Union Budget 2023-24 Has A Long-Term Vision
The focus of the budget 2023 is pro-growth. It has a long-term vision. It has also been described as an “Amrit Kaal” Budget.
The Budget allows free cash availability and pushes employment generation which will give an impetus to domestic consumption as also to rural demand.
In order to stimulate further economic growth, the government has announced a number of measures and enhanced allocations to critical sectors. This will open up employment opportunities and increase disposable income.
Such measures include allocation of Rs 2 lakh crores under PM Garib Kalyan Anna Yojana and setting up Agricultural credit target of Rs. 20 lakh crore. The outlay towards PM Aawas Yojana has been increased by 66 per cent to Rs 79,000 crores. While there’s a debate if MNREGA deserved a greater outlay, it’s hoped that the measures to boost Rural India will more than make up for it.
The capital outlay of Rs 2.40 lakh crores for Railways, which is 9 times of 2013-14, is extremely significant. The Railways’ growth rate has been sluggish, and it’s hoped that this capacity expansion will have a multiplier effect on the economy.
Overall, the Capital investment outlay increase by 33 per cent to Rs. 10 lakh crores (which means, roughly twice the absolute amount spent in 2021-22), is a standout feature of the Union Budget. It shows the government’s belief in “boost infrastructure expansion to boost growth” dictum.
The tweaks in the income tax slabs as well as no payment of tax by those earning up to Rs 7 lakhs in the new tax regime is a welcome move.
Overall, then, this Budget has something for everyone, and every section of the society.
For economy watchers, the government’s commitment to fiscal consolidation is welcome. Seen in the context of global upheavals (look, for instance, what the Ukraine war did to fertilizer pieces), the Budget’s target of Centre’s fiscal deficit for 2023-24 at 5.9 per cent of GDP, down from 6.4 per cent, is reassuring.
The overall contours of the Budget appear more significant when viewed in the context of elections – nine Assembly elections, and then the Lok Sabha election in 2024. That the Government resisted the temptation to come out with a populist Budget and stuck to time-tested economic principles bodes well for the nation and the economy.
To sum up, I would like to argue, that the Budget has something for all sections even as it walks the path of fiscal consolidation.
(A former Chairman of BSE, the author is Founder & Managing Partner of Ravi Rajan & Co)
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