Union Finance Minister Nirmala Sitharaman speaks during a post-budget press conference, in New Delhi, Wednesday, Feb. 1, 2023.
| Photo Credit: PTI

The government will focus on economic growth and job creation and cut down the fiscal deficit, Union Finance Minister Nirmala Sitharaman said on Wednesday, presenting its last full budget in Parliament before the 2024 election.

Here are the charts that show major aspects of Union Budget 2023:

Budget at a glance

The Narendra Modi government focused on a slew of measures that expanded Capital Expenditure spending and tied in various priorities including Green Growth, Youth Power, and Inclusive Development.

Fiscal deficit would be brought down to below 4.5% by 2025-26, Finance Minister Nirmala Sitharaman said. She also said that tax receipts for the next fiscal are budgeted at ₹23.3 lakh crore and States would be allowed 3.5% of GDP as fiscal deficit.

What funds the deficit

The government plans to borrow a record ₹15.4 lakh crore from dated securities in FY24 to meet its expenditure requirement to prop up the economy. This is higher than the total borrowing of ₹14.21 lakh crore for the current financial year ending March 31, 2023.

Rupee come from

Borrowings and other liabilities account for the largest avenue from where the Budget money comes.

Rupee goes to

With 20% of its budget going into interest payments, the State’s share of taxes and duties and the Central sector scheme assume two major areas of spending for the government.

State-wise allocation of central taxes and duties

Here is the state-wise distribution of net proceeds of Union Taxes and Duties for Budget Estimates 2023-24. The distribution was conducted according to the recommendation of the 15th Finance Commission which fixed the share of states at 41% of the net proceeds of sharable Central Taxes and Income Tax.

Transfer to states/UTs

Allocation to Ministries

The Union Budget allocated a massive ₹5.94 lakh crore for the Defence Ministry, a 13% increase year-on-year from last year’s budget estimates.

Outlay for Major Schemes

The Union Budget 2023-24 document listed the new allocations for core welfare schemes that drive socio-economic development.

Finance Minister Nirmala Sitharaman announced a number of measures for the agriculture sector, including an increase in the credit target to ₹20 lakh crore, with focus on animal husbandry, dairy and fisheries.

% change for major schemes

Here’s a roundup of how the budgetary allocations for some of the key schemes have changed. While the MGNREGS budget saw a 32% decrease from the revised estimates of 2022-23, the outlay for PM-Kisan remained the same.

Railway Budget in a Glance

With an outlay of ₹2.40 lakh crore for the financial year 2023-24 compared to ₹1.40 lakh crore in the FY22-23, Finance Minister Nirmala Sitharaman said that the outlay for the railways is nine times the amount provided in 2013-2014.

Cheaper vs Dearer

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

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.”

Bihar Deputy CM Tejashwi Yadav sought to compare Union Budget 2023 with previous Budgets. 
| Photo Credit: PTI

Bihar Deputy Chief Minister Tejashwi Yadav on Wednesday said the Centre has cheated Bihar in the Union Budget 2023-24 and fooled the people of the State.

“Bihar is a backward State. The Prime Minister and the Centre had made commitments to grant Bihar a special package and status several times before but nothing has been done so far. They have only fooled the people of Bihar and cheated us,” Mr. Yadav said while speaking to mediapersons in Patna.

He also sought to compare Wednesday’s Budget with previous Budgets. “There are lots of differences between previous Budgets and this Budget. People should know about the revenue and expenditure and they should be told from where the money is coming and where it is going… but they are not”, said Mr. Yadav.

Meanwhile, Chief Minister Nitish Kumar, who is currently undertaking a ‘Samadhan Yatra’ (solution journey) across the State, said he couldn’t listen to the Budget speech as the yatra was pre-scheduled. “Once I wrap up today’s yatra, I will get to know the details,” Mr. Kumar told mediapersons in Supaul.

However, Finance Minister Vijay Kumar Choudhary, who was alongside Mr. Kumar, said the State’s demands were not met in the Budget. “The people of Bihar had a lot of expectations from the Budget but the Centre has again cheated the State,” said Mr. Choudhary.

The Congress also echoed similar views. Senior State Congress leader Ajit Sharma said, “Bihar has got nothing in the Budget and the people of Bihar have been cheated once again,” said.

Opposition BJP leaders termed the Budget “pro-people”. “It’s a balanced and pro-people Budget which will benefit all sections of people in the country,” said Vijay Kumar Sinha, BJP leader and Leader of the Opposition in the State Assembly.

Union Law Minister Kiren Rijiju said Phase III of eCourts Project will build on the gains made by the earlier two phases that proved crucial in the delivery of justice during the COVID-19 pandemic when courts were under lockdown protocol. File
| Photo Credit: PTI

Finance Minister Nirmala Sitharaman on Wednesday allocated ₹7,000 crore for the launch of Phase III of the eCourts Project that seeks efficient administration of justice.

Union Law Minister Kiren Rijiju, in a series of tweets, thanked Prime Minister Narendra Modi, the Finance Minister as well as Chief Justice of India D.Y. Chandrachud, who headed the eCommittee of the Supreme Court.

Track Budget 2023 latest updates here

“This will ensure “Ease of Justice” and further improves the justice delivery system that the Hon’ble PM @narendramodi ji has always envisioned,” Mr. Rijiju tweeted.

“I also compliment the Hon’ble Chief Justice of India, Dr D.Y. Chandrachud ji who as the Chairperson of the eCommittee of the Supreme Court of India has been instrumental in the success of the earlier phases of the eCourts Project and who personally supervised and mentored the formulation of the DPR [Detailed Project Report] of the Phase-III of the Project,” he added.

The Minister said Phase III of eCourts Project will build on the gains made by the earlier two phases that proved crucial in the delivery of justice during the COVID-19 pandemic when courts were under lockdown protocol.

“The project envisages various path breaking initiatives like: Digital & Paperless Courts that aim to bring court proceedings under a digital format in a court, thereby, limiting the use of paper and speeding up the disposal of cases, Online Court that focus on eliminating the presence of litigants or lawyers in the court, Expansion of scope of Virtual Courts beyond adjudication of Traffic Violations,” Mr. Rijiju said in the tweets.

The Minister noted that the use of Artificial Intelligence and Machine Learning would allow for data analysis to work towards reduction in pendency and understanding litigation patterns and forecasting future needs.

While 4,400 fully functional eSewa Kendras will provide assistance to all lawyers and litigants, live streaming of court hearings would allow for further transparency in judicial proceedings, he said.

Digitisation of all court records will further pave the way for a completely paperless environment in future. “An Online Dispute Resolution platform will encourage alternate dispute resolution and a robust video conferencing system will create seamless connectivity between the jails & courts, allowing for all bail appearances over VC,” Mr. Rijiju said.

File photo of officials collecting data as part of Census in 2011.
| Photo Credit: MURALI KUMAR K

In an indication that the census exercise — meant to be completed in 2021, but delayed because of COVID-19 — may not be conducted in 2023-24, the Union Budget allocation for the Census Survey and Statistics head has been slashed to ₹1,565 crore from the ₹3,676 crore allocated in 2022-23. The last census was held in 2011.

Overall, the Ministry of Home Affairs (MHA) has been allocated ₹1.96 lakh crore in the Budget 2023-24, a 5% hike from the almost ₹1.86 lakh crore allotted to it in the current fiscal.

In her Budget speech on Wednesday, Finance Minister Nirmala Sitharaman said that States must spend the entire fifty-year loan given to them on capital expenditure within the 2023-24 financial year. Parts of the outlay will also be linked to, or allocated for scrapping old government vehicles and housing for police personnel above or as part of police stations, she said.

Intelligence database funding up

The allocation for the National Intelligence Grid (NATGRID) has been more than doubled, growing a whopping 128% from ₹87.77 crore in 2022-23 to ₹200.53 crore in the coming year. NATGRID is one-stop destination for security and intelligence agencies to access databases related to immigration entry and exit, and the banking and telephone details of terror and crime suspects, using a “secured platform”. The Intelligence Bureau has seen an increase of 7% with an allocation of ₹3,418 crore in 2023-24.

The Official Languages division that promotes the use of Hindi language in official government work has been allocated a budget of ₹93.26 crore.

The Special Protection Group, which only provides security cover to the Prime Minister of India, has seen a 12% increase in budgetary allocation from ₹385 crore to ₹433 crore.

The Indo Tibetan Border Police Force that is deployed along the 3,488 km border with China has seen an 8% increase in its budget from ₹7,461 crore in the current fiscal to ₹8,097 crore in the next fiscal.

Managing border infra, movement

The budget for the Immigration, Visa and Foreigners Registration and Tracking System (IVFRT) has increased 30% from ₹175 crore to ₹229 crore. IVFRT’s core objective is to develop and implement a secure and integrated service delivery framework that facilitates legitimate travellers, while strengthening security.

Border infrastructure and management has seen its budget grow 29%, from ₹2,744 crore in 2022-23 to ₹3,545 crore in 2023-24. The provision is allocated for barbed wire fencing, construction of roads, observation posts and border outposts, installation of flood lights, induction of hi-tech surveillance along the Bangladesh and Pakistan borders, and for other such construction activities at India’s international borders

The Indian Cyber Crime Coordination Centre has been allocated ₹94 crore, almost 60% more than the ₹59 crore allocated the previous year

A large component of the budget, a total of ₹2,092 crore, has been reserved for “research,” which is almost 50% higher than the ₹1,400 crore revised estimates for 2021-22.

The modernisation of the Central Armed Police Forces, newly introduced as a budget head in 2022-23, has seen its allocation fall more than 18% to ₹202 crore, down from the ₹248 crore allotted earlier.

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Prime Minister Narendra Modi addressed the media at Parliament House on the first day of the Union Budget session of Parliament
| Photo Credit: Shiv Kumar Pushpakar

Prime Minister Narendra Modi on February 1 termed the Union Budget as the “first budget of Amrit Kaal” (the 25-year period between the 75th year of independence and its centenary) and said that it would lay a strong foundation for building a developed India.

“The first budget of Amrit Kaal will build a strong foundation for building a developed India. It gives priority to the deprived. This Budget will fulfil the dreams of an aspirational society including poor people, middle-class people, and farmers. I congratulate Nirmala Sitharaman and her team for this historic budget,” Prime Minister Modi said in a televised address after the presentation of the Union budget.

Also Read | Budget 2023 | Income tax rejig signals BJP’s return to core middle class support base close to 2024 polls

The Prime Minister called the middle class a big force to fulfil dreams of prosperous, developed India and said his government has taken many decisions to empower them. The Budget for this year rejigs tax slabs and exempts those with an income of ₹7 lakh per annum (up from ₹5 lakh per annum in the past) from paying personal income tax and also brings down the effective rate of tax for the higher tax brackets as well.

He hailed the unprecedented investment of ₹10 lakh crore in infrastructure and said it will give speed and new energy to development. Noting that PM Vishvakarma Kaushal Samman will bring a huge change in the lives of “Vishvakarmas,” the Prime Minister said that for the first time schemes relating to their support has been incorporated into the budget.

“Those toiling traditionally through their hands for the country, ‘Vishvakarmas’ are the creators of this country. For the first time scheme related to training and support for ‘Vishvakarma’ has been brought into the budget. Preparations have been made for their training, technology, credit and market support. PM Vishvakarma Kaushal Samman means PM Vikas will bring about a huge change in the lives of crores of Vishwakarma,” the Prime Minister said.

Prime Minister Modi underlined the government’s efforts to enhance the lives of women. “The government has taken several steps to make the lives of women, in rural and urban areas, easy. Women’s self-help groups will further enhance them. Special savings scheme will be started empowering women in households,” the Prime Minister said.

Union Finance Minister Nirmala Sitharaman presents the Union Budget 2023-24.
| Photo Credit: ANI

The Union Budget 2023 presented in the Parliament by Finance Minister Nirmala Sitaraman has come as a disappointment to the Telangana government which claimed that “there is nothing particular about Telangana”.

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

Finance Department officials termed the Budget as “business like” and said the Centre had in fact reduced the outlay for national rural employment guarantee scheme at a time when the State was asking for enhancement of mandays under the scheme. “There are of course some positives such as focus on capital expenditure and fiscal consolidation, but most of the State’s demands remained unconceded,” they said.

A senior official said the incentive of enhancement of 0.5% fiscal deficit to States was of no big use to the State as it is anyway not participating in the power sector reforms as mandated by the Centre to avail it.

Strong pitch made by Finance Minister T. Harish Rao to bring down the share of cesses and surcharges as a percentage of gross tax revenue to a level not exceeding 10% remained unfulfilled.

The State expressed concern during the pre-Budget meetings convened by the Union Finance Ministry that its interests are being compromised with the increase in recourse to levy of cesses and surcharges by the Centre claiming that tax devolution to States as percentage of gross tax revenue of the Centre worked out to 29.7% in 2022-23 as compared with the share of 41% recommended by the XV Finance Commission.

“Thus, increase in the amounts collected through cesses and surcharges has not only compromised the recommendation of the Constitutional institution but also the interests of States,” Mr. Harish Rao lamented. There was, however, no announcement forthcoming in the Union Budget regarding redressal of the grievance raised by the State.

The Union Finance Minister did not also make any mention about the State’s request to make applicable the decision to prospectively treat the off-Budget borrowings raised by the State public sector corporations serviced out of the State Budget as State borrowings from the next fiscal year.

Regarding the Centrally sponsored schemes, Mr. Harish Rao said: “We request that apart from reducing the number of schemes, a State should be given the option of selecting a few schemes which suit its requirements. This will be in the interest of promoting cooperative federalism.” Ms. Nirmala Sitaraman, however, did not touch upon the subject during her speech in the Parliament.

Union Budget 2023-24 Highlights | Income tax rebate limit increased to ₹7 lakh crore; Railways accorded highest-ever capital outlay

Another area of concern for the State has been the non-implementation of the promises made in the A.P. Reorganisation Act 2014 mandating the Centre to take fiscal measures including offer of tax incentives to promote industrialisation in the State.

Officials said so far, no major tax concessions have been offered to the State with exception of minor concessions in the depreciation rate.

The persistent demand for according national project status to Kaleshwaram project also went in vain as the Union Finance Minister did not touch upon the subject in her speech.