A BALANCED BUDGET

FROM GIVING IMPORTANCE TO INFRASTRUCTURE TO GREEN ECONOMY TO RURAL ECONOMY, BUDGET 2023 HAS GRABBED ATTENTION OF MANY PEOPLE. MOST IMPORTANTLY, THIS BUDGET HAS GIVEN A MAJOR RELIEF TO THE MIDDLE CLASS BY TWEAKING TAX SLABS AND MAKING INCOME UPTO RS 7 LAKHS TAX-FREE

Union Budgets are always hits and misses for all Finance Ministers. On February 1, 2023, as FM Nirmala Sitharaman presented her 5th and last Budget for PM Modi’s 2nd tenure Government, it is important to note that the budget holds extremely high significance in wake of multiple factors and constraints. These includes pre-election Budget, critical in time when there are no signs of Russia-Ukraine war ending, and concerns of growth in wake of economic crisis in the West. Any untoward volatility in crude price or exchange rates holds the potential to hurt the economy. Amid such compulsions, the Government is also sitting on benefits arising from tailwinds like higher than projected tax collections and higher tax buoyancy along with an encouraging economic growth outlook. Tax buoyancy has helped the

Government in augmenting higher than budgeted tax revenues. This was backed by a better than expected economic recovery, backed by strong surge in industrial production and exports. Success of Productivity Linked Incentives (PLI) schemes in reducing imports and making Make In India and atmanirbhar Bharat possible along with promoting exports of products like Mobile Phones that India was importing has increased confidence of the Government in pushing PLI schemes in more sectors.

While lot of dissection of the Budget is done, this article endeavours to evaluate it from the prism of three major forward looking themes and its likely impact on the economy.

CAPITAL FORMATION DRIVEN ECONOMIC GROWTH