Amrit Kal Budget – Focus on the Swadeshi Foundation

The Central Budget presented in Parliament on 1st February 2023 amidst global turbulence and uncertainties arising out of the Russia-Ukraine War and the recessionary trend around the World is broadly focused on the principles and ideology of ‘Swadeshi’ to achieve an economic growth of 6.5 per cent in the Financial Year 2023-24. It has relied upon the economic growth by giving emphasis on the five broader principles of Swawalamban.

 1. Skill Development and providing incentives to youth as engine of growth for Entrepreneurship including innovative Start-ups in rural areas and encouragement to research and development and providing adequate credit facilities to the MSME sector. There is an effort for transformation through innovation by harnessing the Human Resource and by utilizing it’s potential for the intellectual resource.

 2. Emphasising on the development for inclusive growth through Co-operatives. It is important to note that the share of Agriculture and Allied Sector which was on a downhill path since 1991 and had come down from 35% of GDP to 16.38% in 2011-12 has regained its share to a large extent and now in 2021-22 its share in GDP has increased to 20.19%. If the process for inclusive growth with financial as well as overall economic inclusion continues, the farmers income will increase to a dignified level and they will not depend on Government support and its subsidies.

 3. Promoting through marketing and other infrastructure support for local produce of artisans and rural cottage industry with the help of KVIC, APEDA and NABARD.

 4. Adoption of the idea of decentralization by involving the fishermen, farmers by setting up farmers’ producers’ organization and by providing support to self-Help groups. The number of self-help groups have increased from19 lakh during 2009-2014 to 81 lakh involving nine crores working women as on 31st December 2022 which has substantially increased from two crores women in 2009-2014 duration and the amount of assistance to these self-help group has also increased from Rs.80000 crores to Rs. 4,93000 crores over 2014 to 2022.There is plan to set up Digital Public Infrastructure with the help of artificial intelligence for informative solutions tos farmers. Making India Global hub for Millets and promoting natural farming and building infrastructure for storage and transport will ensure remunerative prices to the farmers.

 5. Promoting green Hydrogen and protecting Environment to achieve the goal of Net Zero by supporting alternative sources of renewal energy and by setting up 500new Waste to wealth Plants as part of the circular economy under Gobardhan Scheme and Mangrove plantation along the coastline for Green Growth.

 The Economic Survey presented a day before the Budget underlines the fact that “Economy has nearly recouped what was lost, renewed what had paused and reenergised what had slowed during the Pandemic and since the conflict in Europe.”

 Indian economy has proved to be resilient to global shocks as have proved during the Asian Crisis of 1997, Global meltdown in 2008-09 and again during the Covid-19, followed by Russia-Ukraine War. The economic growth in the current Fiscal Year is likely to be 6.8 per cent as against China 3.4 per cent and US 2.4 per cent. This gives a clear indication that India@2047 will become the largest economy in the world once again as it was until 1700AD contributing more than 25 percent of the global economy before the arrival of British in India.

Increase in capital investment outlay by 33.4 % to Rs.10 crores and allocation of Rs. 2.4 lakh crores for Railway is the highest ever capital outlay and will have a multiplier effect on the private investment and will thus open the gateway for continuous growth to achieve the target of not only US$ 5 Trillion economy but will reach to US$ 10 trillion by 2030.

The Fiscal deficit has come down from 9.2 per cent in 2020-21 and 6.7 per cent in 2021-22 to 6.4 per cent in 2022-23 and has been projected to be just 5.9 per cent in 2023-24. Revenue deficit has decreased from 4.4 per cent in 2021-22 to 4.1 per cent in 2022-23 and has been projected at just 2.9 per cent in 2023-24. Tax collections (net to Centre)have increased from Rs. 18.04 lakh crores to Rs.20.86 lakh crores with impressive increase in GST on an average of Rs.1.5 lakh crores Per month and this has resulted in to substantial benefits to states including West Bengal to at least around Rs. 10000 crores.

The challenge for the Government is the income inequality, rising unemployment and inflation or price rise. Modi Government has given a call for Aatmanirbhar Bharat and has undertaken make in India drive by giving more emphasis on the manufacturing sector through production link incentives. However major part of the consumables and the spare parts for automobiles, electronics, mobile phones are imported. Our dependence on energy sector is highest in the world and therefore the prevailing current account deficit is also a big challenge. Our rupee is under pressure and has devalued from around Rs 74-75 before COVID period is now Rs82-83 and the increase in interest rates by Fed Reserve is causing outflow of capital by the foreign institutional investors coupled with declining exports due to slowing global economy. Although there is no imminent danger in the balance of payment as our forex reserves are sufficient but if the global inflation continues due to Russian-Ukraine War, there may be further spurt in oil prices and will have double edged impact on our inflation firstly due to devaluation and secondly due to cascading effect of increased crude oil prices.

Under such prevailing global uncertainties the Government has opted for strong measures for increased capital expenditure for building infrastructure and to maintain liquidity and adequate demand for industrial goods and to maintain the growth momentum. However, we must motivate our private sector to collaborate and spend on research for scientific inventions in order to manufacture qualitative goods at competitive prices so that in the long run we can increase our exports and conserve our foreign exchange. Thus there is a need to strengthen our innovation on the one hand and also strengthen our exchange rate on the other hand. This alone can make our manufacturing sector strong, create more employment and help controlling our price rise. This will bring out our economy from vicious cycle of unemployment and low income to full employment and higher income with more purchasing power in the hands of the masses. We are the country with highest number of youth and the working population and must take the benefit of demographic dividend. The Budget announcements are positive and it will depend upon us about its proper implementation and for exploiting the opportunity in the next 20 -25 years to make India the strongest economy of the World.

Dr CA Dhanpat Ram Agarwal 

Director

Itag Business Solution Ltd.