Upper Bhadra Project to provide sustainable
micro irrigation and filling up of surface tanks for drinking water.

PM Awas Yojana

40. The outlay for PM Awas Yojana is being enhanced

by 66 per cent to over ` 79,000 crore.

Bharat Shared Repository of Inscriptions (Bharat SHRI)

41. ‘Bharat Shared Repository of Inscriptions’ will be set up in a digital

epigraphy museum, with digitization of one lakh ancient inscriptions in the
first stage.

Support for poor prisoners

42. For poor persons who are in prisons and unable to afford the
penalty or the bail amount, required financial support will be provided.
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Priority 3: Infrastructure & Investment

43. Investments in Infrastructure and productive capacity have a large

multiplier impact on growth and employment. After the subdued period of
the pandemic, private investments are growing again. The Budget takes the
lead once again to ramp up the virtuous cycle of investment and job
creation.

Capital Investment as driver of growth and jobs

44. Capital investment outlay is being increased steeply for the third
year in a row by 33 per cent to ` 10 lakh crore, which would be 3.3 per cent
of GDP. This will be almost three times the outlay in 2019-20.

45. This substantial increase in recent years is central to the

government’s efforts to enhance growth potential and job creation, crowd-
in private investments, and provide a cushion against global headwinds.

Effective Capital Expenditure

46. The direct capital investment by the Centre is complemented by the

provision made for creation of capital assets through Grants-in-Aid to
States. The ‘Effective Capital Expenditure’ of the Centre is budgeted at
` 13.7 lakh crore, which will be 4.5 per cent of GDP.

Support to State Governments for Capital Investment

47. I have decided to continue the 50-year interest free loan to state
governments for one more year to spur investment in infrastructure and to
incentivize them for complementary policy actions, with a significantly
enhanced outlay of ` 1.3 lakh crore.

Enhancing opportunities for private investment in Infrastructure

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48. The newly established Infrastructure Finance Secretariat will assist

all stakeholders for more private investment in infrastructure, including
railways, roads, urban infrastructure and power, which are predominantly
dependent on public resources.

Harmonized Master List of Infrastructure

49. The Harmonized Master List of Infrastructure will be reviewed by an

expert committee for recommending the classification and financing
framework suitable for Amrit Kaal.

Railways

50. A capital outlay of ` 2.40 lakh crore has been provided for the
Railways. This highest ever outlay is about 9 times the outlay made in 2013-
14.

Logistics

51. One hundred critical transport infrastructure projects, for last and
first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors
have been identified. They will be taken up on priority with investment of
` 75,000 crore, including ` 15,000 crore from private sources.

Regional Connectivity

52. Fifty additional airports, heliports, water aerodromes and advance

landing grounds will be revived for improving regional air connectivity.

Sustainable Cities of Tomorrow

53. States and cities will be encouraged to undertake urban planning

reforms and actions to transform our cities into ‘sustainable cities of
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tomorrow’. This means efficient use of land resources, adequate resources

for urban infrastructure, transit-oriented development, enhanced
availability and affordability of urban land, and opportunities for all.

Making Cities ready for Municipal Bonds

54. Through property tax governance reforms and ring-fencing user

charges on urban infrastructure, cities will be incentivized to improve their
credit worthiness for municipal bonds.

Urban Infrastructure Development Fund

55. Like the RIDF, an Urban Infrastructure Development Fund (UIDF) will
be established through use of priority sector lending shortfall. This will be
managed by the National Housing Bank, and will be used by public agencies
to create urban infrastructure in Tier 2 and Tier 3 cities. States will be
encouraged to leverage resources from the grants of the 15th Finance
Commission, as well as existing schemes, to adopt appropriate user charges
while accessing the UIDF. We expect to make
available ` 10,000 crore per annum for this purpose.

Urban Sanitation

56. All cities and towns will be enabled for 100 per cent mechanical
desludging of septic tanks and sewers to transition from manhole to
machine-hole mode. Enhanced focus will be provided for scientific
management of dry and wet waste.

Priority 4: Unleashing the Potential

57. “Good Governance is the key to a nation’s progress. Our government

is committed to providing a transparent and accountable administration
which works for the betterment and welfare of the common citizen,” said
Hon’ble Prime Minister.
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Mission Karmayogi

58. Under Mission Karmayogi, Centre, States and Union Territories are
making and implementing capacity-building plans for civil servants. The
government has also launched an integrated online training platform, iGOT
Karmayogi, to provide continuous learning opportunities for lakhs of
government employees to upgrade their skills and facilitate people-centric
approach.

59. For enhancing ease of doing business, more than

39,000 compliances have been reduced and more than
3,400 legal provisions have been decriminalized. For furthering the trust-
based governance, we have introduced the Jan Vishwas Bill to amend 42
Central Acts. This Budget proposes a series of measures to unleash the
potential of our economy.

Centres of Excellence for Artificial Intelligence

60. For realizing the vision of “Make AI in India and Make AI work for
India”, three centres of excellence for Artificial Intelligence will be set-up in
top educational institutions. Leading industry players will partner in
conducting interdisciplinary research, develop cutting-edge applications and
scalable problem solutions in the areas of agriculture, health, and
sustainable cities. This will galvanize an effective AI ecosystem and nurture
quality human resources in the field.

National Data Governance Policy

61. To unleash innovation and research by start-ups and academia, a

National Data Governance Policy will be brought out. This will enable access
to anonymized data.

Simplification of Know Your Customer (KYC) process

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62. The KYC process will be simplified adopting a ‘risk-based’ instead of

‘one size fits all’ approach. The financial sector regulators will also be
encouraged to have a KYC system fully amenable to meet the needs of
Digital India.

One stop solution for identity and address updating

63. A one stop solution for reconciliation and updating of identity and
address of individuals maintained by various government agencies,
regulators and regulated entities will be established using DigiLocker service
and Aadhaar as foundational identity.

Common Business Identifier

64. For the business establishments required to have a Permanent

Account Number (PAN), the PAN will be used as the common identifier for
all digital systems of specified government agencies. This will bring ease of
doing business; and it will be facilitated through a legal mandate.

Unified Filing Process

65. For obviating the need for separate submission of same information
to different government agencies, a system of ‘Unified Filing Process’ will be
set-up. Such filing of information or return in simplified forms on a common
portal, will be shared with other agencies as per filer’s choice.

Vivad se Vishwas I – Relief for MSMEs

66. In cases of failure by MSMEs to execute contracts during the Covid

period, 95 per cent of the forfeited amount relating to bid or performance
security, will be returned to them by government and government
undertakings. This will provide relief to MSMEs.

Vivad se Vishwas II – Settling Contractual Disputes

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67. To settle contractual disputes of government and government

undertakings, wherein arbitral award is under challenge in a court, a
voluntary settlement scheme with standardized terms will be introduced.
This will be done by offering graded settlement terms depending on
pendency level of the dispute.

State Support Mission

68. The State Support Mission of NITI Aayog will be continued for three
years for our collective efforts towards national priorities.

Result Based Financing

69. To better allocate scarce resources for competing development

needs, the financing of select schemes will be changed, on a pilot basis,
from ‘input-based’ to ‘result-based’.

E-Courts

70. For efficient administration of justice, Phase-3 of the

E-Courts project will be launched with an outlay
of ` 7,000 crore.

Fintech Services

71. Fintech services in India have been facilitated by our digital public
infrastructure including Aadhaar, PM Jan Dhan Yojana, Video KYC, India
Stack and UPI. To enable more Fintech innovative services, the scope of
documents available in DigiLocker for individuals will be expanded.

Entity DigiLocker

72. An Entity DigiLocker will be set up for use by MSMEs, large business
and charitable trusts. This will be towards storing and sharing documents
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online securely, whenever needed, with various authorities, regulators,

banks and other business entities.

5G Services

73. One hundred labs for developing applications using

5G services will be set up in engineering institutions to realise a new range
of opportunities, business models, and employment potential. The labs will
cover, among others, applications such as smart classrooms, precision
farming, intelligent transport systems, and health care applications.

Lab Grown Diamonds

74. Lab Grown Diamonds (LGD) is a technology-and innovation-driven

emerging sector with high employment potential. These environment-
friendly diamonds which have optically and chemically the same properties
as natural diamonds. To encourage indigenous production of LGD seeds and
machines and to reduce import dependency, a research and development
grant will be provided to one of the IITs for five years.

75. To reduce the cost of production, a proposal to review the custom

duty rate on LGD seeds will be indicated in Part B of the speech.

Priority 5: Green Growth

76. Hon’ble Prime Minister has given a vision for “LiFE”, or Lifestyle for
Environment, to spur a movement of environmentally conscious lifestyle.
India is moving forward firmly for the ‘panchamrit’ and net-zero carbon
emission by 2070 to usher in green industrial and economic transition. This
Budget builds on our focus on green growth.

Green Hydrogen Mission

77. The recently launched National Green Hydrogen Mission, with an

outlay of ` 19,700 crores, will facilitate transition of the economy to low
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carbon intensity, reduce dependence on fossil fuel imports, and make the
country assume technology and market leadership in this sunrise sector.
Our target is to reach an annual production of 5 MMT by 2030.

Energy Transition

78. This Budget provides ` 35,000 crore for priority capital investments
towards energy transition and net zero objectives, and energy security by
Ministry of Petroleum & Natural Gas.

Energy Storage Projects

79. To steer the economy on the sustainable development path, Battery

Energy Storage Systems with capacity of 4,000 MWH will be supported with
Viability Gap Funding. A detailed framework for Pumped Storage Projects
will also be formulated.

Renewable Energy Evacuation

80. The Inter-state transmission system for evacuation and grid

integration of 13 GW renewable energy from Ladakh will be constructed
with investment of ` 20,700 crore including central support of ` 8,300 crore.

Green Credit Programme

81. For encouraging behavioural change, a Green Credit Programme will

be notified under the Environment (Protection) Act. This will incentivize
environmentally sustainable and responsive actions by companies,
individuals and local bodies, and help mobilize additional resources for such
activities.

PM-PRANAM

82. “PM Programme for Restoration, Awareness, Nourishment and

Amelioration of Mother Earth” will be launched to incentivize States and
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Union Territories to promote alternative fertilizers and balanced use of

chemical fertilizers.

GOBARdhan scheme

83. 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing

Organic Bio-Agro Resources Dhan) scheme will be established for promoting
circular economy. These will include 200 compressed biogas (CBG) plants,
including 75 plants in urban areas, and 300 community or cluster-based
plants at total investment of ` 10,000 crore. I will refer to this in Part B. In
due course, a 5 per cent CBG mandate will be introduced for all
organizations marketing natural and bio gas. For collection of bio-mass and
distribution of bio-manure, appropriate fiscal support will be provided.

Bhartiya Prakritik Kheti Bio-Input Resource Centres

84. Over the next 3 years, we will facilitate 1 crore farmers to adopt
natural farming. For this, 10,000 Bio-Input Resource Centres will be set-up,
creating a national-level distributed micro-fertilizer and pesticide
manufacturing network.

MISHTI

85. Building on India’s success in afforestation, ‘Mangrove Initiative for

Shoreline Habitats & Tangible Incomes’, MISHTI, will be taken up for
mangrove plantation along the coastline and on salt pan lands, wherever
feasible, through convergence between MGNREGS, CAMPA Fund and other
sources.

Amrit Dharohar
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86. Wetlands are vital ecosystems which sustain biological diversity. In

his latest Mann Ki Baat, the Prime Minister said, “Now the total number of
Ramsar sites in our country has increased to 75. Whereas, before 2014,
there were only 26…” Local communities have always been at the forefront
of conservation efforts. The government will promote their unique
conservation values through Amrit Dharohar, a scheme that will be
implemented over the next three years to encourage optimal use of
wetlands, and enhance bio-diversity, carbon stock,
eco-tourism opportunities and income generation for local communities.

Coastal Shipping

87. Coastal shipping will be promoted as the energy efficient and lower
cost mode of transport, both for passengers and freight, through PPP mode
with viability gap funding.

Vehicle Replacement

88. Replacing old polluting vehicles is an important part of greening our

economy. In furtherance of the vehicle scrapping policy mentioned in
Budget 2021-22, I have allocated adequate funds to scrap old vehicles of
the Central Government. States will also be supported in replacing old
vehicles and ambulances.

Priority 6: Youth Power

89. To empower our youth and help the ‘Amrit Peedhi’ realize their
dreams, we have formulated the National Education Policy, focused on
skilling, adopted economic policies that facilitate job creation at scale, and
have supported business opportunities.

Pradhan Mantri Kaushal Vikas Yojana 4.0

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90. Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill
lakhs of youth within the next three years. On-job training, industry
partnership, and alignment of courses with needs of industry will be
emphasized. The scheme will also cover new age courses for Industry 4.0
like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft
skills. To skill youth for international opportunities, 30 Skill India
International Centres will be set up across different States.

Skill India Digital Platform

91. The digital ecosystem for skilling will be further expanded with the
launch of a unified Skill India Digital platform for:

• enabling demand-based formal skilling,

• linking with employers including MSMEs, and

• facilitating access to entrepreneurship schemes.

National Apprenticeship Promotion Scheme

92. To provide stipend support to 47 lakh youth in three years, Direct

Benefit Transfer under a pan-India National Apprenticeship Promotion
Scheme will be rolled out.

Tourism

93. With an integrated and innovative approach, at

least 50 destinations will be selected through challenge mode. In addition to
aspects such as physical connectivity, virtual connectivity, tourist guides,
high standards for food streets and tourists’ security, all the relevant
aspects would be made available on an App to enhance tourist experience.
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Every destination would be developed as a complete package. The focus of

development of tourism would be on domestic as well as foreign tourists.

94. Sector specific skilling and entrepreneurship development will be

dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative.
This was launched as an appeal by the Prime Minister to the middle class to
prefer domestic tourism over international tourism. For integrated
development of theme-based tourist circuits, the ‘Swadesh Darshan
Scheme’ was also launched. Under the Vibrant Villages Programme, tourism
infrastructure and amenities will also be facilitated in border villages.

Unity Mall

95. States will be encouraged to set up a Unity Mall in their state capital
or most prominent tourism centre or the financial capital for promotion and
sale of their own ODOPs (one district, one product), GI products and other
handicraft products, and for providing space for such products of all other
States.

Priority 7: Financial Sector

96. Our reforms in the financial sector and innovative use of technology
have led to financial inclusion at scale, better and faster service delivery,
ease of access to credit and participation in financial markets. This Budget
proposes to further these measures.

Credit Guarantee for MSMEs

97. Last year, I proposed revamping of the credit guarantee scheme for
MSMEs. I am happy to announce that the revamped scheme will take effect
from 1st April 2023 through infusion of ` 9,000 crore in the corpus. This will
enable additional collateral-free guaranteed credit of ` 2 lakh crore. Further,
the cost of the credit will be reduced by about 1 per cent.
 24

National Financial Information Registry

98. A national financial information registry will be set up to serve as the

central repository of financial and ancillary information. This will facilitate
efficient flow of credit, promote financial inclusion, and foster financial
stability. A new legislative framework will govern this credit public
infrastructure, and it will be designed in consultation with the RBI.

Financial Sector Regulations

99. To meet the needs of Amrit Kaal and to facilitate optimum

regulation in the financial sector, public consultation, as necessary and
feasible, will be brought to the process of regulation-making and issuing
subsidiary directions.

100. To simplify, ease and reduce cost of compliance, financial sector

regulators will be requested to carry out a comprehensive review of existing
regulations. For this, they will consider suggestions from public and
regulated entities. Time limits to decide the applications under various
regulations will also be laid down.

GIFT IFSC

101. To enhance business activities in GIFT IFSC, the following measures

will be taken:

• Delegating powers under the SEZ Act to IFSCA to avoid dual

regulation,

• Setting up a single window IT system for registration and

approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and
IRDAI,

• Permitting acquisition financing by IFSC Banking Units of

foreign banks,
 25

• Establishing a subsidiary of EXIM Bank for trade

re-financing,

• Amending IFSCA Act for statutory provisions for arbitration,

ancillary services, and avoiding dual regulation under SEZ Act,
and

• Recognizing offshore derivative instruments as valid contracts.

Data Embassy

102. For countries looking for digital continuity solutions, we will

facilitate setting up of their Data Embassies in GIFT IFSC.

Improving Governance and Investor Protection in Banking Sector

103. To improve bank governance and enhance investors’ protection,

certain amendments to the Banking Regulation Act, the Banking Companies
Act and the Reserve Bank of India Act are proposed.

Capacity Building in Securities Market

104. To build capacity of functionaries and professionals in the securities

market, SEBI will be empowered to develop, regulate, maintain and enforce
norms and standards for education in the National Institute of Securities
Markets and to recognize award of degrees, diplomas and certificates.

Central Data Processing Centre

105. A Central Processing Centre will be setup for faster response to

companies through centralized handling of various forms filed with field
offices under the Companies Act.
 26

Reclaiming of shares and dividends

106. For investors to reclaim unclaimed shares and unpaid dividends

from the Investor Education and Protection Fund Authority with ease, an
integrated IT portal will be established.

Digital Payments

107. Digital payments continue to find wide acceptance. In 2022, they

show increase of 76 per cent in transactions
and 91 per cent in value. Fiscal support for this digital public infrastructure
will continue in 2023-24.

Azadi Ka Amrit Mahotsav Mahila Samman Bachat Patra

108. For commemorating Azadi Ka Amrit Mahotsav, a one-time new small

savings scheme, Mahila Samman Savings Certificate, will be made available
for a two-year period up to March 2025. This will offer deposit facility upto `
2 lakh in the name of women or girls for a tenor of 2 years at fixed interest
rate of 7.5 per cent with partial withdrawal option.

Senior Citizens

109. The maximum deposit limit for Senior Citizen Savings Scheme will be
enhanced from ` 15 lakh to ` 30 lakh.

110. The maximum deposit limit for Monthly Income Account Scheme
will be enhanced from ` 4.5 lakh to ` 9 lakh for single account and from ` 9
lakh to ` 15 lakh for joint account.

Fiscal Management

Fifty-year interest free loan to States

 27

111. The entire fifty-year loan to states has to be spent on capital

expenditure within 2023-24. Most of this will be at the discretion of states,
but a part will be conditional on states increasing their actual capital
expenditure. Parts of the outlay will also be linked to, or allocated for, the
following purposes:

• Scrapping old government vehicles,

• Urban planning reforms and actions,

• Financing reforms in urban local bodies to make them

creditworthy for municipal bonds,

• Housing for police personnel above or as part of police stations,

• Constructing Unity Malls,

• Children and adolescents’ libraries and digital infrastructure,

and

• State share of capital expenditure of central schemes.

Fiscal Deficit of States

112. States will be allowed a fiscal deficit of 3.5 per cent of GSDP of which
0.5 per cent will be tied to power sector reforms.

Revised Estimates 2022-23

113. The Revised Estimate of the total receipts other than borrowings is
` 24.3 lakh crore, of which the net tax receipts
are ` 20.9 lakh crore. The Revised Estimate of the total expenditure is
` 41.9 lakh crore, of which the capital expenditure is about ` 7.3 lakh crore.
 28

114. The Revised Estimate of the fiscal deficit is 6.4 per cent of GDP,
adhering to the Budget Estimate.

Budget Estimates 2023-24

115. Coming to 2023-24, the total receipts other than borrowings and the
total expenditure are estimated at ` 27.2 lakh crore and ` 45 lakh crore
respectively. The net tax receipts are estimated at ` 23.3 lakh crore.

116. The fiscal deficit is estimated to be 5.9 per cent of GDP. In my

Budget Speech for 2021-22, I had announced that we plan to continue the
path of fiscal consolidation, reaching a fiscal deficit below 4.5 per cent by
2025-26 with a fairly steady decline over the period. We have adhered to
this path, and I reiterate my intention to bring the fiscal deficit below 4.5
per cent of GDP by 2025-26.

117. To finance the fiscal deficit in 2023-24, the net market borrowings
from dated securities are estimated at ` 11.8 lakh crore. The balance
financing is expected to come from small savings and other sources. The
gross market borrowings are estimated at ` 15.4 lakh crore.

I will, now, move to Part B.

 29

PART B

Indirect Taxes

118. My indirect tax proposals aim to promote exports, boost domestic

manufacturing, enhance domestic value addition, encourage green energy
and mobility.

119. A simplified tax structure with fewer tax rates helps in reducing
compliance burden and improving tax administration. I propose to reduce
the number of basic customs duty rates on goods, other than textiles and
agriculture, from 21 to 13. As a result, there are minor changes in the basic
custom duties, cesses and surcharges on some items including toys,
bicycles, automobiles and naphtha.

Green Mobility

120. To avoid cascading of taxes on blended compressed natural gas, I

propose to exempt excise duty on GST-paid compressed bio gas contained
in it. To further provide impetus to green mobility, customs duty exemption
is being extended to import of capital goods and machinery required for
manufacture of lithium-ion cells for batteries used in electric vehicles.

Electronics

121. As a result of various initiatives of the Government, including the

Phased Manufacturing programme, mobile phone production in India has
increased from 5.8 crore units valued at about ` 18,900 crore in 2014-15 to
31 crore units valued at over ` 2,75,000 crore in the last financial year. To
further deepen domestic value addition in manufacture of mobile phones, I
propose to provide relief in customs duty on import of certain parts and
 30

inputs like camera lens and continue the concessional duty on lithium-ion
cells for batteries for another year.

122. Similarly, to promote value addition in manufacture of televisions, I

propose to reduce the basic customs duty on parts of open cells of TV
panels to 2.5 per cent.

Electrical

123. To rectify inversion of duty structure and encourage manufacturing

of electric kitchen chimneys, the basic customs duty on electric kitchen
chimney is being increased from 7.5 per cent to 15 per cent and that on
heat coils for these is proposed to be reduced from 20 per cent to 15 per
cent.

Chemicals and Petrochemicals

124. Denatured ethyl alcohol is used in chemical industry.

I propose to exempt basic customs duty on it. This will also support the
Ethanol Blending Programme and facilitate our endeavour for energy
transition. Basic customs duty is also being reduced on acid grade fluorspar
from 5 per cent to 2.5 per cent to make the domestic fluorochemicals
industry competitive. Further, the basic customs duty on crude glycerin for
use in manufacture of epicholorhydrin is proposed to be reduced from 7.5
per cent to 2.5 per cent.

Marine products

125. In the last financial year, marine products recorded the highest
export growth benefitting farmers in the coastal states of the country. To
further enhance the export competitiveness of marine products,
particularly shrimps, duty is being reduced on key inputs for domestic
manufacture of shrimp feed.
 31

Lab Grown Diamonds

126. India is a global leader in cutting and polishing of natural diamonds,

contributing about three-fourths of the global turnover by value. With the
depletion in deposits of natural diamonds, the industry is moving towards
Lab Grown Diamonds (LGDs) and it holds huge promise. To seize this
opportunity, I propose to reduce basic customs duty on seeds used in their
manufacture.

Precious Metals

127. Customs Duties on dore and bars of gold and platinum were
increased earlier this fiscal. I now propose to increase the duties on articles
made therefrom to enhance the duty differential. I also propose to increase
the import duty on silver dore, bars and articles to align them with that on
gold and platinum.

Metals

128. To facilitate availability of raw materials for the steel sector,

exemption from Basic Customs Duty on raw materials for manufacture of
CRGO Steel, ferrous scrap and nickel cathode is being continued.

129. Similarly, the concessional BCD of 2.5 per cent on copper scrap is
also being continued to ensure the availability of raw materials for
secondary copper producers who are mainly in the MSME sector.

Compounded Rubber

130. The basic customs duty rate on compounded rubber is being

increased from 10 per cent to ‘25 per cent or ` 30/kg whichever is lower’, at
par with that on natural rubber other than latex, to curb circumvention of
duty.
 32

Cigarettes

131. National Calamity Contingent Duty (NCCD) on specified cigarettes

was last revised three years ago. This is proposed to be revised upwards by
about 16 per cent.

Direct Taxes

132. I now come to my direct tax proposals. These proposals aim to

maintain continuity and stability of taxation, further simplify and rationalise
various provisions to reduce the compliance burden, promote the
entrepreneurial spirit and provide tax relief to citizens.

133. It has been the constant endeavour of the Income Tax Department
to improve Tax Payers Services by making compliance easy and smooth. Our
tax payers’ portal received a maximum of 72 lakh returns in a day;
processed more than 6.5 crore returns this year; average processing period
reduced from 93 days in financial year 13-14 to 16 days now;
and 45 per cent of the returns were processed within 24 hours. We intend
to further improve this, roll out a next-generation Common IT Return Form
for tax payer convenience, and also plan to strengthen the grievance
redressal mechanism.

MSMEs and Professionals

134. MSMEs are growth engines of our economy. Micro enterprises with
turnover up to ` 2 crore and certain professionals with turnover of up to
` 50 lakh can avail the benefit of presumptive taxation. I propose to provide
enhanced limits of ` 3 crore and ` 75 lakh respectively, to the tax payers
whose cash receipts are no more than 5 per cent. Moreover, to support
MSMEs in timely receipt of payments, I propose to allow deduction for
 33

expenditure incurred on payments made to them only when payment is

actually made.

Cooperation

135. Cooperation is a value to be cherished. In realizing our Prime

Minister’s goal of “Sahkar se Samriddhi”, and his resolve to “connect the
spirit of cooperation with the spirit of Amrit Kaal”, in addition to the
measures proposed in Part A, I have a slew of proposals for the co-operative
sector.

136. First, new co-operatives that commence manufacturing activities till

31.3.2024 shall get the benefit of a lower tax rate of 15 per cent, as is
presently available to new manufacturing companies.

137. Secondly, I propose to provide an opportunity to sugar co-operatives

to claim payments made to sugarcane farmers for the period prior to
assessment year 2016-17 as expenditure. This is expected to provide them
with a relief of almost ` 10,000 crore.

138. Thirdly, I am providing a higher limit of ` 2 lakh per member for cash
deposits to and loans in cash by Primary Agricultural Co-operative Societies
(PACS) and Primary Co-operative Agriculture and Rural Development Banks
(PCARDBs).

139. Similarly, a higher limit of ` 3 crore for TDS on cash withdrawal is

being provided to co-operative societies.

Start-Ups

140. Entrepreneurship is vital for a country’s economic development. We

have taken a number of measures for start-ups and they have borne results.
India is now the third largest ecosystem for start-ups globally, and ranks
second in innovation quality among middle-income countries. I propose to
 34

extend the date of incorporation for income tax benefits to start-ups from
31.03.23 to 31.3.24. I further propose to provide the benefit of carry
forward of losses on change of shareholding of start-ups from seven years
of incorporation to ten years.

Appeals

141. To reduce the pendency of appeals at Commissioner level, I propose

to deploy about 100 Joint Commissioners for disposal of small appeals. We
shall also be more selective in taking up cases for scrutiny of returns already
received this year.

Better targeting of tax concessions

142. For better targeting of tax concessions and exemptions,

I propose to cap deduction from capital gains on investment in residential
house under sections 54 and 54F to ` 10 crore. Another proposal with
similar intent is to limit income tax exemption from proceeds of insurance
policies with very high value.

Rationalisation

143. There are a number of proposals relating to rationalisation and

simplification. Income of authorities, boards and commissions set up by
statutes of the Union or State for the purpose of housing, development of
cities, towns and villages, and regulating, or regulating and developing an
activity or matter, is proposed to be exempted from income tax. Other
major measures in this direction are:

• Removing the minimum threshold of ` 10,000/- for TDS and

clarifying taxability relating to online gaming;
 35

• Not treating conversion of gold into electronic gold receipt and vice
versa as capital gain;
• Reducing the TDS rate from 30 per cent to 20 per cent on taxable
portion of EPF withdrawal in non-PAN cases; and
• Taxation on income from Market Linked Debentures.

Others

144. Other major proposals in the Finance Bill relate to the following:

• Extension of period of tax benefits to funds relocating to IFSC, GIFT

City till 31.03.2025;
• Decriminalisation under section 276A of the Income Tax Act;
• Allowing carry forward of losses on strategic disinvestment including
that of IDBI Bank; and
• Providing EEE status to Agniveer Fund.

Personal Income Tax

145. Now, I come to what everyone is waiting for -- personal income tax. I
have five major announcements to make in this regard. These primarily
benefit our hard-working middle class.

146. The first one concerns rebate. Currently, those with income up to
` 5 lakh do not pay any income tax in both old and new tax regimes. I
propose to increase the rebate limit to ` 7 lakh in the new tax regime. Thus,
persons in the new tax regime, with income up to ` 7 lakh will not have to
pay any tax.

147. The second proposal relates to middle-class individuals.

I had introduced, in the year 2020, the new personal income tax regime
with six income slabs starting from ` 2.5 lakh. I propose to change the tax
 36

structure in this regime by reducing the number of slabs to five and

increasing the tax exemption limit to ` 3 lakh. The new tax rates are:

` 0-3 lakh Nil

` 3-6 lakh 5 per cent
` 6-9 lakh 10 per cent
` 9-12 lakh 15 per cent
` 12-15 lakh 20 per cent
Above ` 15 lakh 30 per cent

148. This will provide major relief to all tax payers in the new regime. An
individual with an annual income of ` 9 lakh will be required to pay only
` 45,000/-. This is only 5 per cent of his or her income. It is a reduction of 25
per cent on what he or she is required to pay now, ie, ` 60,000/-. Similarly,
an individual with an income of ` 15 lakh would be required to pay only
` 1.5 lakh or 10 per cent of his or her income, a reduction of 20 per cent
from the existing liability of ` 1,87,500/.

149. My third proposal is for the salaried class and the pensioners
including family pensioners, for whom I propose to extend the benefit of
standard deduction to the new tax regime. Each salaried person with an
income of ` 15.5 lakh or more will thus stand to benefit by ` 52,500.

150. My fourth announcement in personal income tax is regarding the

highest tax rate which in our country is 42.74 per cent. This is among the
highest in the world. I propose to reduce the highest surcharge rate from 37
per cent to 25 per cent in the new tax regime. This would result in reduction
of the maximum tax rate to 39 per cent.

151. Lastly, the limit of ` 3 lakh for tax exemption on leave encashment
on retirement of non-government salaried employees was last fixed in the
year 2002, when the highest basic pay in the government was ` 30,000/-
 37

pm. In line with the increase in government salaries, I am proposing to

increase this limit to ` 25 lakh.

152. We are also making the new income tax regime as the default tax
regime. However, citizens will continue to have the option to avail the
benefit of the old tax regime.

153. Apart from these, I am also making some other changes as given in
the annexure.

154. As a result of these proposals, revenue of about ` 38,000 crore –

` 37,000 crore in direct taxes and ` 1,000 crore in indirect taxes – will be
forgone while revenue of about ` 3,000 crore will be additionally mobilized.
Thus, the total revenue forgone is about ` 35,000 crore annually.

155. Mr. Speaker Sir, with these words, I commend the Budget to this
august House.

*****
 38

Annexure to Part B of the Budget Speech 2023-24

Amendments relating to Direct Taxes
A. PROVIDING TAX RELIEF UNDER NEW PERSONAL TAX REGIME
A.1 The new tax regime for Individual and HUF, introduced by the
Finance Act 2020, is now proposed to be the default regime.
A.2 This regime would also become the default regime for AOP (other
than co-operative), BOI and AJP.
A.3 Any individual, HUF, AOP (other than co-operative), BOI or AJP not
willing to be taxed under this new regime can opt to be taxed
under the old regime. For those person having income under the
head “profit and gains of business or profession” and having opted
for old regime can revoke that option only once and after that
they will continue to be taxed under the new regime. For those
not having income under the head “profit and gains of business or
profession”, option for old regime may be exercised in each year.
A.4 Substantial relief is proposed under the new regime with new slabs
and tax rates as under:
Total Income (`) Rate (per cent)

Upto 3,00,000 Nil

From 3,00,001 to 6,00,000 5

From 6,00,001 to 9,00,000 10

From 9,00,001 to 12,00,000 15

From 12,00,001 to 15,00,000 20

Above 15,00,000 30

A.5 Resident individual with total income up to ` 5,00,000 do not pay

any tax due to rebate under both old and new regime. It is
proposed to increase the rebate for the resident individual under
 39

the new regime so that they do not pay tax if their total income is
up to ` 7,00,000.
A.6 Standard deduction of ` 50,000 to salaried individual, and deduction
from family pension up to ` 15,000, is currently allowed only under
the old regime. It is proposed to allow these two deductions under
the new regime also.
A.7 Surcharge on income-tax under both old regime and new regime is
10 per cent if income is above ` 50 lakh and up to ` 1 crore, 15 per
cent if income is above `1 crore and up to ` 2 crore, 25 per cent if
income is above ` 2 crore and up to ` 5 crore, and 37 per cent if
income is above ` 5 crore. It is proposed that the for those
individuals, HUF, AOP (other than co-operative), BOI and AJP
under the new regime, surcharge would be same except that the
surcharge rate of 37 per cent will not apply. Highest surcharge
shall be 25 per cent for income above
` 2 crore. This would reduce the maximum rate from about 42.7
per cent to about 39 per cent. No change in surcharge is proposed
for those who opt to be under the old regime.
A.8 Encashment of earned leave up to 10 months of average salary, at
the time of retirement in case of an employee (other than an
employee of the Central Government or State Government), is
exempt under sub-clause (ii) of clause (10AA) of section 10 of the
Income-tax Act (“the Act”) to the extent notified. The maximum
amount which can be exempted is ` 3 lakh at present. It is
proposed to issue notification to extend this limit to ` 25 lakh.
B. SOCIO-ECONOMIC WELFARE MEASURES
 40

B.1 Promoting timely payments to Micro and Small Enterprises

In order to promote timely payments to micro and small
enterprises, it is proposed to include payments made to such
enterprises within the ambit of section 43B of the Act. Thus,
deduction for such payments would be allowed only when actually
paid. It will be allowed on accrual basis only if the payment is
within the time mandated under the Micro, Small and Medium
Enterprises Development Act.
B.2 Agnipath Scheme, 2022
The payment received from the Agniveer Corpus Fund by the
Agniveers enrolled in Agnipath Scheme, 2022 is proposed to be
exempt from taxes. Deduction in the computation of total income
is proposed to be allowed to the Agniveer on the contribution
made by him or the Central Government to his Seva Nidhi
account.
B.3 Relief to sugar co-operatives from past demand
It is proposed that for sugar co-operatives, for years prior to A.Y.
2016-17, if any deduction claimed for expenditure made on
purchase of sugar has been disallowed, an application may be
made to the Assessing Officer, who shall recompute the income of
the relevant previous year after allowing such deduction up to the
price fixed or approved by the Government for such previous year.
B.4 Increasing threshold limit for Co-operatives to withdraw cash
without TDS
It is proposed to enable co-operatives to withdraw cash up to ` 3
crore in a year without being subjected to TDS on such
withdrawal.
B.5 Penalty for cash loan/transactions against primary co-operatives
It is proposed to amend section 269SS of the Act to provide that
where a deposit is accepted by a primary agricultural credit
society or a primary co-operative agricultural and rural
development bank from its member or a loan is taken from a
primary agricultural credit society or a primary co-operative
agricultural and rural development bank by its member in cash, no
 41

penal consequence would arise, if the amount of such loan or

deposit in cash is less than ` 2 lakh. Further, section 269T of the
Act is proposed to be amended to provide that where a deposit is
repaid by a primary agricultural credit society or a primary co-
operative agricultural and rural development bank to its member
or such loan is repaid to a primary agricultural credit society or a
primary co-operative agricultural and rural development bank by
its member in cash, no penal consequence shall arise, if the
amount of such loan or deposit in cash is less than ` 2 lakh.
B.6 Relief to start-ups in carrying forward and setting off of losses
The condition of continuity of at least 51 per cent shareholding for
setting off of carried forward losses is relaxed for an eligible start
up if all the shareholders of the company continue to hold those
shares. At present this relaxation applies for losses incurred during
the period of 7 years from incorporation of such start-up. It is
proposed to increase this period to 10 years.
B.7 Extension of date of incorporation for eligible start up for
exemption
Certain start-ups are eligible for some tax benefit if they are
incorporated before 1st April, 2023. The period of incorporation of
such eligible start-ups is proposed to be extended by one year to
before 1st April, 2024.
B.8 Gold to Electronic Gold Receipt
The conversion of physical gold to Electronic Gold Receipt and vice
versa is proposed not to be treated as a transfer and not to attract
any capital gains. This would promote investments in electronic
equivalent of gold.
B.9 Incentives to IFSC
Relocation of funds to IFSC has certain tax exemptions, if the
relocation is before 31.03.2023. This date is proposed to be
extended to 31.03.2025. Further, any distributed income from the
offshore derivative instruments entered into with an offshore
banking unit is also proposed to be exempted subject to certain
 42

conditions.
B.10 Exemption to development authorities etc.
It is proposed to provide exemption to any income arising to a
body or authority or board or trust or commission, (not being a
company) which has been established or constituted by or under
a Central or State Act with the purposes of satisfying the need for
housing or for planning, development or improvement of cities,
towns and villages or for regulating any activity or matter,
irrespective of whether it is carrying out commercial activity.
B.11 Facilitating certain strategic disinvestments
To facilitate certain strategic disinvestments, it is proposed to
allow carry forward of accumulated losses and unabsorbed
depreciation allowance in the case of amalgamation of one or
more banking company with any other banking institution or a
company subsequent to a strategic disinvestment, if such
amalgamation takes place within 5 years of strategic
disinvestment. It is also proposed to modify the definition of
‘strategic disinvestment’.
B.12 15 per cent concessional tax to promote new manufacturing co-
operative society
In order to promote the growth of manufacturing in co-operative
sector, a new co-operative society formed on or after 01.04.2023,
which commences manufacturing or production by 31.03.2024
and do not avail of any specified incentive or deduction, is
proposed to be allowed an option to pay tax at a concessional rate
of 15 per cent similar to what is available to new manufacturing
companies.
C. EASE OF COMPLIANCE
 43

C.1 Ease in claiming deduction on amortization of preliminary

expenditure
At present for claiming amortization of certain preliminary
expenses, the activity is to be carried out either by the assessee or
by a concern approved by the Board. In order to ease the process
of claiming amortization of these expenses it is proposed to
remove the condition of activity in connection with these
expenses to be carried out by a concern approved by the Board.
Format for reporting of such expenses by the assessee shall be
prescribed.
C.2 Increasing threshold limits for presumptive taxation schemes
In order to ease compliance and to promote non-cash
transactions, it is proposed to increase the threshold limits for
presumptive scheme of taxation for eligible businesses from ` 2
crore to ` 3 crore and for specified professions from ` 50 lakh to
` 75 lakh. The increased limit will apply only in case the amount or
aggregate of the amounts received during the year, in cash, does
not exceed five per cent of the total gross receipts/turnover.
C.3 Extending the scope for deduction of tax at source at lower or nil
rate
It is proposed to allow a taxpayer to obtain certificate of
deduction of tax at source to lower or nil rate on sums on which
tax is required to be deducted under section 194LBA of the Act by
Business Trusts.

D. WIDENING & DEEPENING OF TAX BASE AND ANTI AVOIDANCE

D.1 It is proposed to extend the deemed income accrual provision
relating to sums of money exceeding fifty thousand rupees,
received from residents without consideration to a not ordinarily
resident with effect from 1st April, 2023.
D.2 It is proposed to omit the provision to allow tax exemption to
news agencies set up in India solely for collection and distribution
of news from the financial year 2023-24.
 44

D.3 It is proposed to tax distributed income by business trusts in the

hands of a unit holder (other than dividend, interest or rent which
is already taxable) on which tax is currently avoided both in the
hands of unit holder as well as in the hands of business trust.
D.4 It is proposed to withdraw the exemption from TDS currently
available on interest payment on listed debentures.
D.5 With respect to presumptive schemes for non-residents, it is
proposed to disallow carried forward and set off of loss computed
as per books of account with presumptive income.
D.6 For online games, it is proposed to provide for TDS and taxability
on net winnings at the time of withdrawal or at the end of the
financial year. Moreover, TDS would be without the threshold of
` 10,000. For lottery, crossword puzzles games, etc threshold limit
` 10,000 for TDS shall continue but shall apply to aggregate
winnings during a financial year.
D.7 The rate of TCS for foreign remittances for education and for
medical treatment is proposed to continue to be 5 per cent for
remittances in excess of ` 7 lakh. Similarly, the rate of TCS on
foreign remittances for the purpose of education through loan
from financial institutions is proposed to continue to be 0.5 per
cent in excess of `7 lakh. However, for foreign remittances for
other purposes under LRS and purchase of overseas tour program,
it is proposed to increase the rates of TCS from 5 per cent to 20
per cent.
D.8 Tax on capital gains can be avoided by investing proceeds of such
gains in residential property. This is proposed to be capped at ` 10
crore.
D.9 The income from market linked debentures is proposed to be
taxed as short-term capital gains at the applicable rates.
D.10 It is proposed to provide for some provisions to minimise risk to
revenue due to undervaluation of inventory.
D.11 It is proposed to provide that where aggregate of premium for life
 45

insurance policies (other than ULIP) issued on or after 1st April,

2023 is above ` 5 lakh, income from only those policies with
aggregate premium up to ` 5 lakh shall be exempt. This will not
affect the tax exemption provided to the amount received on the
death of person insured. It will also not affect insurance policies
issued till 31st March, 2023.
D.12 It is proposed to amend provisions for computing capital gains in
case of joint development of property to include the amount
received through cheque etc. as consideration.
D.13 While interest paid on borrowed capital for acquiring or improving
a property can, subject to certain conditions, be claimed as
deduction from income, it can also be included in the cost of
acquisition or improvement on transfer, thereby reducing capital
gains. It is proposed to provide that the cost of acquisition or
improvement shall not include the amount of interest claimed
earlier as deduction.
D.14 There are certain assets like intangible assets or rights for which
no consideration has been paid for acquisition and the transfer of
which may result in generation of income. Their cost of acquisition
is proposed to be defined to be NIL.
E. IMPROVING COMPLIANCE AND TAX ADMINISTRATION
E.1 With respect to rectification of orders by the Interim Board of
Settlement, it is proposed to provide that where the time-limit for
amending an order by it or for making an application to it expires
on or after 01.02.2021 but before 01.02.2022, such time-limit shall
stand extended to 30.09.2023.
E.2 To expedite the disposal of certain appeals pending with
Commissioner (Appeals), it is proposed to introduce a new
authority in the rank of Joint Commissioner/ Additional
Commissioner [JCIT(Appeals)], for appeals against certain orders
passed by or with the approval of an authority below the rank of
Joint Commissioner. Certain related and consequential
amendments are also proposed in this regard.
 46

E.3 It is proposed to reduce the minimum time period required to be

provided by the transfer pricing officer to assessee for production
of documents and information from 30 days to 10 days.
E.4 It is proposed to provide for appeal against penalty orders passed
by Commissioner (Appeals) under certain sections of the Act
before the Appellate Tribunal. It is also proposed to provide that
an order under section 263 of the Act passed by the Principal
Chief Commissioner or Chief Commissioner and any rectification
order for the same shall also be appealable before the Appellate
Tribunal. Further, it is proposed to enable filing of memorandum
of cross-objections in all classes of cases against which appeal can
be made to the Appellate Tribunal.
E.5 It is proposed to amend section 132 of the Act, dealing with
search and seizure, to allow the authorised officer to take
assistance of specific domain experts like digital forensic
professionals, valuers and services of other professionals like
locksmiths, carpenters etc. during the course of search and also to
aid in accurate estimation of undisclosed income held in the form
of property by the assessee.
E.6 Section 170A of the Act, inserted vide Finance Act, 2022 is
proposed to be substituted to clarify that a modified return shall
be furnished by an entity to whom the order of the business
reorganisation applies, and to introduce provisions for assessment
or reassessment in cases where such modified return is furnished.
E.7 It is proposed that an order of assessment may be passed within a
period of 12 months from the end of the relevant assessment year
or the financial year in which updated return is filed, as the case
may be. It is also proposed that in cases where search under
section 132 of the Act or requisition under section 132A of the Act
has been made, the period of limitation of pending assessments
shall be extended by twelve months.
E.8 It is proposed to make amendments to empower the Central
Government to make modifications in the already notified
 47

schemes regarding e-Verification, Dispute Resolution, Advance

Rulings, Appeal and Penalty, at any time to enable better
implementation of such schemes.
E.9 It is proposed to limit the time for furnishing of a return for
reassessment. Further, it is also proposed to provide that in cases
where search related information is available after 15th March of
any financial year, an additional period of fifteen days shall be
allowed for issuance of notice, for assessment/reassessments etc,
under section 148 of the Act. It is also proposed to clarify that the
specified authority for granting approval shall be Principal Chief
Commissioner or Principal Director General or Chief Commissioner
or Director General.
E.10 It is proposed to provide a penalty of ` 5,000 if there is any
inaccuracy in the statement of financial transactions submitted by
a prescribed reporting financial institution due to false or
inaccurate information submitted by the account holder.
E.11 It is proposed to amend section 271C and section 276B of the Act
to provide for penalty and prosecution where default in TDS
relates to transaction in kind.
E.12. It is proposed to amend the time period for filing of appeal against
the order of the Adjudicating authority under Benami Act within a
period of 45 days from the date when such order is received by
the Initiating Officer or the aggrieved person. The definition of
‘High Court’ is also proposed to be modified to allow
determination of jurisdiction for filing appeal in the case of non-
residents.
F. RATIONALISATION
F.1 The restriction on interest deductibility on interest payment to
overseas associated enterprise does not apply to those in the
business of banking and insurance. It is proposed to extend this
benefit to non-banking financial companies, as may be notified.
F.2 TDS on payment of certain income to a non-resident is currently at
the rate of 20 per cent, but the tax rate in treaties may be lower. It
 48

is proposed to allow the benefit of tax treaty at the time of TDS on

such income under section 196A of the Act.
F.3 At present the TDS rate on withdrawal of taxable component from
Employees’ Provident Fund Scheme in non-PAN cases is 30 per
cent. It is proposed to reduce it to 20 per cent, as in other non-
PAN cases.
F.4 Sometimes, tax for income of an earlier year is deducted later,
while tax thereon has already been paid in the earlier year.
Amendment is proposed to facilitate such taxpayers to claim
credit of this TDS in the earlier year.
F.5 Higher TDS/TCS rate applies, if the recipient is a non-filer i.e. who
has not furnished his return of income of preceding previous year
and has aggregate of TDS and TCS of ` 50,000 or more. It is
proposed to exclude a person who is not required to furnish the
return of income for such previous year and who is notified by the
Central Government in the Official Gazette in this behalf.
F.6 It is proposed to clarify that the amount of advance tax paid is
reduced only once for computing the interest payable u/s 234B in
the case of an updated return.
F.7 It is proposed to extend taxability of the consideration (share
application money/ share premium) for shares exceeding the face
value of such shares to all investors including non-residents.
F.8 It is proposed to enable prescription of a uniform methodology for
computing the value of perquisite with respect to accommodation
provided by employers to their employees.
F.9 It is proposed to provide a time limit for an SEZ unit to bring the
proceeds from exports of goods or services into India. The filing of
income-tax return is also proposed to be made mandatory for
claiming deduction on export income.
F.10 Due to changes in classification of non-banking financial
companies by the Reserve Bank of India, it is proposed to make
necessary amendments to align such classifications in the Act with
 49

the same.
F.11 It is proposed to clarify that for taxability under section 28 of the
Act as well for tax deduction at source under section 194R of the
Act, the benefit could also be in cash.
F.12 It is proposed to make amendments relating to exemption
provided to charitable trusts and institution to
• provide clarity on tax treatment on replenishment of corpus
and on repayment of loans/borrowings;
• treat only 85 per cent of donation made to another trust as
application;
• omit the redundant provisions related to rolling back of
exemption;
• combine provisional and regular registration in some cases;
• modify the scope of specified violation;
• provide for payment of tax on assets if a trust does not apply
for exemption after getting provisional exemption and for re-
exemption after expiry of exemption;
• align of time for furnishing of certain forms;
• clarify that the time provided for furnishing return of income
for claiming exemption shall not include the time provided for
furnishing updated return.
F.13 It is proposed to omit certain name-based funds from section 80G
of the Act, which provides for deduction of donation to such funds
from the income of the donor.
F.14 It is proposed to provide that where refund is due to a person,
such refund shall be set off against existing demand, and if
proceedings for assessment or reassessment are pending in such
case, the refund due will be withheld by the Assessing Officer till
the date of assessment or reassessment.
G. OTHERS
G.1 It is proposed to omit section 88 and some of the clauses of
section 10 of the Act which are no longer in force.
G.2 It is proposed to extend tax exemption to Specified Undertaking of
 50

Unit Trust of India (SUUTI) till 30th September, 2023. It is also

proposed to enable the Central Government to notify the date of
vacation of office of administrator of SUUTI.
G.3 It is proposed to decriminalize certain acts of omission of
liquidators under section 276A of the Act with effect from 1st
April, 2023.
 51

Annexure to Part B of the Budget Speech 2023-24

Amendments relating to Indirect Taxes

A. LEGISLATIVE CHANGES IN CUSTOMS LAWS

A.1 Amendments in the Customs Act, 1962
Section 25 (4A) is being amended to exclude certain categories of
conditional customs duty exemptions from the validity period of
two years, such as, notifications issued in relation to multilateral
or bilateral trade agreements; obligations under international
agreements, treaties, conventions including with respect to UN
agencies, diplomats, international organizations; privileges of
constitutional authorities; schemes under Foreign Trade Policy;
Central Government schemes having a validity of more than two
years; re-imports, temporary imports, goods imported as gifts or
personal baggage; any other duties of Customs under any other
law in force including IGST levied under section 3(7) of Customs
Tariff Act, 1975, other than duty of customs levied under section
12 of the Customs Act 1962.
Section 127C is being amended to specify a time limit of nine
months from date of filing application for passing final order by
Settlement Commission.
A.2 Amendments in the provisions relating to Anti-Dumping Duty
(ADD), Countervailing Duty (CVD), and Safeguard Measures
Sections 9, 9A, 9C of the Customs Tariff Act are being amended to
clarify the intent and scope of these provisions. They are also
being validated retrospectively with effect from 1st January 1995.
A.3 Amendments in the First Schedule to the Customs Tariff Act, 1975
The First Schedule to the Customs Tariff Act, 1975 is being
amended to increase the rates on certain tariff items with effect
from 02.02.2023 and also modify the rates on certain other tariff
items as part of rate rationalisation with effect from date of
assent.
The First Schedule to the Customs Tariff Act is being proposed to
be amended in accordance with HSN 2022 amendments.
 52

New tariff lines are also proposed to be created, which will help in
better identification of millet-based products, mozzarella cheese,
medicinal plants and their parts, certain pesticides, telecom
products, synthetic diamonds, cotton, fertilizer grade urea etc.
This will also help in trade facilitation by better identification of
the above items, getting clarity on availing concessional import
duty through various notifications and thus reducing dwell time.
These changes shall come into effect from 01.05.2023.
A.4 Amendment in the Second Schedule to the Customs Tariff Act,
1975
The Second Schedule (Export Tariff) is being amended to align the
entries under heading 1202 with that of the First Schedule (Import
Tariff) .
B. LEGISLATIVE CHANGES IN GST LAWS
B.1 Decriminalisation
Section 132 and section 138 of CGST Act are being amended, inter
alia, to -
• raise the minimum threshold of tax amount for launching
prosecution under GST from ` one crore to ` two crore, except
for the offence of issuance of invoices without supply of
goods or services or both;
• reduce the compounding amount from the present range of
50 per cent to 150 per cent of tax amount to the range of 25
per cent to 100 per cent;
• decriminalize certain offences specified under clause (g), (j)
and (k) of sub-section (1) of section 132 of CGST Act, 2017,
viz.-
o obstruction or preventing any officer in discharge of his
duties;
o deliberate tempering of material evidence;
o failure to supply the information.
B.2 Facilitate e-commerce for micro enterprises
Amendments are being made in section 10 and section 122 of the
CGST Act to enable unregistered suppliers and composition
taxpayers to make intra-state supply of goods through E-
 53

Commerce Operators (ECOs), subject to certain conditions.

B.3 Amendment to Schedule III of CGST Act, 2017
Paras 7, 8 (a) and 8 (b) were inserted in Schedule III of CGST Act,
2017 with effect from 01.02.2019 to keep certain transactions/
activities, such as supplies of goods from a place outside the
taxable territory to another place outside the taxable territory,
high sea sales and supply of warehoused goods before their home
clearance, outside the purview of GST. In order to remove the
doubts and ambiguities regarding taxability of such transactions/
activities during the period 01.07.2017 to 31.01.2019, provisions
are being incorporated to make the said paras effective from
01.07.2017. However, no refund of tax paid shall be available in
cases where any tax has already been paid in respect of such
transactions/ activities during the period 01.07.2017 to
31.01.2019.
B.4 Return filing under GST
Sections 37, 39, 44 and 52 of CGST Act, 2017 are being amended
to restrict filing of returns/ statements to a maximum period of
three years from the due date of filing of the relevant return /
statement.
B.5 Input Tax Credit for expenditure related to CSR
Section 17(5) of CGST Act is being amended to provide that input
tax credit shall not be available in respect of goods or services or
both received by a taxable person, which are used or intended to
be used for activities relating to his obligations under corporate
social responsibility referred to in section 135 of the Companies
Act, 2013.
B.6 Sharing of information
A new section 158A in CGST Act is being inserted to enable sharing
of the information furnished by the registered person in his return
or application of registration or statement of outward supplies, or
the details uploaded by him for generation of electronic invoice or
E-way bill or any other details on the common portal, with other
systems in a manner to be prescribed
B.7 Amendments in section 2 clause (16) of IGST Act, 2017
Clause (16) of section 2 of IGST Act is amended to revise the
 54

definition of “non-taxable online recipient” by removing the

condition of receipt of online information and database access or
retrieval services for purposes other than commerce, industry or
any other business or profession so as to provide for taxability of
OIDAR service provided by any person located in non-taxable
territory to an unregistered person receiving the said services and
located in the taxable territory. Further, it also seeks to clarify that
the persons registered solely in terms of clause (vi) of Section 24
of CGST Act shall be treated as unregistered person for the
purpose of the said clause.
B.8 Online information and database access or retrieval services
Clause (17) of section 2 of IGST Act is being amended to revise the
definition of “online information and database access or retrieval
services” to remove the condition of rendering of the said supply
being essentially automated and involving minimal human
intervention.
B.9 Place of supply in certain cases
Proviso to sub-section (8) of section 12 of the IGST Act is being
omitted so as to specify the place of supply, irrespective of
destination of the goods, in cases where the supplier of services
and recipient of services are located in India.
 55

C. CUSTOMS DUTY RATE CHANGES

C.1. Reduction in basic customs duty to reduce input costs, deepen value
addition, to promote export competitiveness, correct inverted duty
structure so as to boost domestic manufacturing etc [with effect
from 02.02.2023]

S. From To
Commodity
No. (per cent) (per cent)
I. Agricultural Products
1. Pecan Nuts 100 30
2. Fish meal for manufacture of aquatic
15 5
feed
3. Krill meal for manufacture of aquatic
15 5
feed
4. Fish lipid oil for manufacture of aquatic
30 15
feed
5. Algal Prime (flour) for manufacture of
30 15
aquatic feed
6. Mineral and Vitamin Premixes for
15 5
manufacture of aquatic feed
7 Crude glycerin for use in manufacture 7.5 2.5
of Epichlorohydrin
8 Denatured ethyl alcohol for use in 5 Nil
manufacture of industrial chemicals.
II. Minerals
1 Acid grade fluorspar (containing by 5 2.5
weight more than 97 per cent of
calcium fluoride)
III. Gems and Jewellery Sector
 56

1. Seeds for use in manufacturing of 5 Nil

rough lab-grown diamonds
IV. Capital Goods
1. Specified capital goods/machinery for As Nil
manufacture of lithium-ion cell for use applicable (up to
in battery of electrically operated 31.03.2024)
vehicle (EVs)
V. IT and Electronics

1. Specified chemicals/items for 7.5 Nil

manufacture of Pre-calcined Ferrite (up to
Powder 31.03.2024)
2. Palladium Tetra Amine Sulphate for 7.5 Nil
manufacture of parts of connectors (up to
31.03.2024)
3. Camera lens and its inputs/parts for 2.5 Nil
use in manufacture of camera module
of cellular mobile phone
4. Specified parts for manufacture of 5 2.5
open cell of TV panel
VI. Electronic Appliances
1. Heat coil for manufacture of electric 20 15
kitchen chimneys
VII. Others
1. Warm blood horse imported by sports 30 Nil
person of outstanding eminence for
training purpose
2. Vehicles, specified automobile As Nil
parts/components, sub-systems and applicable
tyres when imported by notified
testing agencies, for the purpose of
testing and/ or certification, subject to
 57

conditions.

C.2. Increase in Customs duty [with effect from 02.02.2023]

S. No. Commodity Rate of duties
From To
(per cent) (per cent)
I. Chemicals
1. Styrene 2 2.5
(+0.2 SWS) (+0.25
SWS)
2. Vinyl chloride monomer 2 2.5
(+0.2 SWS) (+0.25
SWS)
II Petrochemical
1 Naphtha 1 2.5
(+ 0.1 SWS) (+0.25 SWS)
III. Precious Metals
1. Silver (including silver plated with gold 7.5 10
or platinum), unwrought or in semi- (+ 2.5 (+ 5 AIDC+
manufactured forms, or in powder AIDC+ 0.75 Nil SWS)
form SWS)
2. Silver dore 6.1 10
(+ 2.5 (+ 4.35
AIDC+ 0.61 AIDC+ Nil
SWS) SWS)
IV. Gems and Jewellery Sector
1. Articles of Precious Metals such as 20 25
gold/silver/platinum (+Nil AIDC (+Nil AIDC
+2 SWS) +Nil SWS)
 58

S. No. Commodity Rate of duties

From To
(per cent) (per cent)
2. Imitation Jewellery 20 or ` 25 or `
400/kg., 600/kg.,
whichever is whichever is
higher higher

(+Nil AIDC +2 (+Nil AIDC

or ` 40 per Kg +Nil SWS)
SWS)
V. Automobiles

1 Vehicle (including electric vehicles) in 30 35

Semi-Knocked Down (SKD) form . (+3 SWS) (+Nil SWS)
2 Vehicle in Completely Built Unit (CBU) 60 70
form, other than with CIF more than
(+6 SWS) (+Nil SWS)
USD 40,000 or with engine capacity
more than 3000 cc for petrol-run
vehicle and more than 2500 cc for
diesel-run vehicles, or with both
3 Electrically operated Vehicle in 60 70
Completely Built Unit (CBU) form, (+ 6 SWS) (+Nil SWS)
other than with CIF value more than
USD 40,000
VI. Others
1. Bicycles 30 35

(+ Nil AIDC (+ Nil AIDC

+3 SWS) +Nil SWS)
2. Toys and parts of toys (other than 60 70
parts of electronic toys)
(+Nil AIDC+ (+Nil AIDC+
6 SWS) Nil SWS)
 59

S. No. Commodity Rate of duties

From To
(per cent) (per cent)
3. Compounded Rubber 10 25 or `
30/kg.,
whichever is
lower
4. Electric Kitchen Chimney 7.5 15

* AIDC -Agriculture Infrastructure Development Cess; SWS – Social Welfare

Surcharge

D. CHANGES IN CENTRAL EXCISE

D.1. NCCD Duty rate on Cigarettes [with effect from 02.02.2023]

Rate of excise duty

From To
Description of goods
(` per 1000 (` per 1000
sticks) sticks)
Other than filter cigarettes, of length not 200 230
exceeding 65 mm
Other than filter cigarettes, of length exceeding 250 290
65 mm but not exceeding 70 mm
Filter cigarettes of length not exceeding 65 mm 440 510
Filter cigarettes of length exceeding 65 mm but 440 510
not exceeding 70 mm
Filter cigarettes of length exceeding 70 mm but 545 630
not exceeding 75 mm
 60

Other cigarettes 735 850

Cigarettes of tobacco substitutes 600 690

D.2. Other changes in Central Excise [with effect from 02.02.2023]

In order to promote green fuel, central excise duty exemption is being
provided to blended Compressed Natural Gas from so much of the amount
as is equal to the GST paid on Bio Gas/Compressed Bio Gas contained in the
blended CNG.
E. OTHERS
There are few other changes of minor nature. For details of the budget
proposals, the Explanatory Memorandum and other relevant budget
documents may be referred to.
*****