India's Union Budget 2023-24 highlights: Income tax relief, reduction in customs duty, jobs and more

New Delhi: The Indian government on Wednesday unveiled a 45 trillion rupees ($549.14 billion) spending budget for the next fiscal year starting April to boost economic growth, while aiming to lower fiscal deficit before elections due next year.

The aim is to have strong public finances and a robust financial sector for the benefit of all sections of society, Finance Minister Nirmala Sitharaman said. Here are the highlights of the budget:

Total spending will rise 7.5% to 45.03 trillion rupees ($549.51 billion) in the next fiscal year starting on April 1.

Sitharaman said the government would target a fiscal deficit of 5.9% of GDP for 2023/24 compared with 6.4% for the current fiscal year and slightly lower than a Reuters poll of 6%. The aim is to lower the deficit to 4.5% by 2025/26. The government's gross market borrowing is estimated to rise about 9% to 15.43 trillion rupees next fiscal year.

Finance Minister Nirmala Sitharaman said the government will spend 10 trillion rupees ($122.3 billion) on longer-term capital expenditure in 2023/24, extending a strategy adopted to revive growth in the aftermath of the COVID crisis.

She also raised the rebate limit for personal income tax to 700,000 rupees from 500,000 rupees, sending shares higher.

The capital spending increase to about $122.3 billion, which would amount to 3.3% of gross domestic product (GDP), will be the biggest such jump after an increase of more than 37% between 2020/21 and 2021/22.

A lack of jobs for young people, and meagre wages for those who do find work, has been one of the main criticisms of Modi. Sitharaman also said the government was allocating 350 billion rupees for energy transition, as Modi focuses on green hydrogen and other cleaner fuels to meet India's climate goals.

Mobile phones and television sets manufactured in India will be cheaper due to reductions in Basic Customs Duty (BCD) on imports of their components, but smokers will pay more because the government has raised taxes. With the finance minister raising customs duty, fully imported cars, including electric vehicles, and those assembled in India with imported parts will become more expensive.