On Wednesday, February 1, Finance Minister Nirmala Sitharaman introduced the Indian Budget 2023. The FM mentioned in her Budget speech that this is the first Budget of the Amrit Kaal. The main goals are inclusion, reaching the last mile, infrastructure and investment, unleashing potential, green growth, young power, and the banking industry.
To spur economic growth, the government increased capital expenditure outlay by 33% in the Indian Budget 2023 to Rs 10 lakh crores. This significant increase represents the government’s endeavor to boost growth potential, create jobs, attract private investment, and provide a buffer against global headwinds.
Budget 2023 prioritizes economic growth through capital spending, all-around inclusive development, ongoing legislative and administrative reforms, and lowering individual taxpayers’ tax burden. It also sends a strong signal to the global investment and business community by restating the government’s stance on fiscal deficit containment.
Private consumption and capital development, aided by an effective immunization policy, have shaped India’s growth story in an otherwise unstable global macroeconomic environment. Indian Budget 2023 aims to strengthen India’s position as a leading investment destination and will impact it’s international image.
A 33% rise in capital investment expenditure to 10 lakh crores, redesigned loan guarantee to MSMEs, and easing the credit cycle would boost capital formation and job development. The government’s green growth policy, particularly on energy transition, attempts to account the environmental impact of industrialization.
Furthermore, increasing tax rebates and rationalizing tax bands for individual taxpayers will result in more disposable income in their hands, thereby stimulating domestic spending. The agricultural credit target of 20 lakh crores will also help solve food security problems while positioning India as a leading exporter of food items.
FM’s Views On The Indian Budget 2023 And Global Economy
Smt. Nirmala Sitharaman mentioned while presenting the Union Budget 2023-24 in Parliament that the Indian economy is on the right track and, despite current obstacles, is headed for a bright future. She added that India’s rising global profile is due to several accomplishments such as unique World Class Digital Public Infrastructure such as Aadhaar, Co-Win, and UPI.
She also stated that this Indian Budget 2023 aims to build on the foundation laid in the previous Budget as well as the blueprint drawn for India@100, which envisions a prosperous and inclusive India in which the fruits of development reach all regions and citizens, particularly our youth, women, farmers, OBCs, Scheduled Castes, and Scheduled Tribes.
The Finance Minister stated that at these times of global problems, India’s G20 presidency provides a unique chance to deepen its role in the global economic system. With the theme ‘Vasudhaiva Kutumbakam,’ India is leading an ambitious, people-centred agenda to solve global challenges and support long-term economic development, she noted.
She stated that the Indian economy has grown from the 10th to the 5th largest in the world in the last nine years. According to the Finance Minister, our vision for the Amrit Kaal involves a technology-driven and knowledge-based economy with solid public finances and a vibrant financial sector, and Jan Bhagidari through Sabka Saath Sabka Prayas.
She went on to say that the economic program for realizing this vision focuses on three things: giving enough chances for individuals, particularly youth, to achieve their aspirations, providing a strong impetus to growth and job creation, and finally, strengthening macroeconomic stability.
She stated that during Amrit Kaal, the following four possibilities can be transformative in serving these focal areas in our journey to India@100: Economic Empowerment of Women, PM ViKAS, Tourism and Green Growth. According to the Finance Minister, the country has a lot to offer both domestic and foreign tourists, and there is a lot of promise there.
She noted that the industry offers several chances for employment and entrepreneurship, particularly for young people, and that tourist promotion will be undertaken on a mission basis, with active engagement of states, the convergence of government programs, and public-private partnerships.
Speaking about Green Growth, the FM stated that India is implementing several programs for green fuel, green energy, green farming, green mobility, green buildings, and green equipment, as well as regulations for energy efficiency across diverse economic sectors. She noted that these green growth activities serve to reduce the carbon intensity.
“India is at the forefront of popularizing millet, whose consumption promotes nutrition, food security, and farmer welfare,” Smt. Sitharaman cited. She stated that India is the world’s largest producer and second largest exporter of ‘Shree Anna,’ growing numerous varieties such as jowar, ragi, bajra, kuttu, ramdana, kangni, kutki, kodo, cheena, and sama.
She said that these millets have a lot of health benefits and have been a vital part of our food for centuries. She added that to make India a global hub for ‘Shree Anna,’ the Indian Institute of Millet Research in Hyderabad will be supported as the Centre of Excellence for sharing best practices, research, and innovations on an international scale.
Expert Views On Indian Budget 2023.
According to Aniruddha Sarkar, Chief Investment Officer, Quest Investment Advisors, “The Indian Budget 2023 has clearly been a tremendous morale booster for middle-class people who would realize large savings. The enormous commitment for capital investment will undoubtedly be the cherry on top of this budget.”
He added that, so far, there was nothing negative about that budget announcement, and it would be a gamechanger in his opinion. The FM has decided to continue The Make in India campaign. Infrastructure capital investment has increased by 33% over the previous year, demonstrating the government’s ongoing emphasis on infrastructure development.
“Inverted duty structure has been handled for several industries too. Customs tax is recommended to be cut from 21% to 13% across industries. It is a refreshing difference. Relief in the form of decreased customs duty on inputs used in manufacturing mobile phones is also particularly proposed,” said Mahesh Jaising, Partner, Deloitte India.
“A 33% increase in infrastructure development spending to 10 lac crores could help the sector for overall economic development,” said Poonam Kaura, Partner-Government & Public Sector Advisory- Nangia Andersen LLP. According to Debashish Biswas, Partner Deloitte India, this capex push will enable economic growth and create more jobs.
“Huge capital expenditure in infrastructure will have a significant multiplier effect on the economy,” Biswas explained. According to Rumki Majumdar, Economist, Deloitte India, with an emphasis on job creation (especially for the youth) and skill and education, Indian budget 2023 aims to create chances for a young, dynamic, and ambitious India.
“A 33% increase in capex spending suggests that the government means business and is willing to go to any length to improve efficiency and competitiveness on par with its competing peers; this effort to build on previous efforts will likely attract more investors and start a virtuous cycle of investments,” Majumdar said.
In the 75th year of India’s independence, the world has acknowledged the Indian economy as a “bright light,” with economic growth estimated at 7%, the highest among major economies, despite the significant global downturn caused by COVID-19. Overall, Indian Budget 2023 is a progressive growth-oriented budget that balances the budget and lays the groundwork for India to become a $5 trillion economy by 2026 and a developed country by 2047.