Budget 2023 : From luring the voters to transforming India into a powerhouse

When Chief Economic Advisor Nageswaran claimed that India will be a 5  trillion economy it looked like a political statement. As the world economy was shattered by the endemic COVID 19 and chances of recovery were doomed due to the Russia Ukraine war. But the 2022-2023 budget has indicated that the government has a concrete plan to achieve this goal systematically. The best part is, it focuses on the knowledge economy. Before moving further let’s take up the criticism first. Strongest one came from Sri Amit Mitra, chief adviser to CM WB.

“they (the central government) have cut down MGNREGA from Rs 89,000 crore to Rs 60,000 crore (almost by a third). The Budget is sending a signal that we do not care for you and you better find some other source of livelihood”

I personally respect Sri Mitra as I had interacted with him as secretary general of FICCI  and  seen him transforming it. However, not only he, but the whole media has missed the point made by prime minister Modi when he criticized MGNREGA and labeled it as ‘Living Monument Of UPA’s Failures’. It shocked everybody and it shocked even more when the PM not  only continued the scheme but kept enhancing the funding.  Rahul Gandhi Ji even mocked the PM for accepting this scheme launched by UPA.  On the other hand, the Prime Minister and his team were working relentlessly  on the ‘Skill India’ programme to take the Indians to the next level . While Mr Mitra  and others are able to see reduction in funds allocated to MGNREGA they have missed the allocation to  Pradhan Mantri Awas Yojana (PMAY), which is  being enhanced by 66 percent to over Rs 79,000 crore. The FM has clarified it further in an interview  that for MGNREGA actual fund allotment can be enhanced as per the demands from states but it seems that it has already peaked in 2021 itself. If Indian dreams of becoming the world guru has any merit then to provide skilled jobs to our rural population or people living in urban slums is the only way. Too little land supporting the livelihood of too many people is unviable.

I  look forward to the day when There is no taker of employment under MGNREGA, that will be a true reflection of the values and priorities of India and its people.

Themes this  budget is  nurturing.

The 5th budget presented by the Finance minister emphasizes seven priorities: inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power, and the financial sector. As a keen follower of Indian scripture I find this in harmony with Chankya who said,”A person can attain everything through knowledge”, a nation is nothing more than the sum total of its citizens. The ‘sone ki chidiya’ India which every one wanted to invade and rule was highly educated and skilled. Nalanda and Takshila and Dhara Nagri (present day Dhar) were not only the learning centers but were  the brand ambassadors of our golden past.The  FM is being praised for not falling for populist measures in the last full budget preceding the next general  election in 2024.

The budget is supporting the New Education policy.

Over and above the initiative discussed above “A National Digital Library for children and adolescents will be set up for facilitating the availability of quality books across geographies, languages, genres and levels and device-agnostic accessibility,” Sitharaman said, adding that this will help children and adolescents overcome learning losses due to the Covid-19 pandemic.The National Book Trust (NBT), the Children’s Book Trust (CBT), and other sources will be encouraged to replenish titles in regional languages in these libraries. This will eliminate the greatest hurdle in the growth of poor students, who suffer on account of lack of  resources.  A level playing field is being given to students. This will also support the setting up of a national digital university as proposed in the last Budget to resolve the problem of limited access to seats within the higher education ecosystem.

This model of a digital university will  integrate the youth of today with the constant need of skill upgrades in a developing and disruptive  industry landscape where upskilling  and reskilling is the only way to stay relevant.

Initiatives to skill India better.

This will be realized through following initiatives.

1. The Eklavya Model residential schools of tribal children is a great initiative and will give a boost to better growth and development.
2. Establishing 157 new nursing colleges in core locations. India has focused on medical colleges and engineering colleges without providing suitable support through nursing,polytechnic and ITI institutes, this initiative will ease pressures from doctors and provide a respectable substitute to students who are not qualified to pursue MBBS.
3. The proposal for a multidisciplinary course for medical devices for skilled manpower. It will be supported in existing institutions to ensure the availability of skilled manpower for futuristic medical technologies and high-end manufacturing and research.
4. To establish three “Centers of Excellence for Artificial Intelligence” in prestigious educational institutions. “AI Work for India” will encourage the entrepreneurs who have been working in the field. Different sectors and services may get a facelift. These centers will serve as a bridge between educational institutions and leading industries, as envisaged in NEP. India needs to graduate from taking exams to taking risks and seeking jobs to create the same.
5. The goal of researching and developing practical AI applications across different verticals including agriculture, health, and sustainable cities. This focus on building a strong AI ecosystem in India.
6. Training of skilled AI professionals will help new businesses in acquiring the right talent. A  lot of responsibility will be  on education institutes to strengthen the curriculum in the field.It can bridge the gap between theory and actual practice. The teaching- learning process can become the essence of outcome-based education (OBE) providing an employable workforce.
7. The new Centers of Excellence programme, aimed to promote pharmaceutical research and innovation. It will encourage investment opportunities to fuel the sector expansion and jobs. It will begin to unleash the high innovation potential of rich Indian scientific talent.

The National Data Governance Policy.

With  over 800 million smartphone users at  the end of the calendar year 2022, UPI’s total transaction value was INR 125.95 Lakh Cr, which  is 75 percent higher year-on-year (YoY), as per the NCPI with  7,404.45 Cr transactions. 2,348 UPI transactions take place  every second, this requires a smooth,secure and efficient foolproof infrastructure in place.

Data governance is managing data usage, data security, data availability, and data integrity.  The Union Budget 2023 promises  that GoI is to launch a National Governance Policy. The policy will create an Indian Data Management Office (IDMO)  which will operate under the IT Ministry. The government of India is to launch a policy to increase access to anonymized data in a safe and secure way.It will unleash innovation and research by start-ups and academia, enabling access to anonymous data.

1. The Unified Skill India Digital Platform would facilitate demand-based formal skilling, employer linkage (including MSMEs).

Women empowerment.

It is the first time that a women finance minister is presenting her budget under a woman president. The nation needs empowered women to realize its dream of a 5 trillion economy.

Deendayal Antyodaya Yojana National Rural Livelihood Mission has achieved amazing success by mobilizing rural women into 81 lakh Self Help Groups.

The budget envisages to enable these groups to reach the next stage of economic empowerment through formation of large producer enterprises or collectives with each having several thousand members and being  managed professionally. They will be helped with supply of raw materials and for better design, quality, branding and marketing of their products. They  will be enabled to scale up their operations to serve the large consumer markets. If implemented successfully this will also reduce dependency on MGNREGA.

PM Vishwakarma Kaushal Samman ( PM VIKAS)

The MSME platform is  unleashing huge potential for Indian craft and  artisans. The special package for the country’s artisans & craftsmen under the PM VishwaKarma Kaushal Samman will help integrate them with the MSME value chain which will enhance their scope  & scale of  business opportunities.The good thing is that it will be available to all without consideration of caste, sex or financial status.

There are many other schemes like  Shree Anna Scheme,Atma Nirbhar Horticulture Clean Plant programme, Aspirational Districts and Blocks Programme,Pradhan Mantri PVTG Development Mission and Green Credit Programme etc. All of these are being integrated  and will provide support to innovation and research.

Longest serving British PM William E Gladstone once wrote,

“Budgets are not merely affairs of arithmetic, but in a thousand ways go to the root of prosperity of individuals, the relation of classes and the strength of kingdoms.”

This budget has presented a document of this intent  and now is the time to execute it with dedication. Both the center and states have to work together in harmony. Our forefathers have laid down their lives to free India from the clutches of slavery to see India pursue the path of learning and prosperity.

Areas of concerns.

Despite addressing the major concern FM has missed few important issues

1. Eliminating GST on higher studies in the area of medical, management etc. Prime minister promised to rationalize, high fee of Indian private colleges and a lot was expected. Just forcing the private colleges to reduce fees is not good enough. The government should also forgo its taxes to make higher education a bit economical.
2. Insurance is the backbone of financial growth as it provides a hedge against risk. Insurance penetration as well as density is low and the sector needed better incentives. In past few budgets service tax or GST is levied on insurance premium, commision paid to agents. Now bringing maturity proceeds of high premium policies under long term capital gains is not fair.
3. The government is focused on the poor and the corporations. The upper middle class which does not fall in this category is  being ignored. Whenever a benefit is offered there should not be any exclusion. One such  example is  elimination of FBIT on dividends paid by companies to help FIIS and the industry and transferring it to the individual  investors, that too  in higher tax brackets is very unfair. Investors planned for their retirement in the long term by building dividend income and taking away such benefits abruptly has jeopardized their old age planning. Either it should  not be there or it should be at lower rates.
4. It is good to attract foreign investments but it is not good to keep on taxing Indian investors who are there to stay. To build a stable equity market, Indian investors should also get a better treatment.This becomes more important in the light of Hindenburg vs Adani sabotage.
5. Government wrongly discriminated between government vs non government employees in the matter of taxation of encashment of leave. Now the anomaly has been eliminated in this budget. By not doing it with a retrospective date, poor employees retired in between have been made to  lose.
6. The GST department is inventing services to tax where there is none and this should be curbed immediately, an example is bringing of small facilities like issue of cheque book under GST.  It is not a service until used for business. This facility should be excluded from GST immediately for savings bank account holders. GST should not be used  to kill initiatives like banking or  digital payments etc.

Author believes that once brought to notice suitable correction will be made after due diligence.  A tweet from industrialist Harsh Goenka, concludes this article aptly, “Mbappe of6 a budget, not ‘Messi’ at all. A budget that puts India on the path to become the world champion- all set to score goals on infra development, consumption and inclusion. A big boost for domestic manufacturing, job creation and ease of doing business!”.