Budget may follow 10 key guiding principles

Housing for all with essential utilities such as drinking water supply, elimination of absolute poverty, health care facilities in villages, and steps to boost manufacturing are among around 10 broad principles that will guide the next Union Budget.

Housing for all with essential utilities such as drinking water supply, elimination of absolute poverty, health care facilities in villages, and steps to boost manufacturing are among around 10 broad principles that will guide the next Union Budget, people aware of the matter said, offering new details of the annual exercise that is meant to focus on inclusive and equitable growth.

Union Budget is expected to be presented on February 1

Union finance minister Nirmala Sitharaman is expected to present the Budget on February 1 and the people aware of discussions said the federal government’s spending and resourcing plan will also set out to address socioeconomic challenges that have emerged from external factors such as the Ukraine war and China’s spiralling Covid situation, both of which have driven up prices.

“The vision of the leadership is inclusive and equitable growth. It will be kept in mind while finalising Budget proposals. The leadership is keen that resources must be spent prudently so as to improve lives of the common man, the poor and the underprivileged sections of society. In digital India, all must get access to food, shelter, health care and basic infrastructure required for ease of living,” one of the people said, asking not to be named.

But the 10 guiding principles are likely to be: housing for all with basic amenities such as toilets, drinking water, and 24-hour power supply; infrastructure creation with all-weather roads; elimination of absolute poverty; providing means of livelihood to at least one member from each family; rural development by increasing farm productivity; health care facilities in villages; bridging the communication divide between rural and urban areas; educating and skilling youth; a balanced regional growth; and making India a manufacturing hub for the world.

These principles will be in keeping with more medium-term and long-term goals, the Aatmanirbhar Bharat (self-reliant India) plan and the “Amrit Kaal” goal of turning India into a developed country by 2047, the year it will celebrate 100 years of Independence.

A second person said the guiding principles for framing the Budget must not be seen in isolation. “Every Budget is carefully prepared to alleviate poverty and raise the living standard of citizens, while accelerating economic growth. Multilateral agencies have acknowledged India’s efforts in this direction,” this person said.

According to the 2022 UNDP Global Multidimensional Poverty Index (MPI) report, India brought 415 million people above the poverty line from 2005-06 to 2019-21.

According to the people mentioned above, the government is reviewing achievements of its schemes and programmes pertaining to about the 10 parameters mentioned above so that calibrated interventions could be proposed in the upcoming Budget.

Under the housing scheme for the poor, about 12.27 million houses have been sanctioned till March 31, 2022 in urban areas and 24.9 million in rural India, the first person quoted above said. Over 107.6 million rural households have already been provided with tap water connections as of now.

“Similar progresses have been made in construction of highways, including rural roads, states have been incentivised to provide quality power, and education and training along with skilling have been brought in the forefront for providing gainful employment to youth. All these elements are expected to see renewed focus in the coming Budget,” the person said.

The Budget will take steps to bridge the digital divide between urban and rural India, focus on health care infrastructure and training, accelerate growth by making India a reliable manufacturing hub for the world, and bring regional balance by focusing on the east and the northeastern regions, the second person said.

“The Budget for FY24 will not be different from earlier budgets of the Modi government as there are elements of continuity in all budgets since the administration came to power in 2014. As this would be the last full Budget of this government, it has to emphasise a political statement in terms of achievements and the road ahead for the people, particularly the poor,” a third person said.

Speaking at the Federation of Indian Chambers of Commerce & Industry on December 16, Sitharaman also hinted that the upcoming Union Budget will follow in the spirit of earlier budgets. “We are not only going to set the template that was set earlier but follow it and take it further for India’s next 25 years. In 2047, we look forward to our children living in an India that will be far more developed,” she said at the 95th AGM of Ficci.

Experts said the Budget 2023-24 is likely to focus on fundamental developmental issues such as poverty, health, education and ease of living, and may not make any major change in the taxation system other than fine tuning the existing direct and indirect taxation regimes.

“This government’s economic policies have been prudent and nimble. It helped the finance minister to take calibrated measures as and when required during the entire Covid period from March 2020. As a result, India emerged as one of the fastest growing economies even as global growth outlook is bleak. Now the Indian economy has recovered from the impact of pandemic, the coming Budget may focus on socio-economic issues to make India a developed nation by 2047,” said Abhishek A Rastogi, author and legal professional on tax-related matters.

According to Naveen Wadhwa, deputy general manager at Taxmann, a tax research and advisory firm, the Budget this year mat focus on inclusive growth through enhanced capital investments. “The current government will present its last full budget before going for the general elections in 2024. Though the government may not announce a remarkable reduction in the tax rate, we expect announcements to give thrust to infrastructure development,” he said.