The finance minister of India presents the union budget yearly in front of the parliament. This year, our honorable Union finance minister Nirmala Sitharaman presented the budget for FY-2023 on the 1st of February, 2023. The union budget aims to achieve growth and all-inclusive welfare in all departments of national interest. There are several Budget differences from last year. The budget is implemented from the 1st of April until the 31st of March of the following year. Various schemes and programs are launched for the betterment of the citizens of the nations. The budget also tries to ensure that resources are allocated efficiently to different governmental departments so income disparities between other groups of society are lessened. Unemployment and poverty levels are reduced, prices are kept in check, and a feasible and profitable tax structure is in place. These are some of the Budget differences from last year.
The nation’s citizens should be aware of the changes in the budget and how they can impact their lives. Knowing about yearly changes in the budget prevents being duped, promotes awareness about programs and their eligibility, and other benefits one can avail. Thus, knowing the similarities, differences, and changes between yearly budgets is imperative.
This article will discuss the similarities and differences between this year’s and last year’s budgets. The main focus will be on Budget differences from last year.
Expenditure
The First Budget difference from last year is the difference in expenditure. In the union budget of 2022-23, the government proposes to spend Rs 39,44,909 crores, while in the union budget of 2023-24, the government proposes to spend Rs 45,03,097 crore 4, which is an increase of 7.5% as compared to the last fiscal year. Out of the budget of 2023-34, the government has proposed to spend Rs 4,76,105 on schemes sponsored by the center. It is estimated that in 2023-34, the government will spend Rs 2,34,359 crore on pensions.
The interest payments increased by 14.8% compared to the last financial year. The ministries with the highest allocations accounted for 55% of the total expenditure in 2023-24, while in 2022-23, they accounted for 53% of the total cost.
Deficits
Second, Budget differences from last year are the difference in deficits.
In 2022-23, the revenue deficit was targeted at 3.8% of GDP, later revised to 4.1%, while in 2023-24, it was targeted at 2.9% of GDP. The fiscal deposit, which is an indicator of the borrowings by the government for financing its expenditures for the financial year, is targeted at 5.9% of GDP. In comparison, it was targeted at 6.4% of GDP in 2022-23. In 2022-23, the interest expenditure was expected to be 43% of revenue receipts at Rs 9,40,651 crore. In 2023-24, the interest expenditure is estimated to be 41% of revenue receipts at Rs 10,79,971 crore. The
estimated revenue deficit for 2022-23 was 4.1%, while for 2023-24, it is 2.9% of the GDP.
Ministry allocations
Thirdly, Budget differences from last year are the difference in ministry allocations.
Among the top 13 ministries allocated with the highest funds in the union budget, in 2022-23, the highest percentage was given to the Ministry of Communications (93%), followed by the Ministry of Road Transport and Highways (52%), and the Ministry of Jal Shakti (25%), while in 2023-24, the ministries remained somewhat same but their percentage funds changed. The funds were allotted to the Ministry of Railways (49%), followed by the Ministry of Jal Shakti (31%), and the Ministry of Road Transport and Highways (25%).
The ministries with the highest allocations of estimated total expenditure remained the same in the union budget for both fiscal years, that is, the Ministry of Defence, with 13.3% of the total budgeted expenditure in 2022-23 and 13.2% in 2023-24.
Main tax proposals in the Finance Bill
Fourth, Budget differences from last year are the difference in the financial bill.
In 2022-2023, there were no changes in the income tax rates regime for the people, while in 2023-24, a new tax regime was introduced, which has become the default regime, but the citizens of India can still avail the benefits of the old tax regime. In the 2022-23 union budget, the surcharge on long-term capital gains was capped at 15%. The union government also changed customs duty and taxation policies for new cooperatives, companies, and startups.
Changes in tax on virtual digital assets and updation of policies regarding the return of income were also seen. In 2023-24, the government will amend the CGST Act, online games will be subjected to taxation, presumptive taxation will be increased, and many other changes regarding the taxation of startups, cooperatives, life insurance, etc., have been introduced.
Transfer to states
Fifth, Budget differences from last year are the difference in expenditure to transfer to states.
In 2022-23, the central government transferred Rs 16,11,781 crore to states and union territories. In 2023-24 this fund is Rs 18,62,874 crore. This fiscal year’s budget shows an increase of 8.9% over the revised estimates for 2022-23. Transfer to the states in 2022-23 included devolution of Rs 8,16,649 crore out of the divisible pool of central taxes and Rs 7,95,132 crore in the form of grants and loans. In 2023-24, it comprises devolution of Rs 10,21,448 crore out of the divisible pool of central taxes, special loans worth Rs 1.3 lakh crore for capital expenditure, and grants worth Rs 6,86,773 crore.
Fiscal Responsibility and Budget Management targets
Sixth, Budget differences from last year are the difference in fiscal responsibility and budget management targets.
The Fiscal Responsibility and Budget Management (FRBM) Act, 2003, requires that the central government progressively reduce its outstanding debt, revenue deficit, and fiscal deficit and gives three-year rolling targets. The Medium-Term Fiscal Policy Statement has not provided this statement for rolling targets for budget deficits since 2021-22. In the Union Budget speech of 2022-23, the finance minister mentioned that the government aims to reduce the fiscal deficit to below 4.5% of GDP by 2025-26. This was reiterated in the budget speech of 2023-24. In the 2022-23 union budget, the government estimated the fiscal deficit to be at 6.4% of GDP.
Conclusion
After reading this article, we can conclude that budgets for different fiscal years have other motives and central aims, but the rationale behind them remains the same. The motive is the nation’s rapid, progress-oriented, and sustainable growth. The budget is centered around the updated requirements, conditions, and prospects of the country and its citizens.
Knowing about the yearly budget provides insights into the government’s plans for the nation’s progress, financial fluctuations, schemes, programs, etc. Being aware of the annual changes also prevents fraud, becoming part of economic malpractices, and being duped by fake schemes. Thus, you must keep an eye on the changes in the budget and its key points.
As responsible citizens of the country, we must facilitate the motive of the yearly union budget. We should play our part in the rapid and lasting financial growth of the country. The country’s citizens can fulfill this national duty by paying taxes, reducing economic disparities, increasing participation by the youth, judiciously using public resources, encouraging indigenous businesses and products, and keeping sustainable ideas in mind.
We hope this article provides you with the information you need and clears all the doubts and queries regarding the similarities and differences between this year’s and last year’s budget.
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