Union Finance Minister Nirmala Sitharaman during the post-budget FICCI national executive committee meeting in New Delhi on February 2, 2023.
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman on Thursday exuded confidence that States will sign up as early as April to avail the ₹1.3 lakh crore of interest-free loans offered to them in Budget 2023-24 for capital expenditure, much faster than they did in the current financial year.  

This 50-year interest-free loan window for States constitutes a critical part of the government’s ambitious ₹10 lakh crore capex push for the coming year, and the Finance Minister asserted that the scheme’s outlay was raised from ₹1 lakh crore allocated this year only because States had shown interest.  

Data relating to the scheme released in the Economic Survey tabled in Parliament this week appeared to suggest those funds had not been fully tapped by States. But Ms. Sitharaman stressed that States’ use of these funds is “not all all that disheartening as you would have inferred from the Survey.”  

“It was delayed in its launch a bit because States had to come up with proposals and then set it rolling… This year, it has been increased for two reasons . One we felt there was a good appetite for more funds and continuation of the scheme. That’s not possible if they [States] didn’t absorb it last year,” she said at a post-Budget interaction hosted by FICCI.  

Preferred projects

Moreover, she pointed out that a ‘good chunk’ of the ₹1.3 lakh crore loans on offer can be used by States on projects they prefer, while a portion of it will be conditional and linked to projects that encourage for instance, municipal bond issuances and building of Unity Malls in States’ capitals.  

Editorial |Credit challenges: On credit flow and all-round capital spending

“Actually, this year, we have been talking through officials with the Chief Secretaries of State governments to see that this moves fast and early. My strong belief is that in the month of April itself, there should be a substantial number of proposals coming from many States so the release can happen straightaway, unlike last year,” she noted.   

“A lot of discussions have already happened with States on the contours of the scheme, the different features from the current year and if is it going to be very onerous to implement and so on. So all the differences have been ironed out,” the Minister said, adding that the Centre was pushing schemes that speed up capital expenditure while carrying forward critical reforms such as building accommodation for police personnel in the States. 

Also read |States may undershoot planned borrowings for Jan.-March: analysts

Interest-free loans for States with a tenure of 50 years to implement capital expenditure were first introduced by the government following the onset of the COVID-19 pandemic in 2020-21, starting with an outlay of ₹12,000 crore, which was raised to ₹15,000 crore next year. 

The attention and allocation to building a green infrastructure and a decarbonised energy regime is the core of the Union Budget which puts india on the path of being future proof, said Prashant Ruia, Director, Essar Capital.

“The ₹35,000 crore allocation for energy transition along with an ambitious target of 5 MMT of hydrogen will unleash new demand impulses across the length and breadth of the country thereby fielding green growth. This has been complemented by a custom duty and tax reliefs for green mobility” he added.

Yogesh Mudras, Managing Director, Informa Markets in India said, “Sustainable growth in each sector is the Government’s top priority in this year’s budget. With an emphasis on shifting to green fuels, green hydrogen is another paramount of budget 2023; therefore, the ₹30,000 crore for energy transition investment will help the nation to touch green hydrogen production of 5 million tonnes by 2030,” he said. 

“In times of unprecedented volatility and uncertainty, the Government has maintained a consistent stance across five definitive themes – follow a path to fiscal prudence, continue to press on the capex accelerator to support growth and give a boost to private sector investment, provide adequate support to the most vulnerable sections and those who have been impacted the most by the pandemic, follow conservative & pragmatic budget maths and move further towards simplification and reform,” said Sanjiv Chadha, Managing Director & CEO, Bank of Baroda.

Bhargav Dasgupta, MD & CEO – ICICI Lombard on the Union Budget said, “The Union Budget FY23-24 is an extremely progressive and inclusive one with a huge focus on infrastructure and capex growth while maintaining the fiscal consolidation path. With fiscal deficit being reduced to 5.9% whilst providing an extremely bullish capex investment of ₹10 lakh crore (highest ever); will in effect convert revenue expenditure to capital expenditure which has a higher multiplier effect.”

Agnishwar Jayaprakash, Founder CEO, Garuda Aerospace said, “The Union Budget announced will certainly prove to be beneficial. Finance Minister Nirmala Sitharaman’s announcement has highlighted many points for the scope and development of the start-up economy.”

“Garuda Areospace’s virtual skilling and training universities will aim to empower 1 lakh youth by providing them with training and skilling for becoming drone pilots. Alongside this, Garuda will also provide them with job opportunities,” he said.

Sudhir Mehta, Founder & Chairman, Pinnacle Industries & EKA Mobility said, “The focus on capital expenditure with promising prospects for the commercial vehicle, green mobility, and railway sector is indeed encouraging. One of the most progressive announcements is the custom duty removal on capital goods imported for manufacturing Li-ion batteries, for electric vehicles built locally in India, which will ensure the cost rationalization for electric vehicles substantially.”

“This will not only help us achieve our sustainability goals but also promote ‘Made in India’ products & technology. The government is consistent in its focus on green mobility, and budget allocation toward the National Hydrogen Mission will bring new opportunities for growth & innovation,” he said.

K.V. Hariharan, Sr. Vice President-FP&A, Data Analytics & Strategic Planning, Amway India said, “The Government’s emphasis on upskilling, job creation, infrastructure development, and strengthening digital capabilities with inclusive growth at the core of the announcements has laid the blueprint for India’s road to a $5 trillion economy.”

File picture of Union Finance Minister Nirmala Sitharaman with Nitin Gupta, Chairman, Central Board of Direct Taxes
| Photo Credit: Vedhan M

The new income tax regime for filing returns has been “sweetened” in the Budget 2023-24 and it will be beneficial for maximum number of taxpayers as they can enjoy a “reduced” tax rate, CBDT Chairman Nitin Gupta said.

Speaking to PTI during a post-Budget interview, Gupta said the intent of the government while announcing the new slabs and rates under the new tax regime is to gradually “do away with deductions and exemptions” so that the “long-standing demand of reduction of taxes for individual taxpayers and entities can be met.”

Finance Minister Nirmala Sitharaman, while presenting the Budget 2023-24 in the Parliament on Wednesday, said the government has made the new income tax regime more attractive for taxpayers and has thus brought about ‘substantial changes’ in its structure for the benefit of the middle class.

“This new regime for individuals was laid down two years ago (Budget of 2020-21) but probably the benefits were not percolating and now the government has re-tweaked the slabs, re-tweaked the number of slabs and rates and the benefit is now clearly visible, be it any taxpayer…,” the CBDT Chairman told the news agency.

He said a similar measure taken for the corporate category of taxpayers sometime back has been found to be beneficial for them. He did not say the number of individual taxpayers who opted for the new regime over the last two years.

EDITORIAL | A raft of concessions amid consolidation: On Budget 2023-24

“The new regime is really sweetened… the section of taxpayers who will not be benefitting will be a very miniscule section which is taking all sorts of benefits in terms of the interest in house property, the deductions under section VIA among others and only those type of taxpayers could be impacted in terms of they would be better off in the old regime.”

“Barring that, the new regime would be beneficial to everyone,” Mr. Gupta said.

The Central Board of Direct Taxes (CBDT) is the administrative body for the Income-tax department.

The CBDT chief said that the government went into various aspects of the new tax regime, bettered it and therefore in the latest Budget, a “parity” of sorts has been achieved between the two schemes.

“There are about 3.5 crore salaried taxpayers in India and every salaried taxpayer will be at par with the old regime if they opt for the new regime because standard deduction has been made available in the new regime… so in terms of parity it has been established.”

“With the reduced number of slabs and wider slabs, the benefit will be percolating to everyone now and the long-standing demand of reduction of taxes will be met,” he said.

Taxpayers have independence to choose

Asked if the Finance Minister’s declaration that the new tax regime will be a “default” tax option will affect the users of old regime in any way, the CBDT Chairman said the taxpayers will have full independence to choose any one of the tax filing systems and none of them will be at any loss including the facility to reverting to the old scheme.

“The new regime is the default scheme in the sense that what will come up on the screen (on the e-filing portal) will be the new regime but the option is intact and the taxpayer can shift between the regimes…”

“There is no disincentive for any section of taxpayers and they can opt for the regime which they want to,” he said.

Mr. Gupta said an ‘online calculator’ will also be provided to the taxpayers, like before over the e-filing portal, to compare their tax liabilities under the two regimes.

Tax slabs

As per the changes proposed in the Budget, no tax would be levied on people with annual income of up to ₹7 lakh under the new tax regime but it made no changes for those who continue in the old regime that provides for tax exemptions and deductions on investments and expenses such as HRA.

Under the revamped new tax regime, no tax would be levied for income up to ₹3 lakh. Income between ₹3-6 lakh would be taxed at 5%; ₹6-9 lakh at 10%, ₹9-12 lakh at 15%, ₹12-15 lakh at 20% and income of ₹15 lakh and above will be taxed at 30%.

“This will provide major relief to all taxpayers in the new regime,” Sitharaman said in her Budget speech.

An individual with an annual income of Rs 9 lakh will be required to pay only ₹45,000. This is only 5% of his or her income. It is a reduction of 25% on what he or she is required to pay now (in the old regime) — ₹60,000, she said.

Also read |Union Budget 2022 | Income tax slabs unchanged, tax payers can file returns in two years

“Similarly, an individual with an income of ₹15 lakh would be required to pay only ₹1.5 lakh or 10% of his or her income, a reduction of 20% from the existing liability of ₹1,87,500,” Sitharaman said.

The minister later told reporters during a press conference on Wednesday that the government wants to make the new tax regime attractive enough and compliance should not be burdensome on taxpayers. However, if someone feels the old regime is more beneficial, he/she can continue in it.

“The ultimate interest is to make the simpler (new) regime more attractive,” she said.

If budget making is a complex task, interpreting the Union Budget can be hazardous given the amount of fine print that one has to pore over. Finance Minister Nirmala Sitharaman’s fifth Budget, and the current Bharatiya Janata Party-led government’s final full-fledged one before next year’s general election, ticks all the right boxes on the face of it. Inclusive development that ensures prosperity for all, especially the youth, women, farmers, Other Backward Classes, Scheduled Castes and Scheduled Tribes, a focus on infrastructure and investment that serves as a multiplier for growth and employment, policies to enable green or environmentally sustainable growth, the rationalisation of direct taxes, including a raft of concessions to the middle and salaried classes, and pensioners, and, most importantly, doing all this while staying the course on fiscal consolidation. Terming it the “first Budget in Amrit Kaal”, Ms. Sitharaman sounded the poll bugle by emphasising the ruling dispensation’s achievements since 2014, when Prime Minister Narendra Modi first assumed office. Per capita income, she said, had more than doubled to ₹1.97 lakh as a result of the economy’s growth to being the world’s fifth-largest and the government’s efforts to ensure a better quality of living for all. She also cited an increase in formalisation of the economy and the widespread adoption of digital technologies, especially in the payments sphere, as other significant achievements.

With an eye on ‘India at 100’, the Budget proposals, Ms. Sitharaman said, were aimed at actualising a “technology-driven and knowledge-based economy with strong public finances, and a robust financial sector”. Emphasising that the economic agenda for achieving this vision would, among other things, require a focus on giving a strong impetus to growth and job creation, the Minister laid out her Budget proposals that were heavy on this government’s trademark acronyms describing the various schemes, but relatively light on details. PM VIKAS or Pradhan Mantri Vishwakarma Kaushal Samman, for instance, would for the first time offer traditional artisans and craftspeople, or Vishwakarmas, a package of assistance aimed at helping them improve the quality, scale and reach of their products, she said. Specifics, including a financial outlay and the likely mechanics of implementation, were, however, not spelt out. Similarly, a ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’ or ‘MISHTI’, aimed at undertaking mangrove plantation along the coastline and on salt pan lands leaves the funding to a “convergence between MGNREGS and a compensatory afforestation fund”. With the rural sector’s mainstay employment guarantee scheme, one that was introduced during the Congress-led United Progressive Alliance government’s term, itself increasingly being starved of budgetary support, it is hard to fathom how the new initiative to protect and regenerate the ecologically sensitive mangroves will be funded. The decrease in outlay comes at a time when the rural economy is still to regain vigour from the ravages of the pandemic, the fallout on incomes from the uneven distribution of last year’s monsoon rainfall, and the relatively greater impact of high food inflation on hinterland households.

At a broader level, the Budget estimate for expenditure on rural development in 2023-24 is pegged at ₹2.38 lakh crore, a marginal 0.1 percentage point increase when measured as a proportion of overall expenditure at 5.3%, compared with the 5.2% in the previous Budget Estimate. When viewed against the revised estimate, the outlay is a good 0.6 percentage point lower. Food subsidy too has been sharply pared: at ₹1.97 lakh crore, it is almost 5% lower than the 2022-23 Budget estimate and a steep 31% down from the revised estimate. To be sure, the government’s resolve to stay the course on fiscal consolidation, especially after the COVID-19 pandemic had led it to spend more even as revenue receipts dipped amid the unprecedented economic contraction, left Ms. Sitharaman with little leeway on the expenditure front once she had decided that the government would concentrate its resources on increased public outlays on infrastructure and investment. Capital expenditure has been allocated ₹10 lakh crore, a 33% jump from this fiscal’s Budget estimate. If one adds the almost ₹3.7 lakh crore set aside for grants-in-aid to States for the creation of capital assets, the Minister’s laudable intent to apply the force multiplier of government capital spending as the primary lever to spur economic activity becomes clearly evident. With global demand uncertain this year on account of the slowdown in the developed economies, as the Economic Survey pertinently pointed out, India’s domestic market will necessarily have to serve as the economy’s bulwark. Ms. Sitharaman has also attempted to woo the middle class with a raft of changes in personal income tax that would, in combination with tweaks to customs duties, in total cost the government ₹ 37,000 crore in foregone direct tax revenue. Some of these changes are aimed at leaving more money in the hands of the salaried and pensioners, cash that the Budget planners hope would find its way back either as savings or increased spending on vital consumption. The biggest beneficiaries of the income-tax changes though are likely to be those in the highest income bracket, where the effective rate has been cut by 3.74 percentage points reinforcing a perception that this government bats for the affluent.

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Illustration: Satheesh Vellinezhi

With the global economy adrift, Finance Minister Nirmala Sitharaman sought to carve out an ark for India in her fifth Union Budget by trying to nudge domestic consumption and reluctant private investments upwards, while also seeking to create a feel-good factor among specific segments of voters as the government gears up for the 2024 Lok Sabha polls.

The FM summed up the BJP-led government’s achievements since 2014 as “leaving no one behind”, taking just 200-odd words to outline the doubling of per capita income to ₹1.97 lakh, the increasing formalisation of the economy and the expansion of targeted benefits. She then used the rest of her Budget speech to soothe sections of society that may have felt a tad left behind over its nine-year-tenure.

To assuage the salaried middle class, deflated by a sustained streak of high inflation, the tax-free limit under the new exemption-less income tax regime was raised to ₹7 lakh from ₹5 lakh. The cap on non-government employees’ leave encashment at the time of retirement was raised to ₹25 lakh from ₹3 lakh.

Help for those left behind

The first Budget of the Amrit Kaal — the 25-year period leading to the centenary of Indian independence in 2047 — aimed to build on existing “inclusive development” efforts that assign overall priority for the underprivileged, the Minister said. She launched new socio-economic development schemes: the PM Particularly Vulnerable Tribal Groups Development Mission, and the PM Vishwakarma Kaushal Samman to support artisans from weaker sections and Scheduled Castes, Scheduled Tribes and Other Backward Classes.

Some measures were also announced to alleviate the lot of micro, small and medium enterprises that have faced successive shocks over the last few years, from demonetisation to the pandemic.

Poll-pleasing focus on jobs

While the Finance Minister addressed various sections’ aspirations through her less-than-90-minutes speech, the broader underlying message was aimed at India’s restive youth and their hopes of securing a job.

References to “job” creation in a Budget speech hit a six-year high, with the Minister flagging it seven times in different contexts, compared to just two mentions in the 2022-23 Budget speech and three references in the year before that.

Giving an impetus to growth and job creation, and creating opportunities, especially for the youth, she said, was a key focus of the government’s economic agenda to achieve its vision for the Amrit Kaal, which will culminate in 2047.

It is perhaps no coincidence that the last time job creation figured high (with six mentions) was when the late Arun Jaitley presented the Budget for 2018-19 — another Budget presented in the year before a general election.

Capex plans depend on States

Polls apart, the Budget’s grand plan to ramp up infrastructure capex to ₹10 lakh crore in the hope that it gives greater traction to a revival in private investments will hinge on the States — which have been offered ₹1.3 lakh crore in the form of 50-year interest-free loans — doing their bit, and Indian industry being bold enough to take risks during a tumultuous, unpredictable period also marked by rising interest rates.

The deposit limit on savings schemes for senior citizens was doubled to ₹30 lakh and a new one-time small savings scheme was also announced for women to invest upto ₹2 lakh with 7.5% returns assured for two years.

An uptick in small savings collections will also help the government fund its fiscal deficit target of 5.9% of GDP in the coming year (from the 6.4% estimated in 2022-23), with net market borrowings pegged at ₹11.8 lakh crore, Ms. Sitharaman said.

While the Economic Survey projected a 6.5% growth for the year ahead, the Budget estimates a nominal GDP growth of 10.5% for its revenue calculations. Finance Secretary T.V. Somanathan explained that this could be derived from any combination of real growth and inflation, and was not a yardstick for hopes about either.

Finance Minister Nirmala Sitharaman on Wednesday, February 1, presented the last full budget of the Narendra Modi government before the 2024 general elections. The Minister announced a range of new initiatives, revised income tax slabs and customs duty, and sops for agriculture and energy transition.

The Union Budget 2023-24 document also listed the new allocations for core welfare schemes that drive socio-economic development. Here’s a roundup of how the budgetary allocations for some of the key schemes have changed-

MGNREGS: The government slashed the budget for its flagship rural employment scheme, the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) by nearly 32% compared to the ₹89,400 revised estimate for the scheme in the current year.

Also read | Explained | The funding and demand for MGNREGA

The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) was passed in 2005 and aimed at enhancing the livelihood security of households in rural areas. Under it, the MGNREGS is a demand-driven scheme that guarantees 100 days of unskilled work per year for every rural household that wants it, covering all districts in the country except those with a 100% urban population.

Food Subsidies: The Centre has allocated a little above ₹2 lakh crore for the food subsidy under the National Food Security Act (NFSA)- this includes funds for the Food Corporation of India, funds for decentralised procurement of grains by State agencies, and other logistical costs. Starting from January 1, 2023, the Centre had decided to provide 5 kg of free foodgrains per month to the 81.35 crore beneficiaries of the NFSA for one year starting from January 2023, rather than charging them a subsidised amount of ₹3 a kg of rice, ₹2 a kg of wheat and ₹1 a kg of coarse cereal as is usually done.

It was announced in December that the government was terminating the Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY), which had provided an additional 5 kg of free grains every month to NFSA beneficiaries after being launched as an emergency measure in response to the COVID-19 pandemic in April 2020 and received multiple extensions since. In a normal year, without COVID disruptions, the Centre’s food subsidy bill on account of the NFSA amounted to around ₹2 lakh crore, similar to the newly-announced allocation, but the PMGKAY had effectively doubled that sum for the past two years.

Jal Jeevan Mission: The Centre increased its budgetary allocation for the Jal Jeevan Mission (JJM) or the National Rural Drinking Water Mission by about 27% to ₹70,000 crore from the current year’s revised estimates of ₹55,000. The Jal Jeevan Mission aims to provide safe and adequate drinking water through individual household tap connections by 2024 to all households in rural India.

The Jal Shakti Ministry tweeted last week that the government had provided 11 crore rural households with a tap water connection under the JJM scheme. Data from the Ministry’s dashboard suggest that 56% of the targeted 19.3 crore households had been covered.

The scheme has a total financial outlay of about ₹3.60 lakh crore, with the Centre funding 50% of the cost with States and Union Territories, except for Union Territories without a legislature, where it foots the entire bill, and northeastern and Himalayan States and Union Territories with legislatures, where it funds 90% of the bill.

Ayushman Bharat-PMJAY: The budget for the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) — the national public health insurance fund, saw an increase of about 12% at ₹7,200 crore compared to the ₹6,000 crore revised estimates for the current year.

The Ayushman Bharat PM-JAY is a health insurance scheme launched in 2018, aiming to provide a health cover of Rs. 5 lakh per family per year for secondary and tertiary care hospitalization. It aims to over 10.74 crore poor and vulnerable families (or 50 crore beneficiaries) from the bottom 40% of the Indian population. Union Health Minister Mansukh Mandaviya had said in December 2022, that 4.5 crore people had so far been empanelled under the scheme.

PM-Kisan: The allocation for the Prime Minister’s Kisan Samman Nidhi (PM-KISAN) scheme was the lowest in five years and remained the same as the revised estimates for the current year at ₹60,000 crore. PM-Kisan is a flagship Central scheme launched in 2019 for cash transfers ₹6,000 per year to eligible farmer families in three instalments of ₹2,000 each.

Finance Minister Nirmala Sitharaman informed while presenting the Union Budget on Wednesday that the government has made cash transfers totalling ₹2.2 lakh crore to around 11 crore farmers under the PM-Kisan scheme.

PM-POSHAN: The government has allocated a budget of ₹11,600 crore to the Pradhan Mantri Poshan Shakti Nirman, or the rebranded version of the mid-day meal scheme for 2023-24. This is down 9.37% from the current year’s revised estimates of ₹12,800.

In 2021, while renaming the mid-day meal scheme to give hot cooked meals to 11.8 crore government school students from Class 1 to 8, the Centre had also decided to extend the scheme to 24 lakh children studying in balvatikas, the pre-primary section of government schools from 2022-23.

National Education Mission: A total of ₹38,965 crore was allocated to the National Education Mission for 2023-24, up 19.44% from the ₹32,612 crore revised estimates for the current year. The Mission is the umbrella scheme integrating major education-related schemes so education can be provided holistically and without segmentation from pre-primary to class 12. It includes the Sarva Shiksha Abhiyan under the Right to Education and schemes for secondary and higher education as well those for teacher training and adult education.

PMAY: The Centre allocated ₹79,590 crore to the Pradhan Mantri Awas Yojana (PMAY), up 3.19% from the current year’s revised estimates and 66% from the budget estimates. The PMAY aims at constructing houses in both urban and rural areas. PMAY-Gramin (rural) was initiated in November 2016 with a target of completing 2.7 crore houses and PMAY-Urban was initiated in June 2015 with a target of constructing 1.2 crore homes.

National Social Assistance Program: The budget allotted ₹9,636 to the National Social Assistance Program (NSAP), which provides monthly pension assistance to the elderly, widows, and persons with disabilities.

Development of Scheduled Tribes and Scheduled Castes: The budget allocated ₹4,295 crore and ₹9,409 crore to the umbrella programs for the development of Scheduled Tribe and Scheduled Caste communities respectively. While the ST development allocation saw a nearly 10% increase, the SC programme funding rose by close to 22%, compared to the current year’s revised estimates.

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AAP MP Sanjay Singh said the Union Budget for 2023-24, presented by the Finance Minister in Parliament, does not have any provision for the country’s farmers, soldiers and youth. File
| Photo Credit: ANI

The Aam Aadmi Party on February 1 questioned Union Finance Minister Nirmala Sitharaman’s claim about doubling of per capita income since 2014, saying it is ‘Amrit Kaal’ for Prime Minister Narendra Modi, not for the common people of the country.

Highlighting the achievements of the Modi dispensation so far, the Finance Minister in her budget speech said the government’s efforts since 2014 have ensured for all citizens a better quality of living and a life of dignity.

The per capita income has more than doubled to ₹1.97 lakh, she added.

“Neither did the MSP of crops increase nor did the youth get employment. But this is Amrit Kaal for Modi ji. Nirmala ji is saying per capita income has doubled,” AAP’s Rajya Sabha MP Sanjay Singh, who is also the party’s national spokesperson, said in a series of tweets in Hindi, wondering “whose income” doubled.

The AAP leader said the Union Budget for 2023-24, presented by the Finance Minister in Parliament, does not have any provision for the country’s farmers, soldiers and youth.

“No provision for anyone in the budget. Common people are longing for Amrit [nectar] in the Amrit Kaal,” Mr. Singh said.

Latching on to the Finance Minister’s proposal that 50 additional airports will be revived, the AAP MP took a swipe at Prime Minister Narendra Modi.

“Modi ji will build 50 new airports. Who will get them?” Mr. Singh said in a tweet.

The AAP’s Rajya Sabha MP Raghav Chadha termed the budget “most lacklustre” and said it is bereft of “any effort or serious application of mind”.

“It sounded like a budget presented by a minority government with its hands tied rather than a government with a brute majority,” he tweeted.

The Modi Government is focused more on “retaining power than wielding it for the common good,” Mr. Chadha alleged.

Tribal women walk to their villages in Chhattisgarh. Image for representation only
| Photo Credit: AP

Finance Minister Nirmala Sitharaman on Wednesday announced the Pradhan Mantri-PVTG Development Mission to focus on improving the overall socio-economic conditions of 75 Particularly Vulnerable Tribal Groups across the country, who live in around 31,000 villages of India’s 18 States and one Union Territory. The announcement was made during the presentation of the Union Budget for 2022-23.

Ms. Sitharaman said that the Union government was putting forward an expenditure outlay of ₹15,000 crore, making this amount available over the next three years for the implementation of this mission. 

“This will saturate PVTG families and habitations with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, health and nutrition, road and telecom connectivity, and sustainable livelihood opportunities,” the Finance Minister said, adding that the amount being set aside for this will be spent under the Development Action Plan for the Scheduled Tribes. 

The detailed Budget statement for FY 2023-24 showed that the Ministry of Tribal Affairs has been allocated a total of Rs 12,461.88 crore, out of which the Ministry’s scheme for the Development of PVTGs, has been allocated ₹256.14 crore. 

Senior officials in the Tribal Affairs ministry told The Hindu that its own scheme for the development of PVTGs, is just a small component of the PM-PVTG Mission. “But like the FM said, the goals are to build roads, telecom connectivity, water and sanitation. The monies for these efforts will go into the Scheduled Tribe Component (STC) of these respective ministries from where it will be allocated for the development of these groups,” he explained. 

Among the ministries that are expected to be roped in to implement the PM-PVTG Mission are the Rural Development Ministry, through which housing component and road connectivity will be implemented; the Water Resources Ministry, under whose Jal Jeevan Mission clean drinking water connections will be taken care of; the Education Ministry, which will take care of building schools and hostels; and the Health Ministry, which will look at filling gaps in healthcare for PVTGs. 

In addition to this, the Women and Child Development Ministry is also going to be roped in to get Anganwadi workers on ground to work towards sensitisation of PVTGs and ensuring they are able to sign up for government benefits. 

One senior official of the Tribal Affairs Ministry said, “In most of these 31,000 villages, the need for infrastructure development is the most urgent.”

The Ministry of Tribal Affairs’ Development Scheme for PVTGs, running since 2008, has already been providing for livelihood, employment opportunities, education, health, provision of safe drinking water, land distribution, land development, social security, housing and habitat, connectivity (road and telecommunication), supply of electricity, irrigation, urban development, etc.

However, the expenditure reports show that spending under this scheme has declined significantly in the last five years since 2018-19, when ₹250 crore was spent on it. The following year, it dropped to ₹249.99 crore, dipping further to Rs 140 crore in 2020-21, rising slightly to ₹160 crore in 2021-22 and then going back down to ₹124.79 crore in 2022-23. 

Ministry officials said that the reason for this dip in spending was initially the Covid-19 pandemic, “but more so because the money we were sanctioning to states were not being spent properly, lying in their treasuries”.

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IDBI Bank is on the government’s list for privatisation. Image for representation
| Photo Credit: G. Ramakrishna

The Budget for 2023-24 has not separately mentioned the amount that the government plans to raise from disinvestment or privatisation of state-owned companies.

Earlier, proceeds from disinvestment were shown separately as part of the miscellaneous receipts in the Capital Receipts Budget.

As per the 2023-24 Budget document, the revised estimate for miscellaneous capital receipts for the current fiscal has been pegged at ₹60,000 crore, lower than the ₹65,000 crore projected in Budget estimates for 2022-23.

For the next fiscal beginning April 1, the miscellaneous capital receipts have been pegged at ₹61,000 crore.

As per the DIPAM website, the government has so far mopped up over ₹31,100 crore by way of minority stake sale in CPSEs, as against the full-year Budget target of ₹65,000 crore.

For the next fiscal, companies like Shipping Corporation of India, NMDC Steel Ltd, BEML, HLL Lifecare, Container Corporation of India and Vizag Steel, besides IDBI Bank, are in the government’s list for privatisation.

This fiscal (2022-23) is the fourth year in a row that the government has missed the budgeted disinvestment target.

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Watch | Budget 2023 | What’s cheaper and what’s costlier?

With a view to promoting exports, boosting domestic manufacturing, and enhancing value addition, the Union Budget 2023-24 has proposed a number of changes to the Customs Duty regime which is likely to make mobile phones and TVs cheaper and a certain class of automobiles, including EVs, as well as toys and bicycles dearer.

Finance Minister Nirmala Sitharaman said, “a simplified tax structure with fewer tax rates helps in reducing compliance burden and improving tax administration. I propose to reduce the number of Basic Customs Duty (BCD) rates on goods, other than textiles and agriculture, from 21 to 13.” Consequently, there would be “minor changes in BCD, cesses and surcharges on some items, including toys, bicycles, automobiles and naphtha,” Ms. Sitharaman said.

A reduction in mobile phone prices is likely on account of BCD on camera lens and its inputs/parts, used in manufacture of camera module of mobile phone, made nil from existing 2.5%. It has been decided to continue concessional duty on lithium-ion cells for batteries for another year. “The proposals are aimed at deepening domestic value addition in manufacture of mobile phones,” the FM said.

“Similarly, to promote value addition in manufacture of televisions, I propose to reduce BCD on parts of open cells of TV panels to 2.5% [from the existing 5%],” she said.

In another Indirect Tax proposal, she said towards rectifying inversion of duty structure and encouraging manufacturing of electric kitchen chimneys, BCD on electric kitchen chimney was being increased to 15% from 7.5%, while the levy on heat coils for the appliance is getting reduced from 20% to 15%.

For bicycles, the new rate is 35% as against existing 30%; for toys and parts of toys, other than parts of electronic toys, it will be 70% (60%). BCD on naphtha has been increased from 1% to 2.5%.

The duty on Styrene and Vinyl Chloride is being increased from 2 to 2.5%. As an impetus to green mobility, the duty exemption is being extended to import of capital goods and machinery required for manufacture of lithium-ion cells for batteries used in EVs, the FM said.

The Budget also proposed exemption from the levy on vehicles, specified automobile parts, sub-systems and tyres imported by notified testing agencies for the purpose of testing/certification.

Denatured ethyl alcohol, which finds applications in the chemical industry, is being exempted from BCD.

Here’s is a list of items that will become cheaper and costlier.

What’s cheaper

• Mobile phones and TV sets manufactured in India
• Denatured ethyl alcohol
• Acid grade fluorspar
• Shrimp feed
• Lab-grown diamonds
• Fish lipid oil used in manufacturing aquatic feed
• Machinery for manufacturing lithium ion cell to be used in electric vehicles
• Raw materials for manufacture of CRGO Steel, ferrous scrap and nickel cathode

What’s dearer

• Fully imported cars, including electric vehicles (EV)
• Kitchen chimney
• Imported bicycles and toys
• Articles made of gold, platinum
• Imitation jewellery
• Silver dores, bars, articles
• Copper scrap
• Compounded rubber
• Cigarettes

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