Union Budget of India 2023-24 & its key features:

Theme:

The central government’s expenditure is presented and authorized by Parliament through the Union Budget every financial year. Article 113 of the Constitution requires all expenses (except charged payment) to be submitted as Demands for Grants (Ministry-wise) to Lok Sabha.

The Demands for Grants are referred to the Ministries’ respective Departmentally-Related Standing Committees for further examination. Following this, they are discussed in Lok Sabha and approved. After Lok Sabha authorized the demands, an Appropriation Bill was introduced and passed to permit expenditure from the Consolidated Fund of India. 

Union Budget of India 2023- 24:

 

 The Union Budget 2023-24 was presented on February 1, 2023, by the Finance Minister Mrs Nirmala Sitharaman. It proposes to spend Rs 45,03,097 crore in the financial year. Revenue expenditures are estimated to be Rs 35,02,136 crore (a 1.2% increase from revised estimates for 2022-23). Interest expenditure is 41% of revenue receipts. Capital expenditure is estimated to be Rs 10,00,961 crore, a 37.4% increase from revised estimates for 2022-23. Increased capital expenditure is driven by higher outlay on transport infrastructure and state capital loans. 

 Under the Finance Bill 2023, several changes have been made to the new tax regime in union budget of India. The income limit to avail of a rebate and not pay taxes has increased from Rs 5 lakh to Rs 7 lakh. Further, the number of tax slabs has been reduced from six to five. The surcharge for the highest slab (income over Rs 5 crore) has been cut from 37% to 25%. 

 

The highlights of expenditure of Union Budget of India 2023-24 in various ministries/departments include the following:

 

1)Defence: The Ministry of Defence has been allocated Rs 5,93,538 crore, the largest across all ministries, and accounts for over 13% of the total expenditure of the central government. Over the last decade, the expenditure of the Ministry as a percentage of GDP has reduced in union budget of India. In 2023-24, its allocation is estimated to be marginally lower than 2% of GDP. Since 2014-15, the spending on defense pensions has been consistently higher than 20% of the total budget, and capital outlay has remained below 30%.

2)Road Transport and Highways: The Ministry has been allocated Rs 2,70,435 crore, 25% higher than the revised estimates for 2022-23 in union budget of india. Most of the additional allocation (60%) has been earmarked for investment in NHAI. The budgetary allocation has increased since NHAI will not borrow from the market. Construction of roads is primarily done through public funds. Private investment constituted 7% of investment in roads in 2020-21. 

 

3)Food and Public Distribution: Allocation for the Department in 2023-24 was 31% lower as compared to the revised estimate for 2022-23. This was due to eliminating the Pradhan Mantri Garib Kalyan Anna Yojana, a program announced during the pandemic to provide eligible beneficiaries with free food cereals. In 2023- 24, expenditure on food subsidy is estimated to be Rs 1.97 lakh crore. Updating the coverage of eligible families is an issue as the total number of beneficiaries continues to be based on the 2011 Census.

 4)Home Affairs: The Ministry has been allocated Rs 1,96,035 crore, an increase of 1.1% over the revised estimates for 2022-23. Of the Ministry’s total budget, 65% is on police, and 31% is on grants to UTs. 74% of the expenditure on police has been allocated to the Central Armed Police. Issues in the sector include shortages of police personnel and an inadequate number of cybercrime cells. In addition, 24% of the Indo-Bangladesh border remains unfenced.

 5)Rural Development: The Ministry of Rural Development was allocated around Rs 1.6 lakh crore for 2023-24, 12% less than the revised estimates for 2022-23. The decline in violent crime is mostly to blame for this. Allocation to the Mahatma Gandhi National Rural Employment Guarantee Scheme (Rs 60,000 crore) is 33% less than the revised estimate for 2022-23. Demand for work under MGNREGS could decrease this year as the rural economy returns to normal after the pandemic. On the other hand, allocation towards rural housing increased by 13% in 2023-24 in union budget of india, while the budget towards rural roads remained unchanged. 

6)Railways: In 2023-24, Railways is projected to have a marginal revenue surplus, which would fund less than 1% of its capital expenditure plan. 92% of capital expenditure will be financed by budgetary support from the central government and 7% from extra-budgetary resources. The operating ratio (expenditures as proportionate to traffic works receipts) is 98.5%, indicating a limited surplus for capital investment in union budget of india.

7)Agriculture: The Ministry has been allocated Rs 1,25,036 crore in 2023-24, a 5% increase over the revised estimates for 2022-23. 77% of the Ministry’s estimated expenditure is towards three schemes that provide cash transfer, interest subsidy, and crop insurance. The amount of institutional credit to farmers has risen (7.8% over the past ten years), but loans are primarily used to meet revenue expenditure in farming or recurring household expenditure. 

8)Education: In 2023-24, the estimated expenditure of the Ministry of Education is Rs 1,12,899 crore, a 13% increase from revised estimates for 2022-23. The Department of Education and Literacy possesses 61%. In addition to the first 61%, the remaining 39% was distributed to the Department of Higher Education in union budget of India. In addition, 33% of the Ministry’s budget has been given to Samagra Shiksha Abhiyan. Since 2015, the overall allocation towards education has been around 2.8% of the GDP. 

9)Telecommunications: Rs 59,740 crore (56% of the allocation) in 2023-24 is towards the revival package for BSNL and MTNL in union budget of India. No funds were disbursed under the PLI scheme in 2021-22. In 2022-23, no funds will be spent towards this scheme as per revised estimates. Bharatnet and Network for Defence projects have seen significant delays.

10)Jal Shakti: The Ministry of Jal Shakti was allocated Rs 97,278 crore for 2023-24, a 31% increase over the revised estimates for 2022-23. The Jal Jeevan Mission received the highest allocation (Rs 70,000 crore). In addition, River Interlinking saw an increase in the budget due to implementing the Ken-Betwa Link Project. However, funds have remained underutilized in schemes such as the Swachh Bharat Mission- Gramin, Atal Bhujal Yojana, and Namami Gange.

 11)Health and Family Welfare: In 2023-24, the expenditure of the Ministry of Family Welfare and Health is estimated to be Rs 89,155 crore, a 13% increase from revised estimates for 2022-23. The National Health Mission is its most significant component, accounting for 33% of the Ministry’s budget, and medical colleges and hospitals account for 27%. However, high out-of-pocket expenditures and a shortage of healthcare personnel remain significant issues.

 12)Housing and Urban Affairs: In 2023-24, the Ministry of Urban Affairs and Housing has been allocated Rs 76,432 crore, an increase of 2.5% over the revised estimates for 2022-23. The significant items are urban housing (PMAY-U) at Rs 25,103 crore and metro projects at Rs 23,175 crore. However, several metro systems cannot generate the required ridership to break even.

13)Petroleum and Natural Gas: The Ministry has been allocated Rs 41,008 crore, a 21% increase over the revised estimates for 2022-23. This includes Rs 30,000 crore towards capital support to Oil Marketing Companies via equity infusions. However, there has been a decrease in allocation toward the LPG subsidy, and no allowance has been made toward the kerosene subsidy. However, investments in oil storage caverns and oil purchases for the Strategic Petroleum Reserves have increased.

14)Women and Child Development: The Ministry has been allocated Rs 25,449 crore in 2023-24, a 6% increase over the revised estimates for 2022-23. This is spent across three centrally sponsored schemes: Saksham Anganwadi and POSHAN 2.0, Mission Shakti, and Mission Vatsalya. However, the Ministry has underutilized its funds between 2016-17 and 2021-22 in the past five years. 

15)Environment, Forests, and Climate Change: The Environment, Forestry, and Climate Change Ministry would receive Rs 3,079 crore in funding in the fiscal year 2023-24 has been allocated Rs 3,079 crore, a 24% increase over the revised estimates of 2022-23. While India has set targets to transition to renewable energy to tackle climate change, the availability of adequate finance is a crucial challenge. According to experts, the overall cost required for India to adapt to climate change by 2030 is expected to be around Rs 86 lakh crore (at 2012 base price).

Conclusion:

The Union Budget of India 2023-24 reflects the government’s commitment to revitalizing the economy, fostering inclusive growth, and addressing the nation’s key challenges. The budget intends to establish India as a worldwide economic powerhouse by investing heavily in infrastructure development, social welfare, job creation, tax reforms, and the financial sector.
The successful implementation of these measures will play a pivotal role in shaping India’s future trajectory and fostering an environment of prosperity and progress.

 

Importance of union budget, union budget 2023-24 date, union budget 2023 pdf & who did present the union budget 2023:

https://www.icicidirect.com/ilearn/personal-finance/articles/union-budget-and-its-importance
https://en.wikipedia.org/wiki/2023_Union_budget_of_India
https://www.youtube.com/watch?v=z_yFoAVUcgY&t=1s
https://pib.gov.in/PressReleasePage.aspx?PRID=1895315

Also Read:
https://mbagdtopics.com/will-e-commerce-dominate-physical-stores/
https://mbagdtopics.com/impact-of-social-media-on-youth/