Illustration: Satish Vellinezhi
With the global economy faltering, Finance Minister Nirmala Sitharaman in her fifth Union Budget did little for India by trying to create a feel-good factor among specific segments of the electorate, while reducing domestic consumption and making private investment reluctant. Tried to make an ark. As the government prepares for the 2024 Lok Sabha elections.
The FM summed up the achievements of the BJP-led government since 2014 as “leaving no one behind”, doubling per capita income to ₹ 1.97 lakh, increasing formalization of the economy and outlining targeted income expansion Took just 200-odd words to build. benefits. He then used the rest of his budget speech to pacify sections of society who might have been left behind in his nine years in office.
To appease the salaried middle class, disheartened by the continuing streak of high inflation, the tax-free limit was increased from ₹5 lakh to ₹7 lakh under the new non-exemption income tax regime. The limit for leave encashment of non-government employees at the time of retirement has been increased from ₹3 lakh to ₹25 lakh.
help those left behind
The first budget of the Amrit period – the 25-year period leading up to the centenary of Indian independence in 2047 – aims to build on existing “inclusive growth” efforts that give overall priority to the disadvantaged, the minister said. He launched new socio-economic development schemes: PM Particularly Vulnerable Tribal Groups Development Mission, and PM Vishwakarma Kaushal Samman to support weaker sections and artisans from Scheduled Castes, Scheduled Tribes and Other Backward Classes.
Certain measures were also announced to provide relief to the micro, small and medium enterprises which have faced successive setbacks in the last few years from demonetisation to the pandemic.
Focus on polling-pleasing jobs
While the finance minister addressed the aspirations of various sections through his speech of less than 90 minutes, the broad underlying message was aimed at India’s restive youth and their hopes of securing jobs.
The reference to “job” creation in the budget speech reached a six-year high, with the minister flagging it seven times in different contexts, compared to only two mentions in the 2022-23 budget speech and three references before that.
Driving growth and job creation, and creating opportunities especially for the youth, he said, was a key focus of the government’s economic agenda to achieve its vision for Amrit Kaal, which will end in 2047. .
It is perhaps no coincidence that the last time this high level of job creation (with six mentions) was when the late Arun Jaitley presented the budget for 2018-19 – another budget presented in the year before general elections.
Capex plan depends on the states
Apart from the elections, the budget’s grand plan to increase capital expenditure on infrastructure to ₹10 lakh crore in the hope that it gives more traction to the revival in private investment will depend on the states – who have to spend ₹1.3 lakh crore as presented. 50-year interest-free loans – seems to be working, and Indian industry is being bold enough to take risks during a tumultuous, unpredictable period, also marked by rising interest rates.
Deposit limit on savings schemes doubled to Rs 30 lakh for senior citizens and a new small savings scheme was also announced for women to invest up to Rs 2 lakh with assured 7.5% returns for two years .
The increase in small savings collections will help the government meet its fiscal deficit target of 5.9% of GDP in the coming year (from an estimated 6.4% in 2022-23), with net market borrowing of ₹11.8 lakh crore, Ms. Sitharaman said.
While the Economic Survey has projected a growth of 6.5% for the coming year, the budget has projected a nominal GDP growth of 10.5% for the revenue count. Finance Secretary T.V. Somanathan explained that this could be derived from any combination of real growth and inflation, and was not a benchmark for expectations about either.