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budget 2023-24

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Economists Suggests FM To Step Up Capex, Cut Tax In Budget 2023

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According to the economists, considering the high inflation rate, providing a relief on income tax will boost domestic demand. In total, the finance minister has held eight rounds of discussions, beginning with India Inc on 21 November and ending with a round of consultation along with economists on 28 November.

The government is asked by the Economists to level up capital expenditure, rationalise personal income tax and stick to fiscal discipline in the upcoming Budget, on 28 November.

During the finance minister Nirmala Sitharaman led pre-Budget interaction, they also urged her to increase health care outlay and focus on quality job creation.

According to the economists, considering the high inflation rate, providing a relief on income tax will boost domestic demand. In their suggestion, the Centre should continue with long-term loans to states, meanwhile relaxing some of the spending restrictions and handhold them through fiscal management. Its focus should especially be on those with high borrowings.

The meeting was attended by the economists and experts along with N R Bhanumurthy of Dr BR Ambedkar School of Economics University, Ashwani Mahajan of Swadeshi Jagaran Manch, Poonam Gupta of National Council of Applied Economic Research, Monetary Policy Committee member Ashima Goyal, economist Karthik Muralidharan, Aditi Nayar of Icra, Santanu Sengupta of Goldman Sachs, Rahul Bajoria of Barclays, Madan Sabnavis of Bank of Baroda, and Deepak Mishra of ICRIER.

In total, the finance minister has held eight rounds of discussions, beginning with India Inc on 21 November and ending with a round of consultation along with economists on 28 November.

Expectedly, the Budget 2023-24 is to be tabled in Parliament on 1 February.

The finance Ministry said that with more than 110 invitees representing 7 stakeholder groups participated in all 8 meetings till date.

Also, she gave assurance to them on their suggestions to be considered carefully while preparing the Budget 2023-24.

Pic credits: AFP

FM Meets State Finance Ministers For Their Suggestions On Budget 23-24

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The details of the meeting are yet not made public. In order to prepare the annual Budget for the upcoming financial year 2023-24 the formal exercise began on 10 October

Union Finance Minister Nirmala Sitharaman chaired a pre-Budget meeting with the finance ministers of all States and Union Territories to consider their inputs and suggestions for the Budget 2023-24.

The meeting took place at the national capital, on 25 November.

Apart from Sitharaman and state/union territories finance ministers, Union MoS for Finance Pankaj Chaudhary and Bhagwat Karad, Chief Economic Advisor Anantha Nageswaran and secretaries from various arms of union finance ministry and others attended the meeting.

The details of the meeting are yet not made public.

As of now, Sitharaman has chaired various pre-budget consultations group of experts and industry leaders, including the agricultural and food processing industry experts.

The first meeting was held on 21 November.

In order to prepare the annual Budget for the upcoming financial year 2023-24 the formal exercise began on 10 October.

The Budget for 2023-24 is expected to be tabled on 1 February.

Notably, Modi 2.0 government will present last full Budget before the Lok Sabha elections to be held in April-May of 2024.

money

Tax Collection To Exceed Budget Estimate Nearly By Rs 4 Lakh Cr: Revenue Secy

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The tax collection target set in the Union Budget is nearly Rs 27.50 lakh crore, for the financial year ending March 2023. Expectedly, the total tax collection is around Rs 31.50 lakh crore for 2022-23

The revenue secretary, Tarun Bajaj said that tax collection in India will exceed the budget estimate by nearly Rs 4 lakh crore in the current fiscal, on 23 November. This is due to buoyant income tax, customs duty and GST (Goods and Services Tax) mop-up.

According to him the tax revenues growth will continue to be on higher than the GDP growth, backed by formalisation of the economy and better compliance, reported a media house.

The tax collection target set in the Union Budget is nearly Rs 27.50 lakh crore, for the financial year ending March 2023.

Bajaj said the direct tax collection comprising personal and corporate taxes would be close to Rs 17.50 lakh crore in the current fiscal. Mop up from indirect taxes (customs, excise and GST) would be close to Rs 14 lakh crore.

Expectedly, the total tax collection is around Rs 31.50 lakh crore for 2022-23, he added.

The direct and indirect tax mop up fixed in the budget stood at Rs 14.20 lakh crore and Rs 13.30 lakh crore for current fiscal, respectively. It took the total figure to Rs 27.50 lakh crore.

Bajaj said that “We are using a lot of data from the income tax and GST departments, and MCA (ministry of corporate affairs). Also, we get data regarding high value expenditure. Formalisation of economy and technology that has helped improved compliance.”

During last fiscal, the direct tax collection went nearly 50 per cent up to Rs 14.10 lakh crore as compared to 2020-21.

“Higher tax collection than GDP growth, will continue as a trend,” said the secretary.

He also said that the government will be very near to the target set during budget, despite there existed a reduction in customs and excise duties during this fiscal.

A target of collecting Rs 2.13 lakh crore and Rs 3.35 lakh crore from customs and excise duties, respectively, has been set in the budget.

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UP Govt To Present State Supplementary FY23 Budget On 5 Dec

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The three-day long State Assembly will begin on 5 December of which the agenda is yet to be finalised. The budget will cover Global Investors Summit along with distribution of tablet, smartphone and other items. The Business Advisory Committee meeting of the House is expected to take place in the next week in order to decide the agenda and the number of sittings of the House

The Uttar Pradesh government will present its supplementary budget for the current financial year 2022-23 on the first day of the winter session of the Assembly on 5 December, reported a media house on 22 November.

The three-day long State Assembly will begin on 5 December of which the agenda is yet to be finalised, the report added

Discussions on the supplementary budget will take place on 6 December followed by which few bills will be passed on 7 December, the report said without quoting the sources.

The budget will cover Global Investors Summit along with distribution of tablet, smartphone and other items, the sources added.

This is going to be the third 18th Legislative Assembly session of Uttar Pradesh and it will be a short session.

The Business Advisory Committee meeting of the House is expected to take place in the next week in order to decide the agenda and the number of sittings of the House.

On 26 May, the Yogi Adityanath government 2.0 presented its first budget after the UP-assembly elections ended on 22 March. Followed by the same, the new government took oath in the last week of March.

The size of the annual budget for 2022-23 was nearly Rs 6.15 lakh crore. It was 10 per cent more than the previous full budget of around Rs 5.5 lakh crore which was presented in February 2021.

economy

Job Creation, Steps To Broaden Tax Base Should Be Budget’s Focus: India Inc

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The virtual pre-Budget meeting was called for an aggressive focus on privatisation of public sector units and increasing allocation to capital expenditure

The focus of upcoming budget should be on measures to boost job creation and widen the tax base by rationalising GST and personal income tax slabs. This will enhance the consumption, said the industry bodies during their pre-Budget meeting with finance minister Nirmala Sitharaman on 21 November.

The president of CII (Confederation of Indian Industry), Sanjiv Bajaj said that the external scenario may continue to remain unfavourable for some time. Therefore, we need to broaden the base of our domestic economy. This can be achieved by creating new sectors of growth and driving employment generation to enhance domestic demand, inclusion and growth.

The virtual pre-Budget meeting was called for an aggressive focus on privatisation of public sector units and increasing allocation to capital expenditure. This is to be done with an aim on an investment-led growth strategy to lift India’s economy amidst the global uncertainty.

The CII forming part of the virtual meet suggested that an employment linked incentive scheme maybe introduced and consideration of an urban employment guarantee scheme and initiate a pilot in metro cities first in this budget, is what the government could do to boost job creation.

Another important industry body PHDCCI (The PHD Chamber of Commerce and Industry) too submitted its suggestions for the Budget to the finance minister virtually on 21 November.

A five-pronged strategy in order to revitalise the private investments through measures to boost consumption, increase capacity utilisation in factories, increase job creation, improve social infrastructure quality and accelerate economic growth of India, formed part of the suggestion.

The president of PHDCCI, Saket Dalmia in a statement said that the union budget 2023-24 is being presented amidst at a crucial juncture where exists geo-political uncertainties, high inflation and slowing world economic growth. At this point, in order to boost domestic sources of growth, calibrated steps would be important to maintain the steady economic growth trajectory.

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CII Suggests I-T Cut, Higher Public Spend In Budget’23 Wish List

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The industry body made suggestion on raising capital spending to 3.3 to 3.4 per cent of GDP (Gross Domestic Product) in FY24 from 2.9 per cent. Also, The suggestions include surge in outlays on green infrastructure along with traditional infrastructure such as roads, railways and ports

The Confederation of Indian Industry (CII) in its pre-budget wish list has suggested a cut in personal income-tax and a boost in public spending.

The industry body made suggestion on raising capital spending to 3.3 to 3.4 per cent of GDP (Gross Domestic Product) in FY24 from 2.9 per cent. The aim is to increase it further to 3.8 to 3.9 per cent by FY25. It focused on the need for revitalising the investment along with consumption demand.

The president of CII, Sanjiv Bajaj thinks a fresh perspective is required at the capital gains tax regarding its rates and holding period to remove complexities and inconsistencies. Also, in his suggestion the personal income tax rates be cut down to give consumers more money.

The suggestions include surge in outlays on green infrastructure along with traditional infrastructure such as roads, railways and ports.

Along with including infrastructure bonds, the CII has proposed amplification of corporate bond markets for the financing infrastructure. This is for prioritising a package for large play of urban municipal bonds among others.

Credits: AFP

FM Nirmala Sitharaman To Begin Pre-Budget Meetings From 21 Nov

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Following the schedule, she will also meet the representatives of services sector and trade bodies, along with the experts from social sector, including health, education, water and sanitation, on 24 November. Also, critical issues related to high inflation will have to be addressed in the budget for the next year

The finance minister Nirmala Sitharaman is ready to begin the customary pre-budget meetings starting from 21 November. This time the discussion will be focusing on issues concerning climate change and infrastructure.

The meetings will take place virtually by Sitharaman on 21 November in three groups along with industry chambers, infrastructure sector and environment experts looking at suggestions for the 2023-24 Budget from the stakeholders.

On 22 November, the minister will meet agriculture and agro-processing industry, representatives from financial sector and capital markets.

Following the schedule, she will also meet the representatives of services sector and trade bodies, along with the experts from social sector, including health, education, water and sanitation, on 24 November.

The trade union representatives and economists will hold the pre-budget meetings scheduled on 28 November.

Suggestions from the participants will be taken on the 2023-24 Budget which will further be presented in Parliament by the finance minister on 1 February.

The climate change would be would be discussed with high priority in 2023-24 Budget making. This is due to India’s pledged towards becoming net zero emitter of carbon by 2070, reported a media house.

Also, critical issues related to high inflation will have to be addressed in the budget for the next year. This shall boost demand, job creation and putt the economy on a sustained 8 per cent plus growth path.

The Modi led government and Sitharaman will be discussing the fifth budget and the last full budget prior to the general elections slated in April-May 2024.

Credits: AFP

FY23 Budget Estimate May Rise Between Rs 3-3.5 Lakh Cr

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The increase ranging between 10.9 to 12.7 per cent for the budget estimate of Rs 27.6 lakh crore gross tax collection has been recorded for the year. The gross direct tax collections went 30.7 per cent up from the last year to Rs 10.54 lakh crore, as per the latest data, as of 10 November

The government expects a surge in tax revenue at around Rs 3 to 3.5 lakh crore in the current fiscal year considering the revised accounts estimates for financial year 2023 (FY23) which is going to be presented in the February budget, said the officials.

There has been an increase in both direct and indirect taxes’ collection due to improved compliance, the post-pandemic economic recovery and high inflation, officials added.

The increase ranging between 10.9 to 12.7 per cent for the budget estimate of Rs 27.6 lakh crore gross tax collection has been recorded for the year.

Expectedly, the collection will majorly fund the extra spending on food and fertiliser subsidies and keep a check on fiscal deficit.

While presenting the budget in February for the current fiscal year, finance minister Nirmala Sitharaman had set a target of gross tax revenue of Rs 27.6 lakh crore in FY23. Reportedly the estimate is 9.5 per cent up from the revised estimate of Rs 25.2 lakh crore for FY22.

The gross direct tax collections went 30.7 per cent up from the last year to Rs 10.54 lakh crore, as per the latest data, as of 10 November. During the first ten months of the fiscal, the goods and service tax revenue is equally robust and up with 29.7 per cent at Rs 10.5 lakh crore.

A surge in the nominal gross domestic product (GDP) at 26.7 per cent on year-on-year basis was witnessed during the June quarter. It nearly doubled from 13.5% growth in real terms. As compared to the budget estimates in FY22 at Rs 22.2 lakh crore, the gross tax collections too went up, reaching Rs 25.2 lakh crore in the revised estimate.

According to the officials, apart from the recovery, the use of data mining and improved compliance, continued buoyancy. The rise in revenue will enable the government meet a spike in subsidy bills due to the rally in global food, fertiliser and fuel prices.

CFO World

Centre May Launch 7-8 PLI Schemes In FY23 Budget: Report

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Previously a report stated that a surge from Rs 7.5 trillion in the current FY to Rs 10 trillion in FY24, may be see in capex. The government has launched 14 PLI schemes 2020 only. Expectedly such schemes may boost manufacturing by 500 billion dollar by 2025, according to a media house. The PLI schemes were put out with an outlay of Rs 51,311 crore in March 2020

The central government may make announcements of seven to eight new production-linked incentive (PLI) schemes in the upcoming Union Budget, to boost the privatisation further. Such schemes will cover segments such as textiles, electronic components, furniture, toys and leather, reported a media house.

There might be surge in capital expenditure target according to media reports. Previously a report stated that a surge from Rs 7.5 trillion in the current FY to Rs 10 trillion in FY24, may be see in capex.

A media house had reported that this will play important role for the NDA government too with the upcoming 2024 general election. Also, the Centre will keep tapping states and central public sector enterprises in order to raise their capex.

The government has launched 14 PLI schemes 2020 only. Expectedly such schemes may boost manufacturing by 500 billion dollar by 2025, according to a media house. The PLI schemes were put out with an outlay of Rs 51,311 crore in March 2020.

Mobile components, pharma ingredients and medical device manufacturing companies were given these schemes. Later then in November 2020 during second round, in total 11 schemes were rolled out with an outlay of Rs 1.46 trillion. Segments like food products, drones and telecom formed part of it.

The private investors faced a slowdown during the second half of FY23 and so responding to them, the centre is trying to give boost.

The demand side of the economy could not be impacted much through PLI schemes. During higher inflation, it means that there would be no surge in prices further, turning them into a safe choice.

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Finance Ministry Asks Ministries To Submit Asset Monetisation Report At Pre-Budget Meet

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In financial year 2022, the Centre exceeded its target by achieving Rs 96,000 crore as against of Rs 88,222 crore. It was largely driven by mines auctions, NHAI (National Highway Authority of India) road assets and power sector assets

The Finance Ministry urged various ministries and departments to submit a report updating the progress of Asset Monetisation at the pre-budget discussions and consultations which started from 10 October. 

Various ministries have been asked to submit a detailed explanation on the speed of asset monetisation by the Department of Economic Affairs, according to a letter dated 6 September.

In financial year 2022, the Centre exceeded its target by achieving Rs 96,000 crore as against of Rs 88,222 crore. It was largely driven by mines auctions, NHAI (National Highway Authority of India) road assets and power sector assets. 

The Centre has now set a target to raise Rs 1.62 lakh crore from asset monetisation for the current fiscal year. For capital expenditure and sticking to the fiscal path, achieving this target remains critical to push.

In September, the Finance Ministry had suggested for vigorous asset monetisation steps at all levels to weather the global headwinds and increased expenditure, through its Monthly Economic Report. 

However, by 15 September, ministries could raise only Rs 26,800, which was much below the level that centre had expected. 

The pre-budget meeting will used to push ministries to pace up their monetisation drive by the Finance Ministry.

The pre-budget meeting was held yesterday to discuss the revised estimates (RE) of expenditure for the current financial year and the fund required for financial year 2023-24. 

The notification issued by Budget Division of the finance ministry stated that the deliberations would continue till 10 November.

The Revised Estimates will be finalised by the centre by 11 January. The 2023-24 Budget will hopefully be presented on 1 February, in the first half of Parliament’s Budget session.