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Economic Survey released on 31st January this year had projected that the GDP growth in 2022-23 will remain7% whereas for the year 2023-24, it is forecasted to be 6.5%. The estimates of receding growth in India are inline with such estimates revealed earlier by the IMF, World Bank, etc. The growth slowdown necessarilyconnotes a decrease in income, both for the individuals as well as the economy. Despite decreasing growth,Finance Minister (FM) presented a Budget that lays down an increase in total expenditure from ` 39.44 lakhcrore in 2022-23 to ` 45.03 lakh crore in 2023-24. It indicates that one or more of the following options couldhave been adopted by the FM while preparing the Budget viz. increase in taxes, increase in borrowings ordecrease in public expenditure.The first option i.e. to finance total expenditure considerably through the imposition of more taxes gets nullifiedon account of slowing growth amid high unemployment in the economy. It left the FM with the latter twooptions. A preliminary investigation of the budget documents reveal that both increase in borrowings anddecrease in public expenditure have been resorted to. To the extent borrowings are concerned, government isprepared to borrow nearly ` 18 lakh crore in this fiscal which is ` 1,25,620 crore higher than the budgeted figuresof 2022-23 (` 31497 crore than revised figures of 2022-23). It is pertinent to mention here that government isalready reeling under high debt (expected to reach ` 155 lakh crore by March 2023) and another ` 18 lakh croresourced this year is going to make the going tough for the government. Not only the interest payments are acause of concern, rather the amount that was borrowed by the government in 2014 is also getting due this yearfor repayment. A brief of interest payment liability of the government of India for the past one and a half decadeor so, is highlighted in table 1. Mounting interest and principal repayments compelled the government to prunethe public expenditure.Table -1Interest payment as apercentage of Total ReceiptsYear Interest payment (in percent)2010-11 28.402011-12 34.642012-13 34.032013-14 35.422014-15 34.902015-16 35.102016-17 33.392017-18 34.102018-19 34.972019-20 34.922020-21 40.092021-22 36.452022-23 38.672023-24 39.75Note: Total receipts are calculated after deducting the amount of borrowingSource: Union Budget for different yearsDespite being the government’s last full budget before the general elections of 2024, there are hardly any bigticket reforms in it. Unlike previous few budgets, there was hardly any introduction of a big scheme likeAyushman Bharat, Ujjwala or PM Kisan. Endeavour of the FM had been to cling around the existing schemeswith a nominal increase or decrease in expenditure under different sectors. Few important sectors which saw amarginal increase in allocation between 2022-23 and 2023-24 turned out to be Education sector (from ` 1.04lakh crore in 2022-23 to ` 1.12 lakh crore in 2023-24), Health sector (from ` 86000 crore to ` 89000 crore),Agriculture sector (from ` 83521 crore to ` 84214 crore) and Rural Development sector (from ` 2.06 lakh croreto ` 2.38 crore). On the contrary, few major sectors that saw a decline in allocation between 2022-23 and 2023-24 remained MGNREGS (from ` 73000 crore to ` 60000 crore), PM Kisan (from ` 68000 crore to `60000 crore),Food Subsidy (from ` 2.06 lakh crore to ` 1.97 lakh crore), Urban Development (from ` 76549 crore to ` 76432crore) and Petroleum (from ` 5813 crore to ` 2257 crore).Along with this, there is also a decrease in Finance Commission grants accruing to the state governments forfunding the local bodies and state disaster relief funds. In 2022-23, ` 1,92,108 crore were budgeted of which`1,73,257 crore were actually allocated. For 2023-24, this figure has further been pruned to ` 1,65,000 crore i.e. `8,000 crore further less. In the absence of expenditure by the centre, state governments will have to resort tomarket borrowings amid existing high rates of interest thereby making their financial health fragile.Absence of ClarityApart from high borrowings and low public expenditure, government seems to have been confused with regardto its stand on small savings schemes. Where on one hand, the government is promoting small savings byintroducing Mahila Samman Saving Certificate, Senior Saving Citizen Scheme and Postal Monthly IncomeScheme, on the other, the government is laying to rest the small savings by ending the old tax regime.Pertinently, the old tax regime offers tax rebate upto ` 1.50 lakh to those who invest in Life and HealthInsurance, Public Provident Fund, National Saving Certificate, New Pension System, loans for housing etc.Gradual discontinuation of the old tax regime means low or no savings under small savings schemes. It alsodenotes that the businesses pertaining to insurance companies, real estate, Equity Linked Saving Schemes andpost office schemes, etc. will get affected. Insurance Regulatory and Development Authority of India (IRDAI)mission “Insurance for all by 2047” launched in October 2022 with an aim to increase insurance penetration inthe country will get severely affected. Similarly, real estate and construction sector which is the second largestemployment provider sector and gives employment to nearly 7 crore people will be negatively affected. Notonly will this move rob the people of obligated adoption of social security measures for their future, rather willdent the borrowing capacity of the government too. In this budget itself government has proposed to borrow `4.73 lakh crore from small savings schemes by issuing securities. Absence of such schemes will force thegovernment towards the procurement of external debt which is highly precarious and can put India on the sameeconomic track that Pakistan, Egypt, Sri Lanka etc. are witnessing today. Short sighted view of increasingconsumption demand by killing the long term social security of the masses is beyond understanding.No action against inequalityOxfam’s recently released report on the opening day of the World Economic Forum 2023 in Davos, Switzerlandand entitled as “Survival of the Richest: The India Supplement”, highlighted the widening gap between the richand the poor in India. The report categorically stated that top 1% of India’s richest people owned about 40.5% ofIndia’s total wealth in 2021, while the bottom 50% (70 crore) owned only 3%. Since the start of pandemic inApril 2020 till November 2022, the wealth of India’s billionaires increased by 121%, or ` 3,608 crore per day, or` 2.5 crore per minute. In contrast, the number of Indians affected by hunger increased from 19 crore to 35 crore.Not only this, 64% of the total GST collection (` 14.83 lakh crore) in 2021-22 got collected from the bottom50% Indian population, while only 3% came from the top 10% rich. Similar estimates were earlier released bythe World Bank in October 2022, where it was highlighted that covid worldwide plunged 7.1 crore people intopoverty during the year 2020, of which 5.6 crore were Indians. It was being sincerely awaited if this budgetbefore general elections of 2024 could address this issue. Table 2 and 3 state the gravity of the matter and itsredressal through latest fiscal policy document.Table -2Receipts of the Central Governmentfrom different sources (as percentage of total receipts)Year Tax Receipts Non-Tax Receipts Capital Receipts2010-11 47.60 18.26 34.152011-12 48.28 9.32 42.392012-13 52.60 9.74 37.662013-14 52.32 12.75 34.932014-15 54.31 11.89 33.792015-16 52.70 14.03 33.272016-17 55.76 13.81 30.432017-18 58.01 9.00 32.992018-19 56.90 10.18 32.922019-20 50.51 12.18 37.312020-21 40.64 5.92 53.452021-22 47.57 9.62 42.802022-23 49.83 6.25 43.912023-24 51.75 6.69 41.54Source: Union Budget for different yearsIt is clear from table 2 that focus of the existing union government remained on collecting the revenue throughtaxes. Share of tax receipts that used to be 47.60% in 2010-11 increased to 51.75% in 2023-24 (BudgetEstimates). Contrary, the share of non-tax receipts that was 18.26% in 2010-11 decreased to 6.69% i.e. therevenue of the government from interest receipts, dividends and profits and external grants has decreased. Eitherthe disinvestment of the public sector units or inefficiency could be the reason for decrease in non-tax receiptsof the government. Similarly, share of capital receipts (disinvestment or more borrowings) has increased from34.15% to 41.54% between 2010-11 and 2023-24 (budget estimates). On the whole, it concludes thatgovernment has more or less continued with more imposition of taxes, excessive mobilization of borrowingsand disinvestment of Public Sector Units. .Table -3Tax collection of the Central Government in different years(as percentage of gross tax revenue)Year Corporate Tax Income Tax Wealth Tax Direct Tax Indirect Tax2010-11 37.66 18.48 0.09 56.23 43.772011-12 36.31 19.14 0.09 55.54 44.452012-13 34.39 19.44 0.08 53.91 46.092013-14 34.65 21.33 0.09 56.07 43.932014-15 34.45 21.35 0.09 55.89 44.112015-16 31.20 19.76 0.01 50.97 49.032016-17 28.26 21.25 - 49.51 50.482017-18 29.77 22.45 - 52.22 47.782018-19 31.90 22.74 - 54.64 45.372019-20 27.70 24.51 - 52.21 47.792020-21 22.58 24.03 - 46.61 53.392021-22 26.28 25.69 - 51.97 48.022022-23 27.45 26.78 - 54.23 45.772023-24 27.51 26.99 - 54.50 45.50Note: Wealth Tax was discontinued from 2016-17 onwardsSource: Union Budget for different yearsTable 3 discusses the nature of taxes imposed. It is evident that the share of direct taxes in the total kitty of taxescollected by the central government has decreased from 56.23% to 54.50% in 2023-24 (budget estimates),whereas the share of indirect taxes has increased from 43.77% to 45.50% between the time period 2010-11 and2023-24. Pertinently, during the covid affected years i.e. 2020-21 and 2022-23, indirect tax collections remainedexceptionally high. It leads us to the conclusion that indirect tax which is highly regressive in nature and whoseincidence and impact can be shifted on to others and which affects the poor more than the richremained in vogue, progressively. In context of direct taxes too, the share of collections from corporate taxdecreased considerably from 37.66% in 2010-11 to 27.51% in 2023-24, whereas the share of income taxcollections increased from 18.48% to 26.99% between 2010-11 and 2023-24. Wealth tax which is imposed onthe income of the person was abolished from the year 2016-17.It sums up that efforts of the government remained focused upon revenue collection from indirect taxes which ishighly regressive. In context of direct taxes too, endeavor remained that corporates should not be overburdenedeven though the income tax payers may have to face the wrath. Further, in the income tax category too, higherincome group i.e. those earning more than `15 lakh annually should be spared in one way or the other. Thepresent Budget is no exception to the previous budgets and tows the same line like the previous budgets. Thecondition is highly precarious and needs to be arrested here and now.What should have been doneAmid the accentuated circumstances, government should have proposed the tax on the wealth of the top 1%richest in India. Similarly, the Multinational companies which try to save tax on one pretext or the other, shouldhave been dealt sternly. Since the problems in India are deep rooted in rural areas hence, the solution to it shouldalso come from the rural areas. The revenue collected by taxing the rich could have been channelized as capitalexpenditure towards rural areas for the developmental activities. As the rural development works (constructionof paved roads, paved streets, clean water source, etc.) are carried out on a small scale, it could have providedemployment to the common people in the villages alongwith an increase in their income. Besides, the smallscale units which have closed down due to demonetization, GST or lockdown could have been revived with thehelp of a special package. So far, government packages remained directed towards those units only which havesurvived these catastrophes.Such measures could have gone a long way towards the revival of the informal sector in general and raising thepurchasing power of the people in particular. It could have also fostered the private investment automaticallyand India in true sense could have experienced the amritkal.