Budget hikes capex to record Rs 10 lakh crore, gives partial relief to 'aam aadmi'
Sandeep Dikshit
New Delhi, February 1
Union Finance Minister Nirmala Sitharaman hiked capital expenditure by a massive 33 per cent to Rs 10 lakh crore and provided direct tax concessions worth Rs 35,000 crore while presenting the last full Budget before next year’s general elections.
Centre’s record capital investment will be supplemented by its Rs 3.7 lakh crore as grants-in-aid to states for the creation of capital assets. This will raise India’s effective capital expenditure in 2023-24 to Rs 13.7 lakh crore or 4.5 per cent of GDP. Railways with Rs 2.4 lakh crore and roads with Rs 3.44 lakh crore will account for bulk of the outlay.
The Budget also announced 100 projects for last and first mile connectivity for ports, coal, steel, fertiliser and food grains sectors with investment of Rs 75,000 crore, including Rs 15,000 crore from the private sector. It also includes Rs 79,000 crore for PM Aawas Yojna and 50 new airports to boost regional connectivity.
The capital outlay for the defence sector has been hiked by Rs 10,000 crore to Rs 1.62 lakh crore.
Sitharaman said a “Saptarishi” of priorities will guide the Government’s plans. These include inclusive development, Reaching the Last Mile, Infrastructure and Investment, unleashing the potential, green growth, youth power and financial sector. These measures would help achieve GDP growth rate of about 6.5 per cent in 2023-24.
For the aam admi, the Budget has proposed a revision in tax slabs. Among the five major announcements in this respect, the IT rebate limit in the new regime will be up from Rs 5 lakh to Rs 7 lakh along with revision of tax slabs for individuals. The other three pertain to reduction of the highest surcharge rate that would reduce the maximum tax rate and extension of tax exemption limit on leave encashment.
In more gestures to the common man, a one-time Mahila Samman Savings Certificate, valid till March 2025, will offer deposits up to Rs 2 lakh at 7.5 per cent interest. The maximum deposit limit for Senior Citizen Savings Scheme and Monthly Income Account Scheme will be doubled to Rs 30 lakh and Rs 9 lakh, respectively. But in a knock to the common man, insurance policies with premium of over Rs 5 lakh will no longer be tax exempt.
The total Government’s expenditure of over Rs 42 lakh crore will be financed by receipts of Rs 27.2 lakh crore and borrowings of Rs 15.4 lakh crore. The gap or the fiscal deficit will be 5.9 per cent of GDP. In comparison, the current fiscal’s expenditure of about Rs 38 lakh crore has been funded by total receipts of 24.3 lakh crore and borrowings of Rs 14.21 lakh crore.
As a result, debt repayment obligations will increase to Rs 8.95 lakh crore as against Rs 7.27 lakh crore – an increase of almost Rs 1.5 lakh crore. Interest payment next year will be Rs 1.13 lakh crore as against Rs 98,000 crore in the current fiscal – an increase of Rs 15,000 crore.
The Government’s expenditure plans will also be helped by savings – Rs 49,000 crore less on fertiliser subsidy as compared to the revised estimates of the current fiscal and Rs. 76,000 crore less on food subsidy.
