UNION BUDGET 2023: THE SEVEN PRIORITIES OF THE BUDGET

As Union Finance Minister Nirmala Sitharaman submitted the current government’s final full budget, which everyone excitedly awaited to see the Centre’s objectives barely a year before the country returns to the national polls. The FM / Finance Minister named ‘Saptarishi,’ or the Centre’s seven priority sectors, with the financial industry ranking seventh.

The following are the important themes of the Union Budget 2023 for the financial industry, taken from the FM’s speech delivered during the budget presentation for the FY2023:

She stated that the BJP Government, reforms in the financial sector and innovative use of technology have led to:

• financial inclusion at scale,
• better and faster service delivery,
• ease of access to credit, and
• participation in financial markets.

While tabling the Budget, Sitharaman recommended numerous measures. A national financial information registry will be established to act as the primary repository of financial and related information. This will enhance financial inclusion and financial stability while also facilitating the efficient flow of loans. This credit public will be governed by a new legislative framework or infrastructure, which will be developed in collaboration with the Reserve Bank of India or RBI.

The focus of the Union Budget was also on Financial Sector Regulations. To satisfy the demands of Amrit Kaal and to allow optimum regulation in the financial sector, public consultation will be introduced to the process of regulation-making and issuing subsidiary instructions, where required and practicable, was noted by the FM.

She also stated that financial sector authorities will be asked to conduct a complete assessment of existing legislation in order to simplify, relax, and minimise the cost of compliance. They will accept proposals from public and regulated companies for this. Time restrictions for deciding applications under various rules will be established.

The FM also mentioned GIFT IFSC. To improve business activities in GIFT IFSC, the following measures will be implemented:

• delegation of powers within the IFSCA to SEZ Act to keep away dual regulation,
• establishing a single window IT system for registration and approval from:
  1. SEZ authorities,
  2. IFSCA,
  3. RBI,
  4. GSTN,
  5. IRDAI and
  6. SEBI
• allowing acquisition financing by IFSC Banking Units of the banks majorly foreign banks,
• establishing a subsidiary of EXIM Bank for trade refinancing, and amending the IFSCA.

She also mentioned the Data Embassy. We would support the establishment of Data Embassies in GIFT IFSC for nations seeking digital continuity solutions.

The banking sector was also highlighted in the Union Budget 2023-24. Certain reforms to:

• the Banking Regulation Act,
• the Banking Companies Act, and
• the Reserve Bank of India Act,

were recommended in the budget speech to strengthen bank governance and safeguard investors.

The budget also emphasises capacity creation in the securities sector, as well as granting regulators additional authority. For increasing or building the capacity of both professionals and functionaries in the securities market, SEBI will be empowered to:

• develop,
• regulate,
• maintain, and
• enforce norms and standards for education in the National Institute of Securities Markets,

as well as to recognise awards of all certificates, degrees as well as diplomas stated by Honourable FM in her speech.

Reclaiming shares and dividends were also significant factors in the banking industry. An integrated IT site will be built to allow investors to easily reclaim unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority. The centre also promotes digital payments, and funding support for this digital public infrastructure will be maintained in budget 2023-24.

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