Yojana Magazine: March 2023 | Union Budget

Please Share with maximum friends to support the Initiative.


 Yojana Magazine: March 2023 | Union Budget

Laying the foundations of India’s Amrit Kaal


  • The Union Budget is a key policy document that outlines the priorities of the Government, for the immediate and the long term, in tandem with domestic and global economic realities.
  • The year 2022 was special for our country as India celebrated its 75” anniversary and its elevation as the world’s 5” largest economy (measured in current dollars).
  • With a rising profile on the global stage and India assuming the G20 Presidency, the country is set to embark on its journey into the ‘Amrit Kaal’ – the 25 years of achieving our developmental potential.


  • Outlining on her vision for the economy, FM Sitharaman spoke of seven focus areas which she termed ‘Saptarishi’ to guide the government.
  • These Saptarishi priority areas are:
    1. Inclusive development
    2. Reaching the last mile
    3. Infrastructure and investment
    4. Unleashing the potential
    5. Green growth
    6. Youth power
    7. Financial sector


  • The Budget for 2023-24 focuses on capital expenditure, inclusive growth, green economy, ease of living, and ease of doing business, especially for small enterprises.
  • Notwithstanding the pandemic shock, the uncertainties triggered by a geo-political conflict, and the evolving context of global economic stress, Budget 2023-24 has displayed deft fiscal management and reiterated its commitment to fiscal prudence and responsibility while not losing sight of medium-term growth.
  • This has been the signature approach of the Finance Minister throughout her Budgets since 2019, incorporating the following elements:
    • Commitment to fiscal prudence
    • Conservative assumption
    • Transparency
    • Commitment to capital expenditure
    • Incremental and steady reforms with an eye on the medium-term growth
  • The Budget also promotes green growth and gives thrust to skill creation for the youth in line with modern themes such as Al and Robotics.


  • Budget 2023-24 is the first to be presented in India’s Amrit Kaal. The measures announced in this year’s budget will complement the ongoing reform agenda and prepare India for charting its course amidst a fast-changing global economic order.

Towards Cooperative Fiscal Federalism


  • Fiscal federalism refers to fiscal relations between various government units, which in the Indian context means the Union Government and the State Governments.
  • Both tiers of government need to possess adequate financial resources to discharge their respective responsibilities enshrined in the Constitution effectively.
  • The announcements in the Union Budget 2023-24 and several initiatives taken in recent years depict the Union Government’s unwavering quest to promote this cooperative fiscal federalism in India.
  • In the Union Budget 2023-24, a mammoth sum of Rs 1.3 crore was allocated for for providing financial assistance to States for capital expenditure. The announcement validated a firm commitment of the Union Government to cooperative federalism and grant of fiscal autonomy to States.
  • Article 246, Article 246A and the Seventh Schedule of the Constitution delineate taxation powers between the Centre and the States.
  • But the distribution of fiscal power has a centripetal bias with more buoyant tax areas assigned to the Union. The State governments, on the other hand, have more expenditure responsibilities for providing core public services.
  • The Constitution makers have very intelligently provided a mechanism to correct the fiscal imbalances through the Finance Commission.


  • The President of India establishes a Finance Commision after every five years under Article 280 of the Constitution.
  • The Commission makes recommendations on distribution of net proceeds of central taxes between the Centre and the States.
  • The Commission also suggests the principles on which grant-in-aid of revenues, out of the Consolidated Fund of India, should be given to the States.
  • Fifteen Finance Commissions have been constituted so far.


  • The annual transfers from the Union to the States have increased from 4.7 per cent of the Gross Domestic Product (GDP) in the financial year 2013-14 to 6.7 per cent of GDP as per revised estimates for 2021-22.
  • Annual total transfers have increased from Rs 5.24 lakh crore to Rs 15.74 lakh crore during this period.
  • It has been facilitated by the recommendations of the 14th and 15th Finance Commissions.
  • The 14th Finance Commission had recommended an enhanced share of States in the central divisible pool of taxes and duties from 32 per cent to 42 per cent.
  • The 15th Finance Commission, in its report for the period from 2021-22 to 2025-26, maintained the higher devolution proportion.
  • After adjusting one percent to provide for the newly formed Union Territories of Jammu and Kashmir and Ladakh from the resources of the centre, the Commission has recommended the devolution of 41% of the central taxes to the States.
  • This has established a decentralised fiscal architecture and drastically altered the composition of the Union transfers to States.
  • A bulk of tax devolution is now formula based rather than grants. The higher untied resources thus made available to the States offer them greater flexibility and autonomy in incurring expenditure based on their priorities.
  • Changed fiscal architecture has also been accompanied by major changes in the mode of planning and design of fiscal transfers.


  • NITI Ayog, a harbinger of cooperative federalism:
    • In a bold move, the Government of India, in January 2015, abolished the Planning Commission and constituted NITI Aayog. The Aayog become a proponent of cooperative federalism.
    • NITI Aayog strives to evolve the shared national vision with the active involvement of States. The Aayog has provided a platform where States act together in the national interest and thereby fosters cooperative federalism.
  • Rationalisation of Centrally Sponsored Schemes:
    • Union Government in 2016-17 effected a major rationalisation of the Centrally Sponsored Schemes (CSS).
    • The number of CSS was reduced to twenty-eight umbrella schemes, consisting of six ‘core of the core’ schemes, twenty core schemes and two optional schemes.
    • Further, the medium term framework for CSS and their sunset dates were made co-terminus with the Finance Commission cycle.
  • Introduction of GST:
    • Implemented on July 1, 2017, GST has fostered cooperative fiscal federalism.
    • States Governments taken together have been assigned weightage of two-third of total votes in the GST Council.
    • We have opted for a dual GST framework. This means that transactions of goods and services attract two levies, Central GST and State GST.
  • Cooperation to boost capital expenditure in States:
    • The pandemic, which hit us in early 2020, had dried up revenue collection in the States. Consequently, capital expenditure, which has a high multiplier effect and was essential to spur economic growth, was declining sharply.
    • According to various studies, capital expenditure has a multiplier effect of 2.45 in the short term and 4.8 in the long term.
    • Union government developed an innovative scheme titled ‘Special Assistance to States for Capital Expenditure’ in 2020-21. Despite fiscal constraints, an amount of Rs 12,000 crore was allocated under the scheme and an amount of Rs 11,830 crore was released to States.
    • This assistance was provided as fifty years interest- free loan. The States were allowed to incur expenditure under the scheme on new capital projects, ongoing capital projects and clear pending bills.
  • Strong federal fiscal shield during pandemic:
    • During the Covid-19 pandemic period, Union Government took a series of measures to make sufficient resources available to States to fight the contagion effectively, boost economic activity and maintain the standard of public service delivery.
    • The borrowing limit of the States was enhanced by 2% of the Gross State Domestic Product (GSDP) in 2020-21.
    • This made available financial resources of up to Rs 4.27 lakh crores to States. It had also set up a special window for borrowing an amount of Rs 1.10 lakh crore in 2020-21 which was passed on to the States as a back-to-back loan to meet the shortfall in GST compensation.


  • The announcements in the Union Budget 2023- 24 and a bouquet of initiatives taken in recent years depict the Union Government’s unwavering quest to promote cooperative fiscal federalism in India.

Blueprint For Inclusive and Empowered Bharat


  • Inclusive growth and last-mile delivery were top among the 7 priorities, termed as ‘Saptarishi’, announced by the Finance Minister as the guiding principles while India moves into the ‘Amrit Kaal’ The Saptarishi work in harmony with each other and provide a blueprint for an inclusive and empowered Bharat.
  • The Union budget 2023 is designed to offer something for every stratum of society which is a testament to the government’s consistent efforts toward citizen-centric policymaking and governance.
  • It reinforces the overarching theme of India’s development model.
  • Navigating through the economic and geopolitical risks, the Indian economy is on a sustained projected growth path of 7% in FY23 and 5-5.8% in FY24.
  • This positive growth forecast is driven by strong domestic drivers which include a strong rebound in consumption, strengthening balance sheets of corporates, and a huge influx of capital expenditure.
  • This budget reaffirms the government’s clear and unwavering dedication to maintaining macroeconomic stability and fiscal prudence.
  • The fiscal deficit target has been set at 5.9% for 2023-24, which is lower than the 6.4% that was initially projected for 2022-23.


  • This budget has increased capital expenditure by 33%. Continuing the rationale of the previous two budgets, the government is wisely pursuing India’s growth through capital creation.
  • Studies indicate that every rupee spent by the government on building capital assets has a 2.95 multiplier effect, a much higher rate of return than spending on consumption.
  • The government’s sizable investments in infrastructure are expected to create more job opportunities besides crowding in private investment and triggering a positive cycle of growth.
  • Centre’s continuous push on infra capex strengthens India’s productive capacity and reinforces the vision of Atmanirbhar Bharat during the Amrit Kaal.


  • Promoting inclusive development, this budget has prioritised growth in agriculture with several policy measures such as the establishment of digital infrastructure, an agriculture accelerator fund, targeted credit for animal husbandry, dairy, and fisheries, and plans to make India a global leader in millets.
  • Through the GOBARdhan scheme, the government is setting up 500 new “Waste to Wealth” plants and augmenting farmers’ income while generating green energy.


  • This budget emphasises key areas such as food and nutrition, public health and education, skilling, social entrepreneurship, and rural housing, to enhance social impact through every rupee invested.
  • Flagship schemes have focused on creating an India that is self-sufficient in all aspects and where all sections of the society have access to basic amenities.
  • These efforts have included providing toilets to eliminate open defecation, access to tap water, electricity, LPG cylinders, healthcare, and bank accounts.
  • The PM AWAS, the flagship rural housing scheme, aims to provide ‘Housing for All’. With a massive outlay of over 54,000 crores, the highest ever since its inception, it is likely to benefit almost 45 lakh rural families in 2023-24.


  • Economically empowering women and youth goes hand in hand with the transformation of India into an economic superpower.
  • The Deendayal Antyodaya Yojana National Rural Livelihood Mission announced in the FY24 budget aims to continue empowering 81 lakh self-help groups of rural women by assisting them in creating large producer enterprises and supporting them in branding and marketing.
  • Mahila Samman Bachat Patra is a small savings scheme for the financial empowerment of women in Amrit Kaal.
  • PM Kaushal Vikas Nana 4.0 and the Amrit Peedhi program aim to equip the youth with abilities such as coding, Al, and robotics, among others, while also offering financial assistance through the National Apprenticeship Promotion Scheme.

Social Sector Allocations: Endevours For Effective Outcomes


  • Strengthening and expanding the social sector in the country has always been the priority of the government and this reflects in this year’s budget also.
  • The mantra of facilitating access and ensuring inclusion in the social sector allocations has continued in this Union Budget.
  • Several measures have been taken for inclusive development under critical schemes leading to many important social sector achievements. The Budget has also explored the possibility of enhancing complementarities across schemes for better outcomes.
  • With rising per capita income and the size of the national economy moving towards the national goal of $5 trillion by 2026-27, the focus is on the development of the social sector.
  • To ensure a better quality of life, a life of dignity and expansion of the economy, the per capita income has more than doubled to Rs 1.97 lakh.
  • Expenditure for the sector has witnessed a significant increase from Rs 3,53 lakh crore in 2015­-16 to Rs 7.9 lakh crore in 2022-23.
  • Considering the latest budget, the annual average growth rate for the social sector spending would be around 14.1 per cent from 2015-16 to 2023-24.


  • The budget for the year 2023-24 indicates a significant trend as there is an increase in expenditure on health as percentage of GDP from 1.4 per cent in 2019-20 to 2.1 percent in 2022-23.
  • Ayushman Bharat—Pradhan Mantri Jan Aarogya Yojana, launched in 2018-19, has emerged as a flagship programme. This is now the world’s largest government funded healthcare programme targeting over 50 crore beneficiaries.
  • Towards it, the BE provision for 2023-24 is over Rs 7,200 crore, showing over 2.6 times increase since 2018-19 when the scheme was launched.
  • Among the new initiatives for Amrit Kaal, it is proposed to eliminate sickle cell anaemia by 2047 through interventions like awareness creation, universal screening, etc. of over seven crore people in the age group of 0-40 years in the affected tribal areas, and counselling them through synergised efforts of Central Ministries and State Governments.
  • A special scheme namely Sickle Cell Anaemia Elimination Mission would be launched.
  • The Government has also announced the establishment of 157 new nursing colleges in co-location with the existing 157 medical colleges established since 2014.
  • Budget also proposed to launch a new programme during 2023-24 to promote research and innovation in pharmaceuticals.


  • In the nutrition sector the proposed Aspirational Blocks Programme, covering 500 blocks for saturation of essential government services across multiple domains, would also include nutrition.
  • The proposed Rs 15,000 crore Development Action Plan for the Scheduled Tribes would also provide nutritious food to vulnerable tribal groups (PVTGs).
  • Similarly, PM Garib Kalyan Anna Yojana, with an expenditure of about Rs 2 lakh crore, would provide food and nutrition security to over 80 crore persons for 28 months.
  • As per the fifth National Family Health Survey (NFI-15) 2019-21, about 19.3 per cent of children below five years were facing wasting and 35.5 percent were stunted.
  • The Budget has made provision for supporting the Indian Institute of Millet Research, Hyderabad as the Centre of Excellence for sharing best practices, research and technologies at the international level.
  • The Integrated Child Development Scheme (ICDS), now known as Sakshann Anganwadi and POSHAN 2.0, is allocated Rs 20,554 crore.
  • Another important initiative, Pradhan Mantri Poshan Shakti Nirman (the mid-day meal scheme) has been provided with a budgetary allocation of Rs 11,600 crore.


  • The allocation for education in this Budget is Rs 1,12,898.97 crore. The Higher Education Budget is allotted Rs 44,094.62 crore for 2023-24, a considerable increase from Rs 40,828.35 crore in revised estimates for 2022-23.
  • The Budget has proposed support of Rs 68,804,85 crore for school education.
  • Measures have also been announced for the effective implementation of all the provisions of the National Education Policy, particularly focussing on skilling.
  • The idea is to synergise skills with economic policies to facilitate job creation at scale and to support business opportunities.
  • For promoting good governance, attention has also been paid to the skilling of government officers and staff under the Mission Karmayogi.
  • To further boost reading habits a National Digital Library for children and adolescents is proposed to provide quality books in various local languages.
  • To address the challenge of last-mile connectivity, education has also been included in the programmes for Aspirational Blocks. Women’s education under the Samagra Shiksha, an overarching school education programme under the National Education Mission, has been provided Rs 37,453 crore.
  • The budget has also proposed to set up three centres of excellence for Artificial Intelligence (Al) at the top educational institutions to help connect industry with academics and help evolve an ecosystem for Al.
  • Pradhan Mantri Kaushal Vikas Yojana 4.0 will be launched to skill lakhs of youth within the next three years.
  • On-job training, industry partnership, and alignment of courses with industry needs will be emphasised.
  • The PM Vishwakarrna KAushal Samman (PM VIKAS) would enable artisans and craftspeople with focus on quality, scale and reach of their products while integrating them with the MSME value chain.


  • The Budget has elaborated some of the programmes that include green fuel, green energy, green farming, green mobility, green buildings, and green equipment and also talks about the industrial transition strategies.
  • The National Green Hydrogen Mission, with an outlay of Rs 19,700 crore is planned with a target to reach an annual production of 5 MMT by 2030.
  • Banks and other financial institutions would also be encouraged to launch a Green Credit Programme, which would be notified under the Environment (Protection) Act.
  • Central and State Government Departments are also being encouraged to scrap old vehicles.
  • For promoting green mobility, excise duty on GST­ paid compressed biogas has been exempted. This would help in avoiding the cascading effect of taxes on blended compressed natural gas.
  • It is also proposed to exempt customs duty on the import of capital goods and machinery required to manufacture lithium-ion cells for batteries used in electric vehicles.
  • PM PRANAM, a new scheme, is also being launched to incentivise States/UTs to promote the usage of alternative fertilisers.

Inclusive Development and Modernisation of Agriculture


  • Agriculture and allied sectors are among the pillars of Indian economy. Inclusive growth of agriculture is essential in the current scenario of economic challenges. This will ensure economic growth of the country and well-being of farmers.
  • The Union Budget (2023-24) shows the government’s determination and commitment in this regard. There are many provisions in the Budget that will ensure inclusive growth in agriculture and allied sectors, modernisation and economic empowerment of farmers.
  • Ministry of Agriculture and Farmers’ Welfare has been allotted Rs 1.25 lakh crore in the Budget. This includes allocation for agricultural education and research.
  • An amount of Rs 60,000 crore for Pradhan Mantri Kisan Samman Nidhi has also been included in the Budget.


  • Passing the resolution tabled by India, the UN has declared Year 2023 as International Year of Millets.
  • India is the highest producer (180 lakh tonnes, 2020-21) and fifth highest exporter of millets.
  • With the great variety (Sorghum, Pearl millet, Ragi, Kodon, Saanvan, Kangani, Kutki, etc.) and long tradition of growing these grains, India has good scope to become a ‘global hub of millets’.
  • Cotton is grown on the largest land segment in India. It is grown on 136 lakh hectare of land which is about 36% of the total cotton cultivation area of the world.
  • An ambitious programme worth Rs 2200 crore named Atmanirbhar Swachch Paudh Karyakram will provide support for cultivation of disease-free, high quality plants. This programme will be mainly focused on high value plantations.


  • The Budget provides for promotion of ‘digital agriculture’ to make farming more profitable and internationally competitive. Digital infrastructure will help Agriculture-based industries and start-ups and provide impetus to their development.
  • Such digital infrastructure will help agriculture-based industries and startups and provide impetus to their development.
  • Latest technologies can be used to provide digital support to agriculture, such as Artificial Intelligence (AI), Internet of Things, Block chain, Kisan drones, etc.
  • Government of India is also implementing a Digital Agriculture Mission (2021-25) in which efforts are being made to develop, popularise and use these technologies.
  • Three centres of excellence are proposed to be developed which will work, among others, for agricultural solutions also. This initiative in the first budget of Amrit Kaal will provide a strong foundation to the modernisation of agriculture.
  • An Agriculture Accelerator Fund with the investment of Rs 500 crore (for five years) has been proposed in the budget to promote entrepreneurship in rural areas. This fund will provide incentives and financial assistance especially to rural youth to open agri-startups.
  • In recent years, the government has made many steps to promote natural farming which is beneficial to environment, farmers and consumers. It is proposed to make one crore farmers volunteering for natural farming practices in next three years and to support them.


  • The limit of agricultural loan has been raised to Rs 20 Lakh to facilitate easy institutional loans to small and marginal farmers.
  • Rs 23 thousand crore has been provided for enhancing Kisan Credit card facilities which have been proved quite beneficial to small and marginal farmers.
  • India has pledged to bring carbon emission to zero level by 2070. Initiatives are being taken in multiple areas to strive towards this goal. A special programme in the agriculture sector— PM-PRANAM has been initiated this year which provides for land’s improvement, nourishment and rejuvenation.
  • Government is also promoting animal husbandry through many schemes. In this budget, the budget allocation for Animal Husbandry and Dairy Department’s allocation has been raised to Rs 4328 crores, 40% higher than the revised estimates of the last year.
  • National Livestock Mission has been allocated Rs 410 crore to ensure smooth running of its schemes.
  • To provide a boost to fishery sector, allocation for this department has been made Rs 2248.77 crore, 38.45% higher than last year.
  • Finance Minister has also declared start of a new co-scheme with an investment of 6.000 crore. ‘Pradhan Mantri Matsya Kisan Sah Yojana’’ (PM Fishery Farmers’ Co-scheme) envisages efforts to raise income of fishermen, fish sellers and marginal and small vendors in this area. The scheme provides reforms in the entire value chain including investment and capital.


  • The first budget of Amrit Kaal is laying a firm foundation of sustained and inclusive development in agriculture and allied sectors. Budget provisions are sure to result in economic progress and uplift of farmers, agri-entrepreneurs and start-ups in this area.

Post-pandemic Health


  • Health is an integral part of a prosperous society. India aims to become a US$ 5 trillion economy; therefore, it needs to take care of the health of every citizen.
  • In the Union Budget, many proposals have been made for the health sector. Health research is emphasised.
  • Attention is on preventive services as well. Improving the health data quality and availability has been a learning from the Covid-19.
  • It is also time to deliberate in what ways cooperative federalism can be strengthened in the matter of public health.


  • Financial Allocation:
    • The Ministry of Health and Family Welfare has received a nominal increase of around 3.5% in financial allocation from BE 2022-23.
    • The allocation for the National Health Mission has remained nearly unchanged at around Rs 29,000 Cr.
    • The allocation for Ayushman Bharat- Pradhan Mantri Jan Aarogya Yojana has increased by 13% to reach around Rs 7,200 Cr. 
  • Mission to Eliminate Sickle Cell Disease by 2047:
    • The government has announced a new mission to eradicate Sickle Cell Disease, a genetic condition that is prevalent in tribal populations in India.
    • The mission aims to identify and treat the disease early to improve the health of affected individuals. 
  • Opening of New Nursing Colleges and Multidisciplinary Courses for Medical Devices:
    • To address the shortage of healthcare professionals, the budget has proposed opening 157 new nursing colleges in districts where medical colleges have been recently established.
    • Additionally, dedicated multidisciplinary courses for medical devices will be introduced. 
  • Emphasis on Health Research:
    • The government aims to promote health research by opening up ICMR labs for research by public and private medical college faculty.
    • The private sector is also encouraged to collaborate with the government for research and innovation in the pharmaceutical industry. 
  • The budget also proposes the establishment of centers of excellence in Artificial Intelligence (AI) with health as one of the core sub-themes; The Aspirational Blocks Programme will cover 500 blocks for the saturation of essential government services, including health sub-components and The National Calamity Contingency duty (NCCD) on cigarettes has been increased by 16% to discourage smoking.


  • It is the right time to reflect upon how to get 'more health from the money' allocated to health sector. Alongside, there is a lot of discussion on the next 25 years in India. Therefore, it is logical to reflect on priorities of the health sector for India at 100 in 2047.

Banking: Focus On New Responsibilities and Governance


  • In the Union Budget 2023-24, a slew of measures have been taken to promote savings among women and secure the future of the elderly through savings.
  • Acknowledging the wider acceptance of digital payments, the budget ensures continuous fiscal support for digital public infrastructure in 2023-24.
  • The agriculture sector continues to get benefits like Kisan Credit Card, besides an increase in the agricultural loan target focusing on animal husbandry, dairy, and fisheries.


  1. New savings schemes and changes in existing savings schemes
  2. Sources of government borrowing
  3. Campaign to promote digital transactions
  4. Loan for a specific sector
  5. Reforms in banking governance


  • In the Budget, measures have been taken to promote savings among women and secure the future of the elderly through savings.
  •  ‘Azadi ka Amrit Mahotsav Mahila Samman Bachat Patra’ has been announced in the budget to promote economic empowerment.
  • Under this, a new small savings scheme, Mahila Samman Savings Certificate, will be available for two years until March 2025. It will offer a deposit facility of up to Rs 2 lakh for women or girls for two years at a fixed interest rate of 7.5 percent with a partial withdrawal option.
  • The interest rate on Mahila Samman Savings Certificate is much higher than the existing schemes.
  • Currently, there is a special scheme for girls, viz. Sukanya Samriddhi Yojana. It was launched on January 22, 2015, by Prime Minister Narendra Modi under the ‘Beti Bachao Beti Padhao’ initiative.
  • The maximum deposit limit for Senior Citizen Savings Scheme has been increased from Rs 15 Lakh to Rs 30 lakh.
  • The maximum deposit limit for the Monthly Income Account Scheme has been increased 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.
  • Under both these schemes, an account can be opened in the post office. Also, the interest rates for both are reviewed quarterl.


  • Net market borrowing from dated securities has been estimated at Rs 11.8 lakh crore against a fiscal deficit of Rs 17.87 lakh crore in the Union Budget 2023-24.
  • Banks will play an important role in fulfilling this estimate because on such dated securities (dated securities, tenure from 1 year to 40 years) interest is received at a fixed rate and the government guarantees both interest and principal.
  • Banks invest a large amount of money in these bonds, with the objective to meet the statutory requirements and, on the other hand, to take advantage of the market conditions.
  • For active participation in this system, the financial condition of the banks must be sound. The deposits of public sector banks are continuously increasing, making it easier for them to participate in the government’s borrowing.


  • Agriculture is most important for specific sector lending. It was stated in the budget that about 86 percent of small farmers in the country had significantly benefited from the Kisan Credit Card (KCC).
  • The agricultural loan target has been increased to Rs 20 lakh crore, focusing on animal husbandry, dairy, and fisheries.
  • The government assists farmers with short-term crop loans up to Rs 3 lakh. The interest rate on such loans is 7 percent, but if the farmer repays the loan on time, he gets an interest subvention of 3 percent, making the effective interest rate 4 percent.
  • On the other hand, for allied activities including fisheries, animal husbandry and dairy, short-term loans up to Rs 2 lakh are also available at an interest rate of 7 percent, but in case of timely repayment of the loan, the interest subvention of 3 percent is available, due to which the effective interest rate here also becomes 4 percent.
  • The government has also been running targeted schemes for MSMEs. Considering this, it is stated now that the renewal of the Credit Guarantee Scheme for MSMEs in the last budget was proposed.
  • After the addition of 9 thousand crore rupees, this renewed scheme will commence from April 01, 2023. This will enable collateral-free loans of an additional Rs 2 lakh crore, besides bringing down the cost of credit by about one percent.


  • With the changes taking place in the banking system the mode of analysing the general budget for the banking sector has also changed.
  • Also, neither in the budget of the financial year 2022-23 nor in the budget of the financial year 2023-24 has there been a move for the recapitalization of public sector banks.
  • The main reason for this is that the financial health of public sector banks has improved a lot, bad loans have come down, and the situation is likely to remain the same in the future.

Strengthening the Financial Sector


  • The Budget 2023-24 laid a blueprint for India@100. The inclusive Budget focussed on growth and employment generation besides boosting infrastructure and development through self-reliance, transparency and digitalisation.
  • The budget proposals would empower youth, women, farmers, scheduled castes, scheduled tribes, senior citizens, BPL families, MSMEs, and people affected by the pandemic. It has used innovative methods of financing various projects using PPP mode, which will all add to the growth and help build the economy’s productive capacity and jobs.
  • Financial inclusion through schemes like Pradhan Mantri Jan Dhan Yojana; Ayushman Bharat; Pradhan Mantri Jeevan Bima Yojana; Pradhan Mantri Suraksha Bima Yojana;Pradhan Mantri Mudra Yojna; Stand Up India; Crop Insurance; Emergency Credit Guarantee Scheme and others with Aadhaar as its backbone provides security and authenticity.
  • It thus enables the poorest of the poor, women, farmers, youth, senior citizens and the MSMEs to seek social security and credit from the financial system appreciated for its robustness and resilience globally by institutions like the World Bank.


  • The Government has, in the long-drawn process of reforms, strengthened the ability of the last mile advantage through a resilient financial system.
  • It was much needed that post-pandemic recoveries are supported by the government to ensure that the poorest of the poor receive the benefits of the continued economic growth pegged at 7%.
  • The setting up of Post Office Banking as core banking in 1.5 lakh Post Offices and 75 Digital Banking units (DBUs) in 75 districts by SCBs is empowering rural consumers with financial liquidity and mobility via JAM Trinity.
  • Encouraging a Digital Payments ecosystem that is economical and friendly will ensure the formalisation of the economy and industry.
  • Digitalisation will help generate wealth, bring ease of doing business, improve livelihood through enhanced employment, double farmer income through DBT at MSP and induce efficiency in currency markets.


  • The budget aims to provide the means to strengthen the social safety net through Mahila Samman Bachat Patra.
  • It is an attempt to secure the small savings of women who find no means or instruments dedicated to their effort of small savings which help them and their families in difficult times.
  • The attempt to reach millions of women, especially the less privileged, is the most innovative and effective structure of defining financial systems as means and ways of reducing the gender gap in various financially available systems.
  • Savings of the women would also potentially secure the financial system as these savings are often used only in dire needs.
  • This would improve the saving rate in the financial system and also make women at the grassroots level incentivised to be part and parcel of economic development and prosperity through interest earning.


  • A business-friendly environment and ecosystem are reflected in the provisions of the Budget for Fintech along with other technology to provide for a business-friendly environment that is compliance-friendly with more than 39,000 compliances have been reduced and over 3,400 legal provisions have been decriminalised.
  • Several initiatives have been taken in GIFT IFSC to make India a financial hub for international transactions and promote international business and trade.
  • The G20 Presidency and Internationalisation/Digitalisation of the Rupee have all put India in a position to become a leader that recognises UN­ESGs, continuous growth needs for its people and sustainable development contributions to the world economy.
  • The Budget proposals for the GIFT IFSC are an essential step in the direction of strengthening trade and open economy frameworks.
  • The direction of the government from being a regulator with draconian laws has shifted to being a facilitator of businesses to ensure that they are job friendly, growth orientated and enhancing the ability of the country’s potential of demographic dividends towards GDP growth.


  • Fiscal consolidation and tapping on the fiscal deficit are often strongly preached ignoring the role of high leverage that facilitates faster economic growth provided it is used for investment in productive capital assets.
  • A country gains tremendously when the Return on Investment, ROI (both social benefits and private benefits) from a project is higher than the cost of such funds invested in various projects (capital assets). Restricting the fiscal deficit to a low level is against the interest of the nation as it will throttle growth and equitable development as it restricts the government in its spending capabilities to induce growth, investment for India@100 and jobs for youth.
  • The Foreign Exchange Reserves for India are US$ 563 Billion (excluding more than US$ 50 billion as loans to neighbouring countries) with over US$ 7 billion FDI being received monthly which is clearly an indication of India being one of the Most Favoured Nations for Investment.
  • Globally, despite the effect of Covid-19 & increased interest rates by the U.S. India has leverage on Fiscal Spending for long-term growth projects.
  • The Budget 2023- 24 has used innovative methods of financing various projects using PPP mode which will all add to the growth and help build the productive capacity of the economy and jobs.

Budget Empowers India’s Gen-Z


  • One of the top priorities of this year’s budget is youth empowerment.  Additional allocations in the budget for skill development and employment opportunities will empower the youth.
  • The proposal to launch PMKVY 4.0 and set up Skill India International centres will facilitate imparting world-class skill training to our youth. Building the capacities of youth through quality education and skilling will contribute to economic growth.
  • A manifold increase in the budget for youth affairs and sports will help develop an enabling ecosystem for learning sports-related disciplines and technology, thus creating opportunities for the youth to make a career in the field of sports.


  • India is a consumer-driven economy with a young working-age population. Young people can adapt fast and be in sync with the dynamic macroeconomic ecosystem and technological change.
  • With a population of more than 1.4 billion, India marks a new phase in its growth story, enabling the opportunity to frame development strategies.
  • The median age in our country is 28.4, this is 38 in China and 47 in Germany. The rural youth population is 65 percent of the total population.
  • The population bulge with young people has produced a demographic dividend providing an unprecedented economic development trajectory.
  • Although there is a global economic slowdown, India’s GDP is projected to grow by 7 per cent in the current financial year as one of the world’s fastest-growing economies.


  • One of the top priorities of this year’s budget is youth empowerment. Additional allocations in the budget for skill development and employment opportunities will empower the youth.
  • The proposal to launch Pradhan Mantri Kaushal Vikas Yojana 4.0 and set up Skill India International centres will facilitate imparting of world-class skill training to our youth.
  • Building the capacities of youth through quality education and skilling will contribute to economic growth.
  • A manifold increase in the budget for youth affairs and sports will help develop an enabling ecosystem for learning sports-related disciplines and technology, thus creating opportunities for the youth to make a career in the field of sports.


  • Education and Skill Development are the growth drivers for inclusive development. Building the capacities of youth through quality education and skilling will contribute to economic growth.
  • The 2023-24 Budget for the Ministry of Education is Rs 1,12,898.97 crores. It is the highest allocation so far.
  • The National Education Policy (NEP) lays the foundation for a comprehensive and inclusive education focusing on up-skilling and facilitating job creation at scale for well-rounded individuals armed with 21st-century skills.


  • India has an inherent entrepreneurial spirit as nearly 79% of organisations in India are family-led businesses.
  • Our new-age businesses and Startups are creating a competitive edge for innovation and prosperity. With the burgeoning Startup ecosystem and the entrepreneurship culture, Indian youth are geared to become entrepreneurs and solve real-life problems.
  • Many young entrepreneurs are now exposed to early-stage incubation support through Atal Tinkering Labs in schools which is crucial to boost entrepreneurship from a young age.
  • The launch of the Startup India Initiative in 2016 has boosted innovation and economic activities in our country.
  • India is the hub of the Startup ecosystem in the world, ranking third with more than 91,000 DP IIT- recognised startups and 108 unicorns worth 30 billion dollars; this has been manifested only by the contribution of India’s youth.
  • The Union Budget has proposed several strides to boost the startup ecosystem, improving the investment climate and boosting the entrepreneurial spirit of the youth.


  • Yuva Shakti is the prime driver for nation-building. India’s development journey depends on creating a progressive ecosystem for creating opportunities for youth to think big, create, innovate, and leapfrog for India’s growth and global impact.
  • The aspirational initiatives proposed in the Union Budget 2023-24 shall strengthen the Indian youth to realise their true potential thereby aiding their advancement, making them more competitive and securing formidable positions on the global front.
  • India’s youth are mindful of the critical challenges related to sustainable development; they are now more sensitised and have increased commitment to social, economic and environmental issues.
  • Policy-makers must create an enabling ecosystem for new-generation entrepreneurs who can become job providers. The time is ripe for India’s youth to rise to the occasion, channel their energy and tech prowess towards a self-reliant India and establish India’s name as a global leader.

Skills, Employment and Human Resource Development


  • According to the World Economic Forum report published in October 2020, the rapid acceleration of automation and economic uncertainty caused by the pandemic will shift the division of labour between humans and machines, causing 85 million jobs to be displaced and 97 million new ones to be created by 2025.
  • Learners today need to be equipped with transferable employability skills across a broad range of job opportunities and help them modify their approach to solving business problems in a dynamic industry environment.
  • India is home to the largest youth population in the world with around 66 per cent of the total population (more than 808 million) below the age of 35.
  • The Indian workforce is set to grow by over 8 million per annum over the coming decade, most of which will be driven by youth entering the labour market.
  • One of the major challenges for policymakers in the current workforce landscape is to create gainful employment and meaningful work opportunities for the ever-increasing educated youth.


  • Over the past decade, a lot of efforts have been directed to short-term training, essentially described as minimum employable skills/which opens doors for entry-level employment, rather than looking at vocational education as a whole.
  • In this regard, the new National Education Policy (NEP) 2020 intends to overhaul India’s education system.
  • With a vision of ‘Making India the Skill Capital of the World’ the government is focusing on speed, scale, and standardisation to the ongoing efforts of the various central and state governments and public and private sector organisations in the area of skilling and entrepreneurship.
  • Union Budget 2022- 23 emphasised having skilling programs in partnership with the industry and aimed at reorienting them to promote continuous skilling avenues, sustainability, and employability.
  • The increments in this year’s budget outlay (8.3% rise in the education sector and around 85% in skill development) clearly indicate the focus of the current government on supporting youth to be gainfully employed and in ensuring sustainable livelihoods.


  • The newly-announced scheme in the Union Budget 2023-24, PM Vishwakarma Kaushal Samman (PM VIKAS) is a welcome move that will enable traditional artisans and craftspeople to improve the quality, scale and reach of their products, integrating them with the MSME value chain.
  • This will significantly benefit the weaker sections while supporting the true spirit of Atma Nirbhar Bharat.
  • The integration of the skilling and entrepreneurship development programme aligned with the theme ‘Dekho Apna Desh’ would open new career avenues for the youth in the sector and boost the tourism sector economy.
  • “Make AI in India and Make AI work for India” conveys that the future skills are digital, and their focus should be on acquiring these skills.
  • The Budget 2023-24 provides for creating solutions for an educated, skilled, and employable workforce.
  • The allocation of Rs 440 crores for the National Apprenticeship Training Scheme (NATS) in this year’s Budget for equipping technically qualified youth with practical knowledge and skills is a landmark decision.
  • Further, the flagship programmes – Skill Acquisition and Knowledge Awareness for Livelihood Promotion (SANKALP) and Skill Strengthening for Industrial Value Enhancements (STRIVE) will continue to support and make the national skilling framework more robust.


  • The investments in infrastructure and productive capacity have a significant multiplier impact on growth, human resource development and employment.
  • Developing 100 labs for creating applications using 5G services is an initiative to realise new opportunities, business models, and employment potential with engineering institutions.
  • The government’s focus on transforming the District Institutes of Education and Training (DIET) into Centres of Excellence will help build capacities within teachers to develop innovative pedagogy and adopt effective ICT implementation.
  • The Digital Library announced in the Union Budget 2023-24 is a reform measure that will bring learning to the doorstep for the ‘Neither in Employment, Education & Training’ (MEET) population.
  • It will also be a gateway of opportunities to self-learn, upskill and re-skill.
  • In alignment with the UN Sustainable Development Goal (SDG) 4 which aims to “ensure inclusive and equitable quality education and promote lifelong learning opportunities for all”, the NEP 2020 intends to realise the full potential of India’s demographic dividend.


  • It is time now to capitalise on the strong and effective skill development framework that is built in the last few years in the country.
  • For us to become a USD 5 trillion economy by 2025, a lot would depend on how we harness our skill potential in the coming years.
  • We must seize this opportunity and rebuild ourselves with greater impetus and work towards the envisioned goal of making India- the Skill Capital of the World.

Sabka Sath Sabka Vikas Through Union Budget


  • The budget has underlined the foremost priorities of the government in terms of taking the development benefits to the vulnerable sections by focusing on empowering women, developing the skills of the youth, providing funds for developing tribal infrastructure and improving employment opportunities.
  • Inclusive development ensures that all marginalised and excluded groups are stakeholders in development processes.


  • Gender Budgeting is a powerful tool for achieving gender mainstreaming to ensure that the development benefits reach women.
  • Focused on empowering women, developing the skills of the youth, providing funds for developing tribal infrastructure and improving employment opportunities – the budget did a lot to promote the notion of equity and give every Indian the opportunity to reach their full potential.


  • The Union Finance Minister announced a new small savings scheme with a fixed interest rate and fixed tenure to encourage more savings among women and girls.
  • A one-time new small savings scheme, Mahila Samman Savings Certificate, will be available for two years up to March 2025. It will offer a deposit facility of up to Rs 2 lakh in the name of women or girls for a tenure of 2 years at a fixed interest rate of 7.5 percent with a partial withdrawal option.
  • The maximum deposit limit for Senior Citizen Savings Scheme (SCSS) will be enhanced from Rs 15 lakh to Rs 30 lakh. An individual above 60 years of age or retired civilian employees above 55 years can open an account under SCSS Scheme can subject to the condition that investment must be made within one month of receipt of retirement benefits
  • The limit for the monthly income account scheme has also been enhanced. The maximum deposit limit for Monthly Income Account Scheme will be 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.


  • The budget for the fiscal year (F Y) 24 prioritises youth power and modern skill development through the PM Kaushal Vikas Yojana 4.0 and the Amrit Peedhi programme.
  • Thus overall, Budget 2023-24 is anchored in reality, transparency, and achievable goals. It is economically, smart, reflects political confidence, is fiscally credible and emphasizes Gender Equality and Inclusiveness.

Fiscal Deficit Policy Shift and Sustainable Development


  • The budget plays an important role in the overall development and socio-economic transformation of the country.
  • The impact of the budget needs to be evaluated on how a particular expenditure would affect the country’s long-term growth in terms of inclusive and sustainable development.
  • From an economic perspective, the impact of the budget must be reviewed from the viewpoint of fiscal deficit and capital expenditure.
  • The development of our nation depends upon fiscal discipline and fiscal consolidation.


  • A fiscal deficit indicates the total borrowing requirements of a country during a fiscal year. It is used as an instrument to measure fiscal discipline and sets the fiscal roadmap of the country in terms of its current needs and future liabilities.
  • The extent and magnitude of the fiscal deficit are determined by two components: revenue deficit and capital expenditure.
  • In the Budget 2023-24, the proposed fiscal deficit is 5.9 percent of GDP while it is 6.4 per cent for FY 2022-23.
  • Considering the post-Covid impact, global headwinds, Russia-Ukraine war, and other geopolitical tensions, trading on a fiscal deficit of 5.9 per cent is not too high, yet will remain a cause for concern.
  • However, the government has to ensure that it does not deviate from the estimated deficit, to avoid an escalation of economic crisis, leading to inflation and other fiscal disturbances.
  • The seriousness of achieving fiscal discipline rests on how to address the gap between the estimated and the actual fiscal deficit so as to get the desired result.


  • To lessen the negative impact of the fiscal deficit, the government has planned for higher capital expenditure of Rs 10 lakh crore, which is 33 per cent higher than last year’s figure and 3.3 per cent of GDP.
  • The overall ‘Effective Capital Expenditure’ of the Centre is budgeted at Rs 13.7 lakh crore, which will be 4.5 per cent of GDP.
  • In the current context, a need for higher public spending is believed to be crucial for providing the required impetus to economic growth. A sustained increase in investment will strengthen infrastructure including power, transport and railways and contribute to higher GDP/employment/output through its multiplier effects and crowd-in private investments.
  • In this Budget, more fiscal freedom has been given to all the states and accordingly each state has been allowed to have the leverage of a fiscal deficit of 3.5 percent of their SGDP.


  • Revenue deficit reflects the excess of revenue expenditure over revenue receipts of the government. A higher revenue deficit compels the government to adhere to borrowings to meet the revenue shortfall.
  • The government has proposed a tight revenue deficit of 2.9 per cent for FY 2023-24 compared to 3.8 per cent in FY 2022-­23, despite various pressing needs of social sectors, welfare schemes, food and fertiliser subsidies, etc.
  • Revenue deficit can be reduced by higher revenue mobilisation through tax buoyancy & wider tax base and with quality tax administration and by reprioritising expenditure through expenditure rationalisation.
  • Based on the recommendations of the Expenditure Reforms Commission, all the expenditures, particularly revenue expenditure are reprioritised and rationalised which is very much visible in the budget provisioning.
  • This will bring efficiency in the fund allocation among different heads, prevent leakages and shut the loopholes in the process to ensure efficiency. Most importantly all the revenue expenditure must be utilised for the socio-economic well-being of the nation and with greater efficiency.

Creating a Conducive Business Environment


  • The Government is spearheading the initiatives under Ease-of-Doing Business and reducing compliance burden which are aimed at creating a conducive business environment, these initiatives aim to extend benefits to all entities/sectors/industries of the economy, including start-ups.
  • The key focus areas of the initiatives are
    • Simplification of procedures related to applications, renewals, inspections, filing records, etc.
    • Rationalisation by repealing, amending or subsuming redundant laws,
    • Digitisation by creating online interfaces eliminating manual forms and records, and
    • Decriminalisation of minor technical or procedural defaults.
  • Specifically for the startup ecosystem, the Government has taken various measures to enhance ease of doing business, raising capital and reducing compliance burden. In this regard, more than fifty key regulatory reforms have been undertaken for the startup ecosystem.
  • The Government has also unveiled National Single Window System (NSWS) to provide a single platform to enable the identification and obtaining of approvals and clearances needed by investors, entrepreneurs, and businesses in India.


  • The Government has also taken various steps to boost domestic and foreign investments in India.
  • These include the introduction of Goods and Services Tax, reduction in corporate taxes, financial market reforms, consolidation of public sector banks, enactment of four labour codes, Foreign Direct Investment (FDI) policy reforms, reduction in compliance burden, policy measures to boost domestic manufacturing through public procurement orders, Phased Manufacturing Programme, to name a few.
  • To promote FDI in the country, the Government has put in place an investor-friendly policy, wherein most sectors except certain strategically important sectors are open for 100% FDI under the automatic route.
  • Further, the policy on FDI is reviewed on an ongoing basis, to ensure that India remains an attractive and investor-friendly destination.


  • Furthermore, the Government has unveiled National Single Window System (NSWS) to provide a single platform to enable the identification and obtaining of approvals and clearances needed by investors, entrepreneurs, and businesses in India.
  • NSWS is providing a single interface to apply for all Government to Business (G2B) clearances from various Ministries/Departments as well as eliminating duplication of work by auto-populating form fields across different approvals based on a single investor profile.

Please Share with maximum friends to support the Initiative.

Download the Samajho App

Join 5 lakh+ students in downloading PDF Notes for 2000+ Topics relevant for UPSC Civil Services Exam. &nbsp Samajho Android App: https://bit.ly/3H9hva1 Samajho iOS App: https://apple.co/3H8ZJE2 &nbsp Samajho IAS Youtube Channel (300K+ Subscribers): https://www.youtube.com/@SamajhoIAS