Budget 2023: Middle-class gets much awaited ‘relief!’

The middle and the salaried class in India wait for the clock to tick 11 am every February 1 waiting anxiously before the TV set listening to the Finance Minister with great hope and expectations. Today, 1 February 2023 I gave big thumbs up to Mrs. Nirmala Sitaraman and the Modi government as a member belonging to this class of the Indian population. It was a great relief after hearing about the exemptions given to income taxpayers under the new tax regime under different slabs. While the zero tax limit is raised to Rs 3.0 lakhs, 5% is levied on Rs 3-6 lakhs, 10% on Rs 6-9 lakhs, 15% on Rs 9-12 lakhs, 20% on Rs 12-15 lakhs and 30% above Rs 15.0 lakhs. Beyond this, an honest middle-class salaried person will not venture to think. A rough calculation in mind made me realize that if the annual earnings are below Rs 15 lakhs the tax component reduces by about Rs 35,000/- in the new tax regime.
A relief that came after a long gap dominated by the Covid 19 pandemic. Another welcome announcement is for the senior citizens where the investment cap for the monthly income scheme and Senior Citizens’ Saving Scheme has been raised.
A little disappointment is on the health and medical side where some more relief would have been a great relief.
A few years back governments introduced a new tax regime under 7 slabs and gave the option to taxpayers. Since, that regime did not have any worthwhile tax benefits, not even the standard deduction of Rs 50,000/-, taxpayers continued with the old tax regime.
Now the government has announced this 5 slab tax regime which is going to be the default regime in the future, though an option to continue in the old regime may likely continue for a year or two. There is a clear emphasis on the government to shift from the existing to the new tax regime.
As a common man, this budget to me is growth oriented that will lead to economic development, and will benefit people of all strata of our population from agriculturists to the working class to the small businessman. The stress on inclusive development reaching the last mile, infrastructure and investment, green growth, youth power, and the financial sector is in the right direction. An increase in capital expenditure to Rs10 lakh crores with huge investments in infrastructure, especially in railways, highways, and the multimode logistic system will generate employment for the youth. The subsidies given to farmers in the agricultural sector and fertilizers will greatly increase the output and with the creation of new storage facilities, the farmers will be benefited and their income will increase. This will surely enhance food security in the country. Especially, the stress on millet is heart-warming that has brought India into focus on the international arena. Millets have been an integral part of our diet for centuries with a plethora of health benefits with low water input requirement that is good for the environment. The United Nations, at the behest of the Government of India, has declared 2023 as the International Year of Millets to create awareness of this super food. There has been an increase in allocation in several schemes like PM Awaz Yojna to Rs 79,000 crores, agricultural credit increased to Rs 20 lakh crores, and so on. For start-ups there is a boost to entrepreneurship and the benefit of carrying forward the losses in MSMEs will further help the middle-level businessman. The boost to indigenous technology will greatly help 5G, AI, and green growth.
Several details will be known after reading the fine print that may have a few misses, too on the part of the government that can be highlighted for future attention of the government.
This is the first budget in the Amrit Kaal as declared by the Finance Minister that is aimed at a technology-driven and knowledge-based economy with strong public finances and a robust financial sector. As India holds the Presidency of the G20 countries, the budget points out to its commitment to fulfil its promises of natural farming, and technology-driven agriculture, with an eye on the climate issues. The government comes out a winner in this budget on several counts from increasing the CAPEX that will boost the economy and provide jobs to the younger population and also on the income tax front where the middle class will now have higher disposal income with them to pump it back into the economy by increasing personal consumption. The Covid-19 pandemic created an imbalance in demand and supply leading to minimal private sector investments. Now that life is normalizing, consumption is expected to increase which will enforce the private sector to increase its investment. The government of India has done the heavy lifting on expenditure on infrastructure in the last two years, it is now the turn of the private sector to chip in and invest back a substantial amount of their resources in the country from where they have earned their silver.