Decoding Budget 2023

Hello,

On Wednesday, Finance Minister Nirmala Sitharaman delivered her fifth Budget—her shortest so far.  

This budget adopted seven priorities, dubbed as the Saptarishi to guide India through Prime Minister Narendra Modi’s Amrit Kaal—inclusive development, reaching the last-mile, infrastructure and investment, unleashing the potential, green growth, youth power, and financial sector.

Industry leaders commended the budget for focusing on infrastructure, fiscal consolidation, financial inclusion, and MSMEs. 

Twitter, of course, had a meme fest.

Check out our coverage of Union Budget 2023 here. 

In today’s newsletter, we will talk about 

• Indian startup benefits
• India, hub for millets
• Skilling with new-age tech
• Set for smoother processes

Here’s your trivia for today: Who has presented the most number of Union Budgets in India?

Startups

Extended tax benefits 

Underlining that entrepreneurship is vital for a country’s economic development, the FM proposed two key tax measures that would benefit existing and upcoming ‘eligible’ startups. 

Rejoice your way:

• The FM proposed to extend the date of incorporation for income tax benefits to startups from March 31, 2023, to March 31, 2024. 
• The benefit of carrying forward losses on change of shareholding of startups has been extended from seven years of incorporation to ten years.
• A finer reading of the Finance Bill, 2023 reveals that non-resident investors are proposed to be brought within the ambit of section 56(2)(vii b) of the Income-tax Act 1961 to eliminate the possibility of tax avoidance.

Agritech

India: A hub for millets

The government wants to set up an agriculture accelerator fund to “encourage agri-startups by young entrepreneurs in rural areas” to bring innovative and affordable solutions for challenges faced by farmers, besides developing modern technologies for agricultural practices, increasing productivity, and profitability.

Kheti mein shakti:

• Hyderabad-based Indian Institute of Millet Research will operate as the Centre of Excellence “for sharing best practices, research, and technologies at the international level”.
• Budget also increased the agriculture credit target by a little over 11% from Rs 18 lakh crore in 2022-23 to Rs 20 lakh crore for FY24, with a focus on animal husbandry, dairy, and fisheries.
• Pradhan Mantri Kaushal Vikas Yojana 4.0 to provide on-job training, industry partnerships, and alignment of courses with industry needs to skill “lakhs of youth within the next three years”. 

Edtech

Skilling with new-age tech

Announcements related to the education sector were encapsulated under the sixth priority of this year’s budget—‘Youth Power’—which would skill the youth within the next three years in courses for Industry 4.0 like coding, artificial intelligence, robotics, mechatronics, Internet of Things, 3D printing, drones, and soft skills. 

For youth:

• Pradhan Mantri Kaushal Vikas Yojana 4.0 (PMKVY) launched to skill lakhs of youth in new-age courses, among other skilling and education-focused programmes. 
• 30 Skill India International Centres to be set up across states, as well as three centres of excellence for AI in top educational institutions.
• Within the next three years, the centre will recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students.

Fintech

Set for smoother processes

The government has moved to enable greater fintech adoption, leveraging DigiLocker and Aadhaar to simplify the KYC process, and PAN as a common identifier for businesses for all digital systems of specific government agencies. 

For everyone:

• DigiLocker and Aadhaar will serve for updating and reconciling the identity and address of individuals maintained by government agencies and regulators. 
• The government will set up a National Financial Information Registry that would serve as a central repository of financial and ancillary information. 
• Digital payments registered an increase of 76% in transactions and 91% in value last year, the FM said, adding that fiscal support for "digital public infrastructure will continue in 2023-24.” 

News & updates

• Worst of times: The world’s dealmakers are enduring their worst start to a year in two decades, as economic and financing headwinds continue to prevent a bounceback in mergers and acquisitions. Global deal values ended January at about $124 billion, according to data compiled by Bloomberg.
• De-risking plans: The UK formally laid out plans to regulate the cryptocurrency industry, with the government looking to rein in some of the reckless business practices that emerged over the past year and contributed to the demise of FTX.
• The AI police: OpenAI has launched a tool that attempts to distinguish between human-written and AI-generated text, like the ones produced by the company’s own ChatGPT and GPT-3 models. The classifier isn’t particularly accurate at the moment with a success rate of around 26%. 

Who has presented the most number of Union Budgets in India?

Answer: Former Prime Minister Morarji Desai, who has presented 10 budgets.

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