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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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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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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