The Union Budget of India is the annual financial statement presented by the Finance Minister of India in Parliament. It outlines the government’s receipts and expenditures for the upcoming fiscal year and provides an overview of the country’s financial health. The Budget Division of the Department of Economic Affairs in the Finance Ministry is the nodal body responsible for preparing the Union Budget.
The budget is closely watched by the public, businesses, and investors, and often includes major policy announcements and tax proposals. The Union Budget plays a crucial role in shaping the country’s economic policies and its impact is felt across the country. Union Finance Minister, Nirmala Sitharaman, presented her last full-fledged Budget before the 2024 Lok Sabha elections in the Parliament on February 01, 2023. This was the 11th consecutive budget of Prime Minister Narendra Modi and the fifth consecutive budget of Finance Minister Nirmala Sitharaman. This budget holds importance as it was the last full budget of the Modi government before the 2024 Lok Sabha elections.
The budget adopted the following “seven priorities”:
1. Inclusive Development: The government’s ‘Sabka Saath Sabka Vikas’ policy has benefitted many sections, including women, SCs, STs, OBCs, and other underprivileged groups.
2. Reaching the last mile: Reaching the last mile on the huge success of Aspirational District program, the govt recently launched the Aspirational Blocks program, covering 500 blocks for saturation of government services.
3. Infrastructure and investment: The CAPEX outlay is being increased steeply by 33% to Rs 10 lakh crore, which would be 3.3% of the GDP.
4. Unleashing the potential: A National Data Governance Policy will be brought up enabling access to anonymised data to unleash innovation and research by startups and academia.
5. Green growth: The revamp schemes will take effect from 2023 through an infusion of Rs 9,000 crore in the corpus.
6. Youth power: This budget provides for Rs 35,000 crore capital investment towards energy transition and net zero objective and energy security by the Ministry of Petroleum and Natural Gas.
7. Financial sector: There will be a launch of the PM Kaushal Vikas Yojana 4.0 to skill Lakhs of youth. The scheme will cover new-age courses.
These seven key priorities will guide India through the “Amrit Kaal”. The term ‘Amrit Kaal’ was first used by Prime Minister Narendra Modi in 2021, during the 75th Independence Day celebrations. It comes from Vedic astrology and indicates a sort of golden era. In the run-up to the 2024 general elections, the Bharatiya Janata Party-led government has heightened the emphasis on ‘Amrit Kaal’, saying that the coming period in India is going to be its most prosperous, with economic growth and social justice. ‘Amrit Kaal’ also describes the hope for a better future, where India would be self-reliant and fulfill all of its humanitarian obligations.
Among the key takeaways of the budget are big incentives under the new income tax regime, a big push in capital expenditure – the money that the government spends on developing buildings, machinery, equipment, schools, and infra – the new savings scheme for women, increased deposit limit on senior citizens savings scheme, and many more.
The budget kept its focus on expanding capital expenditure showing that the Modi government’s priorities are building roads, highways, and railway lines. The middle class has been given some relief in terms of the new income tax regime clearly pointing out that the government wants a shift towards the new regime from the older one. The FM stuck to the fiscal deficit roadmap in the budget with a target of 5.9% in FY 24 and adhering to the target for the current year. The budget has been lauded for being bold in its vision as the FM ramped up CAPEX to Rs 10 lakh crore at 3.3% of GDP. This is a positive move that will support economic growth and help crowd in private investment. Significantly, the increase in allocation for housing under the PMAY (Pradhan Mantri Awas Yojana) scheme and the Jal Jeevan Mission should also improve the quality of life of the weaker sections. According to many industry leaders, the budget gives priority to the deprived and will fulfil the dreams of the aspirational society, farmers, and the middle class.
To conclude, the Union Budget of India plays a crucial role in shaping the country’s economic and fiscal policies. The budget proposals, tax reforms and allocations for various sectors serve as indicators of the government’s priorities and its plans for the coming financial year. The budget has emphasized the government’s focus on infrastructure development, healthcare, education, and rural empowerment. It also seeks to promote self-reliant and inclusive growth, with an emphasis on digital transformation and job creation. The Budget 2023-24 offers something positive for every strata of society, for it has kept the requirements of the common Indian in mind. From personal tax revision to the extension of credit to small and medium businesses, FM Nirmala Sitharaman has suggested via her budget proposals that saving and spending go hand in hand and her government is determined to help Indians manage their needs and expenses better. While the budget has received mixed reactions from various stakeholders, its implementation will determine its actual impact on the Indian economy and the common man.
Author is Assistant Professor, Economics, at GDC Sogam (Lolab), Kupwara. Feedback at [email protected]