Budget 2023-24: FM stakes on infra sector to push up growth but rising revenue spent threatens to upset fiscal balance

Budget 2022-23 has been widely hailed for achieving what appeared a difficult exercise considering the uncertain macroeconomic development both at home and abroad.

- Tushar K Mahanti

Sitharaman has increased capital spending by a whopping 33% while reducing individual income tax rates and estimating a lower fiscal deficit.

Given that nine state elections are due this year, followed by a general election next year, speculation was ripe that the country would get an election Budget full of giveaways that would threaten long-term finances. But this has not happened. FM has tried to balance growth with fiscal stability.

In line with the government’s ambitious economic agenda, the Budget focuses on three key aspects- first, to provide opportunities to citizens, second, to provide a strong impetus to growth and finally, to strengthen macro-economic stability. Among the many priority areas outlined in the budget, agriculture and infrastructure are keys. There is a sustained push towards building of digital public infrastructure in agriculture, strengthening credit to farmers and promotion of the cooperative sector.

Like in the past years the government considers infrastructure development as a driver of growth and employment. This is reflected in record capital outlays this year, which saw a 33% increase to reach ₹10 lakh crore. There is also a focus on enhancing private investment in this sector. The capital outlays for the railways too have increased substantially over the years to support the government’s increasing efforts to improve the road transport network.