Agriculture to zero emissions: here’s the budget in 26 letters

Farm issues always take up a significant part of any union budget and this year was no different. The big talking point is the increase in the credit target to ₹20 trillion. Another ₹2,200 crore has been set aside for a new clean plant programme.

Batteries

The future of sustainability will depend on batteries, and the budget is mindful of that reality. A capacity of 4,000 MWh of battery energy storage systems is being supported with viability gap funding. A more immediate impact will be felt by the country’s EV industry, as the import duty on goods and machinery used in the manufacture of lithium-ion cells has been waived. This should bring down the cost of EVs and provide a further impetus to the sector.

Capital Expenditure

A sharp 33% increase in the capital investment outlay to ₹10 trillion is the big headline of finance minister Nirmala Sitharaman’s fifth budget. This is the third year in a row that she has loosened the purse strings. And while efforts have been made to shore up private investments, it underlines the intent of the government to keep up capital expenditure.

Defence

The armed forces did not find a mention in the budget speech, but at ₹5.44 trillion, the allocation for defence (an increase of 1.5%) is at an all-time high. Almost a quarter of this has been set aside for purchasing new weapons, aircraft, warships and other hardware. India’s tenuous relations with its neighbours on both the eastern and western borders require the armed forces to be prepared.

e-Courts

Justice delayed is justice denied. The budget has made an outlay of ₹7,000 crore towards the third phase of the e-courts project to try and alleviate the burden on the justice system. The project seeks to increase digitization in the Indian judiciary while making it easier for citizens to seek legal redressal. In a country where 85% of cases are pending in district courts, this is a small price for a potentially big reform.

Fiscal Consolidation

While it has all the makings of an election budget, Sitharaman has not been profligate and has stayed true to the fiscal consolidation path. On the back of a deficit of 6.4% for FY23, the target for the next fiscal year has been set at 5.9%. The finance minister exuded confidence about taking it below 4.5% by FY26.

Green Growth

One of the seven priorities of this budget is green growth, and it figured the maximum number of times in the budget speech. It is all encompassing, running the gamut from green fuel and energy through farming and mobility to buildings and green equipment. To walk the talk, an outlay of ₹35,000 crore for priority capital investments towards energy transition and net zero objectives has also been made. The message is clear — the colour of money, going forward, will be green.

Housing

One of the government’s flagship schemes, which has seen a 66% spike in allocation over the previous year to ₹79,000 crore, is the PM Awas Yojana. The scheme targets people at the bottom of the pyramid with the aim of providing them a roof over their heads. This targeted incentive also doubles up as a growth driver and employment generator by virtue of the demand it generates in the real estate sector.

Import duties

There have been widespread changes in import duties in the budget. To improve tax administration and reduce the compliance burden, the overall number of slabs has been reduced from 21 to 13. In cases like camera lens and cells for lithium-ion batteries or TV panels, duties have been reduced to encourage domestic value addition.

Jobs

The budget lays more emphasis on skill development and in expanding new-age industries for job creation. The Pradhan Mantri Kaushal Vikas Yojana 4.0 will seek to skill lakhs of youth in the next three years, providing them on-job training, industry partnerships, and alignment of courses with the needs of industry.Additionally, 30 skill India international centres will be set up across different states.

KYC

Know Your Customer (KYC) has in a way become the bedrock of India’s digital finance revolution. But for some time now, a need has been felt for it to be simplified. The budget has proposed a simplified KYC process adopting a ‘risk-based’ rather than a ‘one size fits all’ approach. This would technically make it easier and faster for individuals with a good credit rating to avail of financial services.

Library

States will be encouraged to set up physical libraries for children and adolescents at the panchayat and ward levels and provide infrastructure to access National Digital Library resources. Additionally, the National Book Trust, Children’s Book Trust and other sources will be encouraged to provide and replenish non-curricular titles in regional languages and English to these physical libraries.

Millets

After yoga, India’s next big export to the world could be millets. The crop, which has numerous health benefits, is grown in abundance in the country. To make India a global hub, the Indian Institute of Millet Research will be supported as a centre of excellence for best practices, research and technologies at the international level.

Nursing

Globally, nurses were in the vanguard of the frontline warriors battling the Covid pandemic. Recognising their importance and in a bid to address the shortage of nurses, the budget has proposed the establishment of 157 new nursing colleges in co-location with 157 existing medical colleges.

One-stop solution

A one-stop solution to reconcile and update the identity and address of individuals maintained by various government agencies, regulators and regulated entities will be established using the DigiLocker service, with Aadhaar as the foundational identity.

Personal Income Tax

After the status quo of the past six years, personal income tax saw widespread changes this year. Restricted only to the new tax regime introduced in 2020, the slabs have been reduced to five from six, with no tax for up to ₹3 lakh and the maximum 30% bracket kicking in at ₹15 lakh.

Quality

In a bid to improve the quality of bank governance and enhance investor protection, the finance minister announced that the Banking Regulation Act, the Banking Companies Act and the Reserve Bank of India Act will be amended. For the securities market, Sebi will be empowered to build the capacity of functionaries and professionals.

Railways

Infrastructure development has been the central pillar of the government’s big bang spending, and Indian Railways has been a primary beneficiary. For fiscal year 2024, the capital outlay has gone up to an all-time high of ₹2.40 lakh crore, which is about 9 times the outlay a decade ago, in 2013-14.

Saptarishi

Saptarishis are seven reverred sages of ancient India who are seen as guiding light for the human race. FM Nirmala Sitharaman has chosen to refer her seven budget priorities – Inclusive Development, Reaching the Last Mile, infrastructure and Investment, Unleashing the Potential, Green Growth, Youth Power and Financial Sector, that will guide the country to ‘Amrit Kal’ as Saptarishis.

Tourism

The budget has made a fresh attempt to unlock the potential of tourism in the country, targeting not just international but domestic travellers as well. To begin with, it aims to promote 50 destinations as a complete package with upgraded standards of physical and virtual connectivity, tourist guides and security, while making all the relevant features of tourism available on an app.

Unity Mall

The budget has introduced the concept of a Unity Mall, encouraging states to set up such a mall in either their capitals or a prominent tourism centre or their financial capitals. The goal will be to promote their own ODOPs (one district, one product), GI products and other handicraft products.

Vishwas

The ease of doing business has been a major focus area for the government. Over 39,000 compliance norms have been reduced and more than 3,400 legal provisions have been decriminalised so far. The Jan Vishwas Bill builds on this by proposing to amend 42 Central Acts.

Women

A one-time new small savings scheme offering a fixed 7.5% return for two years, up to March 2025, has been launched for women. The maximum deposit allowed will be ₹2 lakh. In addition, the 81 self-help groups mobilised as part of the Deendayal Antyodaya Yojana National Rural Livelihood Mission will be further empowered through the formation of large producer enterprises or collectives.

X-factor

Cutting direct taxes, especially personal income tax, appears to be the Budget’s X-factor. The government claims the move will leave a large sum of money in the hands of the people, to boost consumption (the finance minister has said the cut in direct tax rates would cost the exchequer as much as ₹37,000 crore). A consumption boost, in turn, will push up capacity utilisation across sectors, forcing companies to expand. This will accelerate private capex, which has long remained sluggish and is just about showing signs of revival.

Youth

Harnessing the power of youth is one of the seven priority areas of the budget. From skill development to accelerator funds for startups, a number of schemes have been announced to harness the potential of young people. Additionally, to provide a stipend to 47 lakh youth in three years, a Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme is also being rolled out.

Zero emission

The ambition to become a zero carbon-emitting country by 2070 is writ large in the budget. Among the various schemes to decarbonise industry, the most prominent is the ₹19,700 crore National Green Hydrogen Mission, which aims to reduce dependence on fossil fuel imports and make the country assume technology and market leadership in this sunrise sector.

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Updated: 02 Feb 2023, 05:40 AM IST