Finance minister gives Rs.10 lakh crore boost to building infrastructure
New Delhi: Putting more money in the hands of the middle class as well as salaried individuals to boost taxpayers in India, finance minister Nirmala Sitharaman on Wednesday announced her Budget 2023-24, saying that the Indian economy was on the right path and heading towards a bright future as economic growth is estimated at nearly seven per cent, the highest among all major economies. Ahead of the 2024 Lok Sabha elections, it is the last full-fledged Budget and the first one in the “Amrit Kaal” that began in 2022. This move of the government aims to create more jobs and growth in the country.
Amid the shaky global economy, Sitharaman’s fifth straight Budget also sees a substantial hike in spending on the social sectors as well as ramping up incentives for local manufacturing. Announcing major changes in tax slabs under the new tax regime, or the “default” tax regime as it is called now, Sitharaman also focused on inclusive growth, mainly on green energy, the continuation of the food security programme for another year and announced a slew of steps for sectors such as MSMEs, agriculture start-ups, fisheries, women, senior citizens, and launched a programme for the primitive, vulnerable and tribal groups as well. Besides, she also gave a big boost for spending, mainly on the Railways, and on capital expenditure.
Reacting to 2023-24 Budget, Prime Minister Narendra Modi called it the first Budget of “Amrit Kaal” that provides a “foundation to fulfil, resolve for a developed India” and also gives priority to the deprived, and will fulfil the dreams of India’s aspirational society, farmers, and the middle class, among others. Citing the Pradhan Mantri Kaushal Vikas Yojana 4.0, Mr Modi also said that those toiling traditionally through their hands for the country, Vishvakarma, were the “creators” of this country, and for the first time a scheme related to the training and support for Vishvakarma has been brought into the Budget.
Besides, both India Inc as well as the stock markets hailed the Budget, where leading industry body CII described it as a “roadmap for nation building, growth-centric and fiscally prudent”, with continued focus on capex and inclusion. With vision, structure and discipline it puts India on the path to become “the world champion”, industry leaders said.
Also, benchmark index Sensex and Nifty pared gains after Ms Sitharaman presented the Budget in the Lok Sabha. In the afternoon trade, the Sensex rose 1,000 points to touch an intra-day high of 60,1618 points, while the NSE Nifty rose by 270 points or 0.78 per cent to 17,933 points.
While presenting the Budget in Parliament, Ms Sitharaman listed seven priorities of the Union Budget and said that they complement each other and act as the “Saptarishi”, guiding us through the “Amrit Kaal”, such as inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector.
In her Budget, the fiscal policy statement highlighted that there was a total expenditure of Rs 45.03 lakh crores in 2023-24, which has been increased by 7.5 per cent over the last Budget of 2022-23. “A total expenditure in Budget 2023-24 has been pegged at Rs 45,03,097 crores, up from Rs 41,87,232 crores of the revised estimates for 2022-23. The Budget estimates of expenditure for 2023-24 show an increase of Rs 3,15,865 crores over the revised estimates 2022-23,” it said.
As for direct tax, she also said the personal income-tax rebate limit has been increased to Rs 7 lakhs from the fiscal year starting April 1 under the new tax regime, up from the previous Rs 5 lakhs. “Tax slabs has been cut to five from seven earlier. Also, the maximum income-tax rate has been reduced to about 39 per cent from 42.7 per cent after a reduction in the highest surcharge to 25 per cent from 37 per cent.
Besides, the deposit limit for senior citizens’ savings schemes has also been doubled to Rs 30 lakhs and for monthly income account scheme to Rs 9 lakhs, and there will be a new small savings scheme for women, offering 7.5 per cent interest rate on deposits of up to Rs 2 lakhs for a tenure of up to two years,” she said.
On the direct tax front, she also went on to clarify that the government was not compelling anyone to shift from the old to the new tax regime, even though the latter had greater incentives. “The total revenue foregone from the reduction in direct and indirect taxes after accounting for a small gain from additional mobilisation will be Rs 35,000 crores annually,” she said.
After Prime Minister Narendra Modi came to power in 2014, his government has ramped up capital spending, including on roads and energy, while wooing investors through lower tax rates and labour reforms, and offering subsidies to poor households to clinch their political support. Even in this year’s Budget for 2023-24, the capital investment outlay has been increased steeply for the third year in a row by 33 per cent to Rs 10 lakh crores, which would be 3.3 per cent of GDP, which is almost three times the outlay in 2019-20.
Ms Sitharaman also said that despite a global slowdown due to the Covid-19 pandemic and the Russia-Ukraine war, the Indian economy was on the right track. As the total expenditure is seen rising, the government would target a Budget deficit of 5.9 per cent of GDP in 2023-24, down from 6.4 per cent for the current year. That would entail a gross borrowing of Rs 15.43 lakh crores. “While the agriculture credit target has been increased to Rs 20 lakh crores with focus on animal husbandry, dairy and fisheries, the increased investment in infrastructure and productive capacity is aimed at having a multiplier impact on growth and employment,” she said.
Besides, the finance minister also said that an additional Rs 9,000 crores has been provided toward credit guarantee for medium and small enterprises. “The Railways has been provided a capital outlay of Rs 2.40 lakh crores, the highest ever and about nine times the outlay made in 2013-14. Besides, an Urban Infrastructure Development Fund (UIDF) will be established for the creation of urban infrastructure in Tier-2 and Tier-3 cities. The Budget has also provided Rs 35,000 crores for energy transition and net zero objectives,” she said.
An outlay for the affordable housing scheme, PM Awas Yojana, has also been increased 66 per cent to Rs 79,000 crores. Other highlights of the Budget include reviving 50 additional airports, heliports and water aerodromes, and establishing a national digital library to make available quality books across languages, geographies and genres.