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.”

Finance Minister Nirmala Sitharaman holding the Budget Papers at the North Block in New Delhi on February 01, 2023.
| Photo Credit: R.V. Moorthy

Finance Minister Nirmala Sitharaman on February 1 raised the personal income tax rebate limit, doled out sops on small savings, and announced one of the biggest hikes in capital spending in the past decade as she did a tightrope walk in the Budget between staying fiscally prudent and meeting public expectations in the year before general elections.

Ms. Sitharaman’s fifth straight Budget comes at a time when the economy is slowing and there is a need for increased spending on social sectors as well as ramping up incentives for local manufacturing. The Modi government will seek third term next year and the BJP will face nine Assembly elections this year.

Announcing its last full budget before the 2024 elections, the NDA 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. This was also accompanied by major tax announcements for the salaried class, with changes in tax slabs and a clear intention to shift to the new tax regime.

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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.

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“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.

A worker in one of the oldest and largest diamond polishing units of Surat checking its dazzle. File image for representation
| Photo Credit: Vijay Soneji

To harness the potential of Lab Grown Diamond (LGD) or synthetic diamond segment, the Union Budget 2023-24 presented by the Finance Minister Nirmala Sitharaman has laid emphasis on research & development as well as to make it competitive in the international markets.

“LGD is a technology-and innovation-driven emerging sector with high employment potential. These environment-friendly diamonds which have optically and chemically the same properties as natural diamonds. To encourage indigenous production of LGD seeds and machines and to reduce import dependency, a research and development grant will be provided to one of the IITs for five years,” the FM said in the Parliament.

Also Read: Key Highlights from Union Budget 2023-24

To reduce the cost of production, the FM has proposed to reduce basic customs duty on seeds used in their manufacturing. Also she has proposed to increase customs duties on silver dore, bars and articles to align them with that on gold and platinum.

Vipul Shah, Chairman, Gem & Jewellery Export Promotion Council (GJEPC) said the FM” decision to accept their recommendation pertaining to the LGD industry would ensure India’s end-to-end world leadership in rough to finished lab-grown diamond and jewellery manufacturing.

“Another positive pro-growth move is that the conversion of physical gold into digital gold will not attract capital gains tax,” he said.

Saiyam Mehra, Chairman, Gem & Jewellery Council (GJC), the domestic council of the industry said, “The Gems & Jewellery Industry’s critical concerns are not addressed in the Union Budget 2023-24. While the Research and Development grant will be provided to one of the IITs for the development of Lab Grown Diamond seeds and machines, the other sectors of the industry have been ignored.”

“The reduction in Gold Custom Duty in this Budget was our big expectation, which has severely hampered the industry and encouraged smuggling and grey market. GJC has been actively representing the reduction in customs duty of Gold over past many years. However, the Silver Dore Bars Custom Duty has been brought at par with Gold and platinum in this budget. This move will adversely affect the masses,” he said.

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Finance Minister Nirmala Sitharaman addressing the Post Budget press conference at the National Media Centre in New Delhi on Wednesday, January 1, 2023.
| Photo Credit: R.V. Moorthy

Finance Minister Nirmala Sitharaman announced new initiatives for the cooperative sector in her 2023-24 Union Budget speech. The Minister stated that new cooperatives that commence manufacturing activities before March 31, 2024, shall get the benefit of a lower tax rate of 15%, as is presently available to new manufacturing companies.

“Secondly, I propose to provide an opportunity to sugar cooperatives to claim payments made to sugarcane farmers for the period prior to assessment year 2016-17 as expenditure. This is expected to provide them with a relief of almost ₹10,000 crore,” the Minister said.

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She announced a higher limit of ₹2 lakh per member for cash deposits to and loans in cash by Primary Agricultural Cooperative Societies (PACS) and Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) adding that a higher limit of ₹3 crore for Tax Deducted at Source (TDS) on cash withdrawal is being provided to cooperative societies.

She said that for small and marginal farmers, and other marginalised sections, the government is promoting cooperative-based economic development model. A new Ministry of Cooperation was formed in 2021. The government has already initiated computerisation of 63,000 PACS with an investment of ₹2,516 crore. In consultation with all stakeholders and States, model bye-laws for PACS were formulated enabling them to become multipurpose PACS. A national cooperative database is being prepared for countrywide mapping of cooperative societies.

“With this backdrop, we will implement a plan to set up massive decentralised storage capacity. This will help farmers store their produce and realise remunerative prices through sale at appropriate times. The government will also facilitate setting up of a large number of multipurpose cooperative societies, primary fishery societies and dairy cooperative societies in uncovered panchayats and villages in the next 5 years,” she said.

Lauding the efforts, Union Home and Cooperation Minister Amit Shah said on Twitter that the decentralised storage capacity will play an important role in Prime Minister Narendra Modi’s resolve to increase the income of farmers.

“With the plan to set up the world’s largest decentralised storage capacity in the budget, farmers associated with cooperative societies will be able to store and sell their produce at the right time and get a fair price,” Mr. Shah said.

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“A National Digital Library for children and adolescents will be set up for facilitating the availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility,” Finance Minister Nirmala Sitharaman said in the Budget speech. Photo: Special Arrangement

Union Finance Minister Nirmala Sitharaman proposed a national digital library for children and adolescents along with strengthening of the National Book Trust, for building a “culture of reading” and to make up for pandemic-time learning losses.

“A National Digital Library for children and adolescents will be set up for facilitating the availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility,” Finance Minister Nirmala Sitharaman said in the Budget speech.

She said the States would also be encouraged to set up physical libraries at panchayat and ward levels, and provide infrastructure for accessing the National Digital Library resources.

The Minister added that the National Book Trust, Children’s Book Trust and other sources would be encouraged to provide and replenish non-curricular titles in regional languages as well as English, which could be used by the brick and mortar libraries set up by the States.

The latest Annual Status of Education Report 2022 conducted by NGO Pratham showed that children’s basic literacy following schools closures during COVID-19 had taken a big hit, with their reading ability as compared to numeracy skills worsening and dropping to pre-2012 levels.

The Minister also spoke of collaborating with NGOs that worked towards promoting literacy to achieve the objectives.

She said that financial sector regulators and organisations would also be encouraged to provide age-appropriate reading material for the libraries to inculcate financial literacy.

Budgetary allocation

As far as the budgetary allocation for the Ministry of Education was concerned, it had seen a total increase of 8.2% from ₹1,04,277 crore to ₹1,12,898 crore, out of which school education saw a rise in allocation of 8.4% and higher education a rise of 7.9%.

The increase in Budget for school education was almost entirely due to the PM SHRI scheme which received ₹4,000 crore. The scheme was announced in September 2022 to turn 14,500 existing schools into model schools for the implementation of the National Education Policy, 2022. The scheme has a total project cost of ₹27, 360 crore for five years between 2022 to 2023 and 2026 to 2027, with the Centre’s share at ₹18,128 crore. Schools would be selected only if their State government agreed to implement the NEP “in entirety with the Centre laying down commitments”. Last fiscal, the scheme received ₹1,800 crore.

Another notable hike under school education was for Kendriya Vidyalaya Sangathan where the allocation went up from ₹7,650 crore to ₹8,363 crore— an increase of 9%.

The PM POSHAN scheme, earlier known as the Mid-Day meals scheme, increased by 13.35% from ₹10,233 crore to ₹11,600 crore, which was however, lower than the revised estimate of the last fiscal of ₹12,800 crore. The scheme provides one hot-cooked meal to children in pre-primary or Bal Vatikas up to Grade 8.

The Samagra Shiksha scheme, which covers pre-primary to higher secondary grades, saw a negligible increase of 0.18% at ₹37,453 crore as it continued to be dogged by under-utilisation of funds allocation. Though it was granted ₹37,383 crore in last year’s budget, under the revised budget the amount fell to ₹ 32,151— or 14% of the funds remaining unutilised.

Under higher education, the allocation for the University Grants Commission went from ₹4,900 crore to ₹5,360 crore. The support for the Central Universities increased by ₹2,262 crore at ₹11,252 crore, and IITs rose by ₹1,246 crore to a total of ₹8,791 crore. Grants to the National Institute of Technology and the Indian Institutes of Engineering Science and Technology received an increased grant by ₹585 crore.

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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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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: PTI

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.

Also Read | Budget 2023 | How is money allocated and where does it come from?

Finance Minister Nirmala Sitharaman while presenting the Budget on February 1 said the net market borrowings from dated securities are estimated at ₹11.8 lakh crore to finance the fiscal deficit in 2023-24.

“The balance financing is expected to come from small savings and other sources. The gross market borrowings are estimated at ₹15.4 lakh crore,” she said.

The government has raised ₹12.93 lakh crore till January 27, which is 91% of the overall borrowing target of ₹14.21 lakh crore estimated for 2022-23.

The indebtedness of the Centre and State governments together is equal to 83% of the annual gross domestic product (GDP).

The Finance Minister retained the fiscal deficit target at 6.4% despite an increase in the subsidy bill.

“Coming to 2023-24, the total receipts other than borrowings and the total expenditure are estimated at ₹27.2 lakh crore and ₹45 lakh crore, respectively. The net tax receipts are estimated at ₹23.3 lakh crore,” she said.

She pegged the fiscal deficit at 5.9% of GDP for FY24.

“In my Budget Speech for 2021-22, I had announced that we plan to continue the path of fiscal consolidation, reaching a fiscal deficit below 4.5% by 2025-26 with a fairly steady decline over the period. We have adhered to this path, and I reiterate my intention to bring the fiscal deficit below 4.5% of GDP by 2025-26,” she said.

Also Read | Budget likely to cap fiscal deficit at 5.8% for FY24; Centre’s borrowings to rise

Ms. Sitharaman had pegged gross market borrowing through dated securities for 2022-23 at ₹14,95,000 crore.

However, the government in September 2022 decided to cut the gross borrowing to ₹14.21 lakh crore during FY23. The gross borrowing for 2021-22 was ₹12,05,500 crore.

With regard to the net borrowing, the government estimated a record ₹11.6 lakh crore raising from the market in 2022-23.

This was nearly ₹2 lakh crore higher than the current year’s Budget estimate of ₹9.7 lakh crore.

The total market borrowings of the government for 2022-23 are estimated at ₹11,58,719 crore, according to the previous Budget document.

The revised estimates for the same for 2021-22 are ₹8,75,771 crore against the Budget estimates of ₹9,67,708 crore.

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