Finance Minister Nirmala Sitharaman delivered Budget 2023 on Wednesday and announced revisions to certain levies and taxes, resulting in certain things being cheaper and others becoming more expensive.
Sitharaman presented her sixth comprehensive budget since taking over as finance minister in July 2019.
Here is a list of things that have been less costly and others that have become more expensive.
What Gets Cheaper in 2023?
- Customs tax on components of open cells in TV panels has been reduced to 2.5 percent.
- The government intends to lower customs duties on some inputs for mobile phone production.
- The government intends to cut the basic customs tariff on seeds used in the production of lab-grown diamonds.
- To encourage exports, the government will lower customs duties on shrimp feed.
Budget 2023 – What Becomes Expensive?
- Taxes for Cigarettes have been raised up by 16%.
- The basic import tariff on compounded rubber was raised from 10% to 25%.
- The basic customs tax on products created from gold bars has been raised.
- The customs tax on kitchen electric chimneys has been raised from 7.5 percent to 15%.
The significance of this year’si.e., 2023 Budget lies in the fact that the country’s next Lok Sabha election is expected during April-May 2024.
Referring to Article 112 of the Indian Constitution, we can see that a budget must be offered and presented to Parliament before the start of each financial / fiscal year. The Union Budget in it’s constitutional sense is allocated for the upcoming financial year, which begins on the 1st of April and ends on the 31st of March of the succeeding / following year.
What is the Union Budget?
The Union Budget can be understood as a budget that summarises the government’s estimated payables and receivables for a particular financial year. This budget statement for a financial year is split / divided into two parts:
- the capital budget and
- the revenue budget.
Capital Budget: Budget for Capital Expenditures
The capital budget accounts for all government-related capital:
- expenditures and
- receipts
Capital revenues include public or Reserve Bank of India (RBI) loans, whereas capital payments comprise costs made for health facilities, equipment development and maintenance, and educational facilities.
The Revenue Budget
A revenue budget, which in a natural sense is implied by its name, is the account for all sales / revenue receipts and revenue expenditures. If the revenue expenditure / cost is exceeding the revenue income / receipts, we can say that the government is having a revenue deficit.
Recognizing the Importance of the Union Budget
The overall goal of the Union Budget is to achieve our country’s quick and balanced economic growth while also promoting social justice and equality. The following are the primary objectives that demonstrate the significance of the Union Budget in India.
Ensure that resources are allocated efficiently.
It is critical to use existing resources in the best interests of the country. Allocating resources optimally aid the government in maximizing profits while promoting public welfare.
Reduce the level of unemployment and poverty.
Another goal that is set or maintained by the Union Budget is the following:
- eradication of poverty and
- provide work possibilities.
This would ensure that every person in the country has access to basic necessities such as food, shelter, and clothes, as well as health care and education.
Reduce inequities in wealth and income.
Through subsidies and taxes, the budget influences the distribution of income. It contributes to ensuring that the wealthy pay a high tax rate, decreasing their disposable income. The lower income group, on the other hand, pays a reduced tax rate to guarantee they have enough money.
Keep an eye on pricing.
The Union Budget also stimulates and aids in controlling economic disabilities and swings. It provides a sense of guarantee and confidence that both:
- inflation and
- deflation,
are handled properly, which would help the government and citizens have a hold of economic stability. Surplus budget policies are approvedand implemented during inflation, whereas deficit budget policies are approved and established during a situation of recession or deflation. This contributes to the economy’s price stability.
Alter the tax structure.
The Union Budget also specifies potential modifications to the country’s direct and indirect taxation. It modifies the income tax rates and tax brackets. This budget includes, for example, the forthcoming income tax slab for fiscal years 2020-21.
The Union Budget is critical since it has a wide-ranging influence on many sectors. As a result, understanding what it stands for and its significance is critical.
