Union Finance Minister Nirmala Sitharaman presented her fourth budget under the Modi 2.0 government, which being is attempting to spur growth with increase in Capital Expenditure and new income tax slabs which would leave something in the hands of the common people to help them spend. The increased capex should spur growth and help in dealing with challenges of global economic headwinds.
Presenting the Union Budget for 2023-24, Finance Minister announced hiking the capital expenditure by 33 per cent to Rs 10 lakh crore for infrastructure development for 2023-24 and will be at 3.3 per cent of the GDP. She said the newly established infrastructure finance secretariat will assist in attracting more private investment. This might lead to some job creation to address some of the serious unemployment issues that has dominated the job market over the past two years. An expert committee will also be set up to make infrastructure classification and financing framework suitable for ‘Amrit Kaal’, she added.
However, reactions to budget on Dallas Street were mixed with BSE Sensex gaining 158.18 points to close at 59,708 points, but the Nifty 50 shed 45.83 points to close at 17,616 points after touching an intra-day high of 17,958 points.
As the industry hailed it as the best budget in the last 5-6 years which had balanced fiscal prudence with some good schemes for the general public. At first glance it seems to be a populist budget, one before the next year’s general elections.
The minister said that the Budget follows seven priorities which include inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector.
The budget aims to include, facilitating opportunities for citizens, especially youth, providing strong impetus to growth and job creation, strengthening macro-economic stability, empowerment of women in Budget 2023, enable women self-help groups to reach next stage of economic empowerment and help self-help groups with raw material supply, branding, marketing of products, she said.
As a cheer for the salaried and the tax payers, Finance Minister proposed to increase income tax rebate limit from ₹5 lakh to ₹7 lakh in new tax regime. There would be no tax for income up to ₹3 lakh; 5% tax on ₹3-6 lakh; highest tax rate of 30% on income above Rs 15 lakh under new I-T regime. An individual with income of ₹15 lakh will have to pay₹1.5 lakh tax down from ₹1.87 lakh under new tax structure and an individual with annual income of ₹ 9 lakh will have to pay only ₹45,000, Sitharaman said.
The minster also stated that her aim is to bring down the fiscal deficit to 5.9 per cent from 6.4 last year. Prime Minister Narendra Modi described the union budget as all-inclusive and historic, one that will lend a “new pace and energy to India’s growth.”
PM said that the budget promotes “sustainable and green growth and touches the lives of everyone from artisans and craftsmen, poor, women and youth to the expanding middle class.”
Dwelling on the subject of Green Growth, the FM said that India is implementing many programmes for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, and policies for efficient use of energy across various economic sectors. These green growth efforts help in reducing carbon intensity of the economy and provides for largescale green job opportunities, she added.
Sitharaman said that Prime Minister has given a vision for “LiFE”, or Lifestyle for Environment, to spur a movement of environmentally conscious lifestyle. India is moving forward firmly for the ‘panchamrit’ and net-zero carbon emission by 2070 to usher in green industrial and economic transition.
She said, this Budget builds on the focus on green growth. 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.
The Budget also provides ₹35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security by Ministry of Petroleum & Natural Gas. The Finance Minister said that 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.
She also informed that the Inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh will be constructed with investment of ₹20,700 crore including central support of ₹8,300 crore.
The Finance Minister announced that a capital outlay of ₹2.40 lakh crore has been provided for the Railways, which is the highest ever outlay and about 9 times the outlay made in 2013- 14.
She also informed that one hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors have been identified and they will be taken up on priority with investment of ₹75,000 crore, including ₹15,000 crore from private sources.
Sitharaman said that fifty additional airports, heliports, water aerodromes and advance landing grounds will be revived for improving regional air connectivity.
The Finance Minister announced that an Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector lending shortfall, which will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities. She said that States will be encouraged to leverage resources from the grants of the 15th Finance Commission, as well as existing schemes, to adopt appropriate user charges while accessing the UIDF.
Government will make available ₹10,000 crore per annum for this purpose.
The Finance Minister said that the outlay for PM Awas Yojana is being enhanced by 66 per cent to over ₹79,000 crore. ‘Bharat Shared Repository of Inscriptions’ will be set up in a digital epigraphy museum, with digitization of one lakh ancient inscriptions in the first stage.
The Finance Minister announced that 157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014. She also informed that a mission to eliminate Sickle Cell Anaemia by 2047 will be launched, which will entail awareness creation, universal screening of 7 crore people in the age group of 0-40 years in affected tribal areas, and counseling through collaborative efforts of central ministries and state governments. On Medical Research, she said that facilities in select ICMR Labs will be made available for research by public and private medical college faculty and private sector R&D teams for encouraging collaborative research and innovation.
Finance Minister said that for realising the vision of “Make A-I in India and Make A-I work for India”, three centers 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, which will galvanize an effective A-I ecosystem and nurture quality human resources in the field.
FM said that to unleash innovation and research by start-ups and academia, a National Data Governance Policy will be brought out, which will enable access to anonymized data.
She also announced that An Entity DigiLocker will be set up for use by MSMEs, large business and charitable trusts for storing and sharing documents online securely, whenever needed, with various authorities, regulators, banks and other business entities.
On 5G Services, she announced that one hundred labs for developing applications using 5G services will be set up in engineering institutions to realize a new range of opportunities, business models, and employment potential. The labs will cover, among others, applications such as smart classrooms, precision farming, intelligent transport systems, and health care applications.