The Budget 2023-24 of Shri Narendra Modi government
lays the foundation for Vishwaguru Bharat, an economic superpower
Gopal Krishna Agarwal
The last full-fledged budget before the general elections next year has resisted to be a populist budget and the Government must be applauded for it. It takes confidence and commitment to stick to the fundamentals of prudent book-keeping when it makes complete sense to go all out political. This attribute, which was also visible during the ‘Atmanirbhar Bharat’ package in the wake of Covid- 19 crisis, will keep the economy on an even keel.
When the global economies are reeling under inflation and being sucked into recessionary cycle, India continues to be an outlier with manageable inflation, high GDP growth rate and well calibrated fiscal consolidation glide path. The difference of Modi Government’s approach to balance the macroeconomic challenges of fighting recession, controlling inflation and meeting fiscal deficit consolidation target is very much evident in budget 2023-24.
The highlight of 2023-24 budget undoubtedly has to be the increased allocation for capital expenditure which has been increased by 33 percent to Rs 10 lakh crore
A major achievement of the Government has been its management of fiscal affairs. Several challenges on macro-economic front that stemmed from external factors and were unseen at the time of presentation of budget last year unfolded as the year rolled by. The actual expenditure on food and fertilizer subsidy for the current year is much more than was initially budgeted while the excise tax collected had to come down due to energy price relief provided to the consumers. Despite this Modi Government has managed to adhere to the budgeted target of 6.4 percent for fiscal deficit for the year 2022-23. The fiscal deficit target for the coming financial year has been put at 5.9 percent of the GDP. Thus the march on the path of fiscal consolidation continues and the Government has committed to bring it down in the range of 4.5 percent by the year 2025-26.
The highlight of 2023-24 budget undoubtedly has to be the increased allocation for capital expenditure which has been increased by 33 percent to Rs 10 lakh crore. Anyone, familiar with the concept of ‘multiplier effect’ of expenditure would know that government Capex has a much bigger effect on the economy than government or private consumption expenditure. After two consecutive years of increase in government Capex, the Government would have stepped off the accelerator, but, the increase in Capex under this context is really heart-warming.
The budget focuses on MSME growth. Capital allocation for collateral free lending to MSME sector has been increased to Rs 9,000 crores. This will lead to an incremental lending of Rs. 2 lakh crore to this sector. Custom duties have been reduced on a number of commodities to make manufacturing in India more competitive with raw material availability at lower costs. These steps, together with the continued work on ‘ease of doing businesses’, will help the MSME sector in a major way. Government has reduced 39,000 compliances and de-criminalized more than 3,000 laws and also introduced Vivad Se Vishwas 2 scheme for enhancing business and government trust.
Relief in personal income tax was widely demanded and the budget has respected the wishes of the people. An individual can now earn up to Rs 7 lakh per annum and not pay any income tax. This is a whopping 40 percent increase over the current exemption limit of Rs 5 lakh per annum. Also the surcharge on income above Rs 5 crore per annum has been reduced and the highest marginal rate of taxation will come down from above 42 percent to about 39 percent.
This year’s budget is a document with the futuristic vision. Government has listed 7 priorities- saptarishi- that will guide policymaking up to 2047. These have elements of green growth and energy transition while not losing sight of inclusive development and reaching the last mile. The focus and commitment to sustainable growth can be seen from schemes like MISHTI- for Mangrove plantation along the coastline and Amrit Dharohar – for preserving the bio-diversity in wetlands.
Scrapping of old vehicles also finds a detailed mention in the budget. Establishing centre of excellence for artificial intelligence (AI) shows that the budget has vision as well as ambition. Skill India scheme will henceforth include futuristic skills like AI, robotics, 3D printing etc. The government plans to set up 100 labs for developing 5G services. Government has identified the potential of tourism industry to propel employment and growth of economy and it will see a number of schemes to realise its true potential.
Relief in personal income tax was widely demanded and the budget has respected the wishes of the people. An individual can now earn up to Rs 7 lakh per annum and not pay any income tax. This is a whopping 40 percent increase over the current exemption limit of Rs 5 lakh per annum
Government’s support to agricultural sector and its commitment to the rural economy is evident from the setting up of agricultural acceleration fund and millet development programme. Schemes like Gobardhan yojna and facilitating natural farming are a case in point. The Government has committed itself to provide large scale support to the cooperative sector at the Panchayat level which can enhance financial inclusion and empowerment of small farmers. The target for credit to agriculture sector has been fixed at Rs 20 lakh crore. It will ensure that the agriculture sector continues to grow at over 4.5 percent per annum.
With this budget and the presidency of G20 this year, Indian economy is poised to see a new level of global engagement and ensure to achieve the vision of our prime minister to make India an economic superpower in the coming decade. Truly this budget is an Amrit Budget- a foundation for Vishwaguru Bharat.
(The writer is National Spokesperson of BJP on Economic Affairs)