What does the Budget 2023 have in store for all of us?

New Delhi: What do you think of this year’s budget? Many personal finance experts hail this year’s budget as all-inclusive with a focus on India’s economic growth. As opposed to the misconception that Finance Minister Nirmala Sitharaman would dole out a populist budget, the country received a budget that allocates money to not only build on the country’s economic framework but also initiate savings and investments in all its key segments.

A cursory look at this year’s budget will help one assess the key segment-specific takeaways.

More savings for women

Take for example the launch of the “Mahila Samman Bachat Patra”, a new two-year micro-savings plan for women that offers a fixed interest rate of 7.5% per annum. Women can invest up to Rs 2 lakh for two years in this plan. The launch of this plan hails the first step to augmenting micro savings by women, thus, enabling their financial inclusion and independence in the long run. Undoubtedly, none can beat women when it comes to disciplined savings as the program encourages them to save more regularly.

Taxpayers – Salaried and professionals

The budget has benefited the middle class by raising the rebate cap to Rs 7 lakh in the new tax regime, reducing the number of flat-rate taxes, and introducing new lower tax rates. However, it is very important to understand whether the old system or the new system is better for taxpayers. The new system will offer more benefits and flexibility to those with incomes below Rs 15 lakh. For those with higher incomes, the old system with many benefits and deductions may be preferable.

Senior citizens

It is positive that the maximum deposit amount for senior savings plans has been increased from Rs 15 lakh to Rs 30 lakh. In addition, the upper limit of the monthly income account system has been raised. Both initiatives will make life easier for seniors who depend on monthly interest income.

High Net Worth individuals

The new budget guidelines will encourage HNI investors to park their money in debt funds instead of low-yield-earning insurance products. Starting April 01 this year, the income from high premium policies (those exceeding Rs 5 lakh in yearly premiums) will be taxable. The continuation of the long-term capital gains tax will be a great relief for capital market participants. The top effective tax rate has been reduced from 42.7 per cent to 39 per cent, thus, clearly benefiting taxpayers falling in higher income brackets.

Digital initiatives

Government-sponsored initiatives including Aadhaar, UPI, Jan Dhan and Video KYC are simplifying banking and finance. Recent initiatives to expand Digilocker services will accelerate digital innovation and bring greater convenience and transparency to digital customers. The government’s recent initiative to encourage people to use the PAN card as a common identifier for all digital systems greatly simplifies the KYC process and documentation.

Self-employed Businessman / MSMEs / Startups

A loan guarantee of Rs 9000 crores for MSMEs will help boost the sector’s creditworthiness. This is important too considering how the country has been rigorously focusing on its “Make in India” initiatives. The income limit for taxing MSMEs has been raised to a maximum of Rs 3 million. Apart, the government has promised support for local startup firms through agriculture accelerators, enterprise-based Digi-lockers and other initiatives that could lead to a potential increase in MSME borrowing and growth.

As a result, the 2023 budget will be rounded to benefit all major segments. It may be best described as an overall pragmatic, progressive and growth-friendly budget.