By Vasudha Jha | Edited by Atiyah Krishnan
India’s 75 years of Independence has showcased its resilience, with an economic growth estimated at 7%, the highest among the major economies despite the geopolitical scenario of the covid-led slowdown, Russia-Ukraine war and supply chain disruptions.
This year’s budget envisions the time “Amrit Kaal” (2022-2047) for a journey of India at 100 years of Independence (India@100). It envisions 4 aspects, namely-
- Economic Empowerment of women– The current female labour force participation is
~33% compared to the global average of 52.6%. Thus the economic empowerment of women will be achieved through financial and technical help under the Deen Dayal Antyodaya Yojana to make them tomorrow’s thriving entrepreneurs.
- PM VIKAS– Indian labour force consisting of traditional artisans, craftspersons, and handicraft manufacturers are considered “Vishwakarma”. This is the first time the budget calls for their inclusion by providing them with financial aid, and skill training, connecting them to the MSME supply chain, and helping them with marketing, credit and broad basing (allowing them to procure on large scale).
- Tourism– The large entrapped potential of Indian tourism will be improved by focusing on infrastructure development, regional connectivity etc. The said vision will be developed in a mission mode (having set objectives, and defined scopes, with implementation timelines and milestones) with a top-to-bottom approach. For this, 50 new tourist hubs will be developed connecting it to the smaller places around it.
- Green Growth– The emphasis on growth with sustainability will incorporate green energy, green farming, and green mobility (reducing air and noise pollution from transports), with efficient use of energy across sectors.
Furthermore, this year’s budget plans to focus on 7 priorities, termed as Saptarishi which will pave the way for the long-term goal of India@100.
● Inclusive development
Agriculture – The budget plans to introduce digital public infrastructure for agriculture which will benefit the farmers with information services provided to them, better access to farm inputs and credit with support for the growth of agritechs and startups with the Agriculture Accelerator Fund. For this government has increased the “Agriculture and farmers” allocation by a 4.5% with an allocation of Rs. 1.32 lakh crores.
Source: Mint
Health – With an aim to tackle Sickle Anaemia till 2047 a mission will be launched with a special focus on people affected in tribal areas who will be provided with counseling. Further, the government focuses on encouraging medical research in the country by setting up ICMR Labs for research and innovation.
Education – The priority of building a culture of reading, and an aim to make up for the pandemic-time learning loss, a National Digital Library for children and adolescents will be operational to provide them with free-quality resources across geographies.
● Reaching the last mile
The government, to add to the benefits of the Aspirational Districts programme, will be launching the Aspirational Blocks programme with a target of covering 500 blocks and providing them with basic benefits of health, water resources, financial inclusion etc.
Additionally, the government to aims to protect and promote the inscriptions, they’ll be digitised by preserving 1 lakh inscriptions and keeping them in the Digital Epigraphy museum at Hyderabad under Bharat Shri Repository of Inscriptions (BHARAT-shri).
● Infrastructure and Investment
An increase in investment and productive capacity has a larger impact on growth and employment, and for this, the capital investment has been increased for the third time in a row by 33%, to 10 lakh crores. The government also plans to continue its 50-year policy of interest-free loans to state governments with the objective of betterment of regional connectivity, access to food grains, etc (as last year’s Gati Shakti mission was taken up for reducing the logistical costs). On the lines of the Rural Investment Development Fund, UIDF has been introduced, which will be looked after by the public agencies for the creation of urban infrastructure in tier 1&2 cities. The UIDF will be allocated 10,000 cr per annum.
● Unleashing the potential
Based on the ideas of good governance and more transparency, National Data Governance policy will unleash research and innovation by the startups and academia. As part of Mission Karmayogi, the government has launched an integrated training programme for the continuous learning opportunities of government employees.
To build an AI ecosystem to strengthen Make In India, the government plans to set up a Centre of Excellence for AI. Alongside, applications using 5G will be developed with 100 labs set up to unlock its opportunities and potential.
● Green growth
This can be attained through the National Green Hydrogen Mission with an outlay of 19,700 cr, which will enable the country to a smooth transition to a low carbon intensity economy. For the energy transitions, 35000 cr has been allotted for the capital investment in net zero objectives.
Source: Ministry of New and Renewable Energy
GOBARdhan scheme will emphasize the need to focus on “waste to wealth”, with 500 plants set up to enhance biodiversity and carbon stock with 10000 cr sanctions. In the same order, under the ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’ (MISHTI) scheme, states will be encouraged to take up mangrove plantations and positively impact the aim of afforestation.
● Youth Power
The empowerment of Amrit Peedhi will be realized with skilling and alignment of the curriculum with courses on AI, Robotics etc. This is one of the major objectives of PM Kaushal Vikas Yojana 4.0, which will also set up 30 Skill India International Centres.
● Financial Sector
The Credit Guarantee for MSMEs has been structured with a rollout of 9000 cr to improve access to credit to the MSMEs with a collateral-free credit corpus of 2 lakh cr to be additionally infused. Enhancement of digital public infrastructure will be continued as the digital payment methods show an increase of 76% from the last year.
Economic Indicators at a Glance
Expenditure
The expenditure for this year is estimated to be Rs. 45.03 lakh crores which is an increase of 7.3% from the budget of 2021-22. Of this, the revenue expenditure (such as salaries, wages, pension) accounts for Rs. 35.02 lakh crores, while the capital expenditure (expenses incurred on construction of roads, inland waterways, recovery of loans etc.) is estimated to be around Rs. 10 lakh crores.
Source: PIB
Receipts
The receipts (including borrowings) of this year are calculated to be Rs. 45.03 lakh crores this is an increase of 7.5% from the last year. The revenue receipts (taxes levied, excise and customs duty) account for Rs. 26.32 lakh crores (an increase of 12.1%), while the capital receipts with borrowings (sale of fixed assets, loans taken) will be Rs. 18.7 lakh crores.
Deficits
Fiscal deficit, which shows the borrowings of the government to fund its expenditure, is calculated to be 5.9% of GDP. This is due to the fact that the economy still needs post-pandemic support and needs to aid the demand revival in the economy. This is also due to the interest burdens accumulated due to the previous year’s overshooting of the deficit target. On the other hand, revenue deficit i.e. revenue expenditure more than the budgeted revenue is 2.9% of the GDP.
Source: Business Standard
Tax Regime
The tax structure has targeted rationalisation better along with tax concessions. The Personal Income Tax slab has been reduced to 5 with which the slabs start from 3 lakhs (compared to 2.5 lakhs in the previous regime). The tax rebate limit (under the new tax regime) has also been increased to 7 lakhs. Additionally, a reduction in each slab has been done, for instance, individuals with a 15 lakh income will be supposed to pay 20% lesser compared to the old tax regime.
| Tax Rate | Current Income Slab | Proposed Income Slab |
| Nil | Upto Rs. 2.5 lakh | Upto Rs. 3 lakh |
| 5% | Rs. 2.5 lakh to Rs. 5 lakh | Rs. 3 lakh to Rs. 6 lakh |
| 10% | Rs. 5 lakh to Rs. 7.5 lakh | Rs. 6 lakh to Rs. 9 lakh |
| 15% | Rs. 7.5 lakh to Rs. 10 lakh | Rs. 9 lakh to Rs. 12 lakh |
| 20% | Rs. 10lakh to Rs. 12 lakh | Rs. 12 lakh to Rs. 15 lakh |
| 25% | Rs. 12 lakh to Rs. 15 lakh | – |
| 30% | Above Rs. 15 lakh | Above Rs. 15 lakh |
References:
India. (2023). Union Budget 2023-24 Analysis. Union Budget 2023-24 Analysis. Retrieved February 7, 2023, from https://prsindia.org/budgets/parliament/union-budget-2023-24-analysis
PIB India, P. I. B. (2023). Summary of the union budget 2023-24. Press Information Bureau. Retrieved February 7, 2023, from https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1895320
Indian Budget, I. B. (2023). Speech of Nirmala Sitharaman – India budget. Government of India. Retrieved February 6, 2023, from https://www.indiabudget.gov.in/doc/budget_speech.pdf
Economics Declassified 