UPSC Key- February 2, 2023: Know about Union Budget 2023-24

Her balancing act: Won’t tax, will spend

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Main Examination: General Studies III: Government Budgeting

Key Points to Ponder:

• What’s the ongoing story– IN her last full Budget ahead of Lok Sabha elections next year, Union Finance Minister Nirmala Sitharaman kept her focus on two key aspects: one, growth – by setting aside a large outlay for an unprecedented surge in capital spending, and two, fiscal consolidation, by slashing subsidies and spending on the job guarantee scheme.

• Union Finance Minister Nirmala Sitharaman kept her focus on two key aspects-What are those aspects?

• Annual Financial Statement (AFS) or Union Budget and Article 112 of the Indian Constitution-Know in detail

• Department of Economic Affairs-Role, Under which Ministry?

• What are the three major components of Budget?

• What do you understand by fiscal consolidation?

• Why is fiscal consolidation important?

• How much did the government proposed to spend or do its total expenditure in 2023-24?

• Which sector get the highest allocations, in 2023-24?

• What are the main tax proposals in the Union Budget?

• What steps have been done toward fiscal consolidation in accordance with the Union Budget?

• “The big Budget idea came in the form of raising the threshold at which income tax kicks in to Rs 7 lakh a year from Rs 5 lakh a year, plus a solid nudge prodding individuals to shift to a new tax regime by restructuring the tax slabs”-how this step will impact everyone?

• Income tax slabs-compare and contrast the new tax regime with the old tax regime

• Nominal growth rate and real growth rate-Compare and contrast

• What is the predicted growth rate in the Union budget?

• Do You Know-The Budget has projected a nominal growth rate of 10.5 per cent for 2023-24; only if the average retail inflation for the year is assumed to be 4 per cent, does the real growth rate turn out to 6.5 per cent (nominal growth rate minus inflation) as projected in the Economic Survey. But the RBI has projected inflation in the first half of this year itself to be 5.2 per cent; even if the average inflation in the second half is 4 per cent, the full year average turns out to be 4.5 per cent. This only suggests that the government may be over-estimating the growth prospects for the next year.

• “Capital spending has a much higher multiplier effect – 2.5x – and hence adds more to economic output than revenue expenditure comprising salaries, pensions, interest payments, etc”-Discuss

• What would be the prudent fiscal policy?

• How did the government managed to stick to its fiscal prudence mantra and did not breach its deficit target of 6.4 per cent of GDP for the current financial year?

Other Important Articles Covering the same topic:

📍Union Budget 2023-24 Analysis

📍Nudge towards an exemption-free tax regime, breaks for the super-rich too

Adani headache grows: flagship sinks 28%, group scraps its FPO

Syllabus:

Preliminary Examination: Current events of national and international importance

Main Examination: General Studies IV: corporate governance

Key Points to Ponder:

• What’s the ongoing story– Adani Enterprises has cancelled its Rs 20,000 crore follow-on public offer (FPO), the company said in a regulatory filing late on Wednesday (February 1) evening. The company will refund proceeds it had received as part of its FPO, which was bailed out largely by corporates and foreign investors on Tuesday. The extraordinary development has come amid a massive market rout in Adani Group stocks following the release of the Hindenburg Research report that accused the group of “brazen stock manipulation and accounting fraud”.

• What Is a Follow-on Public Offer (FPO)?

• How Follow on Public Offer is different from IPO?

• Why Adani Enterprises has cancelled its Rs 20,000 crore follow-on public offer (FPO)?

• But wasn’t the Adani FPO oversubscribed?

• Adani Group calls off FPO: Why, what happened?

• What has the Adani Group said on the FPO?

• What does Hindenburg Research do?

• Who are the people behind the company?

• What other work has Hindenburg done?

• Finally, why is the company called ‘Hindenburg’?

• What Hindenburg Research said about the Adani Group?

• What is short selling?

Other Important Articles Covering the same topic:

📍Adani Group calls off FPO, to return money to investors: What exactly has happened?

📍What is Hindenburg Research, the company that has accused Adani Group of stock manipulation, fraud?

📍Hindenburg Research, which has accused the Adani Group of fraud, is a short seller. What is short selling?

THE CITY

Budget has a promise to end manual scavenging for good; victims’ families hope it resonates on the ground

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Main Examination:

• General Studies I: Salient features of Indian Society, Poverty and Developmental issues

• General Studies II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation

Key Points to Ponder:

• What’s the ongoing story- Aiming to put an end to manual scavenging, Finance Minister Nirmala Sitharaman while presenting the Union Budget 2023, on Wednesday, informed that all cities and towns will be enabled for 100% mechanical de-sludging of septics tanks and sewers to transition from manhole to machine hole mode. In December 2022, Minister of State for Social Justice and Empowerment Ramdas Athawale informed the Lok Sabha that as many as 400 people had died while undertaking hazardous cleaning of sewers and septic tanks since 2017.

• How mechanical desludging of septic tanks and sewers will end manual scavenging?

• Why the announcement made by Finance Minister is significant?

• What do you understand by the term ‘Manual Scavenging’?

• Is Manual Scavenging is driven by Caste, Gender and Income Divides?

• What data’s and statistics given by Ministry of Social Justice and Empowerment on Manual Scavengers says?

• What Socio-Economic Caste Census of 2011 says on ‘Manual Scavenging’?

• Prohibition of Employment as Manual Scavengers and their Rehabilitation Act, 2013 or Manual scavenging Act, 2013-Know the key highlights

• Survey of manual scavengers was conducted by the National Safai Karamcharis Finance and Development Corporation (NSKFDC)-What were the key takeaways?

• What are the steps taken by Centre and State Governments for rehabilitation of manual scavengers?

• Who is Bezwada Wilson?

• Why is manual scavenging still prevalent in India?

Other Important Articles Covering the same topic:

📍Budget has a promise to end manual scavenging for good; victims’ families hope it resonates on the ground

📍Explained: What is manual scavenging, and why is it still prevalent in India?

Union Budget 2023 Explained

BIG PICTURE: CAPEX PUSH & TAX REFORM

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Main Examination: General Studies III: Government Budgeting

Key Points to Ponder:

• What’s the ongoing story- Even though it is the last full-fledged Union Budget (for 2023-24) before the Lok Sabha elections of 2024, Finance Minister Nirmala Sitharaman chose to stick to the growth strategy that she first unveiled in 2019 when she announced a historic corporate tax cut. This growth strategy had two prongs. One, incentivise the private sector in the economy to invest in the productive capacity and thereby create jobs and push growth. The second part was about the government’s role in the economy. Here, the mantra has been minimum government. That, in turn, meant increasing the capital expenditure on the one hand, and raising more revenues via disinvestment and privatisation on the other. This was done to ensure that the government maintains fiscal prudence and doesn’t splurge on populist schemes.

• What is the current state of the Indian economy?

• “Even before Covid, the Indian economy was suffering from a secular deceleration in growth”-Analyse the given statement

• “Over the next three years — FY21 to FY23 — the economy suffered a technical recession as well as a protracted period of high inflation”-Elaborate further

• What is technical recession?

• What is the national income of India?

• How national income is calculated?

• What are the main engines of GDP growth?

• How have the main engines of GDP growth—private consumption, expenditures towards investments, everyday expenditures of the government, and net exports—performed?

• What has the Budget tried to achieve in this situation?

• Will the Finance Minister’s Budget strategy work?

Other Important Articles Covering the same topic:

📍Finance Minister Nirmala Sitharaman’s Union Budget 2023 has some big takeaways

📍First, what everyone has been looking forward to: changes in the new income tax regime. She has made the new tax regime more attractive. There are changes in the rebate limit and in tax slabs. What does this mean for the taxpayer?

📍FM Sitharaman proposed a 33% increase in capital investment outlay, raising it to Rs 10 lakh crore. This is the biggest in the past decade. What does it mean?

📍Some articles get cheaper and others get costlier due to changes in customs duty. Here is a list

📍The capital outlay for the railways has been increased to the highest ever – Rs 2.40 lakh crore. The government is trying to create more jobs

📍FM Sitharaman said the fiscal deficit will fall to 5.9% of the GDP. What does it mean for the stakeholders?

📍The FM called it the ‘first Budget of Amrit Kaal’. PM Narendra Modi said it will build a strong foundation for a developed India. What did opposition leaders say?

UNION BUDGET 2023-24 THE FISC

How cuts in spending, key schemes helped rein in fiscal deficit

Syllabus:

Preliminary Examination: Economic and Social Development

Main Examination: General Studies III: Government Budgeting

Key Points to Ponder:

• What’s the ongoing story-With the government sticking to the fiscal consolidation path, the move towards a sub-6 per cent fiscal deficit target in the next financial year of 2023-24 from 6.4 per cent of the GDP comes on the back of an effective compression in expenditure, including cuts in MGNREGA scheme, utilising savings on the back of a reduction in subsidies and expectations of high revenue growth.

• What is the targeted fiscal deficit for FY 23?

• What is the fiscal deficit?

• Fiscal deficit is an indication of what?

• Why fiscal deficit takes place?

• Do You Know-The government is aiming to follow a path of fiscal prudence by sticking to its fiscal glide path. High nominal growth along with buoyancy in revenues and compression in non-essential expenditure apart from savings on subsidies is expected to support the government’s move towards a sub-6 per cent fiscal deficit target for 2023-24. The government intends to stick to its fiscal glide path to reach the fiscal deficit target of below 4.5 per cent by FY2025-26.

Other Important Articles Covering the same topic:

📍Economy on right track; to grow at 7% in FY23: FM

Outlay on subsidies, MGNREGA lower as pandemic disruptions cease

Syllabus:

Preliminary Examination: Economic and Social Development

Main Examination: General Studies II: Important aspects of Governance and Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes

Key Points to Ponder:

• What’s the ongoing story– The Centre’s subsidy outgo on the three Fs – food, fertiliser and fuel (petroleum) – is expected to be Rs 1.47 lakh crore lower in the coming fiscal compared to 2022-23. Along with a Rs 29,400 crore reduction in the Budget for the Mahatma Gandhi National Rural Employment Act (MGNREGA), it would generate savings of over Rs 1.76 lakh crore, amounting to 0.6 per cent of GDP. That’s more than the fall in the fiscal deficit – from 6.4 per cent to 5.9 per cent of GDP – targeted by the finance minister Nirmala Sitharaman for 2023-24.

• ‘The apparent normalisation of economic activity – and, hence, no perceived need for special alleviation measures – also accounts for the outlay on MGNREGA being projected at Rs 60,000 crore for 2023-24’-Analyse the given statement

• What is the MGNREGS allocation in the Budget 2022-23?

• For Your Information-Finance Minister Nirmala Sitharaman has allocated Rs 60,000 crore for the scheme, lower than the budgetary estimate of Rs 73,000 crore for 2022-23. The reduction is sharper when compared with the revised estimate of Rs 89,400 crore for the current financial year. In 2021-22, an actual expenditure of Rs 98,468 crore was incurred on the MGNREGS. While presenting the budget, Sitharaman mentioned the MGNREGS only once, in the context of work for mangrove conservation.

• What is the debate on MGNREGS?

• What did the Economic Survey say about MGNREGS?

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA)-Mandate, Goals

• What are the core objectives of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS)?

• When was Mahatma Gandhi National Rural Employment Guarantee Act passed by the Indian Parliament?

• In what way paradigm shift has taken place with the implementation of MGNREGA?

• Who are the key stakeholders of MGNREGS?

• Issues with MGNREGA?

• COVID-19 pandemic and its impact on MGNREGA?

• After a dip in demand for work under Mahatma Gandhi National Rural Employment Guarantee Scheme (MG-NREGS) the demand for work has again seen a rise-Know the reasons

• How schemes such as MGNREGA helped alleviate distress migration?

Other Important Articles Covering the same topic:

📍Budget 2023 cuts MGNREGS funds: The debate around the rural employment scheme

UNION BUDGET 2023-24 TAXATION

Fresh pitch for overhauled income tax regime, with a sweetened deal

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Main Examination: General Studies III: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Key Points to Ponder:

• What’s the ongoing story-The government has gone all out in its attempt to convince individual taxpayers to migrate to the new income tax regime by overhauling slabs and offering additional sops to the lowest as well as the top strata of taxpayers. In the Budget speech, Finance Minister Nirmala Sitharaman pitched hard for the new tax regime, offering a slew of incentives in comparison to the old system, and dangling the carrot of negligible compliance burden that the simplified new regime promises.

• Why Transition from old tax regime to new tax regime?

• What changes Government has made in tax regime?

• For Your Information-While no changes have been made in the old tax regime, the government has decided to increase the scope of rebate to those with a taxable income of Rs 7 lakh per year from the earlier limit of Rs 5 lakh in the new system. Put simply, this means that those with an annual income of up to Rs 7 lakh will not be required to pay tax under the new system. The income ceiling for rebate in the old regime continues to be Rs 5 lakh.

• ‘Considering various scenarios across income groups, it appears that the spruced up tax regime will be more lucrative and nudge a large number of taxpayers to switch to it’-How?

• What is tax collected at source (TCS) rate?

• Do You Know-The Finance Bill, through the Budget 2023-24, amended Section 206C of the Income Tax Act levying a higher TCS on overseas tour programme packages. Also, 20 per cent TCS will be applicable on certain remittances without any threshold as against the current scenario of 5 per cent tax rate where funds in excess of Rs 7 lakh are sent out of India under the Liberalised Remittance Scheme of the RBI. The amendments will come into effect from July 1, 2023.

Other Important Articles Covering the same topic:

📍Remittances high, low tax payment: Govt hikes TCS rate

Deposit limit for senior citizens’ scheme hiked, new savings scheme for women

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Main Examination:

• General Studies II: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes; mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections

• General Studies III: Government Budgeting.

Key Points to Ponder:

• What’s the ongoing story- The Union Budget has proposed more incentives to senior citizens and women to save more money at a better interest rate. Finance Minister Nirmala Sitharaman announced a new savings scheme for women and hiked the limit for Senior Citizens Savings Scheme and Monthly Investment Scheme (MIS).

• What is ‘Mahila Samman Savings Certificate’?

• For Your Information-The maximum deposit limit for Senior Citizen Savings Scheme will be enhanced from Rs 15 lakh to Rs 30 lakh. The current interest rate on this scheme is 8 per cent, higher than most bank deposit rates. However, it has a lock-in period of five years. The total outstanding in this scheme as of February 2022 was Rs 1,17,239 crore, according to RBI data. The maximum deposit limit for Monthly Income Scheme Account for senior citizens has been enhanced from Rs 4.5 lakh to Rs 9 lakh for a single account, and from Rs 9 lakh to Rs 15 lakh for a joint account.

• What is Senior Citizen Savings Scheme?

• Who is considered senior citizen in India?

• What percentage of Indian population is senior citizens?

• How senior citizens’ savings schemes will empower senior citizens?

Other Important Articles Covering the same topic:

📍Accusing Centre of denying benefits to disabled persons and senior citizens, NCP stages protest

UNION BUDGET 2023-24 INFRA

Renewed thrust on capex: Outlay hiked 33% to Rs 10 lakh cr

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Main Examination: General Studies III: Government Budgeting and Infrastructure

Key Points to Ponder:

• What’s the ongoing story-The Union government has again chosen capital expenditure as a key focus area in the 2023-24 Union Budget. Finance Minister Nirmala Sitharaman Wednesday said that the Centre will continue its 50-year interest-free loans to state governments for an additional 12 months in order to aid infrastructure investment with an outlay of Rs 1.3 lakh crore. The Centre’s capital expenditure outlay will be Rs 10 lakh crore for FY 24, an increase of 33 per cent year-on-year, she said.

• How much budget allocated for infrastructure development?

• How much budget allocated for the Indian Railways?

• ‘Roads and railways have been two sectors that have seen higher additional capital outlays over the last few budgets and have been central to the government’s capex push’-Elaborate

• For Your Information-The Economic Survey 2022-23, tabled in Parliament on Tuesday and authored by Chief Economic Advisor V Anantha Nageswaran, had emphasised on the importance of capital expenditure to crowd in private investment and to drive growth. The government’s thrust on capex, particularly in the infrastructure-intensive sectors like roads and highways, railways, and housing and urban affairs, has longer-term implications for growth, the survey had stated.

Other Important Articles Covering the same topic:

📍Handed its highest-ever allocation, Rlys plans more lines, Vande Bharat factories

📍Push for highways sector, NHAI allocation up

UNION BUDGET 2023-24 RURAL

High rural housing outlay to spur asset creation

Syllabus:

Preliminary Examination: Economic and Social Development-Sustainable Development, Poverty, Inclusion, Demographics, Social Sector Initiatives, etc.

Main Examination: General Studies III: Government Budgeting and Infrastructure

Key Points to Ponder:

• What’s the ongoing story- In a big push to rural infrastructure, the government has allocated Rs 54,487 crore for its flagship rural housing scheme—Pradhan Mantri Awaas Yojana-Gramin—for financial year 2023-24, which is the highest ever allocation since the inception of the scheme in 2016. Besides, an allocation of Rs 70,000 crore has been made for Jal Jeevan Mission, a scheme aimed at providing tap water connections to rural households.

• For Your Information-The details available in the budget documents shows that out of Rs 79,000 crore allocated for the PMAY (Rural & Urban both), an amount of Rs 54,487 crore has been earmarked for the PMAY-Gramin. The allocation of Rs 54,487 crore for the PMAY-Gramin is 172 per cent higher as compared to the allocation of Rs 20,000 crore in 2022-23. It is even higher than the Revised Estimates of Rs 48,422 crore for the year 2022-23. Of the allocation of Rs 54,487 crore, an amount of Rs 50,486.99 crore has been allocated for the programme component, while an amount of Rs 4,000 crore has been provided for interest payment to NABARD for EBR [Extra Budgetary Resources] loans.

• Pradhan Mantri Awas Yojana Gramin (PMAY-G)-Features of the Scheme and Nodal Ministry

• PMAY (Rural or Gramin) and PMAY (Urban)-Difference

• “The PMAY-Gramin is one of the schemes that plays a crucial role in asset creation in rural areas”-how?

• “The PMAY-Gramin generates employment both directly and indirectly”-Discuss

• The PMAY-Gramin aims what?

• Do You Know- In addition to a big jump in the PMAY-Gramin budget, the government has retained the allocation of Pradhan Mantri Gram Sadak Yojna (PMGSY) at Rs 19,000 crore for financial year 2023-24. After NREGS and PMAY-Gramin, the PMGSY is the third biggest scheme of the Rural Development Ministry. The higher allocation for the PMAY-Gramin and maintaining the allocation of PMGSY at the last year’s level is significant in view of the government focus on capital expenditure. The government has allocated Rs 70,000 crore for Jal Jeevan Mission, which is higher than the allocation of Rs 60,000 crore made in 2022-23. However, the allocation of Jal Jeevan Mission was reduced to Rs 55,000 crore at the time of RE for the current financial year (2022-23).

Other Important Articles Covering the same topic:

📍Demand still high, but NREGS kitty shrinks to pre-Covid level

📍As number of beneficiaries dips, PM-Kisan allocation lowest in 5 years at Rs 60k crore

UNION BUDGET 2023-24 SOCIAL SECTOR

157 new nursing colleges on the cards, drive to end sickle cell anaemia by 2047

Syllabus:

Preliminary Examination: Economic and Social Development

Mains Examination: General Studies II: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

Key Points to Ponder:

• What’s the ongoing story-Increasing the FY24 healthcare budget to Rs 89,155 crore from the previous year’s estimate of Rs 86,200 crore, Finance Minister Nirmala Sitharaman Wednesday also announced a plan to set up 157 new nursing colleges in co-location with the existing 157 medical colleges established since 2014. The 157 medical colleges were established in three phases covering 39 aspirational districts under a centrally-sponsored scheme, along with existing district or referral hospitals.

• India’s Health Budget-Know the Statistics

• Public Health Systems in India-Know the Background

• Current state of India’s health infrastructure- What World Bank data says?

• COVID-19 Pandemic and India’s Healthcare System-Connect the dots

• Steps required to strengthen the existing state of Health infrastructure in India

• What do you understand by Universal Health Coverage (UHC)?

• PM Atma Nirbhar Swasth Bharat Yojana and Ayushman Bharat Scheme-Key Highlights

• Is there any explicit/implicit recognition of the right to health or healthcare under the Constitution? (Hint: Directive Principles of State Policy in Part IV of the India Constitution provide a basis for the right to health)

• What is Supreme Court of India stand on Right to Health?

• What are the key issues faced by the healthcare sector of India?

• For Your Information-The Finance Minister also announced a mission to eliminate sickle cell anaemia by 2047. The programme will include awareness, counselling and universal screening of seven crore people aged up to 40 years in affected tribal areas.

• What is sickle cell anaemia?

• What is the burden of disease?

• Why is Sickle Cell anaemia so under-diagnosed and how can it be prevented?

Other Important Articles Covering the same topic:

📍Union Budget 2023: What is Sickle Cell anaemia? Pioneer ICMR researcher says how the target can be met

Other Important Articles to be Read in today’s Budget Special

📍Education outlay hiked 8%, PM-Poshan gets 13% more

📍Tribal welfare gets Rs 4,000 crore more, but not much for women

📍Climate action central to Budget again

For any queries and feedback, contact priya.shukla@indianexpress.com
The UPSC KEY Indian Express is now on Telegram. Click here to join our channel and stay updated with the latest Updates.