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

Farm issues are always a significant part of any union budget and this year was no different. The big talking point is the increase in the credit goal to ₹20 trillion. Other ₹2,200 crore has been set aside for a clean new 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. The country’s EV industry will feel a more immediate impact, as the import duty on goods and machinery used in the manufacture of lithium-ion cells has been waived. This should reduce the cost of electric vehicles and provide additional impetus to the sector.

Capital expenditure

A steep 33% increase in 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 her purse strings. And while efforts have been made to wind down private investments, it underlines the government’s intention to keep capital spending up.

Protection

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

e-Courts

Justice delayed is denied. The budget has disbursed it ₹7,000 crore towards the third phase of the e-courts project to try to ease the burden on the justice system. The project seeks to increase digitization in India’s judiciary and make it easier for citizens to seek legal redress. In a country where 85% of cases are pending in district courts, this is a small price to pay for a potentially large reform.

Fiscal Consolidation

Although he is involved in an election budget, Sitharaman was not exasperated and remained faithful to the path of fiscal consolidation. As a result of a 6.4% deficit for FY23, the target for the first fiscal year was set at 5.9%. The finance minister was confident of taking it below 4.5% by FY26.

Green Growth

One of the seven priorities of this budget is green growth, and it was mentioned the maximum number of times in the speech on the budget. It’s all about running the gamut from green fuel and energy to farming and mobility to green buildings and equipment. To walk the talk, disbursement of ₹35,000 crore has also been made for priority capital investments towards the energy transition and net-zero objectives. The message is clear – the color of money, in the future, will be green.

Housing

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

Duties on imports

There are far-reaching changes in the budget on import duties. To improve tax administration and reduce the compliance burden, the overall number of slabs was reduced from 21 to 13. In cases such as camera lens and cells for lithium-ion batteries or television panels, duties were reduced to encourage domestic value addition.

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The budget places more emphasis on skill development and expansion of new age industries to create jobs. The Pradhan Mantri Kaushal Vikas Yojana 4.0 will look at upskilling the youth over the next three years, providing them with on-the-job training, industry partnerships, and aligning courses with industry needs. In addition, 30 international skill India centers will be set up across various states.

KYC

In a way Know Your Customer (KYC) is the cornerstone of India’s digital financial revolution. But for some time now, it needs to be simplified. The budget has proposed a simplified KYC process that takes a ‘risk-based’ approach 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 establish physical libraries for children and youth at the panchayat and ward levels and provide infrastructure to access the resources of the National Digital Library. In addition, the National Book Trust, Children’s Book Trust and other sources will be encouraged to supply and replenish non-curricular titles in regional languages ​​and English for these physical libraries.

Millet

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

Nursing

All over the world, nurses have been the frontline warriors fighting the Covid pandemic. In recognition of their importance and in an effort to address the shortage of nurses, it has been proposed in the budget that 157 new nursing colleges be established in conjunction with 157 existing medical colleges.

One-stop solution

A one-stop solution to resolve 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 underlying identity.

Personal Income Tax

After the status quo for the past six years, there have been far-reaching changes to personal income tax this year. Not limited to the new tax system introduced in 2020 only, the slabs have been reduced to five out of six, with no tax for up to ₹3 lakh with the maximum 30% bracket kicking in at ₹15 lakhs.

Quality

In order to improve the quality of bank governance and improve 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 develop the capacity of executives and professionals.

Railways

Infrastructure development has been a key pillar of the government’s massive spending, and Indian Railways has been a major beneficiary. For fiscal year 2024, the capital outlay has increased to a record level ₹2.40 lakh crore, which is about 9 times the outlay a decade ago, in 2013-14.

Saptarishi

Saptarishis are seven revered sages of ancient India who are seen as a guiding light for mankind. FM Nirmala Sitharaman chose to convey her seven budget priorities – Inclusive Development, Reaching the Last Mile, infrastructure and Investment, Unleashing the Potential, Green Growth, Youth Power and Financial Sector, which will lead the country to ‘Amrit Kal’ as Saptarishis .

Tourism

The budget has made a new effort to unleash the potential of tourism in the country, targeting not only international travelers but domestic travelers as well. Firstly, it aims to promote 50 destinations as a complete package with upgraded standards of physical and virtual connectivity, tourist and security guides, and make all relevant tourism features available on an app.

Unity Mall

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

Vishwas

Ease of doing business is a key area of ​​focus for the government. More than 39,000 compliance norms have been reduced and more than 3,400 legal provisions decriminalized so far. The Jan Vishwas Bill builds on this by amending proposed 42 Central Acts.

Women

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

X Factor

The Budget’s X-factor appears to be the imposition of direct taxes, particularly personal income tax. The government claims that the move will leave a large sum of money in the hands of the people, to boost consumption (the Minister for Finance has said that a cut in direct tax rates would cost the exchequer as much as possible. ₹37,000 crore). Boosting consumption will, in turn, stimulate resource utilization across sectors, prompting companies to expand. This will boost private capex, which has remained sluggish for a long time and is only showing signs of revival.

Young

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

Zero emission

The ambition of becoming a country that emits no carbon by 2070 is written big in the budget. Among the various schemes to decarbonize industry, the most significant is the ₹19,700 crore National Green Hydrogen Mission, which aims to reduce dependence on fossil fuel imports and make the country adopt technology and market leadership in this sunrise sector.

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Updated: 02 February 2023, 05:40 AM IST