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Any annual Budget that the government presents, generally at the end of the financial year, is
a record of the government’s estimated or projected incomes and expenditures for the coming
financial year. The nature of the Budget may vary according to the needs of the economy. At
present the Indian economy has been passing through sustained high unemployment crisis by
more than 9% at present, according to CMIE report. The inflation is high for about a year,
particularly the inflation of the core sector is still high, that is beyond RBI’s tolerable level,
many units of MSME sector are trying hard to get leas of lives, low export demand, high
current account deficit (CAD) and most importantly the low private consumption and
investment. Therefore, it is expected that the coming Budget must address the factors as far
as possible for it.
Some of the expected special allocations that the Budget 2023-24 can propose
First, fiscal deficit target may not be much below 6% of the GDP. This is because the private
consumption and private investment is at subdued levels. The only treatment has been high
government capital expenditure to float the economy. This is why there should not be much
scope for new tax concessions. But for some areas like home loan, there can be some tax
concessions at least for low budget houses as it is now hard for a big section of home buyers
to pay EMI in higher interest period. Moreover, there is not high scope for growth of tax
collection because the amount of collection is already very high in the current FY and also
because projected slow growth of GDP in FY 24.
Secondly, customs duty for inputs of production can be lowered because otherwise
production units of domestic economy would lose competitiveness. The production linked
incentive scheme is helpful for domestic as well as foreign investors But if input prices is
higher it will be difficult to remain competitive in the present economic scenario. To make
the PLI scheme more fruitful it should be addressed in the Budget by lowering customs for at
least some targeted goods.
Thirdly, Special incentives for the very small and micro units are important. Otherwise rural
and semi-urban industrial sector would not stay in the production activities to a large extent.
Fourthly, transport sector has been smaller by about 15% if number of people engaged in the
sector is concerned compared to that before the pandemic. So a special attention for the sector
is needed. This sector employs a huge number of people.
Fifthly, for employment generation bigger allocation should be proposed in the Budget. At
the same time in the urban sector special scheme for job creation should also be strengthened.
Sixthly, special allocation must be announced in the Budget on the health sector to deal with
the renewed anxiety about the spread of a new variant of Omicron virus in different parts of
world. China has been most affected country as of now. Moreover, South Korea, USA and
many other countries have also been affected by this. Prime Minister Narendra Modi chaired
a meeting of top government officials to assess India’s Covid 19 preparedness. Modi advised
the state governments to audit Covid 19 specific facilities to ensure the operational
preparedness of hospital infrastructure, including oxygen cylinders. So a considerable amount
of allocation is expected to make the country prepared to face any health emergency.
Seventhly, subsidy bill for the FY 24 is expected to be lower than it has been in the present
FY. The total subsidies on food, fertilisers and fuel, considering revised expenditure, will be
532,446.79 crore if the recent supplementary grants are allowed. Out of this, food subsidy is
rs 287,179.34 crore, fertilizers include rs 214,511.27 crore and rs 30,756.18 crore for
petroleum subsidy. But for various reasons in the coming FY it is expected that the subsidy
will be less by about rs 150,000 crore (Harish Damodaran, India Express, 23, December).
The allocation can be increased in constructing agricultural infrastructure or on any other
areas on rural non farm sector.
Lastly, education sector, particularly, the higher education sector should be allocated more
money. This is because reports are coming about the inadequacy of funds in state run
Universities and colleges. If this goes on India will lose its quality of human resources in
future.