India is still the fastest-growing major economy and will continue to be so, said finance minister Nirmala Sitharaman during the general discussion on Union Budget 2023-24 in Lok Sabha on Friday. She said the government chose capex route to revive the economy as it has a great multiplier effect.
“Fiscal prudence is maintained as announced in the fiscal glide path in the Budget, Sitharaman said. She also said the new tax regime announced in the Budget is “very attractive” as the tax exemption limit has been hiked to ₹3 lakh, from ₹2.5 lakh earlier. Besides, a standard deduction of ₹50,000 too has been allowed under the scheme.
Sitharaman said the new tax regime, which offers a rebate on annual income of up to ₹7 lakh, will leave higher disposable income in the hands of people.
Replying to the discussion on Union Budget 2023, Sitharaman said the Budget astutely balances the requirement of development imperatives within the limits of fiscal prudence.
She said the Budget focuses on the middle class, employment generation, MSME, agri sector, rural population, health and green growth.
Under the revamped concessional tax regime, which will be effective from the next fiscal, no tax would be levied for income up to ₹3 lakh. Income between ₹3-6 lakh would be taxed at 5 per cent; ₹6-9 lakh at 10 per cent, ₹9-12 lakh at 15 per cent, ₹12-15 lakh at 20 per cent and income of ₹15 lakh and above will be taxed at 30 per cent.
However, no tax would be levied on annual income of up to ₹7 lakh.
Responding to RSP member NK Premachandran’s remark that the new tax regime will not be beneficial for a person earning ₹9 lakh annually and having an investment of ₹4.5 lakh in tax savings instruments, Sitharaman said for a person saving ₹4.5 lakh will be an “effort-ridden exercise”.
“For a person earning ₹9 lakh, it’s not always possible to have ₹4.5 lakh as saving and then also have enough money to spend on your family,” Sitharaman said.
“It is a very, very delicately balanced Budget,” Sitharaman said, adding the government chose the capital expenditure route to revive the economy as it has a greater multiplier effect.
(With inputs from PTI)