Union Budget 2023 – A Responsible Budget Sans Fiscal Profligacy!

All inclusive growth strategy is the foundation of an independently developed economy and ready Bharat to play a larger global role.

Bharat’s finance minister Nirmala Sitharaman presented a responsible budget on behalf of the BJP-led government on Wednesday. It is on expected lines. Conservative in content and spirit, but the budget for 2023 – 24 has a grand vision for taking Bharat to the big boys club globally. It lays the foundation for Bharat’s centennial run in 2047 by the time it seeks to evolve as an independent, inclusive and developed economy that is sustainable.

The Rs 45 lakh crore budget swan song is to best utilize the ‘Amrit Kaal’, intervening 25 years to get there and get big. It’s in continuation of the Bharat@100 line given in both the Presidential speech and pre-budget economic survey on Tuesday. Women’s empowerment, skilling our vast human resources, expansion of our tourism industry and achieving green growth as areas that have been identified in the grand vision presented for 2047.

Seven priorities laid-out by the Narendra Modi government in the budget point to reshaping Bharat’s economic and development paradigm. She gave the budget civilizational connect by christening these priorities as ‘saptarishis’ that guided this country for millennia.

Nirmala Sitharaman who has now turned a veteran with her fifth budget presentation, the tenth for the Narendra Modi government did not lose on basics. She pushed peddle hard to stay the course on fiscal consolidation and not go for the easy option of ‘reckless spending’ or profligacy, a hallmark of a government that faces polls in a year or so.

On most parameters like fiscal deficit pruning it to 6.4 per cent in the next financial year and 4.5 per cent by 2025-26 has been projected.  Keeping the jobs-led green growth on track at 6.5 per cent in 2023-24 and achieving double-digit expansion in the medium term is what the government aspires to achieve.

Even for the current fiscal, the government managed to keep the deficit at 6.4 per cent on strength of tax revenues and expanded the spending to Rs 41.9 lakh crore.

Grandstanding on a global vision and fiscal prudence did not mean that Prime Minister Modi or his protégé Sitharaman lost out on facing Lok Sabha elections in 2024 preceded by assembly elections in seven states this year.

Jobs and environmentally sustainable growth were articulated by Sitharaman in the backdrop of ‘rozgar melas’ that Modi has been holding last six months giving out appointment letters to thousands of first-time work seekers.

Vocal middle-class voters that have been the main stray of this government also got their due especially the honest taxpayers with across-the-board tax concessions, remissions and exemptions with limits rejigged.

In the process, Nirmala Sitharaman had to forego Rs 35,000 crore in revenue that the government could afford, given the buoyancy in tax mop-up. From the economic management side, this would spur further demand for goods and services having a multiplier effect on growth impulses. But, opposition political formations are bound to criticize the last full budget of this government in the present term as ‘election oriented’.

The opening line of the budget speech itself was strong on political messaging as it enlisted youth, women, farmers, backward classes, scheduled castes, tribes and economically weaker sections to be targeted in making Bharat’s economy ‘inclusive’, open and prosperous.

Budget is the third instance when the government chose to present its report card of nine years of governance. Nirmala Sitharaman’s numbers were impressive at 11.7 crore households getting toilets, 9.6 crore cooking gas connections, 220 crore Covid vaccinations for 102 crore persons, 47.8 crore Jan dhan yojana bank accounts, 44.6 crores getting insurance cover and 11.4 crore farmers getting cash support of Rs 2.2 lakh crore.

Not just addressing the voters’ class, Nirmala Sitharaman managed to keep the industry and markets trigger positive. Two big decisions that have had positivity include a 33 per cent increase in infrastructure investment at a whopping Rs 10 lakh crore in 2023-24, way above Rs 7.3 lakh crore in the current fiscal. This is three times what was possible in 2019-20.

If one were to take the grants given to support capital assets in states, capital expenditure moves up to Rs 13.7 lakh crore translating to 4.5 per cent of GDP. Capital outlay of Rs 2.4 lakh crores to railways and Rs 75,000 crore to developing critical transport infrastructure and logistics is an addition.

The second trigger was that most consumers across tax brackets got relief thereby allowing extra money for investment or purchases. Thirdly, the government managed to keep its public finances in order without making any major demands on the industry through corporate taxes.

Modi government’s budget also makes a sincere attempt at building confidence in the populace at large and swells with pride in Bharatiya citizenship, especially while making out a case for a momentous G-20 Presidency and economic surge as the fastest-growing global economy.

Formalization and digitization are factors that would be pushed by the government thereby weeding out corruption in government schemes and shrinking the informal economy. For instance, digital payments led to 7400 crore transactions valued at Rs 126 lakh crore in 2022 alone. Jobs in the formal sector have also grown and this reflects in EPFO membership that swelled to 27 crores.

Agriculture as a big priority is no surprise and the shift to millet-based natural farming is a big idea that the government has sold through the budget.

‘Shri Anna’, an Indic name for millets like Jowar, Ragi, Bajra, Kuttu, Ramdana, Kangni, Kutki, Kodo, Cheena and Sama, resonates as an initiative to make Bharat a global hub for these wholesome nutritious grains.

Another significant shift is taking economic growth on the green pathway. Apart from the dedicated hydrogen mission, Rs 35,000 crore was set aside to enable energy transition from carbon fuels, green credits, 500 waste-to-wealth projects with Rs 10,000 crore investment and renewable energy evacuation from Ladakh supported through budget resources of Rs 8300 crore.

Skills development got a new heft in its 4.0 version with 47 lakh youth getting trained for taking up jobs three years from now.

As tourism has been identified as a priority area, 50 destinations are sought to be developed with a complete package. Most interesting is that domestic tourism will take precedence over foreign tourists.

(Author is the director and chief executive of a nonpartisan think tank, Centre for Integrated and Holistic Studies based in New Delhi. The article was first published on CIHS, to whom it belongs. Republished with permission. Opinions expressed are the author’s own)

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