BUDGET 2023
India’s Budget 2023, was announced by the Indian government on 01/02/2023 (Wednesday) unveiling a 45 trillion rupees ($549.14 billion) spending budget for the next fiscal year starting April to boost economic growth while aiming to lower fiscal deficit before elections due next year. It was presented by the Union Finance Minister Nirmala Sitharaman. Through Budget 2023, the capital expenditure for the financial year 2022 2023 has been increased by 35.4 percent to Rs 7.5 lakh crore by the Finance Minister, which was Rs 5.5 lakh crore in the previous year, that is, 2.5 lakh in Budget 2023 for this financial year 2023 2024.
HIGHLIGHTS
India’s Budget for 2023 feature’s the following arrangements-
- The Union Budget 2023-24 has focused on bolstering production and promoting exports in several new and emerging areas of opportunity, with an emphasis on technology-intensive areas.
- The government lowered the customs duty on aqua feed in the agriculture and related sector, which will lower input costs and increase the competitiveness of marine product exports. Although marine product exports from India experienced strong growth in 2021-22, they have seen slower growth from April to December 2022-23. This reduction in customs duty on inputs will revive exports from the sector and unlock its potential.
- The government has strengthened its focus on diversifying exports to higher value, high-tech products, with new initiatives in the electronics sector and technology-focused areas within the traditional gems and jewelry industry. By easing duties on specific inputs, the government’s continued emphasis on this sector will further establish India as a significant manufacturing and export center for mobile phones.
- India’s exports of polished lab-grown diamonds have grown by more than 20 times during the period 2015-16 to 2021-22, but there is high dependence on imported rough lab-grown diamonds. The government has planned a comprehensive ecosystem for the promotion of this sector, including research and development grant and the removal of custom duty on seeds for use in the manufacturing of rough lab-grown diamonds.
- In the pharmaceutical sector as well, the government will be promoting research and development in specific priority areas, which would help the country move up the value chain in the life sciences sector.
- There has also been an emphasis on green mobility , with a focus on the localization of greater segments of the value chain for electric vehicles. The government has announced a custom duty exemption for the import of capital goods and machinery required for the manufacture of lithium-ion cells for batteries used in electric vehicles
- The government has also made the tax system simpler by reducing the number of basic customs duty rates. This simplification, which is particularly beneficial for industries that heavily rely on imports, can result in significant efficiency improvements. A clearer tariff structure may lead to fewer disagreements, enhance the efficiency of manufacturing, promote automation, and facilitate India’s integration into global supply chains.
- There has also been an institutional push towards export promotion, with the government announcing the setting up of a subsidiary of India Exim Bank in the GIFT City.
India’s Budget 2023 offers a comprehensive strategy for supporting growth in both tech-focused and traditional industries, through measures such as lowering customs duties on essential imports for manufacturing, boosting R&D, continuing to improve infrastructure, and streamlining tax systems, among other initiatives.