Modi 2.0 Union Budget 2023: Stimulating the Economy & Investing in Agriculture & Defence
On Wednesday, February 1, India’s Finance Minister Nirmala Sitharaman presented the Union Budget for 2023.[0] This is the last full budget of the Modi 2.0 government, which came to power in 2019.[1] The budget has been lauded for its efforts to stimulate the economy and provide more resources to the citizens.
The budget has laid out a plan for fiscal consolidation by setting a target of reducing the fiscal deficit to 5.9% of GDP in FY24. This target is to be achieved by raising the net market borrowings from dated securities to Rs 11,80,000 crore and balancing the rest with small savings and other sources.
Subsidies, a crucial part of the government’s overall revenue expenditure, have seen a major reduction across schemes.[2] Focus has been on two major subsidies: food and fertilizers.[2] The budget for food subsidy has been cut by more than 31% to Rs 1,97,350 crore from Rs 2,87,194 crore in the revised budget estimate for 2022-23.[3] Fertilizer subsidy has been cut by Rs 50,121 crore and is now at Rs 1,75,099 crore.[2]
The capital outlay for the Indian Navy has been increased to INR 528.04 billion from INR 475.90 billion, to be spent towards ship-borne drones, loitering munitions, missiles, satellites and new small warships.[4] The defence budget for 2023-24 is Rs 5.94 lakh crore, with pensions accounting for Rs 1.38 lakh crore and salaries for uniformed personnel and civilians amounting to about Rs 1.54 lakh crore.[5]
The budget also addressed the needs of the agriculture sector by setting up an agriculture accelerator fund to encourage agritech startups and providing digital public infrastructure for agriculture to enable “inclusive, farmer-centric solutions.”[6] Additionally, the primary agricultural credit societies will be computerized with an investment of Rs 2,516 crore and 10,000 bio input resource centres will be set up to support 1 crore farmers in adopting natural farming.[7]
Furthermore, the maximum deposit limit for Monthly Income Account Scheme has been enhanced from Rs 4.5 lakh to Rs 9 lakh for a single account and to Rs 15 lakh for a joint account.[8] The Senior Citizen Savings Scheme also saw its maximum deposit limit rising from Rs 15 lakh to Rs 30 lakh.[9]
0. “In India’s budget plan, Modi has one eye trained on his 2024 re-election” Yahoo! Voices, 1 Feb. 2023, https://www.yahoo.com/now/indias-budget-plan-modi-one-134900039.html
1. “Here is how much has been allocated to the Ministry of Minority Affairs in Budget 2023: Why it may disappoint the Left” OpIndia, 1 Feb. 2023, https://www.opindia.com/2023/02/budget-2023-ministry-of-minority-affairs-allocated-rs-3097-crore
2. “Union Budget 2023: Did the Govt Meet Welfare Promises & Secure the Marginalised?” The Quint, 4 Feb. 2023, https://www.thequint.com/voices/opinion/union-budget-2023-did-the-govt-meet-welfare-promises-secure-the-marginalised
3. “Explained | Is the government on track on fiscal deficit targets?” The Hindu, 4 Feb. 2023, https://www.thehindu.com/business/budget/explained-is-the-government-on-track-on-fiscal-deficit-targets/article66472080.ece
4. “India to boost defense spending 13%, with billions for new weapons” Defense News, 2 Feb. 2023, https://www.defensenews.com/global/2023/02/02/india-to-boost-defense-spending-13-with-billions-for-new-weapons/
5. “Low spending, fewer new contracts: Why defence upgrade funds got modest hike of 6.5%” The Indian Express, 5 Feb. 2023, https://indianexpress.com/article/india/low-spending-fewer-new-contracts-why-defence-upgrade-funds-got-modest-hike-of-6-5-8426041/
6. “Union Budget to Boost Agrotech Startups By Young Entrepreneurs: FM | Weather.com” The Weather Channel, 1 Feb. 2023, https://weather.com/en-IN/india/news/news/2023-02-01-budget-2023-to-boost-agrotech-startups-by-young-entrepreneurs
7. “Union Budget 2023: What it has for the technology industry” Gadgets Now, 1 Feb. 2023, https://www.gadgetsnow.com/slideshows/union-budget-2023-what-it-has-for-the-technology-industry/photolist/97523806.cms
8. “Post Office Monthly Income Scheme (POMIS) Calculation 2023: What Rs 9 lakh or Rs 15 lakh deposit will give” The Financial Express, 3 Feb. 2023, https://www.financialexpress.com/money/post-office-monthly-income-scheme-pomis-calculator-2023-what-rs-9-lakh-rs-15-lakh-deposit-will-give/2969589
9. “Finance Secretary defends higher investment limit in saving schemes, says…” Hindustan Times, 5 Feb. 2023, https://www.hindustantimes.com/business/budget-2023-news-higher-investment-limit-in-saving-schemes-to-benefit-elders-finance-secretary-101675573577174.html
