BRIEF REVIEW OF UNION BUDGET 2023-24.

Under a strong wicket of comparatively resilient strong and stable macroeconomic environment  India's Finance minister presented budget for 2023-24 that signals  growth and stability, a vision for Amrit Kaal  with thrust on - opportunities for youth and citizens, growth and Job creation. With an eye on India @ 2047 budget proposals  were aimed at realising a " technology driven, knowledge based economy with strong Public finances and robust financial sector".Seven priorities were identified to meet growth,  stability and employment namely 1. Inclusive Development 2.Infrastructure and Investment 3.Unleashing the potential 4.Green Growth. 5 Financial Sector development 6.Youth power and 7.Reaching the Last Mile.Apart from whopping  increase in allocation for infrastructure development, personal income tax exemption upto ₹7 lakhs under the new scheme regime for personal income tax, 5.9% fiscal deficit target, 50 year interest free loans to states to boost capital outlay to ₹13 trillion 100 5 G enabled labs for developing apps, two AI centers of excellence planned at educational institutions, ₹ 35000 crores for priority capital investment towards energy transition and net zero objectives and  small saving schemes for women for 2 years with a deposit facility upto ₹ 2 lakhs.Another innovative programme was  the PM Vishwakarma Kaushal Samman to support artisans from weaker sections ,scheduled castes,scheduled tribes and other backward classes.

Total budget expenditure for 2023 -24 is rupees 4503097 crores 7.5 % increase over the  revised estimate of 2022-23. Adhering to the fiscal consolidation path budgeted revenue and expenditure gap for 2023-24 is projected at 5.9% of GDP. Fiscal deficit would be  brought down to below 4.5 % of GDP by 2025-26. However Fiscal deficit target for current year 2022-23 is retained at 6.4% of GDP facilitated  by higher buoyancy in tax revenues. Fiscal deficit for 2021-22 actual estimate stood at rupees 1584521 crores accounting for 6.7% of GDP and in RE of 2022-23 it accounted for 1755319 crores or 6.4 % of  GDP.Revenue expenditure in 2021-22(AE) was rupees 3200926 crores which increased to 3458959(RE) in 2022-23 and rupees 3502136 in 2023-24(BE), as against revenue receipts of rupees 2169905,2348413 and 2632281 crores respectively showing a revenue deficit of 4.4% ,4.1% and 2.9% of GDP respectively. In 2023-24 capital expenditures is expected to witness massive increase of 37.4 % over the revised estimate of 2022-23 to above rupees 10 lakh crore,(1000961) in 2023-24 and revenue expenditure is expected to increase by 1.2 % . The disinvestment target for 2023-24 is rupees 51000 crores.With regard to budget receipts 34% come from borrowings and other liabilities, 17% from GST 15% each from both income tax and corporation tax,7% from union excise duties, 6% non tax receipts,4%customs and 2% non debt capital receipts. As per distribution of budget expenditure twenty percent of Public expenditure goes to interest payments followed by states' share of taxes and duties 18%,Central sector schemes 17%, Centrally sponsored schemes 9%,Finance commission and other transfers 9%, other expenditures 8%,Defence 8%,subsidies 7% and pensions 4%.

 Inorder to simplify direct tax proposals and to reduce the compliance burden, to promote entrepreneurial spirit and provide tax relief to citizens  income limit for rebate of income tax increased from rupees 5 lakh to 7 lakhs in the new tax  regime,in addition to extending benefits of standard deduction to salaried class and pensioners  under new tax regime. Similarly  tax exemption limit to leave encashment on retirement for non Government salaried employees has been increased to  rupees 25 lakhs.However there is no changes in the old tax regime and the government intention is to gradually withdraw it ending the era of exemptions and investment. 

   Budgetary policies of  the  government include -   Setting up of  agriculture and cooperatives  Accelerator fund  for cooperatives and Agriculture for encouraging innovative start-ups in rural areas. Rupees 20 lakh crore targeted funding of agricultural credit for animal husbandry is allocated.  For both  Dairy and fisheries sector, Setting up of widely available storage capacity to enhance farmers  facilities  were designed. Similarly under Making India Global Hub for millets 'Sree Anna ' is supported by IIMR Hyderabad for promoting research.To  boost production of high value horticultural crops,and to build an accessible, Inclusive and informative Digital Public Infrastructure for farmers are other projects envisaged.The Enhancement of agriculture credit target and the cluster based  value chain approach through public private partnership (PPP)for enhancing productivity are also welcome particularly to cotton .In health sector 157 new nursing colleges are to be established.Sickle cell and Anaemia elimination Mission to be launched. New programme to promote research in pharmaceuticals to be launched and joint Public and private Medical Research to be encouraged via select IMR labs. Under Education and Skilling- Revamped teachers training via District Institutes of Education and Training, National Digital libraries to be set up for children and adolescents in addition to that states will be encouraged to set up physical libraries at Panchayat and ward levels. Inclusive Development achievements  so far include - 220 crores covid vaccination of 102 crore people 11.7 crore household toilets constructed under Swatch Bharat Mission, 9 crore drinking water connections to rural households, Rupees 2.2 lakh crore cash transfers to over 11.4 crore farmers under PM-KISAN.47.8 crore PM Jhan Dhan bank accounts ,44.6 crore persons under insurance cover of schemes PMSBY and PMJJY and 9.6 crore LPG connections under Ujjawalla scheme. In order to reach the last mile PM PVTG Development Mission to be launched. More teachers to be recruited for 740 Ekalavya Model Residential schools. 

Having briefly reviewed various schemes and their allocations for the budget 2023-24 along with  Inclusive Development achievements realised so far under various welfare schemes an attempt is made here to address few  issues regarding the possible impact of this budget.The Increase in the Income limit for rebate of income tax  which increased from ₹ 5 lakhs to 7 lakhs under the new tax regime is likely to benefit many tax payers But there is no changes in the old tax regime and government intends to withdraw it gradually ending the era of exemptions and investment.Budget intends to give boost to jobs.In the absence of any recent official data on unemployment, data provided by CMIE  for December, 2022 indicated that 48 percent among the 77 million young Indians in the 20-24 age group were unemployed. While emphasis on infrastructure development may generate indirect employment reduced allocation on MGNREGA will adversely affect direct rural jobs.However Schemes like The new P M Vishwakarma Kaushal Samman with quality products  and access to better markets integrating with the MSME value chain along with utilisation of Agriculture Accelerator fund for agri tech start ups and tourism will provide jobs. It has been observed that fine harmony is required between spurring infra investment, incentivising manufacturing through PLI scheme and having a healthy fiscal deficit.Containing  fiscal deficit  assumes vital especially in the context of the possibility of the return of infamous twins- fiscal deficit and current account deficit. (CAD). In fact fiscal deficit which was actually 4.6 % in 2019-20 shooted up to 9.2 in 2020 - 21 against BE of 3.5.But for 2021-22 as against budget estimate of 6.8 actual estimate is 6.7,whereas fiscal deficit estimated in the budget remain 6.4 for 2022-23 and 5.9 for 2023-24.Despite sufficient foreign exchange reserves adverse trade deficit and depreciation of rupee has aggravated CAD hovering around 4.4% of GDP as against accepted ideal limit of 2. Obviously monetary policy is more suitable to tackle issues related to both inflation and CAD.With major Central banks including US Federal Reserves continuing restrictive monetary policy leading to deceleration in growth will adversely impact India's external trade ,especially in services, inward remittances and portfolio and FDI flows.ln addition to that RBI's rate hikes is likely  to reduce domestic demand. Hence while formulating monetary policy RBI has to take into account " global head winds". Last but not least after 1991 reforms  it is a fact that successive governments have been very reluctant  to take any measure to check glaring inequalities in income and wealth in the country as revealed by OXFAM report on India. Even the expenditure spent by firms under corporate social responsibility remain both opaque and inadequate.