TL;DR - As citizens rushed to understand the new Tax Slabs and Economic impetus of the proposed Budget, the Government took a very nuanced approach by significantly increasing allocation in sectors like Transport while the percentage allocation in Education and Healthcare fell.
“This is the first Budget in the era of Amrit Kaal,” said our Finance Minister, Mrs. Nirmala Sitharaman as she presented Budget 2023 with a tagline that would open the gates of heaven for the people of India. Demarcated as the time period between 2023 and 2047, the completion of which would mark 100 years of India’s Independence.
However, as soon as the Budget was presented, opposition leaders spoke up to critique the nuances of the document. “No mention of MGNREGA, no mention of unemployment, and inflation,” said Shashi Tharoor, Member of the Lok Sabha, after attending the unveiling of the budget. Under Capital Spending, the allocation that the Government earmarks for long-term assets, such as Infrastructure and Transport, has seen one of the most significant hikes to ₹10 Lakh Crore in FY24. FM claims that the reason for the same is to create more jobs, which is a pressure point for the BJP Government. After unemployment rates rose to a 45-year high of 6.4% during the COVID Pandemic, it was imperative that there be a particular focus on job creation.
Fiscal Deficit, the delta value between Government expenditure and its revenue, was another point of concern for FY24. The deficit this year was about 6.4% of the GDP, which essentially means that the Indian Government overshot its expenditures to a value more significant than the value of the sum of the total Goods and Services produced in the country. Aiming to bring it down to about 4.5% by next year, the Government has naturally thought of a two-pronged approach - increasing revenues by taxing some products more while reducing expenditures in select areas.
This brings us to the expenditure changes that this year brought about - there was a phenomenal 28% cut in subsidies on Food, Fertilizers and Petroleum subsidies. MGNREGA scheme, the most important rural unemployment scheme that sprang controversies this year, had its budget cut this year by about ₹20,000 Crore.
While the country gorged on the episodes of Shark Tank, the Government put in place the National Governance Data Policy in an attempt to give impetus to more start-ups in the country. Under this, these ventures will be given access to datasets from across the country, which will allow them to harness the potential of AI. Finally, this brings us to AI.
Under the umbrella of ‘Sabka Saath Sabka Vikaas’, there was a significant impetus to have inclusive growth with all sects of the economy, but critics cited no significant increase in this year’s Women’s Ministry Budget. Additionally, in times where India has slipped to the 107th rank in the world in terms of malnutrition, we now see significant budget allocation towards this cause.
After seeing an uptick in the economy of 95% of the villages in the past year’s attempts to revitalize and uplift the rural settings, the Government has identified 500 blocks to scale of the Aspirational District Model.
According to the Finance Ministry’s survey, we can expect an uptick in the country’s GDP next year in the range of 6 - 6.8%. Education and Healthcare saw a significant decrease in their percentage allocation in the budget, while road transport saw an uptick of 24%. Additionally, the Railways Sector saw an unprecedented increase of ₹1 Lakh Crore while the Defense Sector saw a smaller uptick.
Pledging a Net Zero by 2070, PM Modi set the target for India at COP26, which prompted a similar approach in the budget document. Hydrogen Trains are estimated to hit the Indian tracks by December 2023, while the FM announced the National Green Hydrogen Mission to initiate Green Hydrogen production in the country.
Overall, this year’s Budget document saw a striking debate encapsulate the Indian population - while one side hailed the oncoming of Amrit Kaal, the other criticized the downturn seen in Healthcare and Education. The looming question remains - what would the consequence of this ever important document have on the future of our Achhe Din?