Problems and solutions in India’s growth and development in context of February 2023-2024 budget

 

Introduction

On 1^st February 2023 India’s Finance Ministry put forwarded the budget policy and budget provisions for the financial year 2023-2024. Budget highlighted the blue print of the yearly expenditure details which are a part of the broader policy of the growth and development model of India. Here some important grey areas will be discussed which has been pointed out in earlier article of the blog.

Food subsidy

In this subsidized food is provided to 80 crore peoples. In 2022-2023 budget food subsidy provision was of 2 lakh crore. In this year’s budget 1,97,350 crore Rs. (1.9 trillion) is allocated. Budget allocation is decreased little bit. Government has not provided any blueprint of how these subsidy will be ended with financially empowering those 80 crore peoples.

Fertilizer subsidy 

In this subsidized fertilizer is provided to farmers. Last year during 2022-2023 budgets 1 lakh crore was allocated. In this year’s budget 1,75,100 crore Rs. (1.7 trillion) is allocated. Budget allocation is increased due to increased prices in international market. Government should have launched a program to test various alternatives as a substitute to imported fertilizers. Domestic low cost substitutes will help government to end foreign dependence, save foreign currency and help to enhance rupee value as well as it will also save government money which is provided as a fertilizer subsidy. 

Work subsidy under Mahatma Gandhi National Rural Employment Guarantee Program

In this 100 days’ guaranteed wage employment work support is provided. In 2022-2023 budget work subsidy provision was of 73,000 crore. In this year’s budget 63,000 crore Rs. is allocated. Budget allocation is decreased little bit. Government needs to find other programs as programs like MGNAREGA have efficacy only up to a certain time period, For example if a district administration is running this program in a village and developing infrastructures like ponds, roads etc. but after certain time nothing will remain in which village residents can be engaged for generating income for their livelihoods.

PM Kisan Samman Nidhi Yojana

In this cash support is provided to more than 10 crore poor farmers. In this yojana 6,000 Rs in a year is provided to farmers. Allocated fund is 60,000 crore where as last year allocation was 68,000. Budget allocation is decreased little bit. Small farmers constitute about 70 million households. Such farmers have small fragmented farmland holdings which results in low monthly income. Government will have to provide other income generating sources at each village level so that farmers do not require any such financial assistance or do not require migrating to urban regions. Government needs to plan and launch such programs in which such a large amount of peoples should be able to earn money on their own. 

 

Conclusions

In this year’s budget a policy related program was expected to be launched but nothing declared. In a total budget of about 45 lakh crore about 10 lakh crore will go as an interest payment to service the debt as per this year’s budget. Revenue receipts are only of about 26 lakh crore and government is targeting to take loan of about 17 lakh crore. So governments finance capacity is tightening year by year. Such borrowings are fundamentally causing the value of rupees to decrease as taking loans as a nation is a sovereign issue not like an individual corporate loan. Where as many thinks that only higher imports in comparison to lower exports influences the value of rupee. This will help to plan accordingly.