The Modi government’s 2023 budget was always going to be a tricky balancing act, thanks to a global economic slowdown and domestic concerns like inflation. But there are also elections.
With polls to parliament just 14 months away and nine states and Jammu and Kashmir going to the polls this year alone, many experts were worried it would be an overtly populist budget.
In the end, it is not an outrightly populist budget but it is one that has tried to please many — like the middle class, women, tribals, and backward castes. It is a budget that aims to create jobs through a massive push in spending without hurting the government’s fiscal discipline. And this will be key ahead of next year’s Lok Sabha polls.
Brokerage Nomura issued a statement saying the budget has “pushed for growth via public capex and continued on the path towards fiscal consolidation, without offering much in terms of outright populism.”
New tax scheme
One big headline was of course the change in tax exemptions under the new tax scheme to please the salaried middle class. For years, the middle class has felt ignored in the budget while simultaneously being hammered by rising prices. Tax slabs haven’t seen a change since 2018.
Some experts have however pointed out that by pushing people to the new tax regime, safety nets provided through exemptions in the old scheme will be hit. This is the only social security net for millions. So the jury is still out on how this may play out.
The outlay for the Pradhan Mantri Awas Yojana, a scheme to build houses for the poor, was increased by 66% to over Rs79,000 crore. That’s up from Rs48,000 crores in the last budget. Subsidies and schemes for the poor have been a key aspect of the government’s election strategy.
The finance minister also launched new socioeconomic development schemes including one for tribals and another to support artisans from weaker sections and Scheduled Castes, Scheduled Tribes and Other Backward Classes. All of these groups are being aggressively wooed by the BJP ahead of the general elections.
