The budget for defence has been set at £593 billion, a meagre 1. 5% increase over the revised estimates from the previous fiscal year and 13% more than budgetary expectations. If the enormous pension allotment of £138 billion for roughly 35,00,000 ex-servicemen and defence civilians is taken into account, it amounts to just 1. 97% of the anticipated GDP for 2023–2024. If the pension bill is not included, the percentage reduces to just 1.5%.
The capital outlay for new weapons systems, platforms and sensors stood at £ 163 billion in the new defence budget, a 6.7% hike from budgetary estimates of 2022-2023.
£24 bn for railways
The railways received a record budgetary push of over £24 billion to accelerate projects like introducing hydrogen-powered wagons and trains, laying of additional tracks, electrification of network, and revamping stations with better amenities for passengers.
The first hydrogen-fueled train that was created and produced domestically would be introduced by December 2023, according to railway minister Ashwini Vaishnaw. These trains will run on historic lines.
On the plan for Vande Bharat trains, Vaishnaw said, “This year, we will expand the production to three new facilities - Sonipat (Haryana), Raebareli (Uttar Pradesh) and Latur (Maharashtra). . . With four factories (including ICF Chennai) simultaneously producing these trains, the output should be close to 2-3 new Vande Bharat trains every week.” Currently, the railways are getting around two trains every month.
Highway funds on a new high
The government has requested the biggest ever allocation for the road, transport, and highways sector in 2023–24 of £27 billion, which is 25% more than the revised estimates for the financial year. This is part of the government's major infrastructure drive.
The road transport and highways will also play a crucial role in the scheme of things with nearly 26% of the capital expenditure earmarked for this sector.
According to government data, the amount of money allocated to the sector has surged by more than five times since 2014, when it was approximately £5.15 billion. Officials from the highway ministry stated the ministry may set a larger construction target than that for the current fiscal year since the focus will now be on finishing more NH segments (12,000 km).
Sending money abroad to cost more
According to the budget proposal, banks that send money overseas will be required to deduct tax at source at a rate of 20% without regard to any threshold restrictions. Therefore, it will hurt your wallet whether you're buying a home abroad, paying for your child's daily costs while they're studying there, or investing in international stocks.
Earlier, in such cases, the remitting bank collected tax at source at 5% only if the amount or aggregate amount being remitted in a financial year exceeded Rs 700,000. Further, the withholding tax applied only on the amount in excess of Rs 700,000 (thus if Rs 10,00,000 was being remitted, only Rs 300,000 was subject to the tax collection norms). But these norms have now changed. The taxpayer can, of course, adjust the amount withheld as TCS against his tax liability, when filing the I-T return. But the higher TCS dents the cash flow, as this adjustment happens only later. Refund, if any, arising out of the higher TCS follows later.