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Ever since the very inception of budget in 1860s it has shown a transformation from briefcase to bahi khata, then to tablet for now. The very first budget of “Amrit Kaal” as enunciated by Finance Minister,was an excellent opportunity for the nation to demonstrate how its tax policy measures align with its growth and investment goals while preventing needless conflicts from arising on its path to becoming the third largest economy by the turn of the decade. Following seven priorities, which complement each other and act as the Saptarishi in guiding us through the ‘Amrit Kaal’ are: inclusive development, infrastructure and investment, reaching the last mile, unleashing the potential, green growth, youth power, financial sector. The big picture of the Budget is its focus on growth through higher productive capital spending, and simultaneously sticking to fiscal prudence.

Prior to the general elections in 2024, the Union Finance Minister, Nirmala Sitharaman, unveiled a significant budget that featured significant investments in infrastructure and agricultural sectors as well as redesigned tax brackets that provided significant relief to middle class. The Union Budget 2023-24 can be summarized in the following big takeaways as mentioned:

PUSH FOR GREEN GROWTH- REDUCING GREEN INFLATION Green inflation is the acceleration of consumer prices triggered by the increase in the price of products linked to the transition to a carbonfree economy, both those to be discontinued and those to be enhanced. With regard to green product prices, such as commodities used intensively by renewable energies (copper, lithium), price increases are also to be expected given the slow response of production to the increase in demand.

With a budget of Rs 19,700 crores, the recently established National Green Hydrogen Mission would help India shift to a low carbon economy, and establish the nation as a market and technological leader in this emerging industry.

The amount spent on capital projects has steadily increased over the past three years, rising from Rs 4.39 lakh crore in 2020–21 to Rs 5.4 lakh crore in 2021–22, Rs 7.5 lakh crore in the current fiscal year (202–23), and Rs 10 lakh crore in the following fiscal year. The expected capital expenditure for 2022–2023 is 33% lower than the expenditure for the following year.

New Personal Income Tax regime is now the default: The Budget choice that will likely garner the greatest attention is this one. Indians who make a living on a salary anticipated some tax relief. Although it was introduced last year and not many people took use of it, the FM appears to have included it under the so-called new personal income tax structure. The public is likely to support this action since it will provide relief for the salaried class. The government hopes that this will help to boost the economy by putting more money in the hands of taxpayers.

By exempting income up to Rs 7 lakh from tax, Sitharaman has put more money in the hands of many young) entrants to the job market. Now, those earning up to Rs 7 lakh (monthly income of just under Rs 60,000) will not pay any tax. Also, those who have retired – government employees and even private sector – which is an increasing number today, will not have to pay tax if their pension is less than Rs 60,000.

The fiscal deficit, or the difference between expenditures and revenues, is the figure that matters the most in the budget and is closely monitored by all FIIs and foreign investors. In addition to estimating the budget deficit for 2023– 24 at 5.9% (less than 6%; a decrease of 0.5 percentage points from the deficit forecast for 2022–23), she noted that the budget has fallen short of the objective this year, which was 6.4% of the GDP. Interest rates are lower when the government borrows less money. This will have a salutary impact on the broader economy as it suggests that money will be available for private entrepreneurs to borrow.

India Budget 2023 has offered a multi-dimensional view. The 3 Cs which stand out are — capex increase, consumption boost, capital gains tax status quo. Mindful of the fact that there is hardly any space for fiscal expansion, FY24 fiscal deficit is pegged at 5.9 % and expected to see progressive reduction by FY 2026. Budget 2023 also aimed at the economic empowerment of women and job generation for youth. Under PM Vishwakarma Kaushal Samman, traditional artisans, for the first time, will get a package of assistance which will focus on bettering the quality, scale and reach of their products. There is no populism in Union Budget for 2023-24, Finance Min Nirmala Sitharaman’s fifth in a row, no foreshadow of 2024LS polls – or its imperatives for a party working for a third term. If at all, this Budget clearly points to continuity to government’s economic strategy. It is bold, and innovative too with the hope that good economics isn’t necessarily bad politics.


PROF ND MATHUR The writer is Dean, Jaipur School of Economics, JECRC University

SUMANT KAUSHIK The writer is Assistant Professor, Jaipur School of Economics, JECRC University

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