The budget 2023 and its focus and expectations as well as priorities are in the news these days. The union budget 2023 will be presented by Finance Minister Nirmala Sitharaman on the parliament on February 1.This years budget is likely to be growth oriented with focus on capex, manufacturing ,infrastructure and rural economy. The former Finance minister and congress senior leader has said that the budget should focus on increase in imports which have reached very low and its focus should be how to remove slowdown of the economy. Moreover the new budget should focus on removing joblessness in the economy and find out ways and devise strategies to fight break breaking inflation which has invaded the country and made the life of common man very difficult. It should give some relief to the middle class and salaried people who pay taxes honestly. Industrial and agricultural development should also be the priorities of the new budget. The business class and the average Indians have great expectations from the budget and it should meet these expectations. Capital outlay allocation is likely to be scaled up to Rs 10 trillion (3.0% of GDP) vs Rs 7.5 trillion in FY 23(2.7%of GDP).Resultantly revenue expenditure could likely consolidate by 90bps in FY 24 primarily on account of lower subsidy outgo. The budget session will begin on February 1and is expected to conclude on April 6,with recess in between.

The first part of the budget session 2023 is expected to continue till February 10.Diffrent sectors and sections of people have different expectations from budget. This will be the last full budget of the Modi government before the crucial general elections of 2023.Experts feel Finance Minister Nirmala Sithraman will try to keep her pace of spending to boost growth while leaning on asset sales and shunning subsidies to shrink the fiscal deficit but cutting of the subsidies will be a hard decision as the Lok Sabha elections are only in less than a year and reducing subsidies will impact the middle and low income group. Therefore the finance minister will have to do a tight rope walk in making and presenting the budget 2023 and she cannot please everybody.There is buzz that FM may hike the limit for the highest tax slab from Rs 10lakh to 20 lakh and reduce the highest tax rate from 30% to 25%.Salaried class may also see a hike in deduction available under section 80G to Rs 2-Rs 2.5 lakh.
A hike in standard deduction from Rs 50000 to Rs 100000 is also expected .A possible increase in tax exemption limit of Rs 1,00000 to Rs 3,00000 for long-term capital gains is also seen. The small pensioners also expect relief in the sense to exempt their income from income tax and this will be a big relief to the pensioners. The FM is most likely to address issues of jobs and look at supporting poor and middle class, but she will stay away from spending beyond the country’s means as government seeks to shore up investor sentiment. Support for consumption and strong focus on manufacturing with an emphasis on SMEs could be top theme.PLI is expected to continue and centre may also tweak duty to encourage domestic manufacturing. Budget 2023 will probably see India target asset sales of about Rs 500 billion. The centre may likely give its flagship household scheme-Pradha n Mantri Awas Yogana –a Rs 40,000 crore boost to improve housing among weaker sections and past few years have seen unprecedented volatility and India has outperformed most large global economics thanks to some very good policy moves by the government.
The broader focus of the budget should be to continue promote growth with focus on local manufacturing and exports, keeping in sync with the Make in India agenda. Inflation has been sticky and difficult for large section of the society and the government must look at reducing some taxes ,both direct and indirect so that more money is available with the people. The middle class is the backbone of the economy. They are the main drivers of consumption and economic growth and there needs to be a special focus on them. The government must consider tax benefits to middle class consumer, the salaried employees who have paid their taxes always honestly. This will have a significant impact on their finances and expenses. It will leave them with additional disposable income in hand which will help drive consumption and boost economy. Thus there should be some tax breaks for this section of the society in the budget.
Housing for All has been amongst the most significant initiatives of GOI. It is expected that the government will continue to build upon schemes such as PMAY to emphasize the importance of same. The rural low-income housing segment with ticket sizes of INR 3lakh annually is the segment where the need for adequate housing is acute. To address the demand –supply mismatch in rural housing, people expect some special incentives for customers/builders in this segment. Further there is also an expectation of a revision in the limits of section 80C and section 24 for principle and interest rebates on home loan. With inflation being elevated over last couple of months, the construction cost has increased and any rationalization of these limits will help the end consumer.
The upcoming budget will undoubtedly be geared towards augmenting the growth of Indian economy, but it also needs to address the challenges faced by the common man and salaried class as we recover from a global pandemic and tackle the the ongoing global economic slowdown. People are especially pinning their hopes on the upcoming budget to address the issue of unemployment, control inflation and make essential goods and services more affordable. The salaried class is looking for some cheer on personal tax front ,hoping the annual basic exemption limit gets enhanced to Rs 5lakh from existing Rs 2.5 lakh. Taking a gold loan against household jewellery is one of the most important funding source for MSMEs, small businesses ,individual borrowers and women borrowers. Gold loans provided by NBFCs are not considered priority status and hence ,specifically to gold loans. NBFCs expect restoring priority sector status to eligible gold loans, including microloans, loans to farmers and micro businesses. Given the stress exerted by the covid 19 pandemic on the public health care system in the nation, there is expected to be a stronger focus on public expenditure on healthcare.
The government of India is also expected to tap into the public-private partnership model to ramp up primary healthcare infrastructure in the nation. In the upcoming budget the industry needs support in terms of access to finance, insurance and regularized import policy for critical components such as Batteries, Engines, Flight Control Electronics, Motors and Engines, which are still not available under make in India.
It is expected that government will present a growth-focused spending plan, maintaining the impetus on investments in infrastructure development. Therefore the road, railway, and urban infrastructure sectors will see meaningful allocation as significant beneficiaries of the budget. Senior congress leader and former Union finance minister P.Chidambaram said that BJP led-centre government in its upcoming budget should focus on addressing issues like impact of the global slowdown on economic growth, falling exports, increase in the current account deficit and mounting total government debt. In short the budget 2023 should focus on providing employment to the educated and skilled youth, controlling inflation and giving relief in taxes to salaried and middle income class. However this year’s budget will not be an easy task as the finance minister has to take this into consideration that general elections are going to happen in 2024 and therefore he has to work through the prism of politico economics and will have to avoid hard decisions due to compulsion of nine state assembly elections in 2023 and the Lok Sabha election in 2024.

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