Union Budget 2023-24: Analysis, Key Highlights, and Impacts on the Economy

Union Budget 2023-24: Analysis, Key Highlights, and Impacts on the Economy

February 04, 2023 Admin
union budget finance government allocation revenue expenditure taxation fiscal policy economic growth subsidies public spending infrastructure

The Union Budget 2023-24 highlights several key initiatives aimed at driving growth across various sectors in India. The government has proposed a range of investments in agriculture, health, infrastructure, business, and green growth.


The Indian government is making a significant investment in agriculture with a budget of 2,200 crores for the Atmanirbhar Clean Plant Program, an agriculture accelerator fund, and is promoting the Indian Institute of Millet Research as a Center of Excellence. These initiatives aim to increase crop productivity, profitability, and exports and create effective solutions for farmers. The long-term goal is to drive growth and modernization in the Indian agriculture sector, which has the potential to provide a significant boost to the country's economy.


The Indian government has announced several initiatives aimed at improving access to healthcare services and transforming the healthcare system in India. This includes establishing 157 nursing colleges, increasing the number and quality of primary caregivers, and promoting pharmaceutical research and innovation. The mission to end sickle cell anemia by 2047 through screening and counselling will also bring greater attention to this disease. Additionally, dedicated courses for medical devices will be taught at existing institutions to ensure a well-trained workforce. These initiatives have the potential to significantly improve the quality of life for the citizens of India.

Union Budget 2023-24: Analysis, Key Highlights, and Impacts on the Economy

The government has increased capital investment by 33% to INR 10 lakh crore (3.3% of GDP) to boost employment and economic growth. This increase is expected to encourage private investment and provide a buffer against global challenges. The government will extend a 50-year interest-free loan to state governments for one more year and establish an infrastructure finance secretariat to attract private investment in sectors such as power, roads, and trains. An Urban Infrastructure Development Fund will also be created with a focus on building urban infrastructure in Tier 2 and Tier 3 cities, overseen by the National Housing Bank. 


The Indian government has announced several initiatives to support MSMEs during the COVID period, including restoring 95% of the forfeited sum related to bid or performance security and restructuring the MSME loans through the guarantee scheme with an investment of 9,000 crore. Additionally, over 3,400 legal provisions have been decriminalized and 39,000 compliances have been pruned to improve the ease of doing business. Also, the Jan Vishwas Bill has been presented to improve trust-based governance. These initiatives are expected to provide a much-needed boost to businesses in India and make it easier for MSMEs to grow.


The Indian government aims to promote sustainable living through the "LiFE" initiative and achieve net-zero carbon emissions by 2070. The budget 2023-24 has allocated Rs 19,700 crores for the National Green Hydrogen Mission, aimed at reducing reliance on fossil fuels, with a goal of producing 5 MMt of green hydrogen annually by 2030. The Ministry of Petroleum and Natural Gas will receive 35,000 crores for high-priority energy projects to promote energy security, the transition to clean energy and foster self-sufficiency. These initiatives aim to promote green growth and reduce the carbon footprint of the country, which will have a positive impact on the environment and the overall quality of life for citizens.


The Union Budget 2023-24 has proposed an increase in the tax rebate from the current Rs 5 lakh to Rs 7 lakh for the salaried class. This change means that an individual earning an annual income of Rs 9 lakh will now only be required to pay 5% of their income, or Rs 45,000, which is a 25% reduction from the previous amount of Rs 60,000. This proposal aims to alleviate the tax burden on the salaried class and provide them with greater financial stability.

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