When you want to start something afresh, the most auspicious time to do that is Amrit Kaal. The Union Budget 23 is a howl to the world, proclaiming the strength of India to march towards Global leadership and turning on all the green signals to rush towards that goal, by setting a larger vision for a better tomorrow. When the budget had made a historical capital investment outlay of Rs 10,000,000,000,000/-(If you counted the zeros in it then, move on) coupled with a drastic reduction in the allocation towards the Rural employment scheme (MNREGA) to the lowest in the last 15 years, the message of the Government is loud, crisp and clear. – “We will take away your begging bowls but will give you opportunities to stand on your own feet, with dignity, integrity and passion”. The budget envisions a self-sustainable economy by creating better job opportunities, in place of the present subsidized economy. A day will come when the common man shall no more look towards the Government for breadcrumbs in the form of subsidies but shall self-sustain with pride and dignity and the budget is setting the stage for that better, brighter tomorrow.
The primary concerns that would have bothered the finance minister while penning down the budget were, dealing with the widening fiscal deficit, finding the funds for capital investment, tapping the tax revenues to fuel the funding speed, reducing the dependency on Public debt and finally, taming the GDP at better levels. The upcoming elections would also have added to her worry, as, after all, the vote matters!!
When I first heard the Rs 10,000,000,000,000/-, the first thing that came to my mind was the source of getting that huge chuck of money for immediate spending. From where do the government raise those funds? Debt, tax revenues and proceeds of disinvestments may be a proper answer. Let time proves that claim.
The one factor which impressed me in the Budget is the manner in which they increased the investment outlay without touching the sensitive tax nerves of the nation. Touching the tax buttons would have triggered much panic among the common man, who is struggling to fix their feet in the strong economic currents. To save the face and to hold the head high during the elections, the finance minister had foregone Rs. 49,00,00,00,00,000/-(count zeros again!) towards the tax revenue by reducing the rates of direct as well as Indirect taxes. Furthermore, a reduction in tax rates will put more cash into the pockets of commoners, which will spend in the market, to strengthen the productivity of the nation. It makes some sense now…..
Another doubt that came to my mind while listening to the announcement of the Customs Duty reduction was the possibility of reducing the fiscal deficit gap (Fiscal deficit = Total Expenditure – Total revenue (Excluding the borrowings)), as any reduction in import duty will result in more imports and that will only help to further widen the fiscal gap. But there is another side to that story. By flexing the capital muscles, the productivity of the nation will increase and that will boost the GDP of the nation (The fiscal deficit is calculated as a percentage of GDP) will increase and will finally result in the shrinking of the Fiscal gaps.
The budget had given due prominence to the Tribal community and to the rural, agrarian and fishermen populace of the country. From that angle, the Budget is addressing the concerns of the commoner too. The economic barometers spiked up, even in the gloomiest situation of falling Adani stocks, as the Finance Minister was not dared enough to touch the raw nerve of long-term capital gain tax on securities. So in that sense, the budget brought a smile on the faces of riches and rags! On the corporate front, the PAN is proposed as a common identifier and a single KYC is proposed across the regulators, thanks for getting relieved from the cobwebs of CIN, TIN, TAN, GSTIN etc and so many other similar complex numbers. The MSME is also getting the benefit of reduced interest rates under the new Credit guarantee scheme and the revamped Credit guarantee scheme is expected to be rolled out by 01st April 2023. Though I won't fully agree with the cliché ‘ ease of doing business’, due to my experiences with the Ministry of Corporate Affairs, the portal for corporate compliance. In the name of ease of doing business and transparency, the life of corporate professionals is in a true mess now. A few years back, filing a return with the Registrar of Companies was as easy as having two eggs for breakfast. But now, alas, it is so complex, as trying to eat iron balls for dinner. Anyway, I had to trust the words of the Finance minister when she claims that around 39000 compliances have been reduced and more than 3400 legal provisions have been decriminalised. Let's move on….
What is there for the states in it, is a most cliché question that can be asked by anyone while listening to the budget figures. There is a mention of the 50-year interest-free loan to states to spend on capital expenditure, other than that nothing is there.!! Is that the fact? When the nation is developing as a whole, won't that benefit all the states? Won't the benefit of the capital investment be spread across all the states? Won't the benefit of PM Avas yojana be for the benefit of all the people of the country? Won't the increased productivity of the nation be spread across all sections of the people across the nation? Won't the Rs 2.4 Lakh Crores investments in railways be benefitting all the states? If so, there is something for the States too in the budget.
That’s my take on the Budget for 2023.
Bijoy P Pulipra LL.M, FCS, IP, RV