Budget 2023: The FM’s inflation-growth dilemma
It is Union budget time again, and speculation is rife and expectations high. Though the economy is in a recovery phase, the global headwinds of slowdown and inflation, along with continued risks of the virus in China, pose serious policy challenges. The Union government is faced with the dilemma of having to loosen the purse strings to fast-track growth recovery through enhanced infrastructure-spending while facing the constraint to return to the path of fiscal consolidation.
Union Budget 2023 to test Modi’s fiscal resolve ahead of 2024
India will unveil its budget Wednesday, testing Prime Minister Narendra Modi’s fiscal mettle seen as key to boosting investor sentiment even as it will likely leave less room for handouts a year before he seeks a third term. Modi, who rides an enduring wave of popularity as his second term is coming to a close, looks poised to sustain fiscal consolidation as he takes the global stage with India’s presidency of the Group of 20 nations. Shrinking the deficit which hit a record 9.2 per centof gross domestic product during the first year of the pandemic is necessary for the country to improve its credit rating currently at the lowest investment grade.
A poll budget will be unhelpful
Some good signals have emerged on the economic front, while the strong negatives of the past persist and cause concern. One big positive is about inflation. Retail inflation fell to a one-year low of 5.72% in December 2022, against 5.88% in the previous month and 5.66% in December 2021. This should give some comfort to the government and the people who have been struggling with rising prices for many months.
What it will take to rejuvenate NREGS
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) mandates the Indian State to provide 100 days of work to every adult rural citizen within 15 days of raising the demand and be paid within the same period on completion of the work. It has served as a lifeline for the poorest and helped deal with abject poverty and hunger.
Budget, of the government, by the government, for the government
January is a busy month in the life of the policy wonk. As mandarins in the Ministry of Finance huddle into lockdown to put the final touches on theUnion budget, presented in parliament on February 1, the policy commentariat comes into high demand -- the media, the seminar circuit are all abuzz with discussions on “what to expect”, and minutes after the budget is presented, policy wonks are called upon to offer “expert” insight on it.
Budget 2023 | Revisit tax policy on cryptocurrency, bring new laws for virtual digital assets
The Government of India’s concerns over cryptocurrencies have been growing, which it primarily attributes to terror-financing and money-laundering. This has been a consistent position on the government and the point of view of the Reserve Bank of India’s. However,despite the ongoing‘ban crypto’ narrative set bytheRBI, the government has decided to levy taxes on virtual digital assets (VDAs) including cryptocurrencies and non-fungible tokens. As per Budget 2022, capital gains derived from crypto assets will be taxed at 30 per cent, regardless of under which tax slab the taxpayer comes under.
Union budget must focus on billionaires, babus & berozgari
The forthcoming Union budget will be presented amid fears of a global recession. Resilient domestic demand, an investment cycle revival, a strengthened financial system, and structural reforms will provide an impetus to India’s economic growth despite the rapid deterioration in global prospects, the finance ministry said in November 22. Though cautious optimism is fine, overconfidence among policymakers in their ability to overcome the global headwinds may pose risks to India.
Budget 2023 | No more illogical cuts; allocate more for biodiversity conservation
Last month, India along with 195 countries agreed upon the ‘Kunming-Montreal Global biodiversity framework’ (GBF), a guide for countries to arrest and reverse biodiversity loss, and set a target to conserve 30 percent of the world’s land and oceans by 2030 — widely referred to as the ‘30×30’ target. “India can comfortably achieve the target of 30×30 by 2030,” as “almost 27% of the country’s geographical area is already subject to some kind of conservation measure”, said Bhupender Yadav the Minister of Environment, Forests and Climate Change (MOEFCC).
Union Budget 2023: Dissecting the tariff barrier
The entire budgetary process takes place in high secrecy. Surprisingly, the news of a possible hike in customs duty across several commodities was splashed in the newspapers. The news linked to an unnamed government official suggests an increase in customs tariffs on electronic items, vitamins, helicopters, plastic goods, jewellery, and high-gloss paper among others. If this is indeed so, it will be part of a pattern noticed over the last few budgets.
Will Budget 2023 see allocation for semiconductor incentive schemes?
The speech promiseda “scheme to invite global companies through a transparent competitive bidding to set up mega-manufacturing plants in sunrise and advanced technology areas such as Semi-conductor Fabrication (FAB)”.Three-and-a-half years later this government is about to deliver its last full budget and till now the scheme has not seen any approvals and release of money for projects.The status of the scheme and the need for a reboot to the nodal agency, the India Semiconductor Mission, isa different story.
Expect a poor budget, not a pro-poor budget
The Budget wish list is big. Yes, the urgent needs of different social classes and the suffering of the poor with high unemployment, inflation, poor healthcare system and education in the country make them aspire for some relief on the big day.