Finance minister Nirmala Sitharaman on Wednesday announced big relief for taxpayers and a mega push for capital spending and infrastructure as she unveiled the Narendra Modi government’s last Budget before the 2024 Lok Sabha elections.
Welfare spending will rise, including on providing all households with piped water and health insurance for the poor, and the finance minister extended a scheme distributing free food grains to about 80 crore underprivileged Indians.
“Our vision for the ‘Amrit Kaal’ includes a technology-driven and knowledge-based economy, with strong public finances and a robust financial sector. To achieve this ‘jan-bhaagidari’ (public participation) through ‘sabka saath, sabka prayaas’ (efforts by all) is essential," Sitharaman said in her speech.
Prime Minister Narendra Modi is set to seek a third term in a general election due before May 2024.
With just 15 months left for the Lok Sabha polls, the union government has tried to ensure that its message of inclusive development reaches all sections of the population and that the fruits of development reach the poor and financially weaker sections of the country, analysts say.
Nirmala Sitharaman listed seven priorities — Saptarishi — of Union Budget 2023: inclusive development, reaching the last mile, youth power, financial sector, green growth, unleashing potential and infrastructure and investment.
“We envision a prosperous and inclusive India, in which the fruits of development reach all regions and citizens, especially our youth, women, farmers, OBCs (other backward classes), Scheduled Castes, and Scheduled Tribes… We ensured that no one went to bed hungry during the Covid-19 pandemic by providing free food grains to over 80 crore people for 28 months. Continuing our commitment, we have a scheme to supply free food grain to all Antyodaya and priority households for the next one year…" said finance minister Nirmala Sitharaman in her Budget speech.
Rising up after Covid carnage
India’s deficit and growth targets were hit after Covid-19 restrictions in 2020 but the country has since recovered to become the world’s fastest-growing major economy.
“Even when there are global challenges, India is shining like a star and is the fastest-growing economy in the world according to IMF report," the finance minister added.
To offset losses due to the Covid-19 pandemic, Sitharaman announced the highest-ever capital outlay of Rs 2.4 lakh crore for Railways — nine times higher than FY-14.
Income tax relief under new regime
The Budget made a much-awaited mega announcement on increasing the income level up to which no income tax is payable: Rs 7 lakh a year from the 2023-24 financial year. It was Rs 5 lakh so far. But there is a caveat: this change is only for those who choose the New Tax Regime.
Introduced in 2020, this new regime has none of the usual exemptions on insurance premiums, mutual funds, and other such investments.
Capex cheer, MGNREGA allocation slashed
The Budget raised capital outlay on construction of schools, airports, heliports and other infrastructure to Rs 10 lakh crore. It, however, slashed spending by 30 per cent on the MGNREGA rural jobs programme, a boon for the country’s most vulnerable, triggering criticism from activists and the opposition.
The biggest increase has been in the PM Awas Yojana for the poor which the government is aiming to complete in 2024 and has allocated Rs 79,950 crore for the scheme, up a massive 66 per cent from Rs 48,000 crore in 2022-23. About 2.94 crore poor people are targeted to get a home by 2024, of which 2.12 crore houses have been completed and handed over to the poor.
Green growth and agriculture
Sitharaman said the government will prioritise “green growth" with a Rs 35,000-crore investment towards helping India meet its goal of going carbon neutral by 2070. India is currently the world’s third highest-emitting nation.
In the agriculture and cooperatives sector, Sitharaman announced building digital public infrastructure, setting up an agriculture accelerator fund, making India the global hub for millets and setting up more storage capacity for farmers.
The finance minister also proposed government incentives for energy storage systems in India that would aid round-the-clock renewable energy use and announced a new framework for pumped storage systems for hydropower.
PM Modi praised the Budget as laying a strong “foundation for the aspirations and resolutions of a developed India," and said the government’s investment into infrastructure has increased by more than 400 per cent since 2014 when he first became prime minister.
(With agency inputs)
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