Comment on Union Budget 2023-24
The yearly budget of the Republic of India is known as the Union Budget of India, also known as the Annual Financial Statement under Article 112 of the Indian Constitution. To ensure that it is implemented before the start of the new fiscal year in April, the government presents it on the first day of February. The Union Budget is not merely a financial statement. It also acts as a foundation for financial reforms and reveals the government’s broad policy stances.
The overall goal of the Union Budget is to promote social justice and equality while also fostering quick and balanced economic growth in our nation. The goal is to assure effective resource allocation, lower unemployment and the rate of poverty, minimise wealth and income disparities, keep a lid on pricing, and alter the tax system. Articles 112-117 of the Indian Constitution establish the role of parliament in enacting the budget. Any request for a grant and any suggestion for expenditures must be submitted only on the President’s recommendation, according to Articles 112-117.
Article 112 of the Indian Constitution states that the President is in charge of delivering the budget to the Lok Sabha. According to Article 77(3), the President has given the Union Finance Minister responsibility for preparing the budget, commonly known as the yearly financial statement, and guiding it through the legislature. Plans are developed by Ministries, Bodies, Union Territories, and States and presented to the finance minister for consideration before being introduced in the Parliament.
The Union Budget is majorly classified into two parts:
- Capital Budget
- Revenue Budget
Capital Budget: Capital Budget consists of capital inflows and outflows. Capital receipts are loans taken out by a government, whether they are from the central bank, a public institution, or a foreign government.
Capital payments include capital outlays for the purchase of assets including land, buildings, machinery, and equipment, as well as investments in shares, loans, and advances given by the federal government to governments of states and union territories, government corporations, and other parties.
Revenue Budget: Revenue Budget is made up of the government’s revenue collections (tax and other sources) and the expenses paid for using these revenues. Revenues from taxes and other Union-imposed levies make up tax revenues. The government also receives money in the form of fees and receipts for other services it provides, as well as interest and dividends on investments it has made.
Revenue expenditures include costs associated with the regular operation of government agencies and a range of services, as well as interest payments on debt the government has accumulated. In general, an expense that does not result in the creation of assets is categorised as a revenue expense. Even while some grants may be used to create assets, all grants granted to state governments and other parties are still considered revenue expenditures.
UNION BUDGET 2023-24
Union Budget 2023-24 presents a vision for Amrit Kaal- Blue print for an empowered economy and inclusive economy. This budget hopes to build on the foundation laid in the previous Budget, and the blueprint drawn for [email protected] envisioning a prosperous and inclusive India in which the fruits of development reach all regions and citizens, especially our youth, women, farmers, OBCs, Scheduled Castes and Scheduled Tribes. The Indian economy is a “bright star” in the world, according to the 75th anniversary of our independence. Economic growth for the current year is predicted to reach 7%. The fact that this is the highest of all the major economies is noteworthy. This is despite the significant global slowdown brought on by COVID-19 and a conflict.
Therefore, despite some difficulties, the Indian economy is on the right route and has a promising future. In these times of global challenges, the G20 Presidency gives India a unique opportunity to strengthen its role in the world economic order. With the theme of ‘Vasudhaiva Kutumbakam’, India is steering an ambitious, people-centric agenda to address global challenges, and to facilitate sustainable economic development.
The budget 2023-24 adopts the following seven priorities. They complement each other and act as the ‘ Saptrarishi’ guiding us through the Amrit Kaal.
- Inclusive Development
- Reaching the last mile
- Infrastructure Investment
- Unleashing the Potential
- Green Growth
- Youth power
- Financial Sector
Inclusive Development: The Government’s philosophy of Sabka Saath Sabka Vikas has
facilitated inclusive development covering in specific, farmers, women,
youth, OBCs, Scheduled Castes, Scheduled Tribes, divyangjan and
economically weaker sections, and overall priority for the underprivileged
(vanchiton ko variyata). There has also been a sustained focus on Jammu &
Kashmir, Ladakh and the North-East. This Budget builds on those efforts.
- Digital Infrastructure for Agriculture: Agriculture-related digital public infrastructure will be developed as a freely available, freely usable, and interoperable public benefit. Through pertinent information services for crop planning and health, greater access to farm inputs, loans, and insurance, assistance for crop estimation, market intelligence, and support for expansion of the agri-tech industry and start-ups, this would enable inclusive, farmer-centric solutions.
- Atmanirbhar Horticulture Clean Plant Program: An Atmanirbhar Clean Plant Program will be launched to boost availability of disease-free, quality planting material for high value horticultural crops at an outlay of ` 2,200 crore.
- Global Hub for Millets‘Shree Anna’: India is the largest producer and second largest exporter of ‘Shree Anna’ in the world. Several types of ‘Shree Anna’ such as jowar, ragi, bajra, kuttu, ramdana, kangni, kutki, kodo, cheena, and sama are grown here. Now to make India a global hub for ‘Shree Anna’, the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
- Fisheries: A new sub-scheme of PM Matsya Sampada Yojana will be launched with a targeted investment of 6,000 crores to further enable activities of fishermen, fish vendors, and micro & small enterprises, improve value chain efficiencies, and expand the market.
Reaching the Last Mile: To provide a sharper focus to the objective of ‘reaching the last mile’, our government has formed the ministries of AYUSH, Fisheries, Animal Husbandry and Dairying, Skill Development, Jal Shakti and Cooperation after the making of Ministry of Tribal Affairs and the Department of Development of North-Eastern Region by Prime Minister Vajpayee’s government.
- Aspirational Districts and blocks programme: Building on the success of the Aspirational Districts Programme, the Government has recently launched the Aspirational Blocks Programme covering 500 blocks for saturation of essential government services across multiple domains such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure.
- Pradhan Mantri PVTG Development Mission: To improve socio-economic conditions of the particularly vulnerable tribal groups (PVTGs), Pradhan Mantri PVTG Development Mission will be launched. This will saturate PVTG families and habitations with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, health and nutrition, road and telecom connectivity, and sustainable livelihood opportunities. An amount of 15,000 crores will be made available to implement the Mission in the next three years under the Development Action Plan for the Scheduled Tribes.
- Bharat Shared Repository of Inscriptions (Bharat SHRI): ‘Bharat Shared Repository of Inscriptions’ will be set up in a digital epigraphy museum, with the digitization of one lakh ancient inscriptions in the first stage.
- PM Awas Yojna: The outlay for PM Awas Yojana is being enhanced by 66 per cent to over ` 79,000 crore.
Infrastructure & Investment: Infrastructure and capacity investments have a significant multiplier effect on employment and economic growth. Private investments are expanding again after the pandemic’s lull. The Budget assumes the initiative once more to intensify the beneficial cycle of investment and employment development.
- Capital Investment as driver of growth and jobs: Capital investment outlay is being increased steeply for the third year in a row by 33 per cent to ` 10 lakh crore, which would be 3.3 per cent of GDP. This will be almost three times the outlay in 2019-20. This substantial increase in recent years is central to the government’s efforts to enhance growth potential and job creation, crowd in private investments, and provide a cushion against global headwinds.
- Effective Capital Expenditure: The direct capital investment by the Centre is complemented by the provision made for creation of capital assets through Grants-in-Aid to States. The ‘Effective Capital Expenditure’ of the Centre is budgeted at ` 13.7 lakh crore, which will be 4.5 per cent of GDP.
- Enhancing opportunities for private investment in Infrastructure: The newly established Infrastructure Finance Secretariat will assist all stakeholders for more private investment in infrastructure, including railways, roads, urban infrastructure and power, which are predominantly dependent on public resources.
- Railways: A capital outlay of 2.40 lakh crore has been provided for the Railways. This highest ever outlay is about 9 times the outlay made in 2013- 14.
- Logistics: One hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified. They will be taken up on priority with an investment of 75,000 crore, including 15,000 crore from private sources.
Unleashing the Potential: Good governance is essential for a country to advance and the government is committed to offering a transparent and accountable administration that works for the welfare and betterment of the average citizen.
- Mission Karamyogi: . Under Mission Karmayogi, Centre, States and Union Territories are making and implementing capacity-building plans for civil servants. The government has also launched an integrated online training platform, iGOT Karmayogi, to provide continuous learning opportunities for lakhs of government employees to upgrade their skills and facilitate people-centric approach. For enhancing ease of doing business, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalized. This budget proposes a series of measures to unleash the potential of our economy.
- Centres of Excellence for Artificial intelligence: For realizing the vision of “Make AI in India and Make AI work for India”, three centres of excellence for Artificial Intelligence will be set-up in top educational institutions. Leading industry players will partner in conducting interdisciplinary research, develop cutting-edge applications and scalable problem solutions in the areas of agriculture, health, and sustainable cities. This will galvanize an effective AI ecosystem and nurture quality human resources in the field.
- National Data Governance Policy: To unleash innovation and research by start-ups and academia, a National Data Governance Policy will be brought out. This will enable access to anonymized data.
- One Stop Solution for Identity and Address Updating: A one stop solution for reconciliation and updating of identity and address of individuals maintained by various government agencies, regulators and regulated entities will be established using DigiLocker service and Aadhaar as foundational identity.
- Common Business Identifier: For the business establishments required to have a Permanent Account Number (PAN), the PAN will be used as the common identifier for all digital systems of specified government agencies. This will bring ease of doing business; and it will be facilitated through a legal mandate.
Green Growth: The objective of the honourable prime minister for “LiFE,” or lifestyle for the environment, is to inspire a trend toward living sustainably. In order to lead the way for a green industrial and economic revolution, India is making strides toward the “panchamrit” and net-zero carbon emissions by 2070. With this budget, we continue to emphasise green growth.
- Green Hydrogen Mission: The recently launched National Green Hydrogen Mission, with an outlay of ` 19,700 crores, will facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector. The target is to reach an annual production of 5 MMT by 2030.
- Energy Transition: This Budget provides ` 35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by Ministry of Petroleum & Natural Gas.
- Energy Storage Projects: To steer the economy on the sustainable development path, Battery Energy Storage Systems with capacity of 4,000 MWH will be supported with Viability Gap Funding. A detailed framework for Pumped Storage Projects will also be formulated.
- Green Credit Programme: For encouraging behavioural change, a Green Credit Programme will be notified under the Environment (Protection) Act. This will incentivize environmentally sustainable and responsive actions by companies, individuals and local bodies, and help mobilize additional resources for such activities.
- PM PRANAM: “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” will be launched to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.
Youth Power: To empower our youth and help the ‘Amrit Peedhi’ realize their dreams, the government has formulated the National Education Policy, focused on skilling, adopted economic policies that facilitate job creation at scale, and have supported business opportunities.
- Pradhan Mantri Kaushal Vikas Yojana 4.0: Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth within the next three years. On-job training, industry partnership, and alignment of courses with needs of industry will be emphasized. The scheme will also cover new-age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills. To skill youth for international opportunities, 30 Skill India International Centres will be set up across different States.
- Skill India Digital Platform: The Digital ecosystem for skilling will be further expanded with the launch of a unified Skill India Digital platform for:
- Enabling demand-based formal skilling
- Linking with employers including MSMEs and
- Facilitating access to entrepreneurship schemes
- National Apprenticeship Promotion Scheme: To provide stipend support to 47 lakh youth in three years, Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme will be rolled out.
- Unity Mall: States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for promotion and sale of their own ODOPs (one district, one product), GI products and other handicraft products, and for providing space for such products of all other States.
Financial Sector: Our 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. This Budget proposes to further these measures.
- National Financial Information Registry: A national financial information registry will be set up to serve as the central repository of financial and ancillary information. This will facilitate efficient flow of credit, promote financial inclusion, and foster financial stability. A new legislative framework will govern this credit public infrastructure, and it will be designed in consultation with the RBI.
- Financial Sector Regulations: To meet the needs of Amrit Kaal and to facilitate optimum regulation in the financial sector, public consultation, as necessary and feasible, will be brought to the process of regulation-making and issuing subsidiary directions. To simplify, ease and reduce cost of compliance, financial sector regulators will be requested to carry out a comprehensive review of existing regulations. For this, they will consider suggestions from public and regulated entities. Time limits to decide the applications under various regulations will also be laid down.
- Data Embassy: For countries looking for digital continuity solutions, the government will facilitate setting up of their Data Embassies in GIFT IFSC.
- Improving Governance and Investor Protection in Banking Sector: To improve bank governance and enhance investors’ protection, certain amendments to the Banking Regulation Act, the Banking Companies Act and the Reserve Bank of India Act are proposed.
REVISED ESTIMATES 2022-23
The Revised Estimate of the total receipts other than borrowings is ` 24.3 lakh crore, of which the net tax receipts are ` 20.9 lakh crore. The Revised Estimate of the total expenditure is ` 41.9 lakh crore, of which the capital expenditure is about ` 7.3 lakh crore. The Revised Estimate of the fiscal deficit is 6.4 per cent of GDP, adhering to the Budget Estimate.
BUDGET ESTIMATES 2023-24
Coming to 2023-24, the total receipts other than borrowings and the total expenditure are estimated at ` 27.2 lakh crore and ` 45 lakh crore respectively. The net tax receipts are estimated at ` 23.3 lakh crore. The fiscal deficit is estimated to be 5.9 per cent of GDP.
The budget will reinforce India’s position in the global economy whilst having a transformative impact on the bottom of the Pyramid. It reflects continuity in the government policies, be it pushing capex, controlling the fiscal deficit or focusing on inclusivity and capability. The budget will fulfil the expectations and aspirations of all sections of society. This will prove to be a milestone in making India an economic superpower.
Article by Vaishnavi Singh