Union Budget 2023-24
The Vision for 'Amrit Kaal' articulated
in the Union Budget for FY 2023-24
Budget Highlights
The seven priorities, termed Saptarishi, adopted in the Union Budget for FY 2023-24 to guide the country towards 'Amrit Kaal', thus providing a blueprint for an empowered and inclusive economy, are:
- Inclusive Development
- Reaching the last mile
- Infrastructure & Investment
- Unleashing the potential
- Green Growth
- Youth Power
- Financial Sector
- Growth & Job creation
- Strong & Stable Macro-Economic Environment
- Opportunities for Citizens with focus on youth
INTRODUCTION
The central government’s expenditure is presented and authorised by Parliament through the Union Budget every financial year. Article 113 of the Constitution requires all expenditure (except charged expenditure) to be submitted in the form of Demands for Grants (Ministry-wise) to Lok Sabha. The Demands for Grants are referred to the Ministries’ respective Departmentally-Related Standing Committee for further examination. Following this, they are discussed in Lok Sabha and approved. After Lok Sabha’s authorisation of the demands, an Appropriation Bill is introduced and passed to permit expenditure out of the Consolidated Fund of India.
Key Highlights
- Per capita income has more than doubled to ₹1.97 lakh in around nine years.
- Indian economy has increased in size from being 10th to 5th largest in the world in the past nine years.
- EPFO membership has more than doubled to 27 crore.
- 7,400 crore digital payments of ₹126 lakh crore has taken place through UPI in 2022.
- 11.7 crore household toilets constructed under Swachh Bharat Mission.
- 9.6 crore LPG connections provided under Ujjwala.
- 220 crore covid vaccination of 102 crore persons.
- 47.8 crore PM Jan Dhan bank accounts.
- Insurance cover for 44.6 crore persons under PM Suraksha Bima and PM Jeevan Jyoti Yojana.
- Cash transfer of ₹2.2 lakh crore to over 11.4 crore farmers under PM Kisan Samman Nidhi.
- Seven priorities of the budget ‘Saptarishi’ are inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector.
- Atmanirbhar Clean Plant Program with an outlay of ₹2200 crore to be launched to boost availability of disease-free, quality planting material for high value horticultural crops.
Vision for Amrit Kaal
The Finance Minister of India called it the first Budget in Amrit Kaal. The vision for the Amrit Kaal is an empowered and inclusive economy that is technology-driven and knowledge-based with a robust financial sector.
The Budget identifies 4 transformative opportunities to be leveraged before reaching India@100:
- Economic Empowerment of Women through SHGs
- PM VIshwakarma KAushal Samman (PM VIKAS)
- Tourism Promotion in Mission Mode
- Green Growth
What are the Priorities of Budget 2023-24?
Saptarishi- Inclusive Development
- Reaching the last mile
- Infrastructure & Investment
- Unleashing the potential
- Green Growth
- Youth Power
- Financial Sector
INCLUSIVE DEVELOPMENT
Agriculture:
- Digital Public Infrastructure: Digital Public Infrastructure for agriculture will be built as an open source, open standard and interoperable public good resulting in:
- Inclusive farmer-centric solutions
- Relevant information services for crop planning/health
- Better access to farm inputs, credit, and insurance
- Growth-support of the agri-tech industry and start-ups
- Funding for Agri-startups: Agriculture Accelerator Fund will be set-up to encourage agri-startups by young entrepreneurs in rural areas.
- Agri-Credit: Agriculture credit target to be increased to Rs 20 lakh crore with focus on animal husbandry, dairy and fisheries.
- A new sub-scheme of PM Matsya Sampada Yojana with targeted investment of Rs 6,000 crore to be launched for fishermen, fish vendors and MSMEs.
- Horticulture: Atmanirbhar Clean Plant Programme will be launched to boost availability of disease-free, quality planting material for high value horticultural crops at an outlay of Rs 2,200 crore.
- Millets: To make India a global hub for ‘Shree Anna’ (Millets), the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
- Agri-Cooperatives: To fulfil the vision of “Sahakar Se Samriddhi”, the Government plans to establish decentralized storage capacity and set up multiple cooperative societies in uncovered villages over the next 5 years.
Education and Skilling:
- Revamped teacher’s training via District Institute of Education and Training.
- National Digital Library to be setup for children and adolescents.
- State will be encouraged to setup physical libraries at panchayat & ward levels.
Health:
- 157 new nursing colleges will be established in co-location with the existing 157 medical colleges established since 2014.
- A Mission to eliminate Sickle Cell Anaemia by 2047 will be launched.
Infrastructure and Investment
Increase in Capex for Infra:
- Capital investment outlay increased for the third consecutive year – by 33% to Rs 10 lakh crore making it 3.3% of GDP.
- The ‘Effective Capital Expenditure’ is budgeted at Rs 13.7 lakh crore – 4.5% of GDP.
Support to State Govts for Cap-Investment:
- The Government has decided to continue the 50-year interest free loan to state governments for one more year to spur investment in infrastructure and to incentivize them for complementary policy actions.
- The enhanced outlay for this is Rs 1.3 lakh crore.
Railways:
- A capital outlay of Rs 2.40 lakh crore has been provided for the Railways – the highest ever outlay and about 9 times the outlay made in 2013- 14.
Aviation:
- 50 additional airports, heliports, water aerodromes and advanced landing grounds will be revived for improving regional air connectivity.
Other Transportation Projects:
- 100 critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertiliser, and food grains sectors have been identified and will be taken up on priority with investment of Rs 75,000 crore, including Rs 15,000 crore from private sources.
- An Urban Infrastructure Development Fund (UIDF) will be established through use of priority sector lending shortfall.
- UIDF will be managed by the National Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.
- Rs 10,000 crore on a yearly basis will be allocated for this purpose.
Reaching the Last Mile
New ‘Aspirational Blocks Programme’:
- Building on the success of the Aspirational Districts Programme, the Aspirational Blocks Programme was recently launched covering 500 blocks.
- It is aimed at improving the performance of areas across multiple domains such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure.
PM PVTG Development Mission:
- To improve socio-economic conditions of the Particularly Vulnerable Tribal Groups (PVTGs), Pradhan Mantri PVTG Development Mission will be launched.
- An amount of Rs 15,000 crore will be made available to implement the Mission in the next 3 years under the Development Action Plan for the Scheduled Tribes.
- The Centre will also recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students.
Water for Drought Prone Region:
- In the drought prone central region of Karnataka, central assistance of Rs 5,300 crore will be given to the Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for drinking water.
Other Initiatives:
- The outlay for PM Awas Yojana is being enhanced by 66% to over Rs 79,000 crore.
- A ‘Bharat Shared Repository of Inscriptions (Bharat SHRI)’ will be set up in a digital epigraphy museum, with digitization of 1 lakh ancient inscriptions in the first stage.
Unleashing the Potential
Reduced Compliances and Jan Vishwas Bill:
- To enhance ease of doing business, more than 39,000 compliances have been reduced and more than 3,400 legal provisions have been decriminalised under the amendments to the Companies Act 2013.
- To further the trust-based governance, the Government introduced the Jan Vishwas Bill to amend 42 Central Acts.
Centres of Excellence for AI:
- To realise the vision of “Make AI in India and Make AI work for India”, three centres of excellence for Artificial Intelligence will be set-up in top educational institutions.
National Data Governance Policy:
- To facilitate innovation and research by start-ups and academia, a National Data Governance Policy will be brought out, which will enable access to anonymized data.
Digilocker for Data Sharing:
- An Entity DigiLocker will be set up for use by MSMEs, large business and charitable trusts for storing and sharing documents online securely, whenever needed, with various authorities, regulators, banks and other business entities.
Resolving Disputes:
- Vivad se Vishwas: Less stringent contract execution for MSMEs (being provided as a relief to the MSMEs affected during the Covid period).
- Easier and standardised settlement scheme enabling faster settlement of contractual disputes of Govt and Govt undertakings.
- e-Courts: Phase III of e-courts will be launched for effective administration of justice.
5G Technology:
- 100 labs for developing applications using 5G services will be set up in engineering institutions to realise a new range of opportunities, business models, and employment potential.
- The labs will cover, among others, applications such as smart classrooms, precision farming, intelligent transport systems, and healthcare apps.
Green Growth
- National Green Hydrogen Mission:
- An outlay of Rs 19,700 crores has been allocated to the National Green Hydrogen Mission to facilitate transition of the economy to low carbon intensity, reduce dependence on fossil fuel imports, and make the country assume technology and market leadership in this sunrise sector.
- The target is to reach an annual production of 5 MMT by 2030.
- GOBARdhan Scheme:
- 500 new ‘waste to wealth’ plants under GOBARdhan scheme will be established to promote Circular Economy (200 compressed biogas (CBG) plants and 300 community/cluster-based plants). Total Investment – Rs 10,000 crore.
- In due course, a 5% CBG mandate will be introduced for all organizations marketing natural and biogas.
- Bhartiya Prakritik Kheti Bio-Input Resource Centres:
- Over the next 3 years, the Centre will facilitate 1 crore farmers to adopt natural farming by setting up 10,000 Bio-Input Resource Centres, creating a national-level distributed micro-fertilizer and pesticide manufacturing network.
- Other Investments in Green Energy:
- Rs. 35,000 crore for priority capital investments towards energy transition and net zero objectives, and energy security (Ministry of Petroleum & Natural Gas).
- Battery Energy Storage Systems with capacity of 4,000 MWH to be supported with Viability Gap Funding.
- Rs 20,700 crore (central support – Rs 8,300 crore) for inter-state transmission system for evacuation and grid integration of 13 GW renewable energy from Ladakh.
Youth Power
- Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth within the next three years.
- On-job training, industry partnership, and alignment of courses with needs of industry will be emphasized.
- The scheme will also cover new age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.
- To skill youth for international opportunities, 30 Skill India International Centres will be set up across different States.
- The digital ecosystem for skilling will be further expanded with the launch of a unified Skill India Digital platform for enabling demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes.
- In order to provide stipend support to 47 lakh youth in three years, Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme will be rolled out.
- At least 50 destinations will be selected through challenge mode. In addition to aspects such as physical connectivity, virtual connectivity, tourist guides, high standards for food streets and tourists’ security, all the relevant aspects would be made available on an App to enhance tourist experience.
- Every destination would be developed as a complete package. The focus of development of tourism would be on domestic as well as foreign tourists.
- Sector specific skilling and entrepreneurship development will be dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative.
- For integrated development of theme-based tourist circuits, the ‘Swadesh Darshan Scheme’ was also launched. Under the Vibrant Villages Program, tourism infrastructure and amenities will also be facilitated in border villages.
- States will be encouraged to set up a Unity Mall in their state capital or most prominent tourism centre or the financial capital for promotion and sale of their own ODOPs (one district, one product), GI products and other handicraft products, and for providing space for such products of all other States.
Financial Sector
- Credit Guarantee for MSMEs:
- In 2022, the credit guarantee scheme for MSMEs was revamped and will take effect from 1st April 2023 through infusion of Rs 9,000 crore in the corpus.
- This will enable additional collateral-free guaranteed credit of Rs 2 lakh crore.
- The cost of the credit will be reduced by about 1%.
- In 2022, the credit guarantee scheme for MSMEs was revamped and will take effect from 1st April 2023 through infusion of Rs 9,000 crore in the corpus.
- Financial Information Registry:
- A National Financial Information Registry will be set up to serve as the central repository of financial and ancillary information.
- This will facilitate efficient flow of credit, promote financial inclusion, and foster financial stability.
- A new legislative framework, designed in consultation with the RBI, will govern this credit public infrastructure.
- Small Savings Schemes:
- To commemorate Azadi Ka Amrit Mahotsav, a one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available for a two-year period up to March 2025.
- This will offer deposit facility upto Rs 2 lakh in the name of women or girls (fixed interest rate of 7.5%) with partial withdrawal option.
- The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs 15 lakh to Rs 30 lakh.
- The maximum deposit limit for the Monthly Income Account Scheme will be enhanced from Rs 4.5 lakh to Rs 9 lakh (for single account) and from Rs 9 lakh to Rs 15 lakh (for joint account).
- To commemorate Azadi Ka Amrit Mahotsav, a one-time new small savings scheme, Mahila Samman Savings Certificate, will be made available for a two-year period up to March 2025.
What is the Status of Fiscal Management?
- Utilisation of Funds for Capital Expenditure:
- The Indian Finance Minister stated that all states must utilise their fifty-year loan for capital expenses by the end of 2023-24.
- Most of this will be at the discretion of states, but a part will be conditional on states designated for specific purposes, such as:
- Replacing outdated government vehicles
- Improving urban planning
- Making urban local bodies eligible for obtaining municipal bonds
- Building housing for police officers
- Constructing Unity Malls
- Creating libraries and digital infrastructure for children and adolescents
- Contributing to the capital expenses of central schemes.
- Fiscal Deficit Allowed to States:
- States are allowed to have a deficit of 3.5% of their Gross State Domestic Product (GSDP), with 0.5% of this amount specifically designated for power sector reforms.
- Revised Estimates 2022-23:
- Total receipts, (excluding borrowings): Rs 24.3 lakh crore
- Net tax receipt: Rs 20.9 lakh crore.
- Total expenditure: Rs 41.9 lakh crore
- Capital expenditure: Rs 7.3 lakh crore.
- Fiscal deficit : 6.4% of GDP.
- Total receipts, (excluding borrowings): Rs 24.3 lakh crore
- Budget Estimates 2023-24:
- Total estimated receipts (excluding borrowings): Rs 27.2 lakh crore,
- Total estimated expenditure: Rs 45 lakh crore.
- Net tax receipts: Rs 23.3 lakh crore.
- Fiscal deficit: 5.9% of GDP.
- To finance the fiscal deficit in 2023-24, the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore.
- The gross market borrowings are estimated at Rs 15.4 lakh crore.
- Also, the government is committed to sticking to this plan to reduce the fiscal deficit to below 4.5% by 2025-26.
