Union Budget 2023-24 is deceptive. The very presumptions of revenue and growth are overestimated, promises made are too high to be realized, allocations made are inequitable for different sectors as well as social groups, and the higher allocations made for certain sectors are being energetically overplayed.
If the Indian Economy is set to have a lower growth rate in 2023-24 as per all the national and international authoritative estimates, all the big talks about the budget provisions are only efforts to deceive the people in the backdrop of the alarming ground reality and inefficiency and insufficiency of the last full budget of the Modi government before General Election 2024.Vulnerable sections of the society would find themselves even more vulnerable with less allocations in real term adjusted with high prices and inflation.
The deception begins with a presumption of the Nominal GDP for BE 2023-2024 that has been projected at Rs 3,01,75,065 crore assuming 10.5 % growth over the estimated Nominal GDP of Rs 2,73,07,751 crore as per the First Advance Estimates of FY 2022-23.
The presumption of growth rate of 10.5 per cent of the GDP for 2023-24 on which all the revenues and expenditure would rest is quite misleading. OECD has projected the growth rate to decline to 5.7 per cent in 2023, and all other international agencies have cut their earlier growth estimates and put it in the range of 6.5-7 per cent.
Even the Economic Survey 2022-23 has projected a baseline GDP growth of 6.5 per cent for 2023-24 in real terms, which it claimed broadly comparable to the estimates provided by multilateral agencies such as the World Bank, the IMF, and the ADB, and by RBI. The actual outcome for real GDP growth, it says, will probably lie in the range of 6 to 6.8 per cent, depending on the trajectory of economic and political developments globally.
It clearly indicates that India’s growth rate for the year 2023-24 has been over estimated to bring bigger figures only to impress the people of India, and to show that bigger allocations have been made that would push the growth momentum further when it has been projected to actually decline much below than the assumed 10.5 per cent to around 6 per cent or even less with downside risks.
It should be noted that annual nominal growth potential of India has been estimated to be around 10 to 12 per cent on average in the coming years, with the condition that fiscal parameters will continue to improve. It was one of the assertions of the Economic Survey 2023-23.
It seemed that the Budget 2023-24 has taken into consideration this potential rather than the actual ground reality. Government had done the same thing in assuming GDP for BE 2022-2023 and projected it at Rs 25800000 crore assuming 11.1% growth over the estimated GDP of Rs 23214703 crore for 2021-2022 (RE).
Economic Survey 2022-23 has now estimated economic growth of the country for the current fiscal at 7 per cent of the GDP, as against the budget presumption of 11.1 per cent of growth. It shows the deception of giving big picture and realising much less.
Digging deep into the data, is even more puzzling. The first advanced estimate for the year 2022-23 shows the estimated GDP at Rs 2,73,07,751 crore, as against the budget estimate of Rs 25800000 crore. It shows an increase of GDP at 15.4 per cent. How it come that the Economic Survey 2022-23 put the GDP growth rate for the current fiscal at only 7 per cent? There are obviously much more concealed in the deceptive and unexplained data. Even the 7 per cent GDP growth for the current fiscal is highly doubtful when it is sliding quarter after quarter.
This makes not only the GDP data dubious but also unachievably higher assumption of growth pushes the revenue projection unrealistically high on the basis of which higher allocations are shown.
Reduction in social sector allocation in real terms adjusted to the price rise and inflation especially in health, education, and employment shows the general intention of the government in very bad light, since the sufferings of the common people has been just ignored.
Budget 2023-24 focussed providing big money to a select few through privatisation, investment, disinvestment, financial incentives, and even through capex or big investment in infrastructure. It would be clear if one compares social sector allocations and provisions with other sectors that create big profit for the government, their favourites, and officials, either legal or illegal in the form of cut and commissions. Inequitable allocation of funds is seen everywhere, and we already known how inequality has been rising sharp under the policies adopted by Modi government since 2014.
The total expenditure in BE 2023-24 is estimated at Rs 45,03,097 crore of which total capital expenditure is Rs 10,00,961 crore. Budget 2023-24 has claimed that it reflects continuing strong commitment of the Union Government to boost economic growth by investing in infrastructure development leading to an increase in capital expenditure by 37.4 per cent over RE2022-23. Effective Capital Expenditure, at Rs 13,70,949 crore in BE 2023-24, shows an increase of 30.1 per cent over RE 2022-23.
Even this big capex conceals several things, and has been made to swell by including several other things among which is the money given to support oil companies under “capital expenditure to fund the green transition”.
Government says that it would boost growth and employment, but it does not explain how the lives and livelihoods of the people would be secured without complete social security coverage at a time when even this so called ‘big boost’ would not be able to stop the decline in GDP growth.
There have been massive cuts in allocation for MGNREGA, labour welfare schemes, food subsidy, and several health schemes including PM Swasthya Suraksha Yojna. Allocation for education is not enough to recover even the learning loss that our students suffered during the pandemic.
The market intervention scheme supposed to provide price support to farmers may shock all that has fallen from Rs 1,500 crore to only Rs 1lakh. There is another surprise, that PM-Kisan allotment is Rs 60,000 crore, same at the current year, but payments have been increased from Rs 6000 to Rs 8000. There must be something wrong with calculation and intention.
As for the state transfers are concerned, the Budget 2023-24 has made a provision for Rs 3,59, 470 crore. However, it must be noted that only Rs 3,07,204 crore are to be transferred to states in the current fiscal as against BE of Rs 3,67,204 crore. Therefore, this provision is not even reliable. Comparing the current transfer to states shows a sharp decline from a transfer of Rs 4,60,575 crore in 2021-22. Share of tax revenue to states has bee brought down to only 30.4 per cent as against 33.2 per cent in 2021-22 while the 14th Finance Commission has promised a share of 42 per cent. (IPA Service)