It is commendable that the finance minister has stayed the course of fiscal consolidation, seeking an acceptable middle road that tries its best to address the interests of various interested parties. The Union Budget 2023-2024 is a forward-looking and well-designed plan that will provide numerous benefits to the Indian economy, including personal finance.

I am happy to highlight the numerous benefits that the budget proposals will bring to the common man. Firstly, the increased tax savings will boost personal consumption, which is a key driver of economic growth. Secondly, the simplified financial processes will make it easier for individuals to manage their finances, which will encourage savings and investment.

Furthermore, the new savings scheme for women and the increased deposit limit for senior citizens will improve financial inclusion and provide these segments of the population with more opportunities to grow their savings and secure their financial futures. Additionally, the reduced tax burden on high-income individuals will create a more favorable business environment, encouraging entrepreneurship and job creation.

The increase in the income tax rebate limit to INR 7 lakh and the lowest exemption limit under the slab to INR 3 lakh will provide a significant boost to taxpayers, especially those at the lower brackets of the income pyramid. The reduction in TDS from 30% to 20% on EPF withdrawal and the proposal to not treat the conversion of gold into electronic gold receipt as capital gain will also simplify and improve financial processes for individuals.

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The launch of the “Mahila Samman Savings Certificate” for women is another important step towards empowering them financially, and the increased deposit limit for senior citizens under the SCSS and Post Office MIS scheme will provide them with a higher rate of return on their savings. Additionally, the reduction in the surcharge on individuals with an income over INR 5 crore will lower the effective tax rate and encourage growth in the economy.

The broadening of tax slabs under the new tax regime, the launch of a new savings scheme for women, and the increased deposit limit for senior citizens are all commendable steps towards promoting personal consumption and tax savings in the economy.

While the proposal to exempt only policies with aggregate premiums up to INR 5 lakh may have a temporary impact, it is ultimately a step towards ensuring that the tax benefits of life insurance policies are better aligned with the purpose of providing financial security to individuals. This will lead to a more informed and responsible approach to personal finance, which is essential for the long-term stability and growth of the economy.

What’s particularly appealing in this budget, has been its predictability and consistency. When government policy is both predictable and consistent, it lends stability to the economy and its constituents. The economic goals of this government are clearly focused on enhancing the capacity of the economy and on developing well-functioning markets. The increased allocation towards capital investments of about 3% of GDP, is capacity enhancing and should lead the way for the private sector and give it the confidence to make capital investments in industry and infrastructure. It has likewise been a prudent choice to keep taxes on capital gains and STT untouched. Keeping taxes and transaction costs low, certainly augurs well for the stock markets.

Overall, I believe that the Union Budget 2023-2024 has taken commendable steps towards promoting personal finance and financial literacy, and I am confident that it will contribute significantly to the development and sustainable & inclusive growth of the country.

(By Jawahar Vadivelu, Chairman of Tradeplus Online)