Popular investment opportunities after Union Budget 2023
Building on the foundations laid down at last year’s Budget session, Finance Minister Nirmala Sitharaman emphasised seven priorities: development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and the financial sector.
Impact on popular themes and sectors after Union Budget 2023 –
Tax relief for India’s middle class:
The Indian government has introduced tax relief measures.
- Incomes lesser than ₹7 lakhs per annum will be exempt from paying the income tax
- India’s maximum personal income tax rate has also been reduced from 42% to 39%
- Expected spending and purchasing power increase by putting more money in people’s pockets.
Clean and renewable energy:
The 2023 Budget is centred around promoting environmentally sustainable growth.
- Emphasis was laid on PM’s vision of LiFE (Lifestyle for Environment)
- ₹35,000 crores allocated for investments towards energy transition and the goal of achieving net-zero emissions
- The National Green Hydrogen Mission aims to reach 5 million metric tons of annual production by 2030.
Infrastructure Development:
One of the seven priorities, this Budget lay emphasis on infrastructural development.
- Capex has been hiked by 33% to ₹10 lakh crores.
- The infrastructure finance secretariat is to help attract more private investment.
- The PM launched the Gati Shakti – National Master Plan on October 13, 2022, which also aimed to lower logistics costs.
Digital India:
India has revolutionised digital payments with the advent of UPI, and adequate funds have been allocated to propel the infrastructure in the future.
- The FM announced an outlay of ₹4,795.24 crores for the Digital India Programme.
- National Digital Library to be set up for children and adolescents
- Apps being built in 100+ labs to facilitate the use of 5G services in India
Agriculture:
This Budget seems to have brought in an increased quality of rural life, leading to increased rural consumption.
- The allocation for agriculture and rural development has shown a CAGR of around 12%, signifying a substantial increase in investment.
- The government has declared plans to increase the agriculture credit target to ₹20 lakh crore.
- Sector to see digitisation in the form of an Agriculture Accelerator Fund and open-source digital public infrastructure.
Housing and Urban development:
It looks promising for the housing and development sector post this Budget.
- In the 2023-24 Union Budget, a pledge of ₹79,000 crore has been made for homes under the Pradhan Mantri Awas Yojana.
- This represents a 66% jump compared to 2022 and will help boost the availability of affordable housing.
- Property tax reforms aimed at increasing incentives for cities to enhance their credit ratings for municipal bonds were also discussed.
Manufacturing:
The Manufacturing Sector saw a considerable boost in this Budget.
- Extended the reduced customs duty on certain input parts for an additional year to spur local investments.
- As a result of government initiatives, such as the phased manufacturing program, mobile phone production in India has skyrocketed from ₹18,900 crores in 2014-15 to ₹2,75,000 crore in the past fiscal.
- To encourage domestic manufacture, the basic customs duty exemption for a number of components was extended until March 2024.
Railways:
This Budget saw the highest-ever allocation and is 9x the amount provided in 2013-2014.
- The Union Budget 2023-24 has set aside a historic high of ₹2.4 lakh crore for the Indian Railways.
- The budget also strongly emphasises freight transportation, with a budget of ₹75,000 crores earmarked for the National Rail Plan (NRP).
- The NRP 2030 aims to transform the rail system through operational and commercial policy improvements.
Defence:
This Budget saw an increase of 13% from the previous year’s allocation.
- The defence budget allocation for 2023-24 was raised to ₹5.94 lakh crores
- ₹1,62,600 crores allocated for the military for capital expenditure, including purchasing new weapons, aircraft, ships, and other defence equipment.
- Aimed to strengthen domestic manufacturing in this sector, emphasising increasing exports from the country.
Biggest Companies of India:
India Inc seems to look much more confident of the times ahead after this Budget 2023-24.
- ₹10 trillion allocated towards infrastructural development
- This increase in government infrastructure spending will enable private sector companies and India’s market leaders to see a growth in demand.
- The government is emphasising the positive impact of infrastructure spending on GDP.
Key takeaways from the Union Budget of India 2023-24 –
- India to grow at 7% in the current fiscal
- Personal income tax slabs to be reduced to 5; tax exemptions up to ₹7 lakhs per year
- Open-source digital infrastructure and an Agricultural Accelerator Fund to boost the agricultural sector
- Highest-ever allocation to railways at a capital outlay of ₹2.40 lakh crore
- Green hydrogen, storage and transmission of clean energy to be key drivers of India becoming net-zero carbon emission by 2070, as promised to the world
- Allocation for PM Aawas Yojana increased to over ₹79000 crores, making housing a priority.
- Government to continue providing free food to priority households until the end of this year.
- The Digital India programme gets a boost of ₹4795.24 crores
- Subsidy for UPI expected to be ₹2137 crore in this fiscal
Disclaimer: This blog is purely based on facts presented at Union Budget 2023. It should not be considered investment advice.
