MUMBAI, New deLHi, beNGALuru, kOLkAtA, cHeNNAi, AHmedAbAd, HyderAbAd, cHANdiGArH*, puNe*
28
Thursday, February 2, 2023
mint primer
All that you need
to know about
this year’s budget
BY VIVEK KAUL
Finance minister Nirmala Sitharaman’s budget speech was all of 13,761
words, a little over two-fifths longer than her speech in 2022. Here are
the major points of the budget.
Cut to the chase
This time too, Sitharaman kept it short, and completed her speech in
about 90 minutes.
20,223 20,931
17,031
2019 2020 2021
1 Personal income tax
The big move here was the
increase in the rebate limit to ₹7 lakh
under the new tax regime. Up until
now, individuals with an income of
up to ₹5 lakh had to pay no income
tax under the new regime and the old
regime. Now, it largely makes sense
for everyone with an income of up to
₹7 lakh to move to the new regime.
2 Changed tax slabs
Further, the government has
changed the tax slabs under the new
regime. For example, up until
2022-23, those with an income of
₹5-7.5 lakh came under the 10% tax
bracket. From 2023-24 onwards,
those with an income of
₹6-9 lakh will come under this
bracket. This seems to be a nudge to
tax-filers to move towards the new
tax regime, which is simpler but
doesn’t come with the deductions
and exemptions like the old one
does. Nonetheless, if your income is
beyond ₹7 lakh, whether you should
be on the new regime or the old one,
depends on the exemptions and
deductions you claim, and your
specific salary structure.
3 Other goodies
The amount of money that can
be invested in the Senior Citizens
Savings Scheme has been increased
from ₹15 lakh to ₹30 lakh. The
current rate of interest on this
scheme is 8%. Most bank fixed
deposits currently offer 7.5% interest
to senior citizens. Other than this,
the maximum deposit under the
monthly income scheme of the post
office has been doubled to ₹9 lakh for
a single account.
4 High net worth
individuals
The highest effective income tax rate
currently stands at 42.74%. In 2023-
24, this will be reduced to 39%. On
the flip side, the government has
decided to limit income tax
exemption from proceeds of
insurance policies of high value, with
an exemption being available only if
the aggregate premium during the
year is up to ₹5 lakh.
5 Stocks
The stock market was
primarily worried about any increase
in the long-term capital gains made
on the sale of listed shares and equity
mutual funds. The government
livemint.com
Length of budget speech (in words)
13,761
9,701
2022 2023
Source: indiabudget.gov.in
didn’t increase the tax and the stock
market gave it thumbs up as soon as
the budget speech ended. But the
mood soon changed, with the Nifty
50 index ending the day almost flat at
17,616.3 points. In all this, Adani
Enterprises, fell by around 27% to
close the day at ₹2,179.75.
6 Economic growth
The Economic Survey released
on 31 January offered three reasons
for the revival of growth in 2022-23;
the pent-up consumer demand, a rise
in exports during the first few
months of 2022 and an increase in
the government capital expenditure.
The pent-up demand is expected to
run out of steam during 2023-24,
whereas a high growth in goods
exports looks dicey because growth
in developed countries is expected to
slow down. So, the government has
to play a major role in driving
economic growth all over again. The
budgeted government capital
expenditure is at ₹10 trillion during
2023-24, more than a third-higher
than in 2022-23. This money will go
towards the creation of new assets
and, hence, drive jobs and growth.
7 Jobs
The government plans to take
up the promotion of tourism on
mission mode. If done well, this can
create many jobs at the local level. It
also plans to launch Pradhan Mantri
Kaushal Vikas Yojana 4.0 to skill
lakhs of youth. This is an idea which
has been tried before. Further, the
government plans to set up 100 labs
for developing applications using 5G
services.
8 Interest paid on debt
In the last few years, the
government has had to spend more
to drive economic growth. This extra
spending has been majorly financed
through higher borrowing, leading
to the government having to pay a
higher interest on its accumulated
borrowings. In 2022-23, the
government will end up paying ₹9.4
trillion as interest on its borrowings
or around 22.5% of its expenditure.
In 2023-24, the interest payments
are expected to jump to ₹10.8 trillion
or around 24% of its expenditure.
Interest payments are the
government’s biggest expenditure.
VOL. 6 NO.
QUICK EDIT
Tax: Value
for money
Finance minister Nirmala
Sitharaman seems to have
pulled off a fine balance, giving
significant relief to the salaried
without going overboard in her
last full budget before national
elections. Those earning up to
₹700,000 will be able to avail
rebate under the country’s new
income tax regime, up from
₹500,000, while its basic
exemption limit has been lifted
to ₹300,000 from ₹250,000.
To enhance the new tax option’s
appeal, the benefit of standard
deduction has been thrown in,
and its slabs have been reduced
to ease the burden on middle-
range earners. There is relief for
the rich, too, with India’s top
effective tax rate slashed to 39%
from almost 43%. This move is
especially commendable, given
the psychological put-off that a
rate closer to half one’s earnings
than a third tends to constitute.
We need to stay globally com-
petitive on this front, too, since
the well-off can move residence
easily, as some high-end tax
advisors recommend. While
nudging the middle class to shift
tax regimes is a good idea,
retaining would-be jurisdiction
shoppers is even better. The
exchequer is expected to take a
net ₹35,000 crore hit for these
giveaways. But it will probably
prove value for money.
9 Fiscal deficit
The fiscal deficit for 2023-24 is
expected to be at ₹17.9 trillion or 5.9%
of the gross domestic product (GDP).
Fiscal deficit is the difference
between what a government earns
and what it spends. This is lower than
the fiscal deficit of 6.4% for 2022-23.
Nonetheless, the government plans
to finance a bulk of this through a net
borrowing of ₹12.3 trillion in the next
financial year, slightly more than the
₹12 trillion it expects to borrow
during the current financial year.
Now this will happen in an
environment where household
financial savings have fallen. If the
situation stays the same, interest
rates will continue to stay high,
leading to high EMIs. If savings
increase, then consumption will take
a beating. There is no free lunch
here. The cost of the government
driving growth through higher
capital expenditure will be paid for
somewhere.
10 Taxes
Tax collections are
expected to be robust in 2022-23,
with the revised gross tax numbers
standing at ₹30.4 trillion or a little
over 10% more than the budgeted
number. This has ensured that the
government’s fiscal deficit didn’t go
up, despite its expenditure increasing
to ₹41.8 trillion against the budgeted
₹39.4 trillion. The tax jump also
helped cover for the government not
being able to meet its disinvestment
target of ₹65,000 crore, with the
revised disinvestment figure
expected to be at ₹50,000 crore. The
government expects tax collections
in 2023-24 to be at ₹33.6 trillion or
around 10.4% higher than in the
current financial year, in line with
the assumed growth of 10.5% in the
nominal GDP (or GDP which hasn’t
been adjusted for inflation)
(Vivek Kaul is the author of Bad
Money. )
 PLAIN FACTS
ASHISH ASTHANA/MINT

WHAT THE BUDGET

MEANS FOR YOU
New slabs with reduced tax rates
Budget 2023 has introduced a range of changes to the concessional tax regime, popularly known as the
new tax regime. This has made the new tax regime more attractive than before.

What's changed
Standard deduction of 50,000 for the salaried.
Surcharge of 25% (down from 37%) for incomes over 5 crore.
Tax exemption limit upped from 2.5 lakhs to 3 lakhs.
Tax rates rejigged - lower than before for many taxpayers.

Concessional tax regime (popularly known as 'new tax regime')

FY 2022-23 FY 2023-24
Income (in  ) Tax rate (in %) Income (in  ) Tax rate (in %)
Up to 2,50,000 Nil Up to 3,00,000 Nil
2,50,001 - 5,00,000 5 3,00,001 - 6,00,000 5
5,00,001 - 7,50,000 10 6,00,001 - 9,00,000 10
7,50,001 - 10,00,000 15 9,00,001 - 12,00,000 15
10,00,001 - 12,50,000 20 12,00,001 - 15,00,000 20
12,50,001 - 15,00,000 25 Above 15,00,000 30
Above 15,00,000 30

Source: Budget documents

Budget 2023 has proposed to reduce surcharge on incomes above ₹5 crore from 37% to
29%. This brings down the maximum marginal tax rate to 39% from 42.74% under the
concessional tax regime.

Budget 2023 has sweetened the concessional tax regime pot. It has proposed to hike the basic exemption limit to ₹3 lakh,
cut the tax slab rates and enhance tax rebate limit to ₹ 7 lakh from the current ₹5 lakh, which means individuals with incomes
of up to ₹7 lakh won’t pay any tax under the concessional regime. There is relief for the super-rich as well: the surcharge on
incomes above ₹5 crore is being slashed from 37% to 29%. This brings down the maximum marginal tax rate to 39% from
42.74%. The aim is to attract more taxpayers to the simplified concessional regime as it has found few takers since its introduc-
tion. While the proposed changes will considerably reduce the tax outgo for those who have already opted for the new regime,
switching from the old regime to the new one may not necessarily benefit you. Back of the envelope calculations show that
taxpayers who make investments to the tune of ₹4.2 lakh to avail tax sops under the old regime will fare better by sticking
to it. The table above shows the old tax slabs and the new tax slabs of the concessional tax system.

How your tax outgo will reduce

Here's how the tax liability for someone under the concessional tax regime will change from FY24.

A taxpayer with income of ₹9 lakh will pay ₹45,000 in tax as

opposed to ₹60,000 under the current slab
All figures (in )

Tax outgo under concessional tax regime (popularly known as 'new tax regime')

Income FY 2022-23 FY 2023-24

700,000 33,800 Nil

1,000,000 78,000 54,600

1,500,000 195,000 145,600

2,000,000 351,000 296,400

5,000,000 1,287,000 1,232,400

Includes health and education cess @ 4% of income tax. Source: Budget documents

With the proposed changes, tax outgo for taxpayers already under the concessional tax regime will change from FY24.
Incomes up to ₹7 lakh are exempt from paying any tax with the tax rebate limit increased. In fact, with standard deduction
of ₹50,000 made available to the salaried and pensioners, taxpayers in these categories with incomes up to ₹7.5 lakh will
pay zero tax. For incomes above ₹7 lakh, tax outgo has reduced by 20-30%.
For instance, a taxpayer with income of ₹9 lakh will pay ₹45,000 in tax as opposed to ₹60,000 under the current slab
rates. Similarly, tax outgo on ₹20 lakh income will reduce by about 15%.
The super-rich with earnings above ₹5 crore not only benefit from the reduced tax rates but also lowering of surcharge
that will reduce the effective tax rate from 42.7% to 39%. The above table explains the reduction in tax outgo with the new
slab rates.
 MUMBAI, New DeLHI, BeNGALURU, kOLkATA, CHeNNAI, AHmeDABAD, HYDeRABAD, CHANDIGARH*, PUNe* VOL. 6 NO. 28 Rs 6.00 28 PAGeS

Thursday, February 2, 2023

livemint.com

Capital Target for fiscal Government Union finance

₹10 tn expenditure
aim for FY24,
5.9% deficit-to-GDP
ratio for FY24,
₹2.4 tn sets aside
record
87 min minister
Nirmala
33% more than the FY23 with aim to reduce it to budget for Indian Railways for Sitharaman’s shortest Budget
budget below 4.5% by FY26 the next fiscal year speech so far

A FINE BALANCE
Finance minister aims to strike a balance between prioritizing growth and fiscal prudence
Dilasha Seth & Subhash narayan job creation.
New DeLHI POLICY SNAPSHOT Experts lauded the budget for sticking
to the fiscal consolidation path and target-
50-yr interest-free loans for states

F
inance minister Nirmala Sithara-
man on Wednesday delivered an
expansive budget amid global
economic turmoil, striking a bal-
ance between prioritizing growth
and fiscal prudence.
In the last full budget before the 2024
elections, Sitharaman tried to address the
expectations of large sections of society,
including the middle class, small busi-
nesses, farmers, women, and high net-
worth individuals, offering sops and new
schemes.
With nine assembly elections in 2023
and the 2024 general elections looming
on the horizon, the Union budget offers
glimpses of the ruling Bharatiya Janata
Party’s playbook for the next two years.
“First budget of the Amrit Kaal lays a
strong foundation for the aspirations and
resolutions of a developed India,” said
Prime Minister Narendra Modi, reacting
to the proposals.
Sitharaman’s budget offered a blend of
measures designed to spur consumption,
such as income tax relief for the middle
class, high earners, and working profes-
sionals, and a record ₹10 trillion allocation
for capital spending to stoke growth and
extended for a year to boost capex,
outlay increased to ₹1.3 tn
100 5G-enabled labs for developing
apps; two AI centres of excellence
planned at educational institutions
Green growth gets push: green credit
programme launched, excise duty
exemption on blended CNG
₹35,000 crore for priority capital
investments towards energy
transition and net zero objectives
A one-time new small savings scheme
for women for two years with a deposit
facility up to ₹2 lakh
₹75,000 crore to be pumped into
100 key infra projects to improve
connectivity for industries
Agriculture accelerator
fund proposed for agri-startups in
rural areas
ing to contain fiscal deficit to 5.9% of GDP
in the year starting 1 April from 6.4% of
GDP in FY23.
Sitharaman reiterated the govern-
ment’s intention to keep the fiscal deficit
below 4.5% of GDP by 2025-26.
“This was a workman-like budget that
was a pleasant surprise. No big stuff. The
capex push has been the key focus area
over the last few years. What I liked espe-
cially was that there were no tall promises,
especially as elections are around the cor-
ner,” said Pronab Sen, an economist and
former chairman of the National Statisti-
cal Commission.
However, financing the fiscal deficit
could pose a challenge to the government,
according to N.R. Bhanumurthy, vice-
chancellor of BASE University.
“The continuation of the capex strategy
by the government, especially increasing The budget makes the need once again to
the share of capital expenditure in the
overall fiscal deficit, will help sustain the
ramp up the virtuous cycle of investment and
economy’s recovery process. However, job creation. Capital investment is being
financing the ₹17.8 trillion fiscal deficit is
going to be a huge challenge, especially
increased steeply for the third year in a row.
when at a macro level, the strategy seems NIRMALA SITHARAMAN, Finance minister
TURN TO PAGE 26

60,773.44
ASHISH ASTHANA/MINT
1.00pm
Intraday high

SENSEX

60,001.17
Market opens

59,708.08
Market closes

60,292.51
12.27pm
Budget speech
ends

59,549.90
Previous close
60,072.11 60,160.04
11.34am 12.23pm
FM announces FM rolls out 58,816.84
capex of ₹10 tn income tax 2.50pm
benefits for the
Rout in Adani
60,094.06 middle-class
Group stocks
11.00am and weakness
Budget in the financial
speech begins services sector
drags down
markets
(intraday low)
SARVESH KUMAR SHARMA/MINT

Adani Ent pulls FPO in surprise U-turn

Ram Sahgal & Satish John impact the capital-raising abil-
Market tremors
mUmBAI
The rout in Adani Group stocks continued for a fifth day.
ity of the group.
However, founder Gautam

T
he board of Adani Enter-
prises Ltd scrapped its
₹20,000 crore follow-on
public offering (FPO), citing
investor protection concerns,
as a massive selloff in Adani
group stocks continued for a
fifth day after a scathing report
alleging accounting fraud and
stock manipulation was
released by a US short seller.
Billionaire Gautam Adani’s
flagship is now working on
returning the funds raised
from investors lying in an
escrow account.
“Given the unprecedented
situation and the current mar-
ket volatility, the company
aims to protect the interest of
its investing community by
returning the FPO proceeds
and withdrawing the com-
pleted transaction,” Adani
Enterprises said in an
announcement to the stock
exchanges late Wednesday
evening.
The FPO subscription
closed successfully on Tues-
day, said Gautam Adani, chair-
man of Adani Enterprises.
(In %)
-28.45 -19.69
ADANI ADANI
ENTERPRISES PORTS
-5.95 -5.78
ACC ADANI
GREEN
“Despite the volatility in the
stock over the last week, your
(investors) faith and belief in
the company, its business and
its management has been
extremely reassuring and
humbling..... However, today,
the market has been unprece-
dented, and our stock price
has fluctuated over the course
of the day. Given these
extraordinary circumstances,
the company’s board felt that
going ahead with the issue will
not be morally correct.”
The company’s withdrawal
comes on a day the shares of
Adani Enterprises plunged
nearly 29%, dealing a massive
-16.56 -10.00
AMBUJA ADANI
CEMENTS TOTAL GAS
-4.99 -4.98
ADANI NDTV
WILMAR
PARAS JAIN/MINT
blow to institutional investors
and family offices that rescued
the offer on the last day.
“Anchor and HNI investors,
who’ve pumped most of the
money into the FPO, have hell
to pay for, taking a 30% haircut
from Day 1 after the offer
closed,” a senior banker affili-
ated with a foreign bank said,
requesting anonymity. “The
only way to salvage the situa-
tion was by calling off the FPO.”
A senior fund manager
termed the withdrawal a “dis-
aster”, indicating investors in
the offering had become
“uncomfortable” after the
steep price fall. It could also
Adani said, “This decision will
not have any impact on our
existing operations and future
plans. We will continue to focus
on long-term value creation, and
growth will be managed by
internal accruals. Once the mar-
ket stabilizes, we will review our
capital market strategy.”
He added that the company
was working with the invest-
ment bankers to refund the
share subscription funds. “Our
balance sheet is very healthy
with strong cash flows and
secure assets, and we have an
impeccable track record of ser-
vicing our debt,” Adani added.
A day after some family offi-
ces were said to have helped
salvage the Adani Enterprises
FPO, investors dumped front-
line group stocks on reports of
a Swiss bank refusing to accept
Adani Group bonds as collat-
eral for margin loans in light of
Hindenburg Research’s alle-
gations of corporate fraud,
which the group has con-
tested.
TURN TO PAGE 26
02 Thursday, 2 February 2023
MuMbai
LIVEMINT.COM

Capex bet and a welfare miss:

Story of Budget in nine charts
TEAM PLAIN FACTS

In the last full-year Budget before the 2024 general elections, finance minister Nirmala Sitharaman delivered her shortest speech, hitting all the right notes. A massive boost to capital expenditure
and income tax relief to the common public formed the highlight. Yet, the Centre is confident of keeping its fiscal math on the path to consolidation. However, this tightrope walk is set to come at
the cost of welfare schemes. We dig deeper into the big Budget numbers that will help the government see the economy through a year that’s set to be challenging at a global level.

Hearty Capex Chart 4

Transport gets massive boost; rural
Other Matters
development, agri left behind
I F
n 2023-24, which is likely to see a global growth slowdown, the Centre has inally, moving beyond the headline figures, it’s the sharing of revenue that has
budgeted a record capital expenditure of ₹10 trillion, up nearly 37% from the Expenditure on major items (₹ trillion) often been a point of contention between the Centre and the states. While the
revised estimate of the ongoing year. Capex will thus make up 22% of the total tension may not be as palpable as it was two years ago when the pandemic hit
spending, the highest share in nearly two decades (see chart 1). Revenue spending states’ earnings, the declining share of states in the Centre’s gross tax collections
will rise just 1%. Interest payments could reignite the debate. The share of states is budgeted at 30.4% of the Centre’s
A breakdown of capex numbers shows that the Centre plans to do the heavy- gross tax collections, the lowest in three years, and substantially lower than the 35-
lifting in the big impetus. In 2022-23, the ₹1.5-trillion increase in capex was Major subsidies FY22 37% between 2015-16 and 2018-19 (see chart 7).
heavily reliant on a component that would go to states. But this time, the Centre’s This may not sit well with some states, especially those with Opposition-led
FY23 (RE)
own share in capex is set to rise to ₹8.6 trillion, from ₹6.4 trillion, and this governments, which have been demanding a continuation of the GST compensation
Defence FY24 (BE)
increase constitutes 80% of the total capex jump. The high capex is expected to guarantee for two more years. (The compensation, in lieu of the losses the states
aid economic growth through a multiplier effect. expected due to the imposition of the new regime in 2017, came to an end last year.)
Meanwhile, changes in the tax structure will provide relief to the public, Transport Giving disinvestment targets a miss again, despite the public listing of Life
meeting the long-pending expectations of the middle class. The government is Insurance Corp. of India in May, the government’s stake sale plans have been
hoping to generate more revenues from goods and services tax (GST) collections, revised downwards to ₹60,000 crore in 2022-23 from ₹65,000 crore pegged
Rural development
with its growth pegged at 12% (see chart 2). If that happens, GST collections would earlier. The budgeted target for next year is ₹61,000 crore, which is 6% lower than
outpace the nominal GDP in 2023-24. Corporate and income tax collections are Agriculture and
the last budget estimates (see chart 8). Despite the lower expectation, this would still
pegged to grow 10.5%, same as the GDP. allied activities require some large disinvestments for the government to be able to meet the goal.
With this, GST is once again expected to be the highest tax revenue source, at Lastly, a bit about the list of items where the Centre expects to have overshot its
3.2% of GDP, and corporate tax, which was once the leader, slightly lower at 3.1%. Education budget in the ongoing year (see chart 9). (The year is expected to end with a total
Many experts have criticized the heavy reliance on GST as it puts undue burden expenditure of ₹41.9 trillion, compared with a budgeted ₹39.4 trillion.) The Centre
on the poor, while lower corporate taxes have failed to revive private saw the maximum pressure from fertilizer subsidies as the Russia-Ukraine war
investments. The key question will be whether the tax relief is able to offset the Health pushed up prices. The continuation of the free foodgrain programme also led to
impact that the ₹35,000 crore foregone revenue will have on consumption. higher food subsidy costs than budgeted. Apart from subsidies, the government has
Sticking to the fiscal consolidation path, the finance minister set the fiscal Social welfare also seen an overspend owing to a one-time grant to oil marketers towards meeting
deficit target at 5.9% of GDP for 2023-24 (see chart 3) and reiterated the goal to 0 2 4 6 8 10 12
under-recoveries in domestic LPG. Despite the additional spending, the Centre still
bring it down to 4.5% of GDP by 2025-26. The government has set the ambitious expects to meet its fiscal deficit target of 6.4% of GDP, thanks to higher-than-expected
fiscal deficit aim by reprioritizing spending from revenue to capital, which tax collections as well as higher-than-expected GDP. All in all, resisting the populist
experts say is a better spending mix to support growth. temptations, the budget prudently appears to be a determined push for growth.
Chart 5
Chart 1 Massive cut to MGNREGS allocation, Chart 7
Aggressive increase in outlay takes capex's share in budgeted at six-year low States set to receive lower share from
spending to 19-year high Centre's tax kitty
Allocation to MGNREGS (in ₹ crore)
120,000 Centre's transfers to states
Revenue expenditure (as a % of total spending) Total expenditure
Capital expenditure (as a % of total spending) (y-o-y growth in %) In grants As sharing of tax revenue
(Left-hand scale) (Right-hand scale) (% of total spending) (as % of gross tax revenue)
100,000
100 35 2014-15 2014-15
84 2015-16 2015-16
30 80,000
80 2016-17 2016-17
78 25 60,000 2017-18 2017-18
60 2018-19
20 2018-19
40,000
2019-20 2019-20
15
40 20,000 2020-21 2020-21
8
7 10 2021-22 2021-22
0
20 2014-15 2021-22 2022-23 2023-24 2022-23 (RE) 2022-23 (RE)
22 5 (RE) (BE)
16 2023-24 (BE) 2023-24 (BE) 30.4
18.7
0 0 0 5 10 15 20 25 0 5 10 15 20 25 30 35 40
1999-00 ‘22-23 ‘23-24 Chart 6

NDA-I UPA-I & II NDA-II

(RE)
NDA-III
(BE) Gender budget as a proportion of total
Chart 8
expenditure sees a decline
Disinvestment target remains elusive,
Chart 2 Gender budget (in ₹ trillion) As % of total expenditure continues to undershoot estimates
(Left-hand scale) (Right-hand scale)
Centre bets on GST tax revenue, while corporate, Disinvestment receipts: budgeted vs actual (in  crore)
income tax take backseat again 2.5 6
2012-13 Actual Budget estimate
Gross tax revenue, 2023-24 budgeted estimates (₹ trillion)
Year-on-year change* (%) 5 2013-14
2
Nominal GDP 4 2014-15
12 10.5 10.5
10.5 1.5
2015-16
3
9.6 9.2 1 2016-17
9.0 2
2017-18
0.5
1
2018-19
5.9
10.5 0 0 2019-20
2018-19 2022-23 (RE) 2023-24 (BE)
3.4 RE: Revised estimates; BE: Budget estimates. Source: Budget documents, CMIE, Mint calculations 2020-21
2.4
2021-22

GST Corporation Income tax Union excise Other heads

Welfare Costs 2022-23*
tax duties

W
*as compared to 2022-23 (revised estimates)
ill the generous capex be socially inclusive enough? Lacklustre allocations, 2023-24 (BE)
or even cuts, for some key welfare schemes and sectors could be a major miss
(see chart 4). In 2022-23, the government was conservative in its budget 0 50,000 100,000 150,000 200,000 250,000
Chart 3 *Revised estimates used instead of actuals.
revenue expenditure target but is now set to overshoot it by 8.3% mainly due to the
Centre's debt as share of GDP set to rise growing needs of the slow-recovering rural economy. But in 2023-24, any much-
despite fiscal consolidation needed boost was absent. The overall allocation for rural development is set to decline Chart 9

Central govt debt as % of GDP Fiscal deficit as % of GDP 2.1% from the revised estimates of 2022-23 to ₹2.4 trillion. (It has, however, seen an Here are the areas where Centre is set to
increase of nearly 16% over the last budgeted numbers.) Outlays on the crucial rural overshoot its FY23 budget the most
2012-13* 2012-13 jobs scheme, the Mahatma Gandhi National Rural Employment Guarantee Scheme, Areas where the Centre will spend beyond budgeted (in  crore)
2013-14* 2013-14 were at a six-year low, sharply down by nearly a third, or by ₹30,000 crore, compared Budgeted Extra spending
to the revised estimates for 2022-23 (see chart 5). The National Social Assistance Reason
2014-15 2014-15
Programme, also a centrally sponsored scheme, remains unchanged in allocation. Defence services Higher revenue
2015-16 2015-16 The budget spending on sectors primarily benefiting weaker sections saw a spending on defence

2016-17 2016-17 marginally slower hike—6.4% as compared to 6.9% in 2022-23. Agriculture and Food storage and Higher food subsidy
related sectors lost focus, with the outlay down from ₹1.5 trillion to ₹1.4 trillion. warehousing requirement
2017-18 2017-18
Meanwhile, following an increased outflow on account of higher payments towards 'One rank one
2018-19 2018-19 fertilizer and food subsidies compared to the initial budget, a substantial cut in the subsidy Pensions pension' scheme
2019-20 2019-20 bill also provides the leeway for capex investments. Altogether, the burden on major Higher fertilizer
subsidies eased by 28% from the revised estimates of 2022-23 to ₹3.7 trillion. Hence, the Industries (urea) subsidy
2020-21 2020-21
share of the Centre’s subsidy bill in the revenue expenditure for 2023-24 has dropped to a Higher provision for rolling
2021-22 2021-22 Capital outlay
four-year low of 11.5%. The budget was a disappointment for women as the share of the on Railways stock and track renewals
2022-23 (RE) 2022-23 (RE) gender budget declined to 5% from 5.2% in the revised estimates of 2022-23 (see chart 6).
One-time grant to oil
Overall, the Centre appears to have shunned populism while maintaining a conservative
2023-24 (BE) 50.6 2023-24 (BE) 5.9 Petroleum marketing central PSU firms
approach. “The boost to capex has come partially at the cost of rural and welfare spending,”
0 20 40 60 0 2 4 6 8 10 0 100,000 200,000 300,000 400,000
said Ranjani Sinha, chief economist at CareEdge. “However, capex has been found to have
*Central government debt data is provisional
a strong multiplier effect on growth through jobs generation and indirect demand boost.” RE: Revised estimates; BE: Budget estimates. Source: Budget documents, CMIE, Mint calculations
RE: Revised estimates; BE: Budget estimates. Source: Budget documents, CMIE, Mint calculations

STORY AND DATA BY NITI KIRAN, PRAGYA SRIVASTAVA, MANJUL PAUL, NANDITA VENKATESAN & SHUJA ASRAR/MINT; GRAPHICS BY PARAS JAIN/MINT

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LIVEMINT.COM
Thursday, 2 February 2023
MuMbai 03

Agriculture to zero emissions:

here’s the budget in 26 letters
The Budget is spending heavily to boost growth. The expectation is that people will spend too and spur consumption to accelerate economic growth
ASHISH ASTHANA/MINT
Sumant Banerji
suimant.banerji@livemint.com

AGRICULTURE
Farm issues always take up a sig-
nificant part of any union bud-
get and this year was no different. The big
talking point is the increase in the credit
target to ₹20 trillion. Another ₹2,200
crore has been set aside for a new clean
plant programme.

BATTERIES
The future of sustainability will
depend on batteries, and the
budget is mindful of that reality. A capac-
ity of 4,000 MWh of battery energy stor-
age systems is being supported with via-
bility gap funding. A more immediate
impact will be felt by the country’s EV
industry, as the import duty on goods and
machinery used in the manufacture of
lithium-ion cells has been waived. This
should bring down the cost of EVs and
provide a further impetus to the sector.

CAPITAL EXPENDITURE
A sharp 33% increase in the capital
investment outlay to ₹10 trillion is
the big headline of finance minister Nir-
mala Sitharaman’s fifth budget. This is the
third year in a row that she has loosened
the purse strings. And while efforts have
been made to shore up private invest-
ments, it underlines the intent of the gov-
ernment to keep up capital expenditure.

DEFENCE
The armed forces did not find a
mention in the budget speech,
but at ₹5.44 trillion, the allocation for
defence (an increase of 1.5%) is at an all-
time high. Almost a quarter of this has
been set aside for purchasing new weap-
ons, aircraft, warships and other hard-
ware. India’s tenuous relations with its
neighbours on both the eastern and west-
ern borders require the armed forces to be
prepared.

e-COURTS
Justice delayed is justice denied.
The budget has made an outlay
of ₹7,000 crore towards the third phase of
the e-courts project to try and alleviate the
burden on the justice system. The project
seeks to increase digitization in the Indian
judiciary while making it easier for citi-
zens to seek legal redressal. In a country
where 85% of cases are pending in district
courts, this is a small price for a potentially
big reform.

FISCAL CONSOLIDATION
While it has all the makings of an
election budget, Sitharaman has
not been profligate and has stayed true to
the fiscal consolidation path. On the back
of a deficit of 6.4% for FY23, the target for
the next fiscal year has been set at 5.9%.
The finance minister exuded confidence
about taking it below 4.5% by FY26.

GREEN GROWTH
One of the seven priorities of
this budget is green growth, and
it figured the maximum number of times
in the budget speech. It is all encompass-
ing, running the gamut from green fuel
and energy through farming and mobility
to buildings and green equipment. To
walk the talk, an outlay of ₹35,000 crore
for priority capital investments towards
energy transition and net zero objectives
has also been made. The message is clear
— the colour of money, going forward, will
be green.
HOUSING
One of the government’s flagship
schemes, which has seen a 66%
spike in allocation over the previous year
to ₹79,000 crore, is the PM Awas Yojana.
The scheme targets people at the bottom
of the pyramid with the aim of providing
them a roof over their heads. This targeted
incentive also doubles up as a growth
driver and employment generator by vir-
tue of the demand it generates in the real
estate sector.
IMPORT DUTIES
There have been widespread
changes in import duties in the
budget. To improve tax administration
and reduce the compliance burden, the
overall number of slabs has been reduced
from 21 to 13. In cases like camera lens and
cells for lithium-ion batteries or TV pan-
els, duties have been reduced to encour-
age domestic value addition.
JOBS
The budget lays more emphasis
on skill development and in
expanding new-age industries for job cre-
ation. The Pradhan Mantri Kaushal Vikas
Yojana 4.0 will seek to skill lakhs of youth
in the next three years, providing them
on-job training, industry partnerships,
Finance minister Nirmala Sitharaman’s 2023 Budget speech, which she described as “the first Budget in Amrit Kaal”, lasted 86 minutes and comprised 13,761 words. But what is interesting is that even a few words can tell the entire story.
and alignment of courses with the needs
of industry.Additionally, 30 skill India
international centres will be set up across
different states.
KYC
Know Your Customer (KYC)
has in a way become the
bedrock of India’s digital finance revolu-
tion. But for some time now, a need has
been felt for it to be simplified. The budget
has proposed a simplified KYC process
adopting a ‘risk-based’ rather than a ‘one
size fits all’ approach. This would techni-
cally make it easier and faster for individu-
als with a good credit rating to avail of
financial services.
LIBRARY
States will be encouraged to set
up physical libraries for children
and adolescents at the panchayat and
ward levels and provide infrastructure to
access National Digital Library resources.
Additionally, the National Book Trust,
Children’s Book Trust and other sources
will be encouraged to provide and replen-
ish non-curricular titles in regional lan-
guages and English to these physical
libraries.
MILLETS
After yoga, India’s next big
export to the world could be
millets. The crop, which has numerous
health benefits, is grown in abundance in
the country. To make India a global hub,
the Indian Institute of Millet Research will
be supported as a centre of excellence for
best practices, research and technologies
at the international level.
NURSING
Globally, nurses were in the van-
guard of the frontline warriors
battling the Covid pandemic. Recognising
their importance and in a bid to address
the shortage of nurses, the budget has
proposed the establishment of 157 new
nursing colleges in co-location with 157
existing medical colleges.
ONE-STOP SOLUTION
A one-stop solution to recon-
cile and update the identity
and address of individuals maintained by
various government agencies, regulators
and regulated entities will be established
using the DigiLocker service, with Aad-
haar as the foundational identity.
PERSONAL INCOME TAX
After the status quo of the past six
years, personal income tax saw
widespread changes this year. Restricted
only to the new tax regime introduced in
2020, the slabs have been reduced to five
from six, with no tax for up to ₹3 lakh and
the maximum 30% bracket kicking in at
₹15 lakh.
QUALITY
In a bid to improve the quality
of bank governance and
enhance investor protection, the
finance minister announced that the
Banking Regulation Act, the Banking
Companies Act and the Reserve Bank of
India Act will be amended. For the secu-
rities market, Sebi will be empowered to
build the capacity of functionaries and
professionals.
RAILWAYS
Infrastructure development
has been the central pillar of
the government’s big bang spending, and
Indian Railways has been a primary bene-
ficiary. For fiscal year 2024, the capital
outlay has gone up to an all-time high of
Rs 2.40 lakh crore, which is about 9 times
the outlay a decade ago, in 2013-14.
SAPTARISHI
Saptarishis are seven reverred
sages of ancient India who are
seen as guiding light for the human race.
FM Nirmala Sitharaman has chosen to
refer her seven budget priorities - Inclu-
sive Development, Reaching the Last
Mile, infrastructure and Investment,
Unleashing the Potential, Green Growth,
Youth Power and Financial Sector, that
will guide the country to ‘Amrit Kal’ as
Saptarishis.
TOURISM
The budget has made a fresh
attempt to unlock the potential of
tourism in the country, targeting not
just international but domestic travel-
lers as well. To begin with, it aims to
promote 50 destinations as a complete
package with upgraded standards of
physical and virtual connectivity, tour-
ist guides and security, while making all
the relevant features of tourism availa-
ble on an app.
UNITY MALL
The budget has introduced the
concept of a Unity Mall, encour-
aging states to set up such a mall in either
their capitals or a prominent tourism cen-
tre or their financial capitals. The goal will
be to promote their own ODOPs (one dis-
trict, one product), GI products and other
handicraft products.
VISHWAS
The ease of doing business has
been a major focus area for the
government. Over 39,000 compliance
norms have been reduced and more than
3,400 legal provisions have been decrimi-
nalised so far. The Jan Vishwas Bill builds
on this by proposing to amend 42 Central
Acts.
WOMEN
A one-time new small sav-
ings scheme offering a fixed
7.5% return for two years, up to March
2025, has been launched for women.
The maximum deposit allowed will be
₹2 lakh. In addition, the 81 self-help
groups mobilised as part of the Deen-
dayal Antyodaya Yojana National Rural
Livelihood Mission will be further
empowered through the formation of
large producer enterprises or collec-
tives.
X-FACTOR
Cutting direct taxes, especially per-
sonal income tax, appears to be the
Budget’s X-factor. The government claims
the move will leave a large sum of money in
the hands of the people, to boost consump-
tion (the finance minister has said the cut in
direct tax rates would cost the exchequer as
much as ₹37,000 crore). A consumption
boost, in turn, will push up capacity utilisa-
tion across sectors, forcing companies to
expand. This will accelerate private capex,
which has long remained sluggish and is
just about showing signs of revival.
YOUTH
Harnessing the power of youth is
one of the seven priority areas of
the budget. From skill development to
accelerator funds for startups, a number of
schemes have been announced to harness
the potential of young people. Additionally,
to provide a stipend to 47 lakh youth in
three years, a Direct Benefit Transfer under
a pan-India National Apprenticeship Pro-
motion Scheme is also being rolled out.
ZERO EMISSION
The ambition to become a
zero carbon-emitting coun-
try by 2070 is writ large in the budget.
Among the various schemes to decarbon-
ise industry, the most prominent is the
₹19,700 crore National Green Hydrogen
Mission, which aims to reduce depend-
ence on fossil fuel imports and make the
country assume technology and market
leadership in this sunrise sector.
04 ThuRsday, 2 FebRuaRy 2023
MuMbai
LIVEMINT.COM

KEY STAT
CLEANER ENERGY PORTFOLIO EXPENDITURE TOWARDS RENEWABLE ENERGY BUDGET POINTERS

WHY IT MATTERS Ministry of new and renewable energy 16,000
(FAME-India)
As a developing economy keen to tread a fast-growth
12,000
path for decades to come, India needs to balance its Green energy corridor
growing energy consumption with its climate-change
commitments—India has pledged net-zero emissions by
FAME-India: Scheme for Faster Adoption
and Manufacturing of (Hybrid and)
2070. That means reducing the relative share of fossil Electric Vehicle in India. Data is revised
fuels in its energy basket by increasing the share of estimates for 2022-23 and budget
estimates for 2023-24.
renewables.
Source: Budget Documents
30
Expenditure (in  crore)
There’s a 78% increase in
allocation to a scheme that
promotes adoption of hybrid
8,000
and electric vehicles and 45%
increase to the ministry of new
X
and renewable energy.
THE MULTIPLE BY WHICH BUDGETARY
4,000 It’s also infusing 37,828 crore in SUPPORT TO VARIOUS ORGANIZA-
two PSUs in this space, IREDA
TIONS AND INITIATIVES IN RENEWABLE
0 and SECI, following 27,547 crore ENERGY HAS INCREASED BETWEEN
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
in 2022-23. 2014-15 AND 2023-24.

Expanded DigiLocker to help fintechs cut costs, ease KYC process

Prasid Banerjee ness but will also simplify the said on Wednesday. haar network, which will elec- expert from a Big Four consult- lations in laws like the Digital platform instead of paying a To be sure, MeitY does cer-
prasid.b@htlive.com know-your-customer (KYC) While it is unclear how the tronically confirm the ancy said, requesting Personal Data Privacy (DPDP) private service provider for the tify KYC providers to allow
NEW DELHI process. government will allow fintechs validity of a docu- anonymity. The bill aren’t violated. technology, he explained. access to DigiLocker. Vivek
“Fintech services in India to tap into the DigiLocker, ment to complete The person, however, Anand Kumar Bajaj, “There are few challenges at Belgavi, Partner, Fintech at

T
he government said it
will expand the scope of
the digital document
repository, DigiLocker, by add-
ing it to the host of public digi-
tal infrastructure (PDI) solu-
tions available to fintech firms,
a move that will not only help
fintech firms cut costs and
enhance the ease of doing busi-
have been facilitated by our
digital public infrastructure
including Aadhaar, PM Jan
Dhan Yojana, Video KYC, India
Stack and UPI. To enable more
fintech innovative services, the
scope of documents available
in DigiLocker for individuals
will be expanded,” finance
minister Nirmala Sitharaman
experts expect application pro- the KYC pro- cautioned that founder, MD and CEO of fin- the moment, especially for ver- PwC, said that expanding the
gramming interfaces (APIs) to cess. proposals will since Digi- tech firm PayNearby, pointed ifying businesses with multiple scope of DigiLocker so that
be built, much like Aadhaar and “They will enable more Locker may out that fintechs currently part- APIs, which can be made con- people and small businesses
other solutions. have to create fintech hold more than ner with KYC service provid- sistent. This will create stan- can store more documents
APIs allow different applica- APIs, which just identity ers, who provide the technol- dardization and make it more would simplify the entire KYC
tions to interact with each allow fintechs to innovative documents of an ogy required to verify docu- like an AA (Account Aggrega- process. He pointed out that
other. In the case of banking or directly tap services individual, frame- ments online. tor) platform, where there is a every fintech may not want to
fintechs, APIs are integral for directly into docu- works will have to be With DigiLocker being a central server, and all outside create their own solution, and
KYC processes. A fintech app, ments stored on Digi- built to ensure there is no government-verified service parties access that server for will want certified tech provid-
for instance, can ping the Aad- Locker,” a senior forensic unauthorized access, and regu- provider, it will simplify the verification,” he said. ers to solve for it.

Large-screen TVs,
Angel tax may trim foreign mobile phones may
funding in Indian startups become cheaper
Abhijit Ahaskar & Shouvik Das which creates a value addition
NEW DELHI of 7-8% of the total price of a
device. “The duty reduction (on
The impact could be hard as
P
rices of mobile phones components) can increase the
and large-screen televi- value addition for manufactur-
startups raise bulk of capital sions may become ers by more than double, on a
cheaper following a set of per-device basis. It can thus
from foreign investors measures in the Union budget easily be at least 15-16%, which
in a boost to the electronics and may make India a viable desti-
information technology sector. nation for electronics compo-
Finance minister Nirmala nent manufacturing.,” he said.
Ranjani Raghavan Sitharaman proposed to halve Muralikrishnan B, president,
ranjani.raghavan@livemint.com the customs duty on open cells Xiaomi India, said a duty cut on
MUMBAI from 5% to 2.5%, while com- select parts will help increase
pletely exempting duty on domestic value addition. “This

I
ndian startups raising capital from for- mobile phone camera lenses will have a positive impact on
eign investors such as SoftBank, Sequoia from 2.5% and on specific the domestic component man-
Capital, Prosus, Tiger Global, KKR and chemicals such as pre-calcined ufacturing industry,” he added.
Blackstone will now have to pay angel tax ferrite powder and palladium However, not all agree that
in a move that could squeeze funding into tetra amine sulphate, on which phone prices will be cut. “These
the sector facing a liquidity crunch and the duty was 7.5%. Palladium is steps will have no significant
prompt more startups to shift overseas. used in parts of connectors in impact on the final product price
Finance minister Nirmala Sitharaman said printed circuit boards (PCBs), but are in the right direction. The
in the budget speech which is used in all electronics. cost impact on mobile phone’s
that non-residents will She also announced Bill of Material (BoM)
KEY now come under the plans to open three will be 0.16% to
ANNOUNCEMENTS purview of Section 56(2) Centres of Excel- Measures aim 0.19%,” said Pan-
VII B, also known as lence (CoEs) for kaj Mohindroo,
BUDGET INCREASES the angel tax, which was artificial intel- to boost the chairman,
period of incorporation to introduced in 2012 as an ligence (AI), electronics and India Cellular
qualify for Inter-Ministerial anti-abuse measure 100 5G labs in and Electron-
Board registration by 1 year aimed at tax avoidance. engineering information ics Association
to 1 April 2024. Alternative invest- institutions, technology (ICEA).
ment funds registered and 30 Skill sectors Presenting
RELIEF FOR startups to with the Securities and India Interna- the budget,
carry forward losses on Exchange Board of tional Centres for Sitharaman also
change of shareholding to India (Sebi) will con- coding, AI, robotics, proposed the introduc-
10 years of incorporation tinue to be exempted mechatronics, internet of things tion of a National Data Govern-
(from 7 years currently). from the tax. However, (IoT), 3D printing, and drones. ance policy to make anonym-
foreign investors who “This is a welcome move, ized data accessible to startups
EXTENSION OF tax were earlier outside the and we will pass this benefit to and researchers. Lack of access
benefits to funds for IFSC, tax’s purview have now customers. TV prices can come to quality non-personal data to
GIFT City till 31 Mar 2025. been brought under the down up to ₹3,000 on larger train AI models is a key chal-
ambit of angel tax. screens (above 50-inch),” said lenge faced by startups work-
REDUCED CUSTOMS duties The step is likely to Avneet Singh Marwah, CEO ing on AI projects.
on components like camera impact startups as they and founder, Super Plastronic The adoption of AI with a data
lenses used in mobile phone raise bulk of the capital Pvt. Ltd, a contract manufac- utilization strategy can add $500
manufacturing, and open from foreign investors. India today boasts of over 100 unicorns, many of them working on cutting-edge technologies. And the number of recognized turer of TVs. “This will signifi- billion to India’s GDP by 2025,
cell panels used in TVs. In 2022, private equity startups in the country has jumped from 452 in 2016 to 84,012 in 2022—that makes India one of the largest startup ecosystems in the cantly boost the domestic tele- Nasscom said in June 2022
and venture capital world. Going ahead, they will play a critical role in India’s dreams of becoming a $5 trillion economy. vision manufacturing industry report. “The proposed three
30 NEW skilling centres and funding into India and help compete with global Centres of Excellence for AI is a
three centres of excellence. totalled $54 billion, brands,” added Arjun Bajaj, decisive step towards promoting
while it was close to $77 director, Videotex Interna- AI and allied technologies in
billion in 2021, a record year for Indian firms. VII B. For instance, if the FMV (of a ₹1 face usually less stark in mature companies. ket value”. “This could compel more startups tional, a contract TV maker. India,” said Ranjan Kumar, CEO
“Non-resident investors were never under value share) is ₹10 apiece, and if the startup Kumar said the government’s decision “pro- to flip overseas, as foreign investors may not Industry experts said lower of Entropik, an AI startup. The
the scope of this tax,” Ritesh Kumar, Partner, allots a share at a premium of ₹15, then the dif- poses to bring into the tax net any amount want deal with additional tax liability by vir- duty on components will also budget has also proposed to do
J Sagar & Associates, said. “We are all hoping ference of ₹5 would be taxed as income at the received by a closely-held company (includ- tue of their investment in the startup,” said encourage component manu- away with the minimum thresh-
that this is a mistake,” he added. hand of the startup. ing start-ups unless they qualify as a venture Siddarth Pai, co-founder of VC firm 3one4 facturing in India. Vivek Tyagi, old of ₹10,000 for levying TDS
Angel tax is applied if the share price that is The impact is likely to be more severe for capital undertaking receiving investment Capital. “The re-introduction is completely chairman, India Electronics on winnings from online gam-
allotted to investors is at a premium to the fair early to growth stage startups – where the from venture capital fund) from a non-resi- counter-intuitive to the entire move of and Semiconductor Associa- ing. TDS will be charged even if
market value (FMV) of the share. In this case, divergence is higher between FMV and the dent towards subscription of shares where reverse-flipping. This, in fact, will accelerate tion (IESA) said so far the focus the winning is under ₹10,000.
the difference is subjected to Section 56 (2) price of the share allotted. This divergence is the consideration is higher than the fair mar- flipping overseas,” Pai added. was on electronics assembly, abhijit.ahaskar@livemint.com

BUDGET EMPOWERS INDIA’S NEXT GENERATION TO SUCCEED IN THE DIGITAL AGE

EXPERT
VIEW
B Y J U R AV E E N D R A N
Respond to this column at
feedback@livemint.com
T
he Union budget presented by finance minister Nirmala
Sitharaman is a well-crafted balance of economic growth and
fiscal discipline. The massive increase in the personal
income-tax rebate limit—from ₹5 lakh to 7 lakh—will substantially
boost consumption-led growth and act as an antidote to the sub-
dued global economic environment. The capital investment outlay
has been increased substantially by 33% to ₹10 trillion. This, along
with the highest-ever allocation of ₹2.4 trillion to the Railways, will
crowd-in more private investment and boost the virtuous cycle of
investment and job creation.
The first budget of ‘Amrit Kaal’ (regarded as the best and most auspi- get estimate. The deficit is now projected to come down to 5.9% of GDP gender parity improved in FY22, reversing a declining trend from FY17
cious time to begin any new task in Vedic astrology) takes a large step in FY24, which means India remains firmly on the glide path, leading to FY19. School dropout rates have steadily declined for both girls and
forward in building India @100 as a technology-driven and knowledge- to a 4% fiscal deficit in FY26. The focus on social welfare and a renewed
based economy. There are many announcements towards continued commitment to improving the ease of doing business will make India’s
boys, attributed to schemes such as Samagra Shiksha, RTE Act, and PM
POSHAN. The education infrastructure has improved, including the
formalization and digitalization of the economy, which bodes growth more inclusive and forward-looking. The government number of recognized schools, teachers’ availability, and basic facilities
well for the digital future of India. The twin inter-disciplin- has proposed several initiatives aimed at improving the such as toilets, drinking water, and hand-washing facilities. The budget
ary missions of ‘Make AI in India’ and ‘Make AI work for common person’s quality of life. In line with its commit- has proposed new initiatives such as teachers’ training through inno-
India’ are timely and will go a long way in establishing
The ment towards affordable housing, the outlay for PM vative methods and a new National Digital Library for children and
an effective AI ecosystem in India. PM Kaushal Vikas government is Awas Yojana has been enhanced by 66%. By increas- adolescents for device-agnostic accessibility in the spirit of NEP 2020.
Yojana 4.0 will now include skill-based new age taking the right ing the quantum and quality of investment in social By investing in cutting-edge digital public infrastructure, and nurtur-
courses such as coding, AI, robotics, mechatronics, safety net schemes, the budget aims to protect the ing an innovation-driven culture, India will be able to take full advan-
steps toward
and drones, which will prepare the next generation most vulnerable segments of the population. More- tage of its demographic dividend and emerge as a major global player.
to succeed in a rapidly changing world. sustainable over, the budget’s transparency will increase trust Overall, this budget enhances the strengths and addresses the
The allocation of more funds towards infrastruc- growth between the government and the citizen. key challenges facing the Indian economy. By focusing on growth
ture development will help attract more foreign invest- The government’s sharp focus on education and skill with fiscal discipline, boosting consumption, promoting social
ment and create new job opportunities. On the other hand, development will be instrumental in shaping the future of welfare, and improving the ease of doing business, the government
the government’s emphasis on fiscal discipline will help create India’s workforce. India has made significant strides in educa- is taking the right steps towards sustainable and green growth.
a stable and predictable investment environment. The budget takes tion and skill development in recent years. The National Education This budget will greatly contribute to the realization of India’s
a responsible approach to reducing government debt, and it is projec- Policy (NEP) 2020 lays the foundation for a comprehensive and inclu- potential as a major player in the global economy and support sus-
ted to lead to decreased government deficits over time. The revised sive education system, with a focus on revamping all aspects of the edu- tainable and inclusive growth for all citizens.
estimate for the fiscal deficit in FY23 is 6.4 %, which adheres to the bud- cation edifice of India. The gross enrolment ratio (GER) in schools and Byju Raveendran is founder and CEO of Byju’s.
LIVEMINT.COM
ThuRsday, 2 FebRuaRy 2023
MuMbai 05

‘New tax regime gives EXPERT

VIEW
KUMAR MANGALAM BIRLA

spending flexibility’ Respond to this column at

feedback@livemint.com

BUDGET PRESENTS

C A COMPELLING
ongratulations on
your fifth consecutive
budget. You have
mentioned that these
five years have been
the toughest times our country
has faced but still we are right up
there as a bright star. In this bud-
get, you have put more money in
the hands of employees, middle
class. But will the employers be
willing to pay them more? Have
you incentivized employers also
to give more money?
Finance Minister Nirmala
Sitharaman: First of all, when you
look at the economy, you can see that
it is showing very clear signs of robust
revival. When robust revival hap-
pens, and especially when you take
the example of the services sector, the
kind of attrition that sector is facing
but at the same time because they are
moving towards greater and greater
use of technology, sophisticated
technology, they are also seeking
people with such skills. To pay better
is also to pay better for people with
the required skills and that’s why the
government of India, has in this bud-
get, through various different ways
underlined the importance of skil-
ling, upskilling, skilling for industrial
revolution 4.0. In that we placed spe-
cific emphasis because skilling is one
thing, upskilling is there, but today
the world is moving towards great use
of Web 3. For that, if Industry 4.0 is
coming up, employers will also pay
more when you have people with the
right kind of appropriate skills. We
are spending that kind of money and
bringing in that kind of training for
people to be better paid.
So, the government is pushing it
from a different supply side readi-
ness, obviously that will have to be
absorbed by the industry.
For the common people, the most
striking thing about the budget is
the new tax regime. What is the
the new regime. And we are creating
a default system, which means when
you log into your computer to file
taxes this is the form that will appear
first. This doesn’t mean you have to
compulsorily follow this. If you want
to follow the old regime, you can, but
take that decision thoughtfully.
Gradually, we are trying to attract
people from the exemption regime to
the new regime.
A lot of people are saying that in
the old regime, for long-term sav-
FM: We are trying to make sure that get there is something or the other for
people get into the formal sector their facilitation. Because our youth
because of the incentives we are giving is so innovative, startups have been
for digital payments also. When peo- rising in numbers, and there are more
ple put their account into the formal- than 80,000 startups today. Over 100
ized routine –for instance, one of the among them are already unicorns. In
announcements we made today for India, men or women, they should be
MSMEs and professionals, that if 95% encouraged through policy support
of your operations are formal, if it without any discretion.
cheque based at least we are giving you In the same way, if SHGs can be
a higher level of showing your claims. united in large numbers into clusters,
We are promoting the informal sector and are supplied good quality raw
to gain from formalizing. The 59-min- material and help them in running in
efficiency, use technology to find out
if someone is not paying though he
can. Secondly, when you are giving
departments funds to spend, are they
being efficiently utilized? If the
money doesn’t reach to the bottom,
the whole motive that funds will help
in increasing demand, that’s not
achieved. I believe that if the finance
ministry pays attention to the budget
attention, it should pay thrice the
attention to implementation, plug-
ging loopholes, stopping evasion,
VISION & STRATEGY
T
here are many stars aligning for India’s Amrit Kaal, includ-
ing demography and the global realignment of supply
chains. The budget presents a compelling vision and strat-
egy that further solidifies this conviction. While providing strong
impulses for near-term growth through a substantive jump in
capex and reduction in the tax burden on the middle class, it is
also cognizant of the technological mega-trends that India must
adapt as it charts its next phase of growth.
Digitization, innovation, sustainability, and emerging futuris-
tic technologies are themes that run throughout the budget. For
example, to realize the vision of ‘Make AI in India and Make AI
work for India’, the government will set up three centres of excel-
lence for artificial intelligence. These will help develop scalable
solutions in agriculture, health and sustainable cities.
The next phase of the skilling programme will focus on skills
like coding, AI, robotics, mechatronics, IoT, drones and 3D print-
ing, ensuring we have enough skills to manage the transition.
Another important announcement pertains to the setting up of
100 labs for developing applications using 5G.
In digital governance and payments, India is already a global
leader. Several initiatives in this budget would further deepen
digitization. An open-source, open-standard digital public infra-
structure for agriculture will make farmers more informed and
better connected to inputs and markets, and spur agri start-ups.
Startups and academia will get access to anonymized data
through the National Data Governance policy. Digilocker ser-
vices and Aaadhar will be leveraged for easier maintenance of
individual records by various agencies. Businesses will experi-
ence more ease through a unified filing process, and because
of the expanded scope of the Digilocker. Digitization is also
being used for speedier administration
of justice through e-courts. The
The thrust on government remains enthusias-
tically committed to digitiza-
‘green growth’ tion to improve the ease of liv-
continues the ing for citizens and the ease of
doing business for enter-
policy direction prises.
spelt out on The thrust on ‘green growth’
continues the government’s pol-
global forums icy direction spelt out on interna-
tional forums. A sizeable provision
has been made for capital investment
towards energy transition, the green hydrogen mission and via-
bility gap funding for battery storage systems. The budget also

rationale behind that?
FM: Whenever there is discussion
about Bharat’s (India) direct taxation,
it is usually on two issues – reduce tax
rates and secondly, don’t complicate
taxes so much, where you are reduc-
ing a certain tax and implementing a
surcharge on another, or you will get
exemption only when you take insur-
ance. So due to such complications, if
the old regime seemed beneficial to
you, it would also appear to be com-
plicated. For this reason, regarding
the old (tax) regime, many commit-
tees also reported that it needs to be
simplified. One of the key reasons for
tax evasion and avoidance is that
when the rate is high, people find
other ways to avoid it. If the rate is
reduced, people will be more willing
to pay up. Keeping all these factors in
mind, two years earlier, we had
brought in the second tax regime in
which the rate was low. But this time
we have reduced the rate in each tax
slab, and finally the surcharge which
has the highest tax rate in India, has
been reduced significantly. So what-
ever suggestions were made on
reducing rates and simplifying it,
everything has been incorporated in
ings for their retirement, etc,
they could invest in PPF, NPS or
other 80C exemptions so that
they have some savings in the
future. But in the new regime,
these exemptions would not be
there. Why do you then think this
is a more lucrative option?
FM: We need to change this
thought process. When the rate is low,
and you are saving money, it is your
choice where you want to invest it. In
the old regime, the rate was high. In
the new regime, there is no pretension
that the rate is high but we are giving
you some exemptions. This regime is
simple. You are paying less, and with
the saved money you can invest any-
where, your child’s education, what-
ever you wish. I think the tax payer
knows how to spend his money.
The simplification of taxes is
obviously going to increase the
compliance and help in formaliz-
ing the economy because a lot
more people are willing to partic-
ipate. Is the informal sector
merging into the formal sector on
a natural course or are you giving
some incentives to them to draw
them in and formalize them?
‘
ute loan giving which happened a professional manner, with mar- stopping diversion of funds and tak- talks about a ‘green credit programme’, which will incentivize
through the digital keting support etc, ing action, throughout the year. The companies that are taking initiatives towards sustainability. The
format where people we believe that like finance ministry needs to work on budget also recognizes the importance of urban infrastructure;
could convey to the We are trying to make the startup revolu- their toes to implement all of these. this will be critical as about 40% of Indians will be living in cities
bank they want it, sure that people get tion happened in The banking sector, for instance, dur- by 2030. There are two significant initiatives on this front: the
and get an in-princi- into the formal sector such a short period, ing covid implemented the emer- Urban Infrastructure Development Bonds and initiatives to
ple loan in that time, the same can happen gency credit guarantee scheme that improve the creditworthiness of cities for municipal bonds.
and after that with- because of the for women empow- the government had announced. If This was the first budget in India’s Amrit Kaal, and the
out visiting the bank incentives we are giving erment and through banks didn’t implement this effi- finance minister has deftly managed to address all stakehold-
you still get bank for digital payments that we can do well in ciently, the purpose of the scheme ers in an inclusive manner. It has a finely crafted mix of capaci-
assistance. These are Nirmala Sitharaman both manufacturing would have failed. Each sector within ty-building initiatives and reliefs for many constituencies,
ways in which we are Union finance minister and services. the finance ministry, each depart- including women, artisans, tribals, youth and middle-class tax-
formalizing. If we talk about fis- ment needs to deliver topnotch per- payers. And yet, from a macroeconomic perspective, it is com-
Today the coun- cal consolidation, formance. mendable that the finance minister has kept an eye on fiscal
try saw a very strong picture of globally, governments are spend- The fact that you have increased prudence as well.
women empowerment, when you ing for their people, but you are public investment for three years After a spike during the covid pandemic, the government
went to meet the President. The talking about consolidating fiscal continuously, what was the has navigated the fiscal deficit to more prudent levels, while
budget also focuses on women deficit to 6.4% and talking about rationale behind that? maintaining higher capex spending. It is reassuring to see that
empowerment which was the sticking to the gliding path to FM: The money that is spent this broad direction has continued. The improved quality of
praised by the Prime Minister. reach 5.9%. How are you manag- through public investment, in that government spending – wherein the government is doing the
When through SHGs (self-help ing this fiscal consolidation? And the returns are high. There is a multi- heavy lifting for investment recovery – will spur growth in the
groups) you are trying to create a what is the signal you are sending plier effect on every paise (penny) coming years. One hopes it would set in a virtuous cycle
paradigm shift, bring in a new you global investors through this spent on infrastructure investment. between growth, tax buoyancy and fiscal consolidation, bring-
culture, you also said that in budget? We firmly believe that this is route ing the fiscal deficit under 4.5% of GDP in two years, as the FM
Amrit Kaal this would be a big FM: I keep talking about manage- which will uplift the economy. We has targeted.
weapon to drive growth. How will ment of finance. It’s not just about have been seeing this since covid, and Overall, this budget fits the description of being a ‘blueprint for
you tackle growth through allocating funds to different depart- it has yielded positive results. If we India @100’. It addresses the needs of an economy that has just
women empowerment? ments in the budget, but there are want to grow at that pace, then public emerged from the pandemic, and nurtures seeds of the transfor-
FM: Just as comparison, the Prime gaps in revenue raising that are not expenditure is the sure path to do so. mations that will be imperative for emerging as a global power in
Minister in 2016 brought in a policy being filled. On both sides, you need The full interview is available on the coming decades.
for startups, after which in every bud- to fill up the revenue gaps, bring in Doordarshan. Kumar Mangalam Birla is chairman of the Aditya Birla Group.

AI + artist + prompt engineer: A Defence gets ₹5.94 tn; ₹1.62 tn for modernization
note on the art in this edition Rahul Singh
rahul.singh@hindustantimes.com
last year’s budget estimates
and about 8% more compared
have set aside more funds was largely on account of
under the capital head. revised pensions under the
trillion in 2021-22, and
₹4.71 trillion the year
to that in the revised esti- “We believe capex alloca- One Rank, One Pension before.

C I
hatGPT, DALL-E and
Midjourney worm
their way into every
casual conversation we have
these days—and AI featured
prominently in finance minis-
ter Nirmala Sitharaman’s
2023 budget speech. So, it
seemed fitting that we had
decided to explore the possi-
bilities that AI offered while
planning the imagery for our
Budget edition this year.
We worked with Madhav
Kohli, a 24-year-old freelance
multidisciplinary artist who
experiments with the mediums
of artificial intelligence, photo
manipulation and 3D model-
ling, to create AI renderings of
the professionals who read as
well as populate our pages. The
images you see on these pages
are the result of hours of work
and many variations.
While we were thrilled with
the realism of the images, we
also encountered the many
limitations of using AI art gen-
erators—from the practical and
the ethical to the experiential
and philosophical.
At the practical end, hands,
for instance, remain a challenge
for Midjourney as it routinely
generates five-fingered human
beings. It reminded us of being
back in art class where teach-
ers—whether of figurative or
traditional forms—made us
sketch page after page of hands
to get them to “look real”.
And at the other end
are the biases that
are baked into
the AI, con-
scious as well
as causal prej-
udices that
show up—
Indians are
almost always
depicted as
impoverished;
backgrounds tended to
be dystopian; women had
impossibly silken skin; men
looked somewhat careworn.
It’s startling to be confronted
with a detailed image of the
biased lenses through which
we are viewed, the prejudices
we hold, and the ease with
which we are training
machines into clones of our
close-minded selves.
We debated whether to use
them and then made a decision.
As with any new technology, the
challenges are many, but they
do have to be managed, if not
resolved, as AI art holds poten-
tial and artists across the world
are experimenting with it—just
like Mint has done.
Worldwide, AI art
generators are
embroiled in law
suits over possi-
ble copyright
infringe-
ment, and
there are cer-
tainly many
key regulatory
questions ahead
of us. India’s Intellec-
tual Property laws will
need to be reformed as well as
the rights of (original) artists
strengthened.
It is clear that we will need
much of the “interdisciplinary
research and scalable problem
solutions” announced in the
Budget in order to “galvanize
an effective AI ecosystem and
nurture quality human resour-
ces in the field”.
ndia on Wednesday set
aside ₹5.94 trillion for
defence spending in this
year’s budget, including a
capital outlay of ₹1.62 tril-
lion for the military’s mod-
ernization, with the alloca-
tion 13% higher than that in
last year’s budget estimates,
and about 2% more com-
pared to that in the revised
estimates for 2022-23, doc-
uments showed.
The budget includes a reve-
nue expenditure of ₹2.7 tril-
lion and pension outlay of
₹1.38 trillion.
This year’s defence budget
accounts for 2% of the coun-
try’s projected gross domestic
product (GDP) for 2023-24.
It forms 13% of the total
government budget.
The enhanced allocation
comes at a time when India is
locked in a border row with
China and pursuing a raft of
modernization programmes
with a sharp focus on deploy-
ing locally produced weapons
and systems.
This year’s capital outlay is
about 6% higher than that in
mates for 2022-23.
The capital allocation will
power the purchase of fighter
aircraft, helicopters, war-
ships, missiles and several
land systems, including tanks
and artillery guns.
“This expenditure will
close critical gaps in the com-
bat capabilities and equip the
Forces in terms of ammuni-
tion, sustenance of weapons &
assets, military reserves etc,”
defence minister Rajnath
Singh wrote on Twitter.
The increase in outlay will
enable more local collabora-
tions, critical technology
development and transfers as
well as development of skills
in the country, said Ashish
Saraf, country director, India-
Thales.
“This will further support
the government’s objective of
developing India as a global
manufacturing hub to aid
defence exports, and the
vision of ‘Aatmanirbhar Bha-
rat’ (self-reliant India),” he
added.
However, some experts
believe the government could
tion misses a commensurate (OROP) scheme for veterans. The payment received
reflection of the govern- In December, the Union from the Agniveer corpus
ment’s impetus on defence Cabinet, headed by Prime fund by Agniveers is proposed
manufacturing,” said Gaurav Minister Narendra Modi, to be exempt from taxes,
Mehndiratta, head, aerospace approved the revision of according to the budget docu-
and defence, KPMG India. pension of ex-servicemen ments.
Revised estimates in the and family pensioners “Deduction in the compu-
budget documents show that under the scheme, with tation of total income is pro-
the armed forces were unable more than 2.5 million posed to be allowed to the
to spend ₹2,369 crore defence pensioners Agniveer on the contribution
out of last year’s to be paid arrears made by him or the central
capital outlay of The budget amounting to government to his Seva Nidhi
₹1.52 trillion. ₹ 2 3 , 6 3 8 account.”
Last year, includes a crore. The Agnipath model for
the armed revenue T h e short-term induction of
forces spent defence min- soldiers into the three ser-
a r o u n d expenditure of ister said the vices is a major departure
₹21,000 crore ₹2.7 tn & pension government from the military’s dec-
on top of the outlay of ₹1.38 towas committed ades-old recruitment sys-
previous year’s strengthening tem that was discontinued
budget allocation, tn infrastructure in when the government
amid the lingering bor- the border areas, partic- announced the new scheme
der row with China that saw ularly the northern borders in 2022.
India make a raft of emer- with China. It seeks to recruit soldiers
gency purchases and sharpen “The capital budget of the for only four years, with a pro-
its focus on building infra- Border Roads Organisation vision to retain 25% of them in
structure in forward areas. (BRO) has increased by 43% to regular service.
The defence ministry spent ₹5,000 crore in FY 2023-24 Those released after four
₹1.53 trillion on pensions last as against ₹3,500 crore in FY years will get ₹11.71 lakh as
year (revised estimates) com- 2022-23,” he said. Seva Nidhi severance pack-
pared to ₹1.19 trillion (budget India allocated ₹5.25 tril- age, including ₹5.02 lakh
estimates). lion for military spending in contributed by them during
The enhanced spending last year’s budget, ₹4.78 their service.
06 ThuRsday, 2 FebRuaRy 2023
MuMbai
LIVEMINT.COM

KEY STAT
BUDGET POINTERS
MORE GOVERNMENT GOVERNMENT EXPENDITURE Fiscal deficit, which soared to
SPENDING?
10
Total government expenditure as % of GDP
20 9.2% of GDP in 2020-21, is
WHY IT MATTERS Government spending data is budgeted to decline to 5.9% in
Central government expenditure as a share of GDP
rose sharply during the pandemic years but has since
revised estimates for 2022-23 and
budget estimates for 2023-24. GDP
data for 2022-23 and 2023-24 are
15 2023-24, still well above targeted
limits under law.  TN
based on government projections 10 Revenue expenditure, net of PROJECTED GOVERNMENT CAPEX
begun to decline. The challenge is to maintain quality in budget documents.
interest payments, is budgeted to IN 2023-24. THE GROWTH IN
of spending in the last full budget before the 2024
Source: Budget documents, 5 decline by 3.8% in 2023-24 versus GOVERNMENT CAPITAL
elections. Overall investment had begun to recover
on the back of higher capex by the government—a
Economic Survey, Ministry of revised estimates of 2022-23. EXPENDITURE HAS PROVIDED
Statistics and Programme 0
momentum the government needs to preserve. Implementation (MoSPI)
IMPETUS TO OVERALL INVEST-
2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24
MENTS IN THE PAST FEW YEARS.

Budget to drive progress in green energy transition, say analysts

Ujjval Jauhari imports—currently, most of the Ladakh and a dedicated corpus stipulated timeline. There had gen production by 2030, they commodity and metal prices is integration of 13 GW renewable tal investments toward energy
ujjval.j@livemint.com country’s crude oil require- of ₹19,700 crore for enhancing been a number of con- said. another positive since the drive energy from Ladakh is to be transition and net zero objec-
ments is met through imports. green hydrogen production cerns and question Experts gave the toward green hydrogen adop- constructed with an invest- tives. This is a huge allocation,

T The budget
he budget announce-
ments made by the
finance minister indi-
cated the government’s sharp
focus on India’s green energy
transition, providing the neces-
sary support and scale it needs,
analysts said.
The green transition is
needed to reduce India’s
dependence on fossil fuel
The budget proposals are also
aimed at helping the country
meet its international commit-
ment to achieve zero carbon
footprint by 2070.
A special focus on energy
transition, with a dedicated
corpus of ₹35,000 crore, prior-
itization of evacuation offtake
of 13 GW renewable energy
capacity being developed in
targeted to reach 5 MT by 2030
were among the key proposals
to help India become a net zero
economy, said Sandeep Upad-
hyay, managing director, infra-
structure advisor at Centrum
Capital.
Experts said the dedicated
corpus and support were
needed to make green hydro-
gen projects viable within a
marks that had example of solar tion remains dependent on a ment of ₹20,700 crore includ- said analysts as Varatharajan S.
been high- projects that saw significant decline in the price ing central support of ₹8,300 an analyst at Antique Stock
lighted. There- provides very high cost of electrolyzers costs by 2030. crore. Broking.
fore, these ini- capital of production The dedicated corpus on pri- In addition, certain more Sanjay Moorjani, research
tial stages sup- investments during the ini- oritizing offtake of renewable announcements in power sec- analyst, SAMCO Securities on
ported by the tial phases energy capacities being devel- tor will benefit smart meter National Hydrogen Mission
government for toward energy before solar oped in Ladakh is also likely to manufacturers, said Rupesh said that Reliance Industries,
setting up a cor- transition power prices provide an impetus to green Sankhe, analyst at Elara Securi- Tata Power, Adani group, L&T,
pus remain critical to declined to ₹3-4 per energy, said analysts. ties India Pvt Ltd. BPCL, HPCL and NTPC would
achieving the first mile- unit over time. The inter-state transmission The budget provides for benefit from the green hydro-
stone of 5 MT of green hydro- The recent correction in system for evacuation and grid ₹35,000 crore for priority capi- gen mission.

The dextrous math

Capex raised to ₹10 tn as behind narrowing
govt pushes for infra, jobs fiscal deficit target
Dilasha Seth
dilasha.seth@livemint.com
New Delhi
FinMin proposed continuing
major savings on subsidies of
almost ₹1.4 trillion. Further,
NREGA has been pruned to
save another ₹20,000 crore, he

F
inance minister Nirmala said.
50-year interest-free loan to Sitharaman’s tightrope “Budgeting is always a zero-
walk in pegging the fiscal sum game and if taxes have not
state govts for one more year deficit at 5.9% of GDP for been raised to garner revenue
2023-24 despite increased and expenses have increased, it
government spending was has to be through cutting other
described on Wednesday as a heads,” said Sabnavis.
Subhash Narayan & Saurav Anand piece of “dextrous fiscal math”, The budget lowered the allo-
New Delhi eased by lower allocations for cation to the Mahatma Gandhi
subsidies and rural jobs National Rural Employment

T
he government proposed a record schemes. Guarantee Program
₹10 trillion in capital expenditure A sharp 28% reduction in (MGNREGP) scheme to
for the next fiscal year as it contin- subsidy allocation in 2023-24 ₹60,000 crore, a 32% reduc-
ued its push for more roads, ports compared with the revised esti- tion from ₹89,400 crore esti-
and other critical infrastructure on mates for FY23 and a lower out- mated in the revised budget
the back of a steep hike it said was set to create lay on schemes such as the estimate for 2022-23.
more jobs and propel economic growth. National Rural Employment The government estimated a
Finance minister Nirmala Sitharaman said Generation programme could nominal GDP growth at 10.5%,
the planned capex was 33% more than the explain the math behind the which according to experts is
₹7.5 trillion this fiscal. budget’s headline numbers. quite modest, and may provide
“Capital investment The subsidy outlay a further cushion to
KEY outlay is being for fertilizers was rein in the fiscal
ANNOUNCEMENTS increased steeply for the cut from ₹2.25 To finance deficit ratio for
third year in a row by trillion in FY24.
CONTINUATION OF 50- 33% to ₹10 trillion, 2022-23 to the fiscal deficit, To finance
year interest free loan to which would be 3.3% of ₹1.75 trillion, a govt will borrow the fiscal defi-
state govts for one more GDP. This will be almost 22% reduc- cit in
year three times the outlay in tion, while ₹15.43 tn from 2023-24, the
2019-20. This substan- that for food the markets in Centre will
₹35,000 CRORE outlay for tial increase in recent was cut 31% 2023-24 borrow a record
energy security, energy years is central to the from ₹2.87 tril- ₹15.43 trillion
transition and net zero government’s efforts to lion as per revised from the markets in
objectives enhance growth poten- estimates to ₹1.97 tril- 2023-24, which is 3.2%
tial and job creation, lion. higher than current year’s bud-
PM-PRANAM to be crowd-in private invest- The petroleum subsidy saw a get estimate of ₹14.95 trillion.
launched to incentivize ments, and provide a 75% reduction in allocation The government has set a
states & UTs to promote cushion against global from ₹9,170 crore to ₹6,913 disinvestment target at
alternative fertilizers headwinds,” Sithara- crore. Overall, total subsidies, ₹51,000 crore for FY24, lower
man said in her budget which had spiked over the last than the previous financial
GREEN CREDIT Programme speech on Wednesday. couple of years on account of year. “The fiscal deficit targeted
to be notified under “The year-on-year the pandemic and the geopoli- in the FY24 be is slightly higher
Environment (Protection) increase of 33% is only tical crisis due to the Ukraine than our projections, although
Act marginally lower than war, have seen a reduction in this is on account of the wel-
last year’s 35% jump. The economic philosophy of the Narendra Modi Government has been to accelerate economic growth through sustained investment 2023-24. While the pandemic come and unexpectedly strong
ONE-TIME NEW small The ratio of capex-to- in infrastructure. India’s National Infrastructure Pipeline currently has 8,964 projects with a total investment of more than ₹108 led to an increase in food subsi- jump in capex…However, the
savings scheme, Mahila GDP, which rose to 2.7% trillion under different stages of implementation. dies over the last two years, the budgeted tax revenue growth
Samman Savings Certificate in 2022/23, is estimated Ukraine war disrupted global may prove to be slightly opti-
to be launched at 3.3% in the new finan- supply chains causing a spike in mistic,” said Aditi Nayar, chief
cial year,” she added. the fertilizer and energy bill. economist, ICRA.
Mint reported in November that the bud- highlighted by the Economic Survey coal, steel, fertilizer and foodgrains sectors. record 35.4% to ₹7.5 trillion in FY23 after it “The government has quite The sharp fiscal consolida-
get would raise the Centre’s capex to ₹10 tril- 2022-23 on Tuesday, a host of economists “They will be taken up on priority with an grew 26% to ₹5.54 trillion in covid-hit FY dexterously managed the fiscal tion proposed for FY24 is
lion to build critical infrastructure. suggested hiking government capital spend- investment of ₹75,000 crore, including 2022. math by starting with the fiscal despite a multi-year high capi-
Capital spending by the government has ing to help steer the economy through any ₹15,000 crore from private sources,“ she said. Before that capex in the revised estimates deficit number and then work- tal expenditure allocation as a
been on the rise for the past few years even as turbulence, including a feared global reces- Finance minister Sitharaman also noted for FY21 stood at ₹4.39 trillion in the first year ing on reallocating outlays,” share of total outlay at 22% esti-
private investment remained tepid during sion in 2023. that investments in infrastructure have a of the pandemic in FY21. said Madan Sabnavis, chief mated for FY24 compared to
the pandemic. Sitharaman said 100 critical transport large multiplier impact on growth and The current capex of ₹10 trillion is three economist, Bank of Baroda. 19% in the previous year, while
Although private investment gathered infrastructure projects have been identified employment. times the pre-covid levels of FY 2020. Hence, while capex has revenue receipts are estimated
some momentum in the fiscal first half, a fact for last- and first-mile connectivity for ports, Sitharaman had increased capex by a subhash.narayan@livemint.com increased smartly, there are to grow by 12.39% in 2023-24.

NOTHING POPULIST ABOUT THIS BUDGET, WITH ITS FOCUS ON JOBS WITH GROWTH .

EXPERT
VIEW
SUSHIL KUMAR MODI
Respond to this column at
feedback@livemint.com
T
here is nothing that you can call populist about this bud-
get. For instance, the biggest takeaway of this budget is
the ₹10 trillion allocated for capital expenditure. This rep-
resents a steep increase (of 33% this year) for the third year in a
row and will create more jobs. So, the focus is on growth with
jobs. This includes ₹1.3 trillion which will be given to the states
as a 50-year interest-free loan that they will effectively spend as
a grant. If you see, the effective capital expenditure is ₹13.7 tril-
lion. This also includes ₹2.4 trillion that has been provided for
the railways, which is nine times the outlay in 2013-14. In the
rural areas, the PM Awas Yojana’s allocation has been increased class, but these were long standing demands. There are also important schemes for senior citizens. The sav-
by 66% to over ₹79,000 crore. This will also help create employ- Another thing to realize is that this is a futuristic budget. The ings scheme is to be enhanced because of the ageing problem we
ment. So, the main focus of this budget is to create more jobs. government wants to make India a digital superpower. For arti-
When you spend ₹100 on revenue expenditure, it does not ficial intelligence, the government has allowed three centres of
have started facing. For women, there will be a two-year period
where they can deposit an amount and receive 7.5% interest.
add anything to the economy. But, if you spend ₹100 in
capital expenditure, it has a multiplier effect on the
excellence to be created.
The second important thing is the energy transition
So, again, I will say that this budget will create more and more
jobs. India is the fastest growing economy in the world and this
economy. During the pandemic, some com- to meet the global warming targets, ₹35,000 crore budget has taken care of each and every sector of our society.
mented that the government was not giving cash
The PM Awas outlay for energy security, net zero objectives There will always be challenges like the Ukraine war that can-
in the hands of the people. However, if you give Yojana’s and for battery energy storage. So green growth not be foreseen. As chief economic adviser V. Anantha Nages-
people cash in hand, they may not spend it. But allocation has and the environment have been a focus. waran put it, there are “known unknowns”.
by creating jobs, in a way we are putting money There have also been very important provi- For example, we have planned the budget keeping in mind
been increased
in the hands of people. This is the more effec- sions for farmers in this budget. The govern- the price of oil as $100 dollars a barrel. But nobody knows about
tive strategy and the focus on capital expendi- by 66% to over ment is promoting chemical fertiliser-free the future. But taking into account all these things, they have
ture allowed us to face global headwinds and ₹79,000 cr farming and 10 million farmers will adopt natural taken sufficient care.
become the world’s fastest growing large econ- farming. We have been successful in handling crises like the covid-19
omy. The Modi government’s strategy is not to give Further, ₹20 trillion will be provided as agricultural pandemic and the Ukraine war and have done much better than
doles but to empower the people. credit. Primary agricultural cooperative societies will be other governments did during the 2008 financial crisis and
Further, the demand of the middle class for income tax rebate computerised in the next three years. other crises.
was a long pending one, for five or six years. Further, those in There is also a shortage of nurses and paramedic staff in the (As told to Shashank Mattoo)
the new tax scheme will not pay any tax if they earn under ₹7 healthcare system, so 157 new nursing colleges are to be estab- Sushil Kumar Modi is a Rajya Sabha MP, former deputy chief
lakh a year. So, some concessions have been given to the middle lished. minister of Bihar, and former finance minister of Bihar
LIVEMINT.COM
GOOD GOVERNMENT
SPENDING
WHY IT MATTERS
Of India’s total gross domestic product (GDP), the
government’s contribution is 10-15%. It makes two
kinds of expenditure. One is to keep the ship going
like staff salaries and administration cost. The other,
more useful spending is ‘capital expenditure’, or
investments in building new assets like roads and
ports that have a multiplier effect for years to come.
Quick acceleration, on-board infotainment, GPS-based passenger information systems, hyperloop technology that will make trains faster
than airplanes... India has been making plans for trains that are technologically more advanced and far faster than anything to which we
are accustomed. Execution of these plans will need significant capital, and this budget’s outlay is encouraging.
Locally made green
trains to be rolled out
Under the ‘Amrit Bharat
Station’ scheme, the central
government plans to
redevelop about 1,275
stations across the country
FM seeks to win the masses
with pre-poll budget sops
Gireesh Chandra Prasad &
Ravi Dutta Mishra
New Delhi
T
he last full budget of the
government before the
2024 general elections
seeks to pack a strong dose of
welfare measures aimed at dif-
ferent sections of the society,
add jobs through capital
spending and woo the middle
class with income tax sops.
The Union budget for FY24
presented by finance minister
Nirmala Sitharaman empha-
sized building a “technology-
driven and knowledge-based
economy with strong public
finances and a robust financial
sector” as India aspires to
become a developed economy
in the next quarter of a cen-
tury.
Sitharaman spoke about
creating opportunities for the
youth, economic empower-
ment of women, offering a
strong impetus to growth and
job creation, and strengthen-
ing macroeconomic stability.
ThuRsday, 2 FebRuaRy 2023
MuMbai 07
KEY STAT
BUDGET POINTERS
CAPITAL EXPENDITURE BY GOVERNMENT Capital expenditure (in ₹ trillion) For the fourth straight year, capital
27
10.0 expenditure is poised for a healthy
increase of above 20%. Against
7.3 21% in 2022-23, the projected
5.9 increase in 2023-24 is 37%.
4.3 Of the budgeted capex of ₹10
%
2.8 3.1 3.4
2.5 2.6 trillion, 26% is designated for the INCREASE IN THE CENTRE’S
2.0
ministry of road transport and CAPITAL EXPENDITURE IN 2020-21,
highways, 24% for railways and THE YEAR WHEN COVID-19 WRECKED
2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 16% for defence.
GOVERNMENT FINANCES
Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents
FY23.
The revenue from freight is expected to
rise to ₹1.79 trillion in the next fiscal from
Many more PLIs in
₹1.65 trillion in FY23.
Addressing the media after the budget
presentation, union railway minister Ash-
the pipeline, says
wini Vaishnaw said: “We will be rolling out
2-3 Vande Bharat trains every week by the
end of 2023-24, which
will be used through the
Piyush Goyal
country. The production
and design will of Vande Ravi Dutta Mishra rejig on certain items?
Bharat metro projects ravi.dutt@livemint.com Generally this effort is to
OUTLAY FOR PM Awas will be completed in New Delhi promote domestic manufac-
Yojana is being 2023-24 and we hope to turing. For instance, a raw
T
enhanced by 66% to over start rolling out these he record capex push in material had a customs duty
₹79,000 crore metro projects in the union budget will and an intermediate product
2024-25.” drive growth and create was coming in—from data
NEW INFRA finance Vande Bharat trains jobs, commerce minister Piy- when we see, it was coming in
secretariat to enhance run at semi-high speeds ush Goyal said in a media through an FTA or some other
opportunities for private of up to 180 km per hour interaction, adding that route at zero duty. The Indian
investment in infrastructure on non-metro routes. For “many” production linked domestic manufacturer is at a
metros, they are incentives (PLIs) are in the disadvantage. So we’ve tried to
AGRICULTURE expected to run at 120 pipeline and they would be reduce the duty on the raw
ACCELERATOR fund to be kmph. announced after getting cabi- material also so that they get it
set up to encourage agri- He said the production net approval on a regular basis. without duty and they can
startups in rural areas of Vande Bharat trains Edited excerpts: compete in the market.
would be started in new What does the Budget do to The economic survey
INDIAN INSTITUTE of locations including Soni- spur growth? pointed out that most of
Millet Research will be pat, Latoor and Rae- Never before in the history our exports go to seven
supported as a Centre of bareli. At present, the of India has the country countries. How are we
Excellence production of Vande focused on growth as much as going to expand that?
Bharat Express trains in the last three or four years— This is something that the
SUB-SCHEME OF PM takes place at Chennai’s the capex from the centre Prime Minister has focused on
Matsya Sampada Yojana Integral Coach factory going up to 3.3% of the GDP. In since 2014. He has been talk-
with targeted investment of (ICF). a short span of four years, we ing to missions also. So in this
₹6,000 crore to be launched Currently, there are have demonstrated to the country for the first time, our
eight Vande Bharat trains world that for us investment in missions have started hand-
and the government aims to operate least 75 infrastructure with its multifa- holding industry. There was a
such trains by August 2023. ceted benefits is the way to time when our businessman
In line with Centre’s energy transition spur growth. If you used to complain that
and net zero goals, Indian Railways plans to were to look at the if I’m stuck in a
design and manufacture India’s first hydro- multiplier effect Never before problem some-
gen-fuelled train by the end of this year. of every rupee where, the
These trains will operate across heritage spent on has the country m i s s i o n
and tourist circuits like the Kalka-Shimla infrastruc- focused on doesn’t come
route, Vaishnaw said. ture, various to my sup-
Vaishnaw said that in line with the gov- estimates growth as much p o r t .
ernment’s green energy mission, the rail- suggest it’s as in the last 3 to Whereas for-
ways will install ultra-mega solar power 3.5x. So the 4 years eign missions
plants to cut the dependency on thermal budget is mas- in India would
power. He said that 85% of railway electrifi- sively focused on always come with
cation has been completed. growth, jobs, opportu- industry delegation
Further, under the ‘Amrit Bharat Station’ nities for our next generation. ..writing letters for their indus-
scheme, the central government plans to Economic survey has try. The data you’ve spoken
redevelop about 1,275 stations across the flagged a slowdown next about us, focus more on mer-
country including New Delhi Railway Sta- fiscal. Where do you think chandise exports. When you
tion and the Chhatrapati Shivaji Terminus the push for exports will add service exports then the
in Mumbai. The scheme announced in come from in this budget? dispersion becomes much big-
December last year envisages development
of stations on a continuous basis with a
long-term vision.
He also said that a corridor-based
approach would be taken up across the
Clearly the international sit- ger. So out of the 200 coun-
uation is challenging. Despite tries, the large countries are
that we continued to be at still only about 15-20. So there
about 8 or 9% growth in mer- is bound to be a concentration
chandise exports in the cur- of exports in a few countries.
country to develop railway infrastructure. rent year which is phenome- There has been a lot of buzz
The corridors would include economic cor- nal, considering that the global about the PLI scheme’s
Rituraj Baruah The hefty increase in allocation for the ridors specified for sectors like energy, trade is growing barely 1%. We likely extension?
rituraj.baruah@livemint.com railways comes with expectations of better cement, ports among others. A ‘Sagarmala’ continue to have a 20% growth That fund has already been
New Delhi returns on investment. corridor will be set up to connect the ports in services which is a big credit provided by the finance minis-
The operating ratio of Indian Railway for in the country. to our young boys and girls ter—₹2 trillion plus ₹76,000
T
he Centre unveiled plans to FY23—which shows the efficiency of a com- The government would also set up a ‘Jan- and particularly our IT sector. crore for the semiconductor
locally design and manufacture pany’s management by comparing the total jati Gaurav Corridor’ connecting tribal It also reflects that tourism is industry. So as and when other
semi-high speed metro trains and operating expense with net sales—stood at areas of the country by rail. In a bid to another area where govern- PLIs schemes get approved,
hydrogen-fuelled trains as it 98.22. In FY24, this is projected to rise to strengthen tourism, the minister said that ments are giving rich divi- the cabinet is empowered to
announced a record allocation of 98.45. The ratio is a key metric to assess the more circuits will be added to the series of dends. And you saw the focus approve it. It does not have to
₹2.4 trillion for the railways in the budget. Indian Railway’s financial health as it comes trains like ‘Bharat Gaurav’. on tourism being presented in go through a budgetary pro-
“This highest ever outlay is about nine under pressure due to heavier capital Speaking on the progress of the Mumbai- the budget today. Also 50 cess a second time. The actual
times the outlay made in 2013-14,” finance expenditure. Ahmedabad high-speed train project, he tourist spots are going to be scheme approvals is a cabinet
minister Nirmala Sitharaman said. The allo- The Centre has projected a passenger said the Maharashtra government has made truly world class. process and the guidelines is a
cation for the last budget stood at ₹1.59 tril- revenue of ₹70,000 crore in FY24 for cleared stuck approvals and that the project What is the rationale ministerial process. Many
lion. Indian Railways, compared with ₹64,000 in would be expedited. behind the custom duty [PLIs] are in the pipeline.
NEW SLOGANS BUT BUDGET ON SAME OLD TRACK
important element would be lack of fairness and transpar- nations and (is) position(ed) to ascend the pre-pandemic
ency. A public policy that is geared to the creation of a few growth path in FY23”.
The priorities of the Modi exemption on leave encash-
EXPERT champion investors leads to minimum government The pre-pandemic growth path of the NDA govern-
becoming maximum government when it comes to certain ment is no record to be emulated. It was another man-
administration cover inclusive ment on retirement of non- VIEW favoured corporates. Such a situation is not one that would made “Hindenburg disaster”. Even more silly is the
development, reaching the government salaried employ- enthuse the “animal spirits” of the investors, which Keynes assumption that the economy fully recovered from the
last mile, infrastrucutre and ees to ₹25 lakh, a scheme T. M . T H O M A S I S A A C famously spoke about. What ever be the reason, the sub- pandemic in FY22. The per capita GDP would still be
investment, uneashing the meant to benefit the salaried dued investment given the level of technology, would below the pandemic level. The ratio of tax and non-tax rev-
potential, green growth and class. Respond to this column at imply subdued growth. No amount of verbiage can white- enues to GDP in 2023-24 is virtually the same as in the pre-
youth power. Also aimed at improving the feedback@livemint.com wash the fact that the Indian economy that was growing at vious year and the fiscal deficit has been brought down
Sitharaman scaled up the lives of people and giving a around 8.6% per annum since 2003-04 entered a marginally from 6.4% to 5.9%. Yet it was possible to
T
target for farm credit by 11% to helping hand to small firm are he union budget of 2023-24 was presented under period of serious deceleration reaching 3.1% in maintain the expenditure-GDP ratio because of
₹20 trillion for FY24 proposals to enhance the long shadow of crisis in the Adani Empire, the the last quarter before the pandemic under the expected increase in the higher receipts
and raised the urban infrastruc- largest of the Indian conglomerates. Why should nine years of the Modi government. The outlay on from the sale of public assets.
allocation for Union budget ture in smaller this scam be brought up in a discussion of the budget? For Though even the economic survey has MGNREGS has The budget holds little relief for the
PM Awas cities with an the simple reason that it is linked to an important policy very carefully avoided it from the list of rural poor whose employment and
Yojana, the emphasized annual alloca- variable of the budget—the enhancement of the effective shocks that adversely affected the Indian fallen from wages are fallen. The outlay on
housing building a tion of capital expenditure from 3. 9% of GDP in 2022-23 to 4.54% economy, it was the demonetisation that nearly ₹90,000 MGNREGS has fallen from nearly
scheme, by ₹10,000 in FY24. triggered the downward slip. ₹90,000 cr in 2022-23 to ₹60,000 cr.
66% to “technology- crore, a The rationale for raising the public capital expenditure Even after the downward slide began,
cr in 2022-23 to National social assistance program has
₹79,000 crore driven revamped is that it would crowd in private investment. But the puzzle budget after budget of the NDA regime ₹60,000 cr been barely maintained at ₹9,650 cr, at
in FY24. economy” credit guaran- is that despite higher government capital investment pri- pursued a foolish strategy of reducing the the same level as 2022-23. The outlay on
With develop- tee scheme for vate investment is not forthcoming. The Gross Fixed Capi- overall budgetary expenditure to GDP ratio from the National Education Mission and Health
ment as the key slo- small businesses tal Formation (GFCF) to GDP in all years has been lower 14% in 2013-14 to 12.2% in 2018-19. Though not related to Mission is lower from the BE of 2022-23 ₹76,700 cr by
gan, the Modi govern- with an outlay of ₹9,000 than the ratio of 32.6 in 2013-14 at around 31.3 until covid the budget, the situation was confounded by the Reserve ₹1,000 cr. For the housing program, ₹90,000 cr was
ment is betting on a massive crore, a new small savings when it fell even more sharply. Bank adopting a policy of increasing the real repro rate expended in 2021–22. In 2022-23 the expenditure is
33% increase in capital scheme, Mahila Samman Sav- The key question is, why is private sector investment not even while inflation was coming down. These policies ₹70,000 cr and in the current year the allocation is
expenditure to ₹10 trillion in ings Certificate for women and crowding in? An exasperated finance minister was quoted were reversed only with the pandemic. In the present bud- ₹79,590 cr.
the next financial year to con- girls and a new scheme for in Mint, “Since 2019, ...I have been hearing industry doesn’t get expenditure-to-GDP ratio is 15%, lower by 0.4 percent- This is the budget presented in the final year of the gov-
tinue supporting economic development of primitive vul- think [the environment] is conducive. All right, the tax rate age points when compared to the previous year. ernment to usher in Amrit Kaal. Nine years’ record is
activities and to crowd in pri- nerable tribal groups with a was brought down. Give PLI? We have given PLI. I want to India’s economic deceleration was the result of multiple sought to be brushed under the carpet with promises for
vate investments. budget outlay of ₹15,000 crore hear from India Inc.: what’s stopping you?”. Even the policy failures, and the present budget does not seem to the future. However, the new slogans are on the same
The budget also proposed to over the next three years are. present budget does not provide an answer. The answer have any new strategy to make up for the mistakes. The track as in the past.
raise the limit of ₹3 lakh for tax gireesh.p@livemint.com certainly is complex. Nevertheless, among other things, an budget assumes “a full recovery in FY22 ahead of many T.M. Thomas Isaac is a former finance minister of Kerala.
08 ThuRsday, 2 FebRuaRy 2023
MuMbai
LIVEMINT.COM

KEY STAT
BUDGET POINTERS
DOUBLE-ENGINE GROWTH TAX REVENUE TRANSFER TO STATES

18.6
In 2023-24, the share of central tax
Share of central tax revenues transferred to states (in %) revenues transferred to states is
WHY IT MATTERS 37
States too need to drive growth. A principal source of their projected to fall marginally to
revenues is the share of central taxes transferred to them. 30.4%, against 31.2% in 2022-23.
Since peaking in 2018-19, this has dropped by about 5
percentage points, though it’s offset by other central
33

28.1
States’ fiscal deficit, which
spiked during the pandemic year
₹ TN
29 PROJECTED CENTRAL TRANSFER TO
transfers such as under centrally sponsored schemes. The 30.4 2020-21 to 4.1% of GDP, declined
STATES IN 2023-24, MAINLY AS SHARE OF
big event this year for states is the end of the GST to 2.8% in 2021-22 due to higher
25 TAXES, GRANTS-IN-AID AND UNDER
compensation cess, under which the Centre compensated 2013-14 2023-24 revenues. For 2022-23, this is
CENTRALLY SPONSORED SCHEMES. THIS
states for a fall in revenues due to the transition to GST. Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents budgeted at 3.4%.
IS UP 8.9% OVER 2022-23.

Financial sector regulators to review norms to ease compliance cost

Shayan Ghosh suggestions from public and sector, she proposed a clutch should s t r u c t u r a l l y the GIFT International Finan- Goods and Services Tax Net- India’s growth story. The pol- ening the ease of doing busi-
shayan.g@livemint.com regulated entities. Time limits of amendments to the Bank- strengthen the sector cial Services Centre work (GSTN), Reserve Bank icy support laid out by the ness in IFSC at GIFT City. The
MUMBAI to decide the applications ing Regulation Act, the Bank- and bolster stake- (IFSC), the govern- of India (RBI), Securities and Union government will cer- establishment of an EXIM
under various regulations will ing Companies Act and the holder confi- The Centre ment said it will Exchange Board of India tainly act as a catalyst in expe- Bank subsidiary would

I
ndia’s financial sector reg-
ulators will review their
current guidelines in a
move aimed at simplifying
and reducing the cost of com-
pliance for regulated entities,
finance minister Nirmala
Sitharaman said on Wednes-
day.
“For this, they will consider
also be laid down,” Sithara-
man said in her budget
speech. She said that public
consultations, as necessary
and feasible, will be included
in the process of regulation-
making.
That apart, in order to
improve governance and pro-
tect investors in the banking
Reserve Bank of India Act.
“Long term, a clear focus
has been articulated on
enhancing bank governance
and investor protection with
an announcement of amend-
ments to the Banking Regula-
tion Act, the Banking Compa-
nies Act, and the Reserve
Bank of India Act, which
dence,” said set up a single (Sebi) and Insurance Regula- diting the growth of GIFT encourage emerging sectors
Krishnan Sita- will set up a window IT sys- tory and Development City thus making it a vibrant such as aircraft & ship financ-
raman, senior single window tem for regis- Authority of India (IRDAI). It global financial hub for ing activities in GIFT City,”
director and IT system for tration and will also permit acquisition domestic and international said Ray.
deputy chief approvals from financing by IFSC banking entities,” said Tapan Ray, That apart, the government
ratings officer registration and International units of foreign banks. managing director and group will also amend the IFSCA Act
at Crisil Ratings approvals Financial Servi- “The Union Budget clearly chief executive, GIFT City. for statutory provisions for
Ltd. ces Centres Author- emphasises the growth aspi- “The far-reaching meas- arbitration, ancillary services,
That apart, to ity (IFSCA), Special Eco- rations of our nation and the ures announced in the budget and avoiding dual regulation
enhance business activities in nomic Zone (SEZ) authorities, vital role of GIFT City in will go a long way in strength- under SEZ Act.

MSMEs to reap gains

A mixed bag for banking of revamped credit
sector with more positives guarantee scheme
Shayan Ghosh
shayan.g@livemint.com
MUMBAI
The rise in outlay for PMAY
The availability of ₹2 trillion
worth of credit to small busi-
nesses would aid the sector, just
emerging from two years of

T
he government will pandemic-related stress. Along
by 66% is likely to boost introduce the revamped with retail borrowers, small
version of the Credit businesses were perhaps the
affordable housing loans Guarantee Trust for Micro and worst hit during this period,
Small Enterprises (CGTMSE) crimping their ability to repay
scheme from 1 April, infusing existing debt. While the gov-
₹9,000 crore to aid collateral- ernment has in the past
Gopika Gopakumar free lending to small busi- announced measures like the
gopika.g@htlive.com nesses, finance minister Nir- Emergency Credit Line Guar-
MUMBAI mala Sitharaman said on antee Scheme (ECLGS) during
Wednesday. covid-19, experts have been

T
he budget has turned to be a mixed
bag for the banking sector at a time
when customer deposits have
lagged credit disbursal amid a dry-
ing up of surplus liquidity.
In terms of positive, bankers view finance
minister Nirmala Sitharaman’s announce-
ment to raise the outlay for PM Awas Yojana
(PMAY) by 66% in the
budget as a big boost to
KEY the affordable housing
ANNOUNCEMENTS loan portfolio. The
scheme’s outlay has
FINANCIAL SECTOR been raised to ₹79,000
regulators will engage in a crore, a sharp rise from
comprehensive review of the FY23 budget that
current regulations had allocated ₹48,000
crore for the ‘Housing
NATIONAL FINANCIAL for All’ initiative.
Information Registry to be “With the announce-
set up to promote financial ment of enhanced capi-
inclusion tal expenditure by 33%
and increment in the
INTRODUCTION OF outlay for PMAY by 66%
revamped credit guarantee to over ₹79,000 crore,
scheme for MSMEs, leading to the government has
₹2 tn of collateral-free loans provided much-needed
support to the afforda-
CENTRE TO continue fiscal ble housing sector. Also,
support for India’s digital the relaxation in income
public infrastructure tax slabs provides addi-
tional disposable
KNOW YOUR customer income in the hands of
process to be simplified the common man which
adopting a ‘risk-based’ can directly lead to
instead of ‘one size fits all’ growth in the affordable
approach homes segment,” said
Sandeep Menon,
founder, managing director and chief execu-
tive, Vastu Housing Finance. Also, starting an
Agriculture Accelerator Fund to encourage
innovative startups in rural areas would help
banks get more information on the farm sec-
tor. In addition, ₹20 trillion worth of targeted
agriculture credit from banking sector will
also see an improvement in credit pick up.
The budget also proposed to increase the
Bankers are a happy lot today. Non-performing assets of lenders have reduced significantly and India’s economy continues to be
resilient. This has led to an all-time high incremental credit growth. Bank loans to micro, small and medium enterprises, under priority
sector, stood at ₹19.12 trillion as of 30 December, up 11.6% year-on-year.
capital investment outlay by 33% to Rs 10 tril-
lion. This is nearly three times the outlay in
2019-20. The decision to extend the 50-year
interest-free loan to state governments for
one more year to spur investment in infra-
structure will also provide further push for
credit growth. “Investing outlay of capital
expenditure to 10 trillion would boost credit
offtake in both public and private sector,
positioning private sector infrastructure
investment to grow further. Strong bank bal-
ance sheets would enable funding capex and
consequent asset creation would help in our
path to a $7 trillion economy,” said Abizer
Diwanji, head-financial services, EY India.
That said, the move to start a one-time new
small savings scheme for women up to ₹2
lakh could intensify competition for deposits.
Launched in August 2000, seeking a revamp of the
the CGTMSE scheme provides CGTMSE scheme.
guarantees to help small busi- “The demand of NBFCs from
nesses access loans. Guarantees the finance minister was to
provided by the scheme ranges advance hassle-free credit
from 75-85% of the loan. Such access and the government has
guarantee schemes are benefi- given a much-needed boost to
cial to banks as well as they do the MSME sector. An allocation
not have to set aside provisions of ₹9,000 crore for credit guar-
for the guaranteed por- antee revamp scheme
tion if it turns bad. starting 1 April will
A MSME sec- The revamp is give a big relief to
tor expert said MSMEs in the
requesting likely to enable current infla-
anonymity additional tionary condi-
that the infu- tions,” said
sion of funds collateral- free Shachindra
into the guaranteed Nath, vice
scheme would chairman
credit of ₹2 tn m a n a g i and
allow more lever- ng
age and that is likely director, UGRO
being termed as a Capital, a non-bank len-
revamp, although more details der to small businesses.
might be soon available. According to Jiji Mammen,
“I am happy to announce executive director and chief
that the revamped scheme will executive of microfinance
take effect from 1 April 2023 institutions’ industry body
through infusion of ₹9,000 Sa-Dhan, the budget has
crore in the corpus. This will addressed the need for credit to
enable additional collateral- the MSME sector by augment-
free guaranteed credit of ₹2 ing the credit guarantee fund.
trillion,” Sitharaman said in her Data from RBI showed that
budget speech, adding the cost bank loans to MSMEs, under
of the credit will reduce by priority sector, stood at ₹19.12
about 100 basis points (bps) due trillion as on 30 December, up
to the scheme. 11.6% from a year earlier. The
Bankers said they would small business sector, with an
have to wait for the details of estimated workforce of 110 mil-
“The banking system could see more com- the revamp to assess the lion, has also gained impor-
petition on deposits given the increase in impact. “The exact detail of the tance owing to its status as one
investment limits across various small saving scheme is awaited and hence of the largest employment pro-
instruments amid an environment of high the exact impact of the scheme viders. A report by consulting
credit growth. The improved attractiveness can be evaluated once the fine firm KPMG and industry body
of the new tax regime will reduce the demand print has been studied,” said CII said in November that these
for tax-break induced investment products,” Manish Kothari, president and entities account for 30% of
said Karthik Srinivasan, group head - finan- head, commercial banking, India’s gross domestic product
cial sector ratings, Icra. Kotak Mahindra Bank. and 45% of exports..

Budget 2023 showcAses A vIsIon for IndIA And A plAn to propel BhArAt
EXPERT
VIEW
SHANTI EKAMBARAM
Respond to this column at
feedback@livemint.com
B
udget 2023 is a stellar effort that encapsulates an inclusive
growth agenda with an eye on the future. The twin focus on
higher capital expenditure for infrastructure development
and tax benefits to the middle class are going to drive growth and
consumption in the coming years. With an expected GDP growth
of 7% in FY23, the first budget in the ‘Amrit Kaal’ lays out the
growth story for the next year and beyond.
At the same time, the finance minister has made a remarkable
effort to stick to fiscal prudence and has indicated a glide path to
< 4.5% by FY25/26, much to the comfort of the markets. By achieving the private sector to take lead. With the railways getting its highest- crore, the finance minister is counting on the boost to the overall
the fiscal deficit at 6.4% of GDP for FY23 and keeping the market ever capital expenditure allocation of ₹2.4 trillion in FY24, India consumption. Importantly, no change in the capital gains tax
borrowing at ₹15.43 trillion with a fiscal deficit estimate of 5.9% for wants to improve last-mile connectivity. With over 50 airports and
FY24, the budget has addressed one of the key concerns. airdromes and renovation of existing aviation facilities, the growth
regime affected much to the comfort of the markets.
The focus areas like green growth and tourism development are
The vision to develop both India and Bharat through juggernaut has been unleashed. going to create employment as well as attract investments. As per
seven distinct focus areas – Saptarishi model - is pro- The ₹10,000 crore Urban Infrastructure Develop- the Prime Minister’s vision, India is moving forward firmly for the
gressive and pragmatic and strategically focuses on ment Fund – through priority sector lending short- ‘Panchamrit’ and net-zero carbon emission by 2070 that would
infrastructure investment, green growth, agricul-
As expected, fall – is another landmark that will transform the ensure ‘green growth.’ As one could see it, the theme of green
ture development and modernization, youth skill the highlight of urban planning landscape, making the cities more growth will now pervade all economic activities, helping India
enhancement, financial literacy, and tourism. the budget was sustainable via efficient use of land, adequate achieve its global promise of net zero and carbon reduction. It will
As expected, the highlight of the budget was resources and transit-oriented development. The also create employment and entrepreneurship opportunities.
the record capital expenditure allocation of ₹10 the record budget has also put much onus on the states to The Budget scores on all fronts as there are several announce-
capex allocation utilize, create and perform when it comes to creat-
trillion that will act as an economic multiplier in ments for women, senior citizens and tribals among others, sus-
sectors like transport and housing. There was a of ₹10 tn ing infrastructure assets. taining the inclusion aspect. It has laid a viable platform for tech-
holistic approach to capital expenditure, given the By simplifying direct taxes and making them nology in even traditional sectors like agriculture, left enough in
balanced allocation to develop railways, roads, urban friendlier to taxpayers, the budget is also a boost to the hands of consumers, strived hard to leverage internal strengths
infrastructure, and power, which are predominantly urban consumption. While the finance minister hiked the like tourism and kept an eye on the global leader with massive
dependent on public resources. rebate limit to ₹7 lakh from ₹5 lakh, no bracket of taxpayer has been domestic capacity building and green focus.
But by setting up the infrastructure finance secretariat to assist left out in the overhaul. Even the highest tax rate of 42.73% has This will certainly lead India to the path of becoming an eco-
all stakeholders with more private investment in infrastructure, been reduced to a maximum of 39%, by revising the surcharge to nomic superpower in the next decade.
the government has actively encouraged the PPP model, inviting 25% from 37%. Though the revenue foregone is close to ₹35,000 Shanti Ekambaram is whole-time director of Kotak Mahindra Bank.
LIVEMINT.COM
FISCAL PRUDENCE
WHY IT MATTERS
Fiscal deficit defines the boundaries of how much
the government can spend beyond its means. To
revive and sustain growth momentum, this
government has committed to a path of big
spending, even if it means a little extra stretch in
borrowings. But if growth in tax collections flags, it
could send the fiscal deficit awry.
India’s stock markets had been rather resilient in 2022, despite withdrawals by foreign portfolio investors. 2023, thus far, has been volatile
and investors lost ₹10.6 trillion between 23 January and 31 January, or ever since the Hindenburg report on Adani group roiled the markets.
While the markets initially cheered the budget, the gains were wiped out because of the rout in Adani stocks.
Adani stocks upset
mkt’s budget party
Sensex and Nifty went on to
hit intraday highs of around
2% each, before changing
course on heavy selling
in Adani shares
Infrastructure sector takes the
cake, yet again, with capex bounty
Harsha Jethmalani
harsha.j@htlive.com
MUMBAI
A
higher-than-expected
budgetary capital
expenditure outlay was
more than welcome. After all,
the Centre’s capex spend has
been holding the fort as a
meaningful revival in private
capex is missing so far.
Finance minister Nirmala
Sitharaman proposed FY24
capex outlay at a whopping ₹10
trillion, up 33%, and 3.3% of the
GDP. This is the third straight
year of a rise in capex outlay.
“We were expecting a 30%
year-on-year increase in capex
outlay, so it has exceeded that.
The increased emphasis on
first and last mile connectivity,
green growth and urban infra-
structure development bodes
well for the sector’s long-term
growth. Execution is the key
now,” said Suresh Subudhi,
global leader for infrastructure
practice at BCG.
The record proposed alloca-
ThuRsday, 2 FebRuaRy 2023
MuMbai 09
KEY STAT
FISCAL DEFICIT BUDGET POINTERS
32
Fiscal deficit as % of GDP Surging tax revenues helped meet
10
the 2022-23 fiscal deficit target of
8 6.4% of GDP. The 2023-24 target is
5.9%. Slower growth in tax
6
4.4 revenues suggests tighter spending.
4 5.9 The government has said it intends THE NUMBER OF YEARS THAT
to work towards reverting to a HAVE PASSED SINCE THE LAST
2 prudent fiscal deficit target of TIME INDIA’S FISCAL DEFICIT
2013-14 2023-24 below 4.5% by 2025-26. EXCEEDED 6% FOR THREE
Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents
CONSECUTIVE YEARS.
path on fiscal consolidation, toward the
sub-4.5% fiscal deficit target by FY26, are pos-
itives. But, a sharp fall in certain index constit-
Little cheer for fin
uents soured the sentiment in the second
half,” he said.
The fiscal deficit has been pegged at 5.9% in
services; insurance
FY24 from 6.4% estimated in FY23.
Key broker associations such as ANMI had
requested, among others,
for exemption of short-
cos left high and dry
KEY term capital gains tax up to
ANNOUNCEMENTS Rs 1 lakh as the tax arises Bavadharini K.S. & product in APE, our qualitative
after securities transaction Vineetha Sampath understanding is that IPRU is a
LONG-TERM capital gain tax is already paid by an relatively recent entrant in this
and short-term capital gain investor. But the budget CHENNAI/BENGALURU area and its share of this busi-
tax on equities remain didn’t offer any relief. ness would be relatively lower
F
unchanged Given that there were or the financial services compared with other listed pri-
no negative surprises, in sector, the Union budget vate sector life insurers,” said
LIMITING INCOME tax addition to the fiscal glide 2023 was a mixed bag. Shivaji Thapliyal, head of
exemption from proceeds path being maintained, Investors in stocks of banking research and lead analyst, Yes
of life insurance policies markets raised a toast post and non-banking financial Securities.
with premium over ₹5 lakh the Budget presentation. firms heaved a sigh of relief as That said, there are still some
But the gains melted soon the budget did not throw any grey areas that investors would
CREDIT GUARANTEE after 1 pm as the Adani negative surprises. On the flip- seek clarity on. For instance, it
scheme for MSMEs to lower group stocks turned bear- side, shares of insurance com- is not clear whether the entire
credit cost for SME lenders ish for the fifth straight panies took a deep knock. proceeds will be taxed or only
session. This had an Among the losers were HDFC the gains. “If the entire pro-
TO BOOST urban impact on PSU banking Life Insurance Co. Ltd, ICICI ceeds is taxed, then it will be big
infrastructure in tier-2 and counters, which witnessed Prudential Life Insurance Co. negative as it will involve taxing
tier-3, an annual allocation profit booking. Ltd (IPRU) and SBI Life Insur- the principal as well, but if only
of ₹10,000 crore was Nilesh Shah, MD, Kotak ance Co. Ltd whose stocks gains/ returns are taxed then
proposed AMC, who likened the slumped by 8%-12% on impact should be manageable,”
scale of the Budget to leg- Wednesday. added the Jefferies report.
AN ALLOCATION of endary strongman This steep reaction was not A bright spot, however, is
₹2.40 trillion set for the “Bahubali,” said, “Growth without a reason. that the maturity proceeds on
Indian Railways was the will be supported not only The government’s move to death of the policyholders, are
highest-ever from the multiplier effect tax the maturity proceeds from still exempt. What’s more,
of the enhanced Infra- life insurance policies (exclud- given that the amendment is
structure investment but also supportive ing unit linked insurance poli- effective on new policies from 1
monetary policy. The budget could have cies (ULIPs) with aggregate April 2023, there is a likelihood
focused more on asset monetization but that premium of over ₹5 of a surge in insurance
can be pursued otherwise also depending lakh has not sat premiums in Feb-
upon market conditions.” He attributed the down well with The move to ruary and March.
post-Budget market reaction to “FPI outflows investors. While this
due to India’s premium valuations. FPIs tacti- Recall that for tax the maturity would augur
cal flows are going into cheaper markets from ULIPs, tax proceeds from well for
premium markets like India.” exemption Q4FY23
To be sure, EMs have outperformed India was removed ULIPs has not earnings of
over the past three months, borne out by the for policies gone down well insurers, the
gross returns of MSCI EM Index being a nega- with annual with investors could way ahead
tive 1.35% against minus 5.48% for MSCI India premium exceed- be chal-
over a month through December-end. ing ₹2.5 lakh in lenging. This is
Apart from Adani shares, the Nifty was FY21-22 budget. because another pres-
partly dragged down by life insurance compa- The amendment dilutes the sure for insurance stocks is
nies such as HDFC Life and SBI Life, thanks to attraction of top-selling prod- feared to emerge from the gov-
maturity proceeds being taxed for policies ucts – non-participating and ernment’s push towards the
where aggregate premia is above ₹5 lakh. The participating versus banks, said new tax regime. This scheme
HDFC Life stock plunged 10.9% to ₹515.7 analysts at Jefferies India in a does not provide tax deduc-
apiece while SBI Life plunged 9% to ₹1,109.4 report. These two products tions for premium paid as is the
and Bajaj Finserv shed 5.5% to ₹1,268.3.
“This move will remove the tax arbitrage
between insurance and mutual funds and
could be in favour of the latter,” said Rajesh
Baheti, MD, Crosseas Capital, one of the coun-
try’s largest proprietary traders. “The budget
form 30-60% of annualized case with the old tax regime. As
premium equivalent (APE) for such, insurance policy volumes
companies under the broking are estimated to take a beating.
firm’s coverage. All in all, insurance stocks are
This means high-value sav- likely to be under pressure, at
ings products which drive busi- least in the near term.
has no negative surprises for the market but ness of insurers would face the Meanwhile, the govern-
Ram Sahgal around 2% each, before turned their course on gains were erased because of the fall in Adani heat. For instance, HDFC Life ment’s massive capital expend-
ram.sahgal@livemint.com heavy selling in Adani shares. Buying in the group frontline stocks and its cascading effect had about 33% of its total APE iture outlay of ₹10 trillion,
MUMBAI last half hour of trade helped the indices pare on PSU banks like heavyweight SBI.” from non-participating policies would also benefit banks, said
losses before the Nifty closed down a fourth of Ashish Kumar Chauhan, managing in the nine-month period analysts. Secondly, the budget
A
rout in frontline Adani group a percentage point at 17,616.3 and the Sensex director and chief executive officer of NSE, ended December. The com- announcement with respect to
stocks spoilt the party for the closed up by as much at 59,708.08. said the budget would support growth and the pany’s revenue is expected to withdrawal of tax exemption on
bulls who cheered the Budget, The reason for the divergent closing Indian consumption story, keep us in good be adversely impacted to the life insurance proceeds from
but were forced to retreat in the between Nifty and Sensex is because both stead, given global headwinds in China and extent of 10-12%, said Vibha policies with premium over ₹5
second half of the trading session Adani Enterprises and Adani Ports are part of developed markets, and until the rest of the Padalkar, managing director & lakh is also a plus for this sector.
on heavy selling in index counters like Adani the Nifty and not the Sensex. world eases. “Before the budget was pre- CEO, HDFC Life, in an inter- “This can narrow the tax arbi-
Ports and Adani Enterprises, which slumped “I’d give the Budget an eight out of 10,” said sented, investors were worried about a rise in view with CNBC-TV. trage between term deposits
17-27%, and its cascading effect on banks such Nirmal Jain, founder and chairman of IIFL capital gains. No change there; has also cre- On the other hand, “While with banks (on marginal rate of
as SBI, which corrected almost 5%. group. “The budgeted government capex of ated a positive reaction. Overall, this is a very IPRU does not explicitly pro- 25-30%) and insurance policies
Both Sensex and Nifty gapped up at open- ₹10 trillion, which will have a multiplier effect positive budget for the markets, with some- vide the share of non-partici- (nil tax),” said Jefferies.
ing and went on to hit intraday highs of on growth and jobs and following the glide thing for everyone,” he said. pating savings guaranteed bavadharini.ks@livemint.com
SITHARAMAN UNVEILS INDIA’S FIRST GREEN BUDGET
Mission LiFE and National Hydrogen Mission. The recently launched National Green Hydrogen
What I find really interesting is that there is a new rig- Mission, with an outlay of ₹19,700 crore will facilitate
tion of ₹2.4 trillion for the off effect, shares of select com-
EXPERT our to encourage agritech startups in rural areas. The the transition of the economy to low carbon intensity,
formation of the Agriculture Accelerator Fund will add reduce dependence on fossil fuel imports and make the
Indian Railways was another panies in the cement and real VIEW a significant boost to startups, which will bring innova- country assume technology and market leadership in
highlight. Further, in a bid to estate sectors also rose. tive and affordable solutions for rural entrepreneurs. this sunrise sector. The government has set an ambi-
give urban infrastructure in “Overall, the allocations MANISHA GIROTRA In my opinion, over the last nine years, the National tious target of reaching an annual production of 5
tier-2 and tier-3 cities a fillip made towards the railways and Rural Livelihood Mission has been a major success. It MMT by 2030.
and make cities more sustaina- roads segment in Budget 2023 Respond to this column at has mobilized rural women. More than 8 million Self In a bid to push energy transition and achieve net-
ble, an annual allocation of were strong; however, alloca- feedback@livemint.com Help Groups (SHGs) and the government will now ena- zero objectives and energy security, the government
₹10,000 crore under the Urban tion to the defence sector came ble these women to reach the next stage of eco- has provided ₹35,000 crore for priority capital
T
Infrastructure Development as a negative surprise and could he finance minister presented a phenomenal nomic empowerment through the formation investments. Moreover, an investment of
Fund was proposed. weigh on the stock, in budget, which sets the Indian economy on the of large producer enterprises or collec- ₹20,000 crore, including the central sup-
It should be the near-term,” right track for continued growth. Her speech tives, with each having several thousand The Centre port of ₹8,300 crore has been proposed
noted that The Nifty said Nilesh succinctly projects this year’s economic growth at 7%. members. These initiatives will help has provided for renewable energy evacuation and
investments in Bhaiya, con- I believe the economy is on the right track despite chal- the government to promote the eco- grid integration by laying interstate
the infrastruc- Infrastructure sumer dura- lenges, both global and domestic. The Indian economy nomic empowerment of women in ₹35,000 crore transmission of 13GW of renewable
ture sector index and BSE bles & capital has increased in size from the 10th to the fifth largest our country. Additionally, FM’s move for priority energy from Ladakh.
tend to have a goods analyst during the past nine years. to fund railways is a very good way to FM has proposed a slew of meas-
multiplier Capital Goods at BNP Paribas The minister has chalked up seven priorities for this gain the highest spike in statistical
capital ures to boost financial inclusion. The
impact on eco- index rose about S e c u r i t i e s budget - inclusive development, reaching the last mile, numbers for GDP and employment mul- investments revamped credit guarantee scheme for
nomic growth 1% and 1.8% India. The infrastructure and investment, unleashing the poten- tiplier. The 33% increase in the capex bud- MSMEs will take effect from 1 April 2023
and job creation defence budget tial, Green Growth, youth power and financial sector. get will have a multiplier effect. with an infusion of ₹9,000 crore corpus. This
across adjacent sec- was increased to This is a step in the right direction which will help boost I strongly feel that this budget should be classified will enable additional collateral-free guarantee credit
tors. Among capital ₹5.94 trillion for FY24 the economy further. The government’s efforts as the First Green Budget of India. To achieve a net zero of ₹2 trillion and reduce the cost of credit by 1%. The
goods stocks, sector bellwether from last year’s allocation of towards a better quality of living and a life of dignity emissions goal by 2070 under the Net Zero pledge, the increase in capital expenditure is expected to increase
Larsen & Toubro, ABB India, ₹5.25 trillion. have paid off as the per capita income has more than finance minister has rolled out a comprehensive Green growth potential and job creation, crowd in private
Thermax and Siemens are seen While the Centre’s commit- doubled to ₹1.97 lakh. Growth Strategy. investments, and provide a cushion against global
as potential beneficiaries. The ment to boost the infrastruc- The finance minister’s budget speech also recog- India is set to achieve its aim of 40% installed electric headwinds.
Nifty Infrastructure index and ture sector does boost inves- nized key game changers like - digital public infra- capacity from non-fossil fuels ahead of 2030. The likely I am of deep conviction that this budget is going to be
the S&P BSE Capital Goods tors’ confidence, an immediate structure, including Aadhaar, Co-Win and UPI, the installed capacity from non-fossil fuels will be more remembered as a historical exercise when India takes a
index rose around 1% and 1.8%, impact on the earnings outlook covid vaccination drive, which was carried out in than 500GW by 2030, resulting in a decline of the decisive step towards transforming itself to the goal of
during the day, respectively on of companies in these sectors is unparalleled scale and speed, a proactive role in fron- average emission rate by around 29% compared to becoming a developed economy and global superpower.
Wednesday. In a positive rub- unlikely, he added. tier areas such as achieving the climate-related goals, 2014-15. Manisha Girotra is the CEO of Moelis India
10 ThuRsday, 2 FebRuaRy 2023
MuMbai
LIVEMINT.COM

KEY STAT
BUDGET POINTERS
NO GOVERNMENT IN BUSINESS STAKE SALES BY GOVERNMENT

36
Disinvestment proceeds (in ₹ crore) The 2022-23 disinvestment target
WHY IT MATTERS 100,045 of ₹65,000 crore is expected to
94,727 fall short by ₹5,000 crore, and a
The prime minister said last year: “Government has
no business to be in business.” It’s not doing too modest increase is projected for
60,000 61,000 2023-24.
well either in delivering shareholder returns. In the 47,743 50,304
past 10 years, an index of PSUs has trailed the BSE 37,737 42,132 37,897 To make strategic sales of PSU
29,368 banks more attractive, Budget NUMBER OF PSUS IN WHICH THE
Sensex in a big way (compounded annual return of
3% versus 12%). And disinvestment even in 14,638 2023 allows carry forward of GOVERNMENT SOLD STAKES, MAJORITY
non-strategic sectors has receded from a accumulated losses by the AND MINORITY, IN 2017-18—THE ONLY
philosophy to an idea. 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 acquirer in the event of a merger. YEAR WHEN DISINVESTMENT PROCEEDS
Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents CROSSED ₹1 TRILLION.

Cheer for EV battery makers as machinery imports to cost less

Alisha Sachdev and ready-made cells. lithium-ion cells will continue Batteries, Exide and Tata is at a critical juncture of trans- country, and import costs are duty exemption should lower battery manufacturing, said
alisha.sachdev@livemint.com The budget proposed to for another year. Chemicals, apart from lating the govern- very high. Exempting this our capex burden by 6-8% of Rahul Bharti, executive
New DelhI exempt capital goods and “The emphasis on increased start-ups such as ment’s green machinery from customs duty the total project cost,” Samu- director, corporate affairs.
machinery used to manufac- infrastructure spends and sup- Ola Electric and India relies growth policy had been a long-standing drala said. “Through the Toshiba-Denso-

T
he Union budget pro-
posals to accelerate local
lithium-cell manufac-
turing will benefit infrastruc-
ture players and battery mak-
ers keen to develop a capital-
intensive sector. India
currently imports most equip-
ment required to make lithi-
um-ion cells, the mineral itself
ture lithium-ion cells for EV
batteries from customs duty, a
move which could slash capital
costs for those setting up large
factories to make advanced
chemistry cells (ACCs).
In her budget speech,
finance minister Sitharaman
also said the existing conces-
sional rate of import duty on
port for lithium-ion battery
manufacturing will be a great
multiplier for industry over-
all,” said Sudarshan Venu,
managing director of TVS
Motor Co., India’s second-
largest electric two-wheeler
maker.
Reliance New Energy, Suz-
uki Motor Co., Amara Raja
Log9 Materials, into actual initi- industry ask and we are India relies heavily on South Suzuki JV, we have India’s first
are working to on other atives. “The big extremely happy that the gov- Korea, China and Japan for Lithium-ion cell manufactur-
set up lithium- countries for challenge is, ernment understood the equipment critical to the man- ing plant doing production
ion cell plants. equipment key capital costs for capex burden on domestic ufacture of lithium-ion cells. and export...Cell manufactur-
According to setting up new infra makers is significant and Japan’s Suzuki Motor is in ing needs precision equip-
Vijayanand to li-ion battery cell manufactur- took action,” Samudrala said. the process of building a fac- ment and very tight environ-
Samudrala, presi- making ing capacities is Amara Raja is investing ₹ tory for EV batteries in Guj- ment control. Easy import of
dent, new energy very high, as not 9,500 crore to build a 16 GWh arat. The budget has made a machinery and capital equip-
business, Amara Raja many of these goods factory in Telangana over the judicious and pointed inter- ment will be helpful,” Bharti
Batteries, the battery industry needed are available in the next 10 years. “The customs vention to encourage local said.

Duty sops to boost

India Inc welcomes focus manufacturing,
on capex, consumption drive consumption
Swaraj Singh Dhanjal
swaraj.d@htlive.com
MuMbaI
The budget has been termed
spending across various sec-
tors, especially with more dis-
posable income in consumers’
hands thanks to tax benefits.

T
he Union budget pledged “The newly announced
as one with vision, structure, strong support for reduction in basic customs
domestic manufacturing duty for several television
and discipline of electric vehicle batteries, component imports is a big
mobile phones and televisions, boost for the television indus-
with Union finance minister try. We welcome this budget
Nirmala Sitharaman cutting in its entirety and we are opti-
Priyanka Gawande basic customs duty on several mistic of our future business
priyanka.gawande@livemint.com components and machinery plans in India,” he added.
MuMbaI used in their manufacturing. The finance minister added
The budget extended cus- that she will reduce the num-

I
ndia Inc. on Wednesday welcomed a fis- toms duty exemption to ber of basic customs duty rates
cally-balanced and tax-focused budget, imports of capital goods and on goods other than textiles
which finance minister Nirmala Sithara- machinery used to make lithi- and agriculture, from 21 to 13.
man presented as the first in Amrit Kaal, um-ion cells for EV batteries. “As a result, there are minor
with the Indian economy looking to a In order to deepen domestic changes in the basic custom
bright future. value addition in mobile phone duties, cesses and surcharges
In her last full budget before the 2024 gen- making, it also proposed to on some items including toys,
eral elections, the focus was on capex, manu- provide duty relief on import bicycles, automobiles and
facturing, tax regime of certain parts and inputs like naphtha. A simplified tax
and infrastructure. camera lens, and con- structure with fewer
KEY Essentially, the Centre tinue the conces- tax rates helps in
ANNOUNCEMENTS outlined seven priority sional duty on The budget reducing com-
areas—development, lithium-ion pliance burden
A NEW programme to infrastructure, invest- cells for for extended and improv-
promote innovation in ment, unleashing another year. customs duty ing tax
pharma through centres of potential, green growth, Similarly, administra-
excellence youth power and the to promote exemption to tion,” said
financial sector. value addition imports of Sitharaman.
INFRA FINANCE secretariat “M’bap’pe of a bud- in the manufac- capital goods industries MSMEs and
to assist all stakeholders for get, not Messi at all. A ture of televi- will
more private investment budget that puts India sions, the budget gain from the
on the path to become proposed to reduce the reduction in customs
MORE THAN 39,000 the world champion— basic customs duty on parts of duties, said Amit Pamnani,
compliances reduced and all set to score goals on open cells of TV panels to 2.5%. chief investment officer, Swas-
more than 3,400 legal infra development, con- “The budget proposed tika Investmart Ltd. “Sectors
provisions decriminalized sumption and inclusion. alignments on duties applica- like metals, ship, seeds, chemi-
A big boost for domestic ble to imports to support the cals, crude, glycerine, mobile
PAN TO be common manufacturing, job cre- Make in India and Atmanir- phones, camera lens, TV, toys,
identifier for all digital ation and ease of doing bhar Bharat initiatives like bicycles, and automobiles will
systems of specified business,” said Harsh customs duty relaxations on get direct augmentation in
government agencies Goenka, in a nod to the camera lens, parts of camera profits,” Pamnani added.
soccer star. The Centre modules, parts for manufac- The finance minister
RELIEF FOR MSMEs which set aside ₹10 trillion for India Inc expects the government to accelerate growth, improve the ease of doing business, put money in the hands of the consumer, ture of open cell of TV panel announced tax relief for many
failed to execute contracts capital expenditure, up and focus on capital expenditure. The central government’s capex increased by 63.4% in the first eight months of 2022-23. It could and some others. It has also other sectors as well, including
during the covid pandemic: nearly 33% from the usher in a ‘multiplier effect’ on the economy. prioritized green growth by exempting excise duty on
95% of forfeited amount to previous year. The Rail- extending customs duty GST-paid compressed bio gas
be returned by government ways gets ₹2.40 trillion, exemptions on capital goods contained in blended com-
its highest ever, and used in manufacturing of lithi- pressed natural gas.
about nine times the outlay in 2013-14. assistance toward MSMEs, a focus on tour- cipline. Immediate benefits to all individual will be cut to 5 instead of 7 in the new regime. um-ion cells for batteries used To rectify inversion of duty
“I welcome the move to more productive ism, and measures announced for the care earners. Continues measured path of fiscal Sajjan Jindal, chairman, JSW Group, said, in EVs and denatured ethyl structure and encourage man-
expenditure, budgeting capital spending of economy will boost job creation. The budget consolidation. Sets foundation to increase “A 40% increase in the income tax rebate limit alcohol,” said Santosh Dalvi, ufacturing of electric kitchen
₹10 lakh crore—a 33% increase over the pre- also remains committed to shared prosperity every India’s per capita income exponentially from 5 lakh to 7 lakh is a huge comfort that this partner and deputy head of chimneys, the basic customs
vious year and the highest in the past two by extending the free food scheme for one from 1.97 lakh (2400$). True to its name: 1st budget has given to our middle-income group indirect tax, KPMG in India. duty on electric kitchen chim-
decades as a share of GDP. At the same time, more year,” said N. Chandrasekaran, chair- budget from Amrit Kaal.” and is a great step to strengthen their finances. Sunil Nayyar, managing ney has been increased from
the revision of income tax slabs under the man, Tata Sons. Under the new tax regime, the rebate limit More money in the pockets, more spending! director, Sony India said that 7.5% to 15%, and that on heat
new tax regime should increase purchasing Uday Kotak, MD & CEO, Kotak Mahindra has been increased to ₹7 lakh from ₹ 5 lakh Overall, I believe it’s a great budget and will the budget should propel coils for these is proposed to be
power for many. Loan guarantees and other Bank said, “Budget with vision, structure, dis- earlier. Additionally, the number tax slabs complement India’s growth story.” more demand and consumer reduced from 20% to 15%.

Budget wIll lay down a BlueprInt for IndIa@100

EXPERT
VIEW
ANISH SHAH
Respond to this column at
feedback@livemint.com
T
he finance minister should be commended for laying
down a comprehensive, inclusive, action-oriented and
progressive budget that presents a masterplan for a build-
ing healthy and strong economy and would act as a blueprint for
India@100. The budget includes seven priorities that are meant
to work in tandem and serve as the ‘Saptarishi’ guiding the
nation through Amrit Kaal, propelling towards a brighter future.
India made significant efforts to fuel the post-pandemic
recovery, despite a dismal external environment, geopolitical
tensions and subdued global demand, making it evident that
growth, innovation and infrastructure will remain the key focus dromes and advanced landing grounds that will be revived for a technology and innovation-driven emerging sector. With the
to ensure resilience. improving regional connectivity. The highest ever outlay pro- depletion in deposits of natural diamonds, this is a commenda-
One of the top priorities in this year’s budget was infrastruc- vided for railways shows that it continues to be a focus area.
ture and investment. By increasing the capital investment out- To improve the ease of doing business in India, more than
ble step to seize the opportunity. Customs duty on seeds used
in lab-grown diamond manufacturing has also been reduced.
lay by 33% to ₹10 trillion consecutively for the third 39,000 compliances have been reduced and more than The government intends to encourage domestic production
time, the government has made its priorities clear. 3,400 legal provisions have been decriminalized. of electronic vehicles, televisions, mobile phones, household
This would spur the investment cycle, aid growth Further, the Jan Vishwas Bill will amend 42 Cen- appliances, and specialty steel. Custom duty have been reduced
and development, and boost job creation. At the
The budget tral Acts which will further strengthen the trust on key components to encourage domestic production of EV
budgeted level of ₹10 trillion, the Centre’s will rejuvenate of the stakeholders in the government. batteries, mobile phone components such as cameras, compo-
capex would be 3.3% of the GDP. Further, the growth drivers, Lack of information on financial credentials nents of TV panels, and steel for cargo to encourage domestic
states that will spend more on capex will be and creditworthiness hinders lending. To over- production, while custom duty on electric chimney has been
give a push to
incentivized by 50-year interest-free loans. come this, the government has proposed to set increased to encourage domestic production.
The budget has also made provision for production up National Financial Information Registry. The budget will rejuvenate the growth drivers, give a push to
₹35,000 crore towards energy transition and net capacities To protect MSMEs from the government con- production capacities, improve infrastructure and logistics,
zero objectives. tract failure during the covid-19, the government reduce cost inefficiencies, boost exports and generate employ-
The government has identified 100 projects for has decided to refund 95% of the forfeited amount as ment, amid mounting challenges posed by slowing global
last and first mile connectivity for ports and other impor- a gesture for the immense contribution made by the small growth. It will further provide a great opportunity to India to be
tant sectors such as coal, steel, fertilizer and food grains. This entrepreneurs. a part of the global value chains and emerge as a global manu-
will give an impetus to exports in these sectors, increase effi- The budget lays a strong foundation for innovation, with cen- facturing hub.
ciency and reduce the cost of doing business. The finance min- tres of excellence for artificial intelligence being one major Anish Shah is senior vice president, Ficci & MD and CEO,
ister also proposed 50 additional airports, heliports, water aero- force. Another interesting proposal is on lab-grown diamonds, Mahindra & Mahindra Group
LIVEMINT.COM
ThuRsday, 2 FebRuaRy 2023
MuMbai 11

KEY STAT
BUDGET POINTERS
MAKE IN INDIA PLI SCHEME APPROVALS

10.5
Value (₹ cr) Government payouts under the PLI
WHY IT MATTERS scheme are just about beginning.
For 2022-23, against the budgeted
With global companies looking to restructure
₹8,503 crore, the revised estimate is
their value chains after covid-19, the
production-linked incentive (PLI) scheme could 40,951 25,938 24,000 18,420 18,100 15,000 12,195 10,683 7,325 6,940 ₹4,820 crore.
 TN
be a draw to have them invest in India. The With more payouts kicking in, the
provision for 2023-24 is ₹8,083 crore, TOTAL PRODUCTION TARGETED
government has announced ₹1.97 trillion worth of
led by semiconductors and displays UNDER PLI SCHEME, WITH 60% IN
incentives under the scheme, across 14 sectors,
Large scale electronics Auto and auto Solar PV Medical Electric-vehicle Pharma Telecom Textiles IT Bulk (₹4,645 crore), food processing (₹1,530 EXPORTS. THE GOVERNMENT ALSO
to be paid on incremental sales from products
manufacturing components modules devices batteries manufacturing equipment hardware drugs
crore) and pharma (₹1,200 crore). HOPES TO GENERATE 200,000 DIRECT
manufactured in India.
Source: investindia.gov.in JOBS AND 300,000 INDIRECT JOBS.

“These proposals are definitely a step in

the direction to simplify compliances and
boost investor confidence,” said Karishma
Tourist spots,
Phatarphekar, partner at Deloitte India.
Sitharaman said financial sector regula-
tors have been requested to carry out a com-
airports get a
prehensive review of existing regulations,
such that regulations can be further simpli-
fied and the cost of compliance for compa-
nies reduced.
major push
“For this, they will consider
suggestions from public and Anu Sharma
KEY regulated entities. Time limits anu.sharma@livemint.com
ANNOUNCEMENTS to decide the applications New DelhI
under various regulations will

T
A VOLUNTARY settlement also be laid down,” she added. he Union government will promote India’s
scheme for contractual However, Deloitte’s Phatar- tourism industry on a mission mode in part-
disputes with government, phekar pointed out that the nership with states and through public-pri-
where arbitral award is budget had widened the tax vate partnerships, finance minister Nirmala
under challenge authorities’ power to withhold Sitharaman said.
any refunds to a taxpayer. “This At least 50 tourist destinations will be selected
100 LABS to build would adversely affect honest through a challenge mode, as well as on the basis
applications using 5G taxpayers who prefer to litigate of physical connectivity, virtual connectivity, tour-
services in engineering after paying taxes instead of ist guides, high standards for food streets, and
institutions preferring stays against tourist security. Each of them will be developed as
demand. The wait for refunds a package. All relevant aspects of these spots will be
DUTY RELIEF on import of increases manifold and will available on an app to enhance the tourist experi-
certain parts and inputs and cause them to approach already ence, in an integrated and innovative approach for
continued concessional over-burdened constitutional domestic as well as foreign travellers.
duty on lithium-ion cells courts. Giving powers to tax “The country offers immense attraction for
authorities that can be poten- domestic as well as foreign tourists. There is a large
CUT IN basic customs duty tially abused goes against the potential to be tapped in tourism. The sector holds
on parts of open cells of TV government’s motto of ease of huge opportunities for jobs and entrepreneurship
panels to 2.5% doing business,” she cautioned. for youth in particular,” Sitharaman said in her
This comes even as the gov- budget speech.
EXEMPTION FROM basic ernment has attempted to Under the Vibrant Villages programme, tourism
customs duty to continue on reduce litigation by introduc- infrastructure and amenities will be facilitated in
inputs for CRGO steel, ing the post of a Joint Commis- border villages, and states will be encouraged to
ferrous scrap, nickel cathode sioner (Appeals) for deciding set up so-called unity malls in state capitals, most
appeals arising from orders prominent tourism centres or financial capitals to
passed by officers below the rank of deputy promote and sell their ‘one district one product’
commissioner. “This would significantly items, GI (geographical indication) products and
reduce the burden on the existing Commis- other handicraft products, Sitharaman said.
sioner (Appeals). This would lead to parallel Under the Dekho Apna Desh initiative, citizens
disposal of small appeals and reduce pending will be encouraged to prefer domestic over inter-
litigation,” she noted. national tourism, aided by sector-specific skilling
For MSMEs, the government introduced and entrepreneurship development.
relief measures under Vivad Se Vishwas, The government has
Private investment, an important engine of growth, continues to remain sluggish despite the government’s repeated attempts to catalyse where in case of failure to execute contracts identified 100 critical
it through large-scale spending. Will companies invest this year? Although the Economic Survey cited “an increasing trend in announced given by government or government under- At least 50 transport infrastruc-
projects and capex spending by the private players”, global headwinds this year could hold back companies from investing. takings during the covid-19 pandemic ture projects for last
period, 95% of the forfeited amount relating tourist and first mile con-
to bid or performance security will be destinations will nectivity for ports,

Tiresome rules out,

returned. Further, for settling contractual be selected coal, steel, fertil-
disputes of the government and government izer, and food
undertakings when the arbitral award is through a grains sectors,
under challenge in a court, a voluntary set- challenge Sitharaman said. It
tlement scheme with standardized terms will has also decided to
be introduced. revive 50 additional air-

trust-based model in “This will be done by offering graded set-

tlement terms depending on the pendency
level of the dispute,” the minister said.
There are other measures towards
increasing ease of doing business for inves-
tors and large corporations, especially those
ports, heliports, water aerodromes, and advanced
landing grounds to improve regional connectivity.
As of November 2022, after four rounds of bid-
ding under state-run regional connectivity
scheme Ude Desh ka Aam Naagrik (Udan), 453
routes have commenced, operationalizing 70 air-
Gulveen Aulakh & Shashank Mattoo bill is expected to mitigate deeply ingrained in the International Financial Services Cen- ports including two water aerodromes and nine
New DelhI colonial hostility against India’s entrepre- tre, GIFT City. The government has pro- heliports.
FM proposes to reduce neurs. There is a clear push towards building posed to delegate powers under the SEZ Act “The Union Budget 2023-24 has reiterated its

F
inance minister Nirmala Sitharaman a trust-based governance model,” said Rishi to International Financial Services Centres focus on improving regional air connectivity, which
39,000 compliances and to emphasized on trust-based govern- Agrawal, CEO and co-founder of Teamlease Authority to avoid dual regulation and set- will boost domestic air travel. Further, the budget
ance in her budget speech, as she Regtech. ting up a single window IT system for regis- provides a lot of thrust on the promotion of tourism
decriminalize 3,400 legal proposed to reduce 39,000 compli- He added that extending the scope of Digi- tration and approval from IFSCA, SEZ through the development of 50 tourist destinations
ances and decriminalize 3,400 legal locker to include business entities is a wel- authorities, GSTN, RBI, SEBI and IRDAI. covering various aspects and further through the
provisions, with an aim to provisions, aimed to enhance ease of doing come step towards digitizing compliance. The budget has also proposed the setting development of theme-based local tourist spots,”
business for companies across the spectrum. Among a series of measures, the finance up of an Exim Bank subsidiary for trade re-fi- said Shamsher Dewan, senior vice president &
facilitate ease of doing biz “For enhancing ease of doing business, minister said the Permanent Account Num- nancing for encouraging emerging sectors group head- corporate ratings at ICRA Ltd.
more than 39,000 compliances have been ber (PAN) will be a common identifier for all such as aircraft and ship financing activities “While these initiatives will benefit domestic
reduced and more than 3,400 legal provi- digital systems of specified government and also setting up data embassies at GIFT travel in the long run, leisure vacations abroad can
sions have been decriminalized. For further- agencies for business establishments City, which would facilitate digital continu- get costly for Indian travelers with TCS (tax collec-
ing the trust-based governance, we have required to have a PAN. This will eliminate ity solutions for countries seeking such solu- tion at source) for overseas tour packages increas-
introduced the Jan Vishwas Bill to amend 42 the need to have over 20 different enterprise tions. The proposal also includes amending ing from 5% to 20%. Higher costs to Indian travel-
Central Acts. This budget proposes a series of identities in the current environment, reduc- IFSCA Act for statutory provisions for arbi- ers because of an increase in tax can impact the
measures to unleash the potential of our ing inefficiency and duplication of effort. The tration, ancillary services, and avoiding dual international travel demand which was slowly
economy,” Sitharaman said in her budget provision will have legal mandate, effectively regulation under SEZ Act. gaining momentum,” Aloke Bajpai, group CEO &
speech on Wednesday. fortifying the provision for businesses. “The policy support laid out by the Union co-founder, ixigo said.
Industry experts welcomed the provisions The government has also proposed to cre- government will certainly act as a catalyst in Menwhile, drone companies are optimistic
to reduce compliances, particularly, the Jan ate a unified filing process, which will do expediting the growth of GIFT City, thus about the opportunities from the Agriculture
Vishwas Bill, which they said would make away with the requirement of separate sub- making it a vibrant global financial hub for Accelerator Fund announced in the Union budget.
ease of doing business a key economic lever, mission of same information to different domestic and international entities. The far- It will aim to bring modern technologies to trans-
while signalling a technology-led transition government agencies. The minister said that reaching measures announced in the budget form agricultural practices.
towards paperless compliance. the filing of information or return in simpli- will go a long way in strengthening the ease There is a big opportunity in collaborating with
“While I eagerly await the fine print, con- fied forms on a common portal, will be of doing business in IFSC at GIFT City,” said agri start-ups to serve and show a real case of
tinued focus on decriminalization of shared with other agencies as per filer’s Tapan Ray, MD and Group CEO, GIFT City. drones in the agriculture industry,” said Kishan
employer compliance via the Jan Vishwas choice. gulveen.aulakh@livemint.com Tiwari, co-founder and CEO, TSAW Drones.

THE FIRST BUDGET OF AMRIT KAAL HAS ITS HEART IN THE RIGHT PLACE
EXPERT
VIEW
A N I L AG A RWA L
Respond to this column at
feedback@livemint.com
I
t is the sign of a maturing economy and a visionary political
leadership that the Union Budget can simultaneously think
strategically for the long-term well-being of the country as well
as the short-term aspirations of different sections of its society.
Finance minister Nirmala Sitharaman’s fifth budget is a contin-
ued reflection of the unique leadership abilities of Prime Minister
Narendra Modi who has steered the economy steadily through
the covid pandemic and the war in Ukraine to emerge as the shin-
ing star of the global economy. As the world looks to India as the
next manufacturing hub as an alternative to China, this budget
is a step in the right direction. world grapples with challenges on growth and inflation. business easier and more attractive in associated technologies.
The immediate task before the PM and FM is to ensure that the The focus on key emerging sectors must be complimented. Perhaps the most exciting part of the budget for me was the
economic recovery sustains, not just for the next year or two but Two areas stand out: the emphasis on the digital economy and the
the next decade and more. The budget has done the right things green economy. In the former, the aspiration to Make AI in India
outlining of opportunities to unlock in our journey to Amrit Kaal
India@100. Right on top is the empowerment of women, the key
in that context. First, the government has increased its and Make AI work for India are laudable. The setting up to our progress along with the empowerment of youth. The deci-
capital expenditure by 33% which will build crucial of three centres of excellence for Artificial Intelli- sion to help women scale up self help groups to producer organi-
infrastructure, create jobs, bring in private invest- gence in premier educational institutions with sations will promote entrepreneurship and raise the income of
ment and deliver a multiplier effect in terms of
Overall, the industry as partners is a game-changing initiative. women in our rural areas. The second is the focus on artisans and
growth. Second, it has given relief to the middle budget provides I am also excited about the proposed National craftspeople. If we link them to global markets and give them
class via a rationalization of the income tax slabs. plenty of reason Digital Library for children and adolescents, access to latest technologies, as envisaged by the budget, huge
Those at lower levels of income will be the big- which will make available quality books in dif- economic opportunities will come to this very deserving section
to be optimistic
gest beneficiaries. They are also likely to spend ferent genres and languages. of society.
their additional income which will provide a big about India’s The government’s commitment to energy The third area of opportunity is tourism. It is my firm belief that
boost to growth and jobs. Third, the lifeline of our future transition and the green economy is well known. several regions of India can build a thriving and self-sufficient
economy, MSMEs have got due attention with a Changes in the indirect taxes/duties structure to economy with jobs and livelihood just through tourism.
revamped credit guarantee scheme that will allow more facilitate a quicker transition, particularly in electric Overall, the budget provides plenty of reason to be optimistic
collateral-free loans and reduce the cost of capital as well. vehicles, is a very positive move. about India’s future. The government has the right priorities.
Fourth, the government has stuck to its fiscal consolidation The continued emphasis on the recently launched National And at a high level, it remains focused on ease of doing business
path projecting a 5.9% of GDP target for next year after meeting Green Hydrogen Mission could make India a world leader in this for entrepreneurs and ease of living for its citizens. The first bud-
the 6.4% target for the current year. This is a positive signal to space. It is good to see that the government is combining its com- get of Amrit Kaal is a journey well begun.
investors as India maintains macroeconomic stability while the mitment to address climate change with an effort to make doing Anil Agarwal is chairman of Vedanta Resources.
12 Thursday, 2 February 2023
MuMbai
LIVEMINT.COM

PURSUIT OF NEW GROWTH

By howindialives.com
feedback@livemint.com DIVIDENDS
AND PROFITS

Amid global headwinds, Budget 2023 aims to ENERGY SERVICES 91,000

27,260 GROWTH PANGS
continue pulling levers that facilitate broader
TRANSPORT Tax revenues are based
growth. At the same time, it needs to spend SERVICES on a nominal GDP growth
where it must and balance the books. Here’s 21,768 of 10.5% in 2023-24. The
knockdown effects of a
how the two sides of Budget 2023 are laid out. COMMUNICATION global slowdown could
SERVICES derail this
2022-23: Change between 2022-23 RE and 2021-22 Actuals INTEREST
2023-24: Change between 2023-24 BE and 2022-23 RE 89,469 RECEIPTS assumption—and result
NON-TAX REVENUES
24,820 in lower revenues.
Graphic by Paras Jain/Mint 301,650
(Figures in  crore) 2022-23: -28.3% ()
2023-24: 15.2% ()

ALL OTHER SERVICES

GST 42,885
956,000
2022-23: 22.3% ()
2023-24: 12% ()

REVENUE RECEIPTS
INCOME TAX 2,632,281
900,575
2022-23: 17.1% ()
2022-23: 8.2% ()
2023-24: 10.5% () 2023-24: 12.1% () TOTAL REC
EXPENDIT
₹ 4,503,0
2022-23: 10.4
2023-24: 7.5
CENTRE'S NET TAX REVENUES
2,330,631
2022-23: 15.6% ()
CORPORATION TAX 2023-24: 11.7% ()
922,675
2022-23: 17.3% () STATE'S SHARE
2023-24: 10.5% () -1,021,448
2022-23: 1.9% ()
2023-24: 11.5% ()

TAXES OF UNION TERRITORIES

8,408 CUSTOMS CAPITAL RECEIPTS
233,100
STATE PROVIDENT
1,870,816
2022-23: 5.1% ()
BASIC EXCISE FUND (NET)
2023-24: 11.0% ()
DUTIES 2022-23: 13.2% ()
20,000
33,100 2023-24: 1.7% ()
ROAD AND OTHER EXCISE DUTIES
OTHER CESSES INFRASTRUCTURE
20,540 CESS
240,260
45,100

OTHE
TO
TOTAL DEBT RECEIPTS DEP
1,798,603 5
2022-23: 11.2% () TOTAL NON-DEBT
2023-24: 2.3% () RECEIPTS
NET MARKET LOANS 84,000
1,230,911
TOTAL DRAW DOWN
2022-23: 46.8% () OF CASH BALANCE
MANAGING THE DEFICIT
2023-24: 2.9% () -11,787
Nominal growth of 15.4%
helped meet the 2022-23 E
fiscal deficit target of L
6.4%. Lower growth is
forecast next year. SECURITIES
ISSUED AGAINST
Further slippages could SMALL SAVINGS
up borrowings and set RECOVERIES OF OTHER CAPITAL
471,317 LOANS AND RECEIPTS
NET OTHER RECEIPTS
back fiscal consolidation. ADVANCES
54,258 2022-23: -20.4% ()
61,000
SHORT TERM/T-BILL
23,000
NET EXTERNAL 2023-24: 7.4% ()
DEBT BORROWINGS
22,118 50,000

Some sub-entries don’t add up to larger

bubbles because of exclusion of smaller
items or reconciliation issues

TAX STREAMS
How each ₹100 of Centre's tax collection will look like As % of GDP
As per the budget estimates of 2023-24, the Corporation tax
highest share of government's tax revenue will 4
come from goods and services tax (GST). At Others sub-components of income tax
0.27
₹9.6 trillion, GST would cover over 28% of the 1 0.8 Others
total tax revenue. The corporation tax, with Health and
Excise duty
Corporation tax
2.5 education cess 3
budget estimates of ₹9.2 trillion, would form 10.09
27.5% of the tax revenue. At ₹9 trillion, taxes 27.45 Surcharge
from income will be the third-biggest source Customs 6.94
of tax revenue. Finance minister Nirmala 2
Sitharaman announced a series of changes to (in )
the tax structure. Persons with income up to Income tax
₹7 lakh per annum will be exempted from GST 22.5 Collections
28.46 26.8 Income tax
paying income tax under the new tax regime. 1
The government also reduced the tax exemp-
tion limit for people with income above ₹7
lakh to ₹3 lakh and reduced the tax slabs from
0
seven to five.
FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24
Shuja Asrar and Pragya Srivastava/Mint (RE) (BE)
 LIVEMINT.COM
Thursday, 2 February 2023
MuMbai 13

H AMID OLD CONTINUITY

ESTABLISHMENT
EXPENSES SALARIES AND
2022-23: 9.2% () ALLOWANCES
301,027 WELFARE SUPPORT
FERTILIZER SHOCK 2023-24: 0% 168,055 The government has cut
The fertilizer subsidy bill 2022-23: 12.4% () outgo towards subsidized
doubled in 2022-23. For 2023-24: 5.2% () food and rural
2023-24, the projected employment
outgo is 22% lower, but guarantee—which helped
prolonging of the OTHER the poor during the covid
Russia-Ukraine war could ESTABLISHMENT crisis—by about Rs 1.2
EXPENDITURE
keep fertilizer trillion. It may need to
prices—and the 132,972
provide more mid-year.
government’s bill—high.

SUPPORT TO
PUBLIC SECTOR
UNDERTAKINGS RAILWAYS
523,632 240,000
CENTRE'S EXPENDITURE
AGRICULTURE
₹ 3,513,761 101,403
2022-23: 12.7% ()
2023-24: 7.0% ()

CEIPTS/
TURE
097 cr CENTRAL SECTOR SCHEMES
1,467,880 FERTILIZERS

4% ()
175,103
2022-23: 16.7% ()
5% ()
2023-24: 4% ()
OTHER
DEPARTMENTS/
OTHER MINISTRIES
EXPENDITURE FOR 253,424
DEPARTMENTS FOOD AND
221,571 PUBLIC
DISTRIBUTION
SYSTEM
197,869
ROAD TRANSPORT
AND HIGHWAYS
OTHER CENTRAL EXPENDITURE 270,250 DEFENCE-
1,301,542 CAPITAL OUTLAY
PETROLEUM AND 162,600
2022-23: 12.5% () NATURAL GAS HOUSING AND
40,786 URBAN AFFAIRS
2023-24: 14.5% ()
TRANSFERS TO 26,445
STATES AND UTs
989,337
2022-23: 2.8% ()
2023-24: 9.4% () INTEREST PAYMENTS
1,079,971
2022-23: 16.8% () DEBT SERVICING
OTHER 2023-24: 14.8% () One-fourth of the
CENTRAL Centre’s expenses goes
SCHEMES SWACHH BHARAT
MISSION towards interest
FINANCE 123,029 12,192 payments. Revenue
ER TRANSFERS COMMISSION UMBRELLA
O UTs AND TRANSFERS INTEGRATED CHILD shortfalls and greater
PARTMENTS 165,480 DEVELOPMENT spending imperatives will
SERVICES pressure borrowings,
54,367
20,554 MGNREGA which are increasing in
60,000 absolute terms.
OTHER TRANSFERS CENTRALLY
246,875 SPONSORED SCHEMES
476,105
PM GRAM
2022-23: -0.5% () SADAK YOJANA
2023-24: 5.4% () 19,000
NATIONAL
EDUCATION MISSION
EXTERNAL
LOANS TO 38,954 PM AWAS YOJANA
STATES
COMPENSATION 79,590
24,550 TRANSFER TO TO STATES FOR GST
STATES FOR SPECIAL REVENUE LOSS TAX HANGOVER
NATIONAL DISASTER ASSISTANCE 145,000
RESPONSE FORCE TO STATES NATIONAL HEALTH
1.45 trillion has been
10,928 12,000 MISSION AMRUT AND SMART provided to compensate
36,786 CITIES MISSION states for revenue loss
NATIONAL RURAL 16,000 due to the shift to GST.
DRINKING WATER MISSION
70,000 The original time frame
was five years, till June
2022, but some states
asked for an extension. Source: Budget documents, Reserve
Bank of India
howindialives.com is a database and
search engine for public data

WELFARE SPENDS FOOD SUBSIDY (IN  TRILLION)

The Centre has slashed the food subsidy budget by 30% to ₹1.97 trillion in 2023-24. The allocation to food subsidy, which accounts for nearly 4.4% of 6
the total expenditure, will be the lowest in the last four years. In 2020-21, the food subsidy bill swelled to a massive ₹5.4 trillion after the government
cleared dues to the Food Corporation of India. Despite the cut, the food subsidy bill remains sharply higher than pre-covid period. The government 5
has also slashed allocation for its flagship rural job scheme, MGNREGS. It allocated ₹60,000 crore, which is 33% less than the revised estimate and
lowest in six years.
4
Shuja Asrar and Pragya Srivastava/Mint

How much government spends on key schemes out of ₹100

3
Food subsidy MGNREGA National Education Mission National Health Mission LPG subsidy

4.4 ₹0.1 0
1.3 0.8 FY11 FY23 FY24
0.9 (RE) (BE)
Source: Budget documents
14 ThuRsday, 2 FebRuaRy 2023
MuMbai
BUDGET POINTERS
FARMER AND FOOD SECURITY ALLOCATIONS TO AGRICULTURE AND ALLIED SECTORS Amount (₹ crore)
PM-Kisan, which transfers ₹6,000
WHY IT MATTERS 160,000 per year to each farmer household,
Agriculture accounts for about 20% of India’s GDP, but is now entering its fifth year. It
120,000 144,214 accounts for 42% of the allocation to
supports about 45% of India’s labour force. It is also
the ground to ensure food security for a population
that is expanding and whose consumption needs are
80,000
agriculture and allied services.
Expenditure in 2022-23 towards the
40,000 Pradhan Mantri Fasal Bima Yojana, a
growing. Farmer incomes have been under stress, and 17,788
policy levers that can improve this are imperative. crop insurance scheme, fell short
0
of budget estimates by 20% and was
2013-14 2023-24
9% lower than 2021-22 levels.
Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents
raised from ₹3,919 crore to ₹ 4,318 crore.
The budget for agriculture research was
raised from ₹8,514 crore in 2022-23 (BE) to
₹9,504 crore in 2023-24 (BE).
“It’s heartening to see the government
increase the budget for research but given
that livestock and fisheries are prime drivers
of farm sector growth, it is time they get their
due share,” said Avinash Kishore, fellow at
the Delhi office of the International Food
Policy Research Institute. “The
basic problem in agriculture is
the paucity of public capital
investments. Subsidies (includ-
ing on fertilizers) have grown
NEW DIGITAL architecture phenomenally and the govern-
to enable farmer-centric ment is spending a chunk of the
solutions, including credit farm budget on cash transfer
and insurance services schemes. It’s time to consider
whether these funds can be
ACCELERATOR FUND for used better,” Kishore added.
rural entrepreneurs to help The budget allocated
them set up agri startups ₹60,000 crore for PM Kisan
which provides all farmers with
ATMANIRBHAR CLEAN an annual cash transfer of
Plant Program to ensure ₹6,000 in three instalments.
disease-free, quality The budget promised to set
planting material for crops up an Atmanirbhar Clean Plant
Program to boost availability of
PM-PRANAM to nudge disease-free, quality planting
states to promote material for high value horti-
alternative nutrients and culture crops with a funding of
balanced use of chemical ₹2,200 crore. The budget also
fertilizers announced a new scheme
christened Prime Minister’s
TARGET TO push 10 million Programme for Restoration,
farmers to shun chemical Awareness, Nourishment and
farming by setting up 10,000 Amelioration of Mother Earth
bio-input resource centres (PM-PRANAM) to incentivize
states to promote alternative
fertilizers and balanced use of chemical fer-
tilizers. In 2023-24, the Centre budgeted
₹1.31 trillion for urea subsidy and another
₹44,000 crore for phosphatic and potassic
fertilizers, which is significantly lower than
last year when international nutrient prices
shot up following the Ukraine war.
Aiming to make India a global hub for mil-
The agriculture sector in India has grown at an average annual rate of 4.6% in the last six years, partly because of good monsoon. But lets, the budget promised to support Hydera-
farming still remains one of the riskiest professions in India. That’s what agricultural scientist M.S. Swaminathan believes. Often, a farmer bad-based Indian Institute of Millet
braces up to poor returns and middlemen. The government, however, is trying to make farming sustainable. Research as a Centre of Excellence for shar-
ing best practices, research and technologies
at the international level. India is currently
A digital push for agri
the largest producer of millets growing at
least ten varieties which are more nutritious
than rice or wheat and are climate smart
crops requiring less of water and fertilizers.
In addition, the budget also increased the
agriculture credit disbursement target to
but with less funds ₹20 trillion from ₹18 trillion last year. It also
promised to set up decentralized storage
facilities for farmers and form more coopera-
tives in the fisheries and the dairy sectors.
It also announced a new sub-scheme of
Prime Minister’s Matsya Sampada Yojana
with an investment of ₹6,000 crore to enable
Sayantan Bera ers with a range of customized services—on fishermen, fish vendors, and micro enter-
Overall, the budget for the sayantan.bera@livemint.com what to plant, where to sell, plus information prises to improve value chain efficiencies
on market prices and credit linkages. and support market expansion.
department of agriculture
A
new digital infrastructure for The digital initiatives will improve access To facilitate higher adoption of natural
farmers and an accelerator fund to farm inputs and boost market intelligence, farming practices, the budget set a target to
and farmer’s welfare was cut to encourage startups were prompting growth of agri startups, said Kar- push ten million farmers to shun chemical
among the major announce- thik Jayaraman, co-founder and managing farming by setting up 10,000 bio-input
from ₹1.24 tn in 2022-23 to ments in the budget. director of WayCool, a leading food and agri- resource centres. It also revealed plans to
The digital public infrastructure for agri- tech platform. “The accelerator fund will create a pan-India micro-fertilizer and pesti-
₹1.15 tn in 2023-24 culture will be built as an open-source public encourage young entrepreneurs while cide manufacturing network.
good which will enable farmer-centric solu- bringing innovative and affordable solutions Farmer organizations criticized the bud-
tions. The proposed digital agri-stack will aid to address challenges faced by the farmers, get strongly.“This year’s budget reduced
farmers with better crop planning and help especially in terms of enhancing profitability allocation for agriculture sector including on
them access credit and insurance services. and access to modern technology,” he said. flagship schemes on crop insurance and PM
The digital infrastructure will also support Despite the digital push, these new Kisan cash transfer scheme. The budget
the growth of agri-tech startups. schemes did not see any budgetary alloca- speech did not even mention minimum sup-
The budget also announced an accelerator tion. Overall, the budget for the department port price while the documents showed that
fund for young entrepreneurs from rural of agriculture and farmer’s welfare was some of the previous price support schemes
areas to help them set up agriculture start- slashed from ₹1.24 trillion in 2022-23(budget (such as PM-AASHA) have been abolished,”
ups. “The fund will aim at bringing innova- estimate) to ₹1.15 trillion in 2023-24 (BE). said Kiran Vissa, a farm activist, at a joint
tive and affordable solutions for challenges The total budgetary allocation for agricul- press briefing by Jai Kisan Andolan and
faced by farmers. It will also bring in modern ture, including on the departments of Rythu Swaraj Vedika. “While allocation for
technologies to transform agricultural prac- research, animal husbandry and fisher- agriculture sector was slashed, new schemes
tices, increase productivity and profitabil- ies,was cut from ₹1.38 trillion in 2022-23 (BE) (on digital infrastructure and a startup accel-
ity,” the finance minister said in her speech. to ₹1.31 trillion in 2023-24 (BE). However, the erator fund) were announced which does not
In 2021, the agriculture ministry had initi- budget for the fisheries sector was raised involve any budgetary expenditure. The
ated an agri-stack pilot project aiming to col- marginally from ₹2,118 crore (2022-23, BE) to budget seems to be prioritizing agri-busi-
lect granular farm level data to provide grow- ₹2,248 crore, while the livestock budget was nesses over farmers,” Vissa added.
GOVT IGNORES REALITY; PRESCRIPTIONS CONTRARY TO WHAT SITUATION DEMANDS
is true for the urban areas with the middle classes most affected. But tion to ₹60,000 crore against actual disbursement of ₹66,825
the distress has been deep and long for the rural areas. All available crore in 2021-22. This has happened despite the employment sur-
EXPERT data on farmers’ income and real wages in rural areas point towards veys reporting a rise in number of households in agriculture.
declining incomes in rural areas. The nature of the crisis also While there is certainly a need to compensate the farm-
VIEW provided an opportunity to correct the structural imbal- ers through cash-transfers, it does not offer any solu-
ances that have plagued the economy not just during Issues in tion to the real problem with farming. The sharp rise
HIMANSHU the pandemic but even before it. The slowdown in in input costs of agriculture have eroded the profit-
the economy after 2016-17 was clearly driven by agriculture ability. These are likely to rise given the budget
Respond to this column at
feedback@livemint.com
declining demand in the economy, both consump- remain which reduces the fertilizer subsidy drastically by
tion and investment. Reviving demand, in particu- ₹50,000 crore. Clearly, the cash transfer is
lar rural demand, given the large population share neglected as in unlikely to compensate for the rising input costs
non-agricultural
O
f the five budgets that finance minister Nirmala Sithara- is Hobson’s choice in the present context. but the least that the government was required to
man has presented, this was the most difficult and crucial The announcements in the budget not only sectors do was to raise the level of investment in the sector.
one. Difficult, given that this was the last full-fledged bud- ignore the reality but even the prescriptions are con- While the issues in agriculture remain neglected, even
get before the general election and pre-election budgets come with trary to what the situation demands. This is true not just the non-agricultural sector has been deprived of basic bud-
an expectation of being populist. But this was also the most impor- for agriculture but also for rural development which plays getary allocations. While the government itself has acknowl-
tant one given the state of the economy where the budget was more a critical role in generating employment and facilitating non-farm edged the stellar role of the National Rural Employment Guarantee
than a financial accounting exercise. This budget was her last diversification. The budget for agriculture sector has declined by Scheme (NREGS) during the pandemic and even earlier, the scheme
opportunity to provide direction to the economy and layout the ₹8,500 crore. Most schemes have seen a decline in budget alloca- has seen a drastic reduction in budgetary allocation to only ₹60,000
roadmap of economic recovery. tion. Even the flagship scheme of the government, Pradhan Mantri crore. The actual expenditure on NREGS in 2021-22 was ₹98.468 crore
There is now consensus that there is distress in the economy. This Kisan Samman Nidhi (PM-Kisan) has seen a decline in the alloca- which declined to ₹89,400 crore in the revised estimates of 2022-23.
LIVEMINT.COM
KEY STAT
2.36
₹ TN
THE TOTAL AMOUNT THAT WOULD
HAVE BEEN TRANSFERRED TO FARMER
HOUSEHOLDS SINCE FEBRUARY 2019
UNDER PM-KISAN SCHEME.
Support for
major rural
schemes down
Sayantan Bera
sayantan.bera@livemint.com
T
he budget slashed funding under the flag-
ship rural jobs scheme despite a prolonged
period of declining wages which affected
incomes and demand in rural India, especially for
non-farm households. The Mahatma Gandhi
National Rural Employment Guarantee Scheme
(MGNREGS) which entitles every rural family to
100 days of work in a year, saw its funding slashed
from ₹73,000 crore in 2022-23 (budget estimate,
or BE) to ₹60,000 crore in 2023-24 (BE), a reduc-
tion of 18%.
Further, the allocation under the jobs scheme is
33% lower than the revised estimates (RE) of
₹89,400 crore in 2023-24. Calculations by the
Peoples’ Action for Employment Guarantee, a
rights group, show that unpaid dues under the
scheme are currently at over ₹16,000 crore, which
means less than ₹50,000 crore will be available for
new work generation in the next financial year.
“MGNREGS and the food subsidy scheme was
instrumental in preventing the rural population
from being decimated during the covid pandemic.
The funding this year falls severely short of the
wage work being demanded in rural areas. Our
estimates show that ₹2.7 trillion is required to pro-
vide 100 days of work to each family which has
worked under the scheme this year,” said Nikhil
Dey, founder member of Mazdoor Kisan Shakti
Sangathan, a group which was instrumental in
India launching the scheme.
Among other major schemes of the rural devel-
opment ministry, funding for the rural roads
scheme (Pradhan Mantri Gram Sadak Yojana) was
u n c h a n g e d a t
₹19,000 crore, but
Funding for allocation for the
rural housing
NRLM raised scheme was raised
from ₹13,336 cr from ₹48,422
in 2022-23 to crore in 2022-23
(RE) to ₹54,500
₹14,129 cr in crore in 2023-24
2023-24 (BE). “The National
Rural Livelihood Mis-
sion (NRLM) has achieved
remarkable success by mobilizing rural women...
We will enable these groups to reach the next stage
of economic empowerment through formation of
large producer enterprises,” finance minister Nir-
mala Sitharaman said in her budget speech.
“Through supporting policies, they will be ena-
bled to scale up their operations to serve large con-
sumer markets as has been the case with several
startups growing into ‘unicorns’,” the FM said.
The budget raised funding for NRLM from
₹13,336 crore in 2022-23 to ₹14,129 crore in
2023-24. But funds for the rural development
department was slashed from ₹1.81 trillion in
2022-23 (RE) to ₹1.57 trillion in 2023-24 (BE),
largely on account of the drop in funding for the
rural jobs scheme. Funding for the National Drink-
ing Water Mission was raised from ₹60,000 crore
in 2022-23 (BE) to ₹70,000 crore in 2023-24 (BE).
The scheme has set a target to provide safe drink-
ing water tap connections to every rural family by
2024. Among social safety net schemes which are
a lifeline in rural India, funding for old-age pen-
sions were unchanged at about ₹9,600 crore.
Funds for child nutrition schemes were raised
marginally, from ₹20,263 crore in 2022-23 (BE) to
₹20,554 crore in 2023-24 (BE).
“If we take the combined expenditure on five
major social sector schemes—child nutrition, mid-
day meals, maternity benefits, rural jobs scheme
and old age pensions—we seem to be back to
square one after a period of two decades,” said
Reetika Khera, professor of economics at IIT,
Delhi. “The expenditure on these schemes fell
from over 0.9% of GDP in 2009-10 to less than
0.4% in this budget.”
Given that NREGS wages have been revised upwards and are likely to
be revised upwards again in April, this is unlikely to be sufficient for
even half the work generated last year. The same is true for most of the
other schemes except for rural housing which has seen an increase. But
for the rest, the allocations remain same as revised or lower than the
budgeted expenditure of last year. The bare minimum of social pen-
sions that the vulnerable has also remained the same despite the fact
that these were fixed more than 15 years back.
This budget was not a usual budget, and therefore, should not
be looked at in standard accounting framework. While there were
certainly expectations that the budget will at the least increase
expenditure in the rural economy, both for social security and
investment, the actual allocations are not even sufficient to protect
the already distressed income situation. The impact of the budget-
ary cuts are likely to go beyond the increase in distress and its
impact on lives and livelihood for majority of workers in rural areas.
The impact is likely to be severe for the sustainability of the eco-
nomic recovery which is already fragile given the domestic and
international economic situation.
Himanshu is associate professor at Centre for Economic Studies&
Planning, School of Social Sciences, Jawaharlal Nehru University.
LIVEMINT.COM
ThuRsday, 2 FebRuaRy 2023
MuMbai 15

KEY STAT
BUDGET POINTERS
WELFARE CUSHION KEY UMBRELLA WELFARE SCHEMES

256
The ambit of households eligible for
WHY IT MATTERS Food subsidy through MGNREGS Ayushman Bharat (PM-JAY) Expenditure (₹ trillion) free foodgrains has been reduced from
PDS and NFSA
Key welfare and support schemes alleviate the covid times. As a result, the Centre’s
2018-19
strain faced by less-privileged Indians. For millions food subsidy bill will drop below
of Indians, these take the shape of three big
umbrellas, within limits: subsidized foodgrains,
2019-20
2020-21
2 trillion for the first time in 4 years.
Allocations to rural employment
%
2021-22 THE YEAR-ON-YEAR INCREASE IN
distress employment on demand in rural areas and 2022-23 guarantee scheme MGNREGS has been SPENDING ON THESE THREE KEY
free health treatment. cut by 33%—the sharpest decline in the
2023-24 WELFARE SCHEMES DURING THE
scheme’s history.
0 1 2 3 4 5 6 7 FIRST PANDEMIC YEAR OF 2020-21.
Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents

Upskilling youth in AI, mechatronics, robotics key to job creation

Devina Sengupta ate the technological needs of a three agendas of the Budget for skills. “To skill the youth for Chakraborty, the co-founder for India’ campaigns, “three ecom companies. The labs will New use-cases including cloud
devina.sengupta@livemint.com new India and the Union bud- FY24, besides strengthening international opportu- and executive director centres of excellence for Artifi- add to “employment potential” computing, robots, and the IoT
mumbai get focuses on required upskil- macro-economic stability as nities, 30 Skill India of TeamLease Ser- cial Intelligence” will be set up in areas like smart classrooms, are also seeing a sharp rise in
ling of technology in terms of well as opportunities for citi- International The govt vices. “However, in educational institutes, and precision farming, intelligent hiring. We believe the budget

T
he central government is
preparing a two-pronged
strategy, to upskill India’s
workforce in areas such as arti-
ficial intelligence and mechat-
ronics, while encouraging pri-
vate partnerships and adding
R&D centres to meet the skill-
set demand across sectors.
“There is a dire need to sati-
setting up AI centres of excel-
lence. This will ensure we are
poised to become the preferred
technology-led R&D hub for
the global conglomerates,” said
A.R. Ramesh, director of digital
business solution, professional
staffing, international engage-
ment, Adecco.
Job creation was one of the
zens, especially the youth.
On Wednesday, the finance
minister rolled out the Pradhan
Mantri Kaushal Vikas Yojana
4.0 aimed at skilling “lakhs of
youth in the next three years”,
which will facilitate on-the-job
training in coding, AI, robotics,
mechatronics, drones, Internet
of Things, 3D printing, and soft
Centres will be access to rural industry players and the insti- transport systems, and health initiatives will be beneficial to
set up across will make talent must be tutes are expected to come up care applications, she added. close India’s growing demand-
States,” the FM provisions for addressed as with “scalable problem solu- Demand for jobs will come supply gap of technical talent
said. 100 R&D labs in part of these tions in the areas of agriculture, from emerging segments such and workforce,” Arvind Bali,
The budget initiatives.” health, and sustainable cities”. as whitespace spectrum, virtual chief executive officer, Tele-
offers a strong engineering In her budget The Budget will make provi- network operations, network com Sector Skill Council, said.
impetus to growth colleges announcements sions for 100 labs across engi- security, IoT in big data, cyber- “There is also a large poten-
and job creation and the finance minister neering colleges to build appli- security, 5G and cloud. “There tial to be tapped in tourism that
promoting macro-eco- said that under the ‘Make cations around 5G services to was demand for 1.3 million tal- has opportunities in entrepre-
nomic stability, said Rituparna AI in India and ‘Make AI Work further the roll out of 5G by tel- ent in FY23 which is growing. neurship,” said the FM.

Govt aims to make

Funds go to medtech R&D in good learning loss
push for healthcare exports during pandemic
Fareeha Iftikhar
fareeha.iftikhar@htdigital.in
New Delhi
Allocation for the ministry of
havoc on students across all age
groups following the closure of
educational institutions. The
Annual Status of Education

T
he central government Report said the basic reading
health and family welfare for will re-envision teachers’ ability of children dropped to
training, and build insti- pre-2012 levels in most states
FY24 is at ₹86,175 crore tutes of excellence across dis- and across genders.
tricts, as well as set up a national The government, which had
digital library to ensure school- announced the setting up of a
going children and the youth national digital university in its
Priyanka Sharma get easy access to quality books last Budget, said it will be oper-
priyanka.sharma@livemint.com across subjects to overcome the ational by June or July.
New Delhi learning losses suffered during States will be urged to set up
the covid-19 pandemic. physical libraries at panchayat

F
inance minister Nirmala Sitharaman The Budget for FY24 has set levels to provide infrastructure
on Wednesday announced a slew of aside ₹1.12 trillion for the edu- for accessing the national digi-
measures for the health and pharma- cation sector, the highest ever, tal library resources, Sithara-
ceuticals industry, including greater up 8.2% compared to the bud- man said. National Book Trust,
push for research and innovation to get allocations for FY23. While Children’s Book Trust, as well
boost the medtech sector as well as seeking to ₹68,804.85 crore is allocated to as other sources will be encour-
eradicate Sickle Cell Anaemia “in a mission schools, ₹44,094.62 crore will aged to give books and study
mode” by 2047. The budgetary allocation for be for higher education. materials in regional languages
the ministry of health While for FY23, the budget and in English to these libraries
and family welfare for allocation was at ₹1.04 to help build a culture
KEY FY24 is at ₹86,175, com- trillion, the revised of reading among
ANNOUNCEMENTS pared to ₹76,370 crore estimates were at The budget the youth. Physi-
for 2022-23. ₹99,881 crore. cal libraries will
157 NURSING colleges to The vision for a Amrit This year’s set aside ₹1.12 tn help make up
be established and will be Kaal budget comprises allocation is a for education, for the learn-
co-located with existing better access to health- 13% increase ing loss due to
medical colleges care services, artificial than the around 8.2% covid, Sithar-
intelligence (AI)-based revised esti- more than aman said.
A MISSION to eliminate solutions driven by mass mates. last year “ Collabora-
Sickle Cell Anaemia by 2047 adoption of digital tech- Dharmendra tions with NGOs
will be launched nology. The Centre has Pradhan, union edu- working in the field
allocated ₹3,160 crore to cation minister, lauded of literacy will be encour-
SELECT ICMR labs will be Department of Pharma- the finance minister’s efforts aged to promote financial liter-
made available for research ceuticals for FY24, up by and said the budget was inclu- acy. Financial sector regulators
by medical colleges and ₹892 crore compared to sive, people-centric and and organisations will be
private sector R&D teams an estimated ₹2,268.54 growth-stimulating, especially encouraged to provide age-ap-
crore in 2022-23 for the for the education sector. “With propriate reading material to
RESEARCH AND innovation department. “A new a boost to education, research libraries,” she added.
in pharmaceutical sector programme to promote and development, skill devel- The teachers’ training pro-
will be encouraged through research and innovation opment, digital infrastructure, gramme will be re-envisioned
centers of excellence in pharmaceuticals will green growth, entrepreneur- through innovative pedagogy,
be taken up through ship, and job creation, the Bud- continuous professional devel-
MULTIDISCIPLINARY centres of excellence. At 1.8 doctors per 1,000 people, India has far less doctors than countries such as Australia or Italy. Nonetheless, the government’s get draws a meticulous blue- opment, and curriculum trans-
MEDICAL devices courses We shall also encourage expenditure on health is on the rise. Central and state governments’ budgeted expenditure on the health sector is expected at 2.1% of print for India@100 and lays a action. “District institutes of
planned to ensure a skilled the industry to invest in GDP in 2022-23, up from 1.6% in 2020-21. solid foundation for transform- education and training will be
manpower for futuristic research and develop- ing India into a technology- developed as vibrant institutes
medical technologies ment in specific priority driven knowledge-based econ- of excellence for this purpose.”
areas,” said Sitharaman. omy,” Pradhan added. The FM said 100 laboratories
The FM said facilities in select ICMR Labs end manufacturing and research, she added. manufacturing sectors for developing med- “The FM has laid the foundation to spur “The national digital library will be set up across engineer-
will be available for research by the faculty of Industry experts said the moves will help tech products, which will benefit medtech inclusive growth, generate employment and for children and adolescents ing institution campuses. “To
public and private medical colleges, as well as promote the pharma and medical devices startups that may not have adequate resour- accelerate India’s role in the global economy will be set up to facilitate availa- realise the new range of oppor-
private sector R&D teams to encourage col- sectors and create a favourable environment ces to set up their own labs. Multi-dimen- despite headwinds. The focus on pharma bility of quality books across tunities, business models and
laborative research and innovation. That for businesses. India imports ₹63,000 crore sional medical devices segment courses will R&D and innovation is a step in the right geographies, languages, gen- employment potential, the labs
apart, dedicated multidisciplinary courses for worth of medical devices every year, and the create talent for the sector that faces a dearth direction as it can enable India become the res, and levels,” FM Nirmala will cover application for smart
medical devices will be supported by existing Centre aims to increase India’s share in global of qualified manpower,” said Jatin Mahajan, worlds’ R&D and bio-manufacturing hub,” Sitharan said. The library will classrooms, precision farming,
institutions to ensure availability of skilled manufacturing of such devices. “ICMR labs secretary, Association of Diagnostic Manu- said Kiran Mazumdar- Shaw, chairperson, be device agnostic. intelligent transport systems
manpower for futuristic technologies, high- will be made available to the corporate and facturers of India, and MD, J Mitra & Co. Biocon & Biocon Biologics. The pandemic had wreaked and healthcare applications.”

INDIA WELL-POISED TO BECOME A GLOBAL HUB FOR NURTURING NURSING STAFF

EXPERT
VIEW
S U N E E TA R E D DY
Respond to this column at
feedback@livemint.com
T
he Circle of Life is continuously replenished. Seasons
change. The sun rises and sets. Nature rejuvenates. The body
heals. In similar fashion, the spokes of the economy rise after
every fall. Higher disposable income leads to more consumption.
Growth in private consumption contributes to higher revenues
and greater profits. Higher profitability contributes to better tax
revenues. Fuller coffers facilitate greater social welfare. The Bud-
get fully embraced this, and triggered the virtuous cycle of invest-
ment. Its focus on inclusiveness, spurring public consumption and
augmenting investment in infrastructure to harvest the multiplier
effects triggered instant market exuberance. fundamental objectives: (i) improving the health of the population; tre combined) spending on healthcare from the current 2.1% to
The fact that we have moved from the 10th largest economy to the (ii) responding to people’s needs; and (iii) providing financial pro- 2.5%. This will help the country achieve the UN Sustainable Devel-
fifth largest, aspiring to become the third largest, is remarkable. The tection against costs due to illness.
current year’s economic growth is estimated at 7%, the highest glo- The budget has offered measures that address these key goals.
opment Goals by 2030.
We are excited about the potential to develop artificial intelli-
bally, despite the slowdown caused by the pandemic and On the healthcare front, the ministry’s mission to make gence in the area of healthcare. This, along with opening up possi-
the war. Growth estimates for next year, at 6-6.8% are India a hub for nurturing nursing staff is very welcome. bilities for partnership in R&D and clinical trials, will help find
also very healthy. Thanks to the broad-based recov- The world over, there is a need for trained nursing path-breaking solutions that reimagine healthcare delivery in the
ery across sectors, the economy is well-positioned
The budget staff and high-quality, low-cost, medical devices. future. Our larger goal of keeping the people of India healthy will
to ascend the pre-pandemic growth path in 2023. addresses the India has the potential to cater to both require- be strengthened by this initiative.
For any economy that operates in an uncertain need to focus ments. The establishment and co-location of 157 This was a green budget, and a seed was sown to drive environ-
global environment, the most prudent measures new nursing colleges with medical colleges set up mentally-sensitive approaches and behaviours—be it in energy,
on soft assets—
are to encourage capital expenditure, boost con- since 2014 will have threefold benefits—offering mobility or construction.
sumption demand and crowd-in private invest- jobs, youth, education and training, employment opportuni- Most importantly, the budget has given relief to our salaried
ment. The FM has rightly focussed on all three skilling ties and filling the supply gaps. class —they will benefit greatly as they will have more cash in hand
aspects to provide an impetus to the economy. The chief economic advisor’s statement that digital to spend and to save.
Capital expenditure on infrastructure development has public infrastructure can contribute up to 100 basis Confidence is contagious. The budget was an expression of con-
been hiked by 33% to ₹10 trillion for 2023-24. The newly estab- points to gross domestic product growth is of specific inter- fidence—of the resilience in our system and outlook for growth.
lished infrastructure secretariat will assist in attracting private invest- est to us in healthcare. We hope to collaborate with the govern- Having weathered the storms of the pandemic better than most
ments. In addition to tangible assets, the budget addresses the need ment to unlock the potential in the digital health ecosystem space. countries, India is definitely well-poised to take on the opportuni-
to focus on soft assets—jobs, youth, skilling and future-ready skill sets. We believe that the government’s intention to spend on health- ties of the future.
When it comes to healthcare, every economy should have three care will continue, increasing the percent of GDP (states and Cen- Suneeta Reddy is the managing director of AHEL .
16 ThuRsday, 2 FebRuaRy 2023
MuMbai
TAX BOUNCE
WHY IT MATTERS
Gross tax revenues is the Centre’s collections
from all taxes, direct and indirect. The subsuming
of several indirect Central and state taxes into the
goods and services tax (GST) in July 2017 gave this
figure a bump, though the Centre has to share
this with states. Tax collections are a good pulse
of how the economy is doing and of the fiscal
room the government has to spend.
Many individual taxpayers would cheer this year’s budget. Tax rates have been reduced; rebate enhanced; standard deduction increased
—all under the new income tax regime. A person earning ₹9 lakh annually will save 25% on income tax outgo, the finance minister said.
This implies a possible boost to India’s consumption story.
New tax regime is
very attractive now
This is especially so for
high-income individuals
who don’t utilize most
exemptions and deductions
of the old regime
Foreign travel, overseas
investment to get costlier
Shipra Singh & Neil Borate
shipra.singh@livemint.com
B udget 2023 has proposed
a hike in tax collected at
source (TCS) on remittances
other than foreign education.
Previously, the TCS was
pegged at 5% on such remit-
tances above ₹7 lakh. How-
ever, the 2023 budget has pro-
posed to do away with both the
minimum threshold and the
lower 5% rate. The budget has
proposed a 20% TCS rate.
If the budget proposals are
passed in their current form,
Indian tourists and individuals
who invest globally are likely
to face a surge in upfront costs
for their activities. To be sure,
extra TCS collected at such
points can be reclaimed while
filing income tax returns.
“Though travellers can get
TCS credit reimbursed, the
hike in TCS rate will increase
their immediate cash require-
ment. This may encourage
them to look at online travel
agents for international trips ”
LIVEMINT.COM
KEY STAT
33.7 BUDGET POINTERS
GROSS TAX REVENUES
-3.4
2022-23 is the second straight year
Change in gross tax revenues (in %) that gross tax collections will grow
by above 10%, though 2021-22
was from the low base of a
12.3
10.4 covid-affected year.
The 2023-24 growth projection
%
(10.4%) is lower than the 2022-23 GROWTH IN THE CENTRE’S GROSS TAX
2019-20
0.8
figure (12.3%). Smaller increases are REVENUES IN 2019-20, THE SECOND
2020-21 2021-22 2022-23 2023-24 FULL YEAR OF GST.
-3.4 projected for GST, corporation tax
and income tax.
Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents
from the current ₹2.5 lakh to ₹3 lakh. The
number of slabs has been reduced from six to
five – the existent 25% tax slab has been done
Why you should
away with. So, for example, those with a taxa-
ble income of over ₹12.5 lakh to ₹15 lakh fell
within the 25% tax slab (pre-budget new tax
invest in small
regime). Now, those with a taxable income of
over ₹12 lakh to ₹15 lakh will fall under the
20% tax slab. Nothing has
changed for those in the
savings schemes
KEY old tax regime.
ANNOUNCEMENTS Currently, those with Navneet Dubey teed returns at a certain inter-
an annual income of ₹5 navneet.d@livemint.com est rate every month can open
STANDARD DEDUCTION lakh do not pay any an account in the MIS scheme.
T
of ₹50,000 introduced for income tax either under he budget gave a big If you open an MIS account
the salaried individuals the old or the new tax push to small savings in the post office, you cannot
under the new tax regime regime. This is after tak- schemes: The finance withdraw from the scheme for
ing into account the minister proposed to double a minimum of 1 year from the
SURCHARGE OF 25% (down rebate of ₹12,500 under the deposit limits for Senior date of deposit. Suppose the
from 37%) for those with an Section 87A of the Citizen Savings Scheme account is closed after one
annual income of over ₹5 Income Tax Act. (SCSS) and Monthly Income year and before three years
crore Now, a rebate of Account Scheme (MIS) and from the date of opening the
₹25,000 will apply to also introduced a new small account, the post office will
BASIC INCOME tax those with income not savings scheme—Mahila Sam- deduct an amount equal to 2%
exemption limit raised from exceeding ₹7 lakh under man Savings Certificate. from the principal.
the current ₹2.5 lakh to the new tax regime. “Per- The maximum deposit limit However, if an account is
₹3 lakh sons in the new tax for SCSS has been raised from closed after three years and
regime, with income up to ₹15 lakh to ₹30 lakh. And that before five years of the date of
TAX RATES rejigged - lower ₹7 lakh will not have to for MIS has been increased opening the account, the post
than before for many pay any tax,” said Nirmala from ₹4.5 lakh to ₹9 lakh for a office will deduct an amount
taxpayers Sitharaman in her budget single account and from ₹9 equal to 1% of the principal.
speech. lakh to ₹15 lakh for a joint In the case of the SCSS
NUMBER OF tax slabs has Extending the ₹50,000 account. scheme, the account can be
been reduced from six to standard deduction bene- For the quarter ending 31 prematurely closed any time.
five – the existent 25% tax fit to the salaried under March, the government is If it is closed before one year of
slab has been done away the new tax regime is offering 8% interest on the opening the account, no inter-
with another big positive. Cur- SCSS scheme. The interest is est will be paid to the investor.
rently, salaried individu- paid quarterly under this So, if any interest is paid in the
als (those with income from salary and pen- scheme. However, in the case account prior to this, it will be
sion) get standard deduction under the old of MIS, the government is recovered from the principal.
tax regime but not the new regime. offering 7.1% interest If the account is closed
In a big relief to those in the higher income per annum, and before two years,
tax brackets, the highest surcharge rate of this interest is Maximum an amount equal
37% (applicable to those with an income of paid monthly. to 1.5% will be
over ₹5 crore) has been cut to 25% under the Adhil Shetty, deposit limit for deducted
new tax regime. This will bring down the CEO of Bank- SCSS has been from the
highest tax rate under the new regime to 39% bazaar.com, principal. If
from 42.74%. said the move raised from the account is
And finally, the new income tax regime is will help sen- ₹15 lakh to closed after
set to become the default regime from finan- ior citizens ₹30 lakh two years but
cial year 2023-24. You can, however, opt for build a strong before five years,
the old regime if you so want. Currently, the retirement corpus. an amount equal to
old regime is the default choice for a taxpayer SCSS comes with a 1% will be deducted from
and you can shift to the new regime by opting lock-in period of five years. An the principal amount.
for it. investment of ₹30 lakh at 8% The budget also proposed a
With all these changes, someone who is interest will fetch ₹60,000 new small savings scheme,
not utilizing several of the tax exemptions every quarter. The govern- Mahila Samman Bachat Patra,
and deductions available under the old tax ment has increased the maxi- for the benefit of women. It
regime can consider shifting to the new tax mum deposit limit for MIS will be made available for two
regime. Though the benefit (in the form of
lower tax outgo) of moving to the new tax
regime gets better for those with very high
income levels (over ₹5 crore).
Here are a few points to note before you
make the shift. One, even if you shift to the
from ₹4.5 lakh to ₹9 lakh for a years, up to March 2025.
single account and ₹9 lakh to The scheme will offer a
₹15 lakh for a joint account. So, deposit facility of up to ₹2 lakh
by putting in ₹15 lakh in the in the name of women or girls
MIS, investors can get a for a tenor of 2 years at a fixed
monthly income of₹8,875 at interest rate of 7.5% and will
Maulik M and reducing the highest surcharge rate—all new regime (and will no longer enjoy any the current 7.1% interest rate. have a partial withdrawal
maulik.madhu@livemint.com under the new tax regime, the needle has deductions except for the standard deduc- Any individual who is 60 option.
definitely moved in favour of this regime. tion), you will still have to continue with years of age or above on the Shetty said, “The return rate
T
he finance minister went all out to The new tax regime for individuals and some of your investments. For instance, you opening date of an account or is similar to that of a bank fixed
woo taxpayers into the fold of the Hindu undivided families, or HUFs, brought cannot discontinue your investments in anyone who is 55 years of age deposit rate. The partial with-
concessional tax regime, popu- via Section 115BAC of the Income Tax Act public provident fund and the national pen- and less than 60 years and has drawal facility makes liquidity
larly known as the new tax regime. was aimed at bringing in a lower rate and a sion system as it could result in penalty and retired under Superannuation convenient. With the bank
Not many taxpayers have simpler tax system from 1 April 2020. Tax- freezing of account. Two, for those lacking in or VRS can open an SCSS savings rate still giving low
shifted to the new concessional tax regime payers could choose between the new and investment discipline, moving to the new tax account. One can open the returns, a 7.5% rate of return is
since its introduction in budget 2020. Most the old regime. Opting for the new regime regime will leave them with no incentive to SCSS account individually or a good rate to lock in at this
individuals have continued with the old tax meant taxpayers would be charged slightly continue with some of these investments, jointly with their spouse. point. An investment of ₹2
regime. lower tax rates but would have to forgo most and insurance policies. On the other hand, Investment under SCSS quali- lakh for two years at 7.5%
With budget 2023 unveiling multiple big deductions and exemptions available to those with cash flow issues may be able to fies for the benefit of section interest will give you a return
changes— by introducing standard deduc- them under the old regime. enjoy the benefit of relatively lower tax rates 80C of the Act. Similarly, adult of ₹30,000-32,000, depend-
tion of ₹50,000, raising the basic tax exemp- Under the new tax regime, the basic without having to invest for tax-saving pur- individuals who want to earn a ing on how the interest gets
tion limit to ₹3 lakh, tweaking the tax rates income tax exemption limit has been raised poses. regular income with guaran- calculated.”
OF A NEW TAX REGIME AND FISCAL PRUDENCE
The budget has also proposed the introduction of The limit of tax exemption on leave encashment at
standard deduction of ₹50,000 under CTR, which the time of retirement of non-government salaried
said Nishant Pitti, CEO and funds to a relative or self for
EXPERT was not allowed earlier. We will therefore see many employees is proposed to be increased from ₹3 lakh
more salaried income earners make the switch to to ₹25 lakh. Tax deducted at source (TDS) on with-
co-founder, EaseMyTrip. gifts, buying of property, giv- VIEW CTR. drawal of money from provident fund for individuals
Indians remitted $19.6 bil- ing loans, buying equities, etc. The surcharge on taxable income of ₹5 crore or not having a PAN is reduced from maximum marginal
lion in 2021-22, according to Maybe, the government has SONU IYER more is proposed to be reduced from 37% to 25% rate of tax to 20%. The threshold for applying pre-
data from the Reserve Bank of removed the ₹7 lakh limit and under CTR. This change directly impacts the high net sumptive tax rate for persons carrying out specified
India. LRS remittances wit- introduced 20% TCS to dis- Respond to this column at worth individuals as it will bring down the highest professions is proposed to be increased from ₹50 lakh
nessed a strong trend in courage making payments feedback@livemint.com income tax rate from 42.744% to 39% under CTR. to ₹75 lakh, subject to the condition that cash receipts
2022-23 as well. LRS is short outside India thereby reduc- CTR has been made as the default tax regime. are up to 5% of total gross receipts. Similarly, the
T
for Liberalized Remit- ing the forex reserve he overarching theme of Budget 2023 is the However, taxpayers will still have the threshold for small business is proposed to
tance Scheme. outlay. This could vision of Amrit Kaal steered by seven priorities option to choose the old tax regime. The be increased from ₹2 crore to ₹3 crore.
In November Indians be because we (aptly termed as ‘Saptarishi’) such as inclusive changes to CTR are in the right direc- Proposed The government has proposed an
2022, forex
remitted $19.6
are left with development, green growth, youth power, infrastruc- tion and will pave the way for a uni- changes to the increase in the rate of Tax Collected at
worth almost only nine ture and investment. fied tax regime. Source (TCS) on certain foreign
$2 billion was billion in 2021-22, months of The finance minister remained steadfast on the Some other notable changes from new tax regime remittances. Currently, the rate of
remitted out-
according to f o r e x path of stability, simplification and rationalization of personal tax/ finance standpoint are are aimed at TCS for foreign remittances for edu-
side Indian reserves,” he tax provisions. as follows. Proceeds from insurance cation is 0.5% and for medical treat-
under LRS. data from the added. The budget has proposed major changes to the policies wherein the premium
attracting ment, the rate is 5% for remittances in
“Effective 1 RBI Adil Shetty, concessional tax regime (lower tax rates without most exceeds ₹5 lakh in a year will now be taxpayers excess of ₹7 lakh. There is no change in
October 2020, CEO, Bankbazaar deductions/ exemptions) that is aimed at attracting taxable, except in case of the death of the these rates. However, for foreign remit-
the tax collection at took a similar view. taxpayers to switch over to the new concessional tax insured. This will apply for policies issued on tances for all other purposes under the Lib-
source is applicable on “With the changes, regime (CTR). or after 1 April 2023. eralised Remittance Scheme and purchase of over-
all LRS transactions, including international tour packages While it is well known that the old tax regime failed The exemption for investment in residential house seas tour package, it is proposed to increase the rate
international debit card trans- would become more expen- to elicit the expected response, the tide could well property are proposed to be capped at ₹10 crore to of TCS from 5% to 20% without any threshold limit for
actions. TCS will be applicable sive as the associated tax on it turn as the following changes proposed to the new restrict the unlimited deduction being claimed in TCS to kick in. This amendment is proposed to take
whenever the payment is has gone up steeply. Other CTR could make it attractive to a large number of tax- such high value transactions. Interest on housing loan effect from 1 July 2023.
made through debit cards, activities such as purchase of payers. The limit of taxable income for claiming claimed as a tax deduction will no longer be permitted Kudos to the finance minister for staying firm on
credit cards and travel cards,” real estate in another country, rebate will be increased from ₹5 lakh to ₹7 lakh. Indi- to be added to the cost of acquisition/ improvement the path of fiscal prudence, yet bringing some cheer
said Maneet Pal Singh, Part- investing in stocks, mutual viduals with taxable income of up to 7 lakh will pay no of house property when computing capital gains on to the taxpayers.
ner, I.P. Pasricha & Co. funds, private equity, treasury income tax under the CTR. Slab rates have been wid- sale of the house property. This move will plug a loop- Sonu Iyer is partner & leader - India Region, People
“Transactions covered bonds, etc., may also become ened with lower tax rates. The basic exemption limit hole which earlier allowed benefit of double deduc- Advisory Services, EY. The views expressed here are per-
under LRS include transfer of expensive,” he said. is proposed to be increased from ₹2.5 lakh to ₹3 lakh. tion to a taxpayer. sonal.
LIVEMINT.COM
ThuRsday, 2 FebRuaRy 2023
MuMbai 17

KEY STAT
BUDGET POINTERS
EXPANDING THE TAX BASE NUMBER OF GST ASSESSEES Registered taxpayers under GST (in million)

5.2
Collections from GST are
WHY IT MATTERS Aug 2017
Migrated New projected to increase 12% in
2023-24, on the back of a
In order to maintain capital spending at a high Apr 2018
robust 22% increase in 2022-23.
level, the government needs revenues, which
mainly come from tax collections. The nationwide
Apr 2019

Apr 2020
2022-23 is the first year since X
goods and services tax (GST) was intended to the launch of GST in July 2017
that collections under this THE MULTIPLE BY WHICH THE NUMBER
streamline indirect taxes, bring more parts of the Apr 2021
economic chain into its fold—and, thus, boost head topped budget OF NEW REGISTERED TAXPAYERS
Apr 2022 UNDER GST ROSE BETWEEN AUGUST
indirect tax collections. estimates, by 9.5%.
0 5 10 15 2017 AND APRIL 2022—FROM 1.7
Source: GST System Statistics, Central Board of Indirect Taxes and Customs MILLION TO 8.8 MILLION.

exemption on capital gains from the sale of

a residential property and any other capital
asset respectively.
Get a hike in
The conditions are that the capital asset
sold should have been held for more than
three years and the proceeds are used to
presumptive
purchase any residential property in India
within a specified time period. These sec-
tions were introduced to give a leg-up to the
house-building activity in India.
tax limits now
Budget 2023 imposed a limit
of ₹10 crore on the maximum Jash Kriplani
KEY exemption that an individual jash.kriplani@livemint.com
ANNOUNCEMENTS can get from the above-said

F
sections. inance minister Nirmala Sitharaman has
HIGHEST SURCHARGE rate “It has been observed that increased the threshold limits for availing
slashed to 25% from 37% for claims of huge deductions by presumptive taxation, a move that will benefit
those paying taxes under high-net-worth assessees are numerous small businesses and professionals.
the new tax regime being made under these provi- “Micro enterprises with turnover of up to ₹2
sions, by purchasing very crore and certain professionals with turnover of up
AS A result, the highest expensive residential houses. to ₹50 lakh can avail the benefit of presumptive
marginal tax rate has fallen It is defeating the very purpose taxation. I propose to provide enhanced limits of
from 42.7% to 39% of these sections,” said the ₹3 crore and ₹75 lakh, respectively, to the tax pay-
finance minister. ers whose cash receipts are no more than 5%,” the
EXEMPTION UNDER Consequently, the cap of finance minister said in her budget speech.
section 54 and 54F capped ₹10 crore will also be made “The presumptive tax regime is a simplified way
at ₹10 crore applicable for deposits in the for filing tax returns for smaller businesses and
Capital Gains Account professionals. The concept of presumptive taxa-
SALE OF market-linked Scheme, which allows individ- tion is ‘what you declare in the returns is treated as
debentures to be treated as uals to park their capital gains your income’. It takes away the burden on the tax-
short-term capital gain in a separate account until it is payer to declare business-related expenditure, etc.
taxed at the applicable slab reinvested. This will ease compliance burden for lot of small
rates According to Kasturirangan, businesses and professionals,” said Aditya Sesh,
capping of deduction amount founder and managing director, Basiz Fund Servi-
REMOVAL OF exemption will only impact a fraction of ces.
for insurance policies (other taxpayers who are very Presumptive taxation for businesses is covered
than a unit-linked insurance wealthy with very high capital under section 44AD of the Income Tax Act. As of
policy) with premium more gains. now, businesses which have a revenue of up to ₹3
than ₹5 lakh per annum These amendments will take crore can avail the benefit of presumptive taxation,
effect from the assessment as long as not more than 5% of this revenue is in
year 2024-25 cash receipts.
Market-linked debentures (MLDs)— For example, a businessman who has a revenue
structured products that invest in both of ₹3 crore (the maximum limit) and meets the eli-
fixed-income and derivative instruments— gibility criteria of presumptive tax is liable to pay
that come with a minimum investment tax on only 8% of the revenue, or ₹24 lakh.
amount of ₹10 lakh gained traction among Similarly, professionals earning up to ₹75 lakh
high-net-worth individuals in the last many in a financial year will now be eligible for presump-
years. tive taxation, as long as
India’s capital gains tax regime is complex. There are different rates and different threshold periods for different asset classes. In the run- Listed MLDs are taxed at 10% after a one- their cash receipts are
up to the budget, there was an expectation that the government will bring about uniformity in holding period and rates between different year holding period, similar to equity. Professionals within the 5% cap of
Budget 2023 highlighted that these secu-
asset classes. They were disappointed.
rities are in the nature of derivatives which earning ₹75 lakh overall turnover.
For example,
are normally taxed at applicable rates. To per year will let’s consider a

What this Budget has

plug the loophole, the finance minister pro- qualify for lawyer earning ₹75
posed that the sale or redemption, or lakh in a financial
maturity of these securities will be treated presumptive year from his prac-
as short-term capital gains and will be taxed taxation tice; he will be liable
at the applicable individual slab rates. to pay tax on 50% of his
This proposal, which will be applicable gross receipts or ₹37.5 lakh.

on offer for HNIs from AY 2024-25, impacts HNIs who are

investing in MLDs, solely for tax benefits.
Further, the budget also removed the
exemption available under section 10 (10D)
on income from insurance policies (other
than a unit-linked insurance policy) with a
Not just an individual, but partnership firms and
hindu undivided family (HUF) can also avail the
presumptive tax mechanism. It excludes limited
liability partnerships (LLPs).
“The 5% cash limit ensures that there is more
transparency. Allowing more businesses to use
premium of more than ₹5 lakh a year. presumptive tax mechanism will improve the ease
Satya Sontanam & Navneet Dubey has been slashed to 25%, but only to those in Currently, the maturity amount received of doing business for smaller enterprises,” says
The reduction in surcharge satya.sontanam@livemint.com the new tax regime. “Highest surcharge from the life insurance policy is tax-exempt Ashok Shah, founding partner of NA Shah Associ-
shall be 25% for income above ₹2 crore. This where the premium is less than 10% of the ates.
rate from 37% to 25%, is a

I
n a major relief to high-net-worth indi- would reduce the maximum rate (for those sum assured. “The enhancement of presumptive tax limits
viduals, finance minister Nirmala with income more than ₹5 crore) from However, the government observed that will reduce the compliance burden for small busi-
nudge by the government Sitharaman announced a reduction in about 42.7% to about 39%,” said Nirmala the welfare objective of insuring the indi- nesses and prompt them to avail of this option.
the highest surcharge rate from 37% to Sitharaman in her fifth Budget speech since viduals’ life was misused, and large sums Small business owners don’t need to maintain sep-
to make HNIs adopt the 25%, for those paying taxes under the 2019. were received by HNIs. Therefore, to curb arate bank account statements, separate cash files,
new tax regime. Note that, there is no difference in the tax the misuse now, if the aggregate annual sales files or audit books to fulfil the compliance
new tax regime Having said that, there are a few other rate for those in the income tax slab of ₹2 premium paid on life insurance policies requirements. If they meet the enhanced eligibil-
budget proposals that took away invest- crore to ₹5 crore. They will continue to be goes beyond ₹5 lakh, the proceeds will no ity criteria, they can simply go through the pre-
ment-linked benefits, to an extent, from taxed at 39% (30% tax + 25% surcharge+4% longer be exempted under the Act. sumptive tax mechanism,” said CA Abhishek Soni,
rich individuals. These include the removal cess). This is to align with the provisions appli- co-founder of Tax2win.
of exempt status for insurance policies with “It is a nudge by the government to make cable to ULIPs, or unit linked insurance pol- Under presumptive taxation, small businesses
a premium of more than ₹5 lakh per annum, high networth individuals, or HNIs, adopt icies. The Finance Act 2021 retained the and professionals are exempted from maintaining
a cap on the deduction limit for capital gains the new tax regime, which is clearly more exemption for ULIP income only for those their books of accounts or getting audits done.
that are reinvested in a residential property, beneficial for them,” said Saraswathi Kas- policies with a total premium amount of less Otherwise, businesses are required to maintain
and taxing gains from market-linked turirangan, partner at Deloitte India. than ₹2.5 lakh per annum. books of accounts as per the IT Act.
debentures at individual slab rates. For example, the difference in the tax lia- Note that these provisions will not be While the move will benefit more businesses
At present, the surcharge—the tax on tax bility of an individual with an income of ₹10 applicable for amounts received on the and professionals, there is a cooling-off period of
—for those with income exceeding ₹5 crore, crore between the old and new tax regime unfortunate death of the insured. These five years if they opt out of the scheme midway. So,
is as high as 37% of the tax amount under would be a staggering ₹₹36.6 lakh, which is high-premium insurance policies have if you were to opt for the scheme in FY24, FY25
both the old and new tax regimes. This essentially due to the lower surcharge rate been focused mainly on HNIs, who will now and FY26 but not in FY27, then you can’t avail pre-
pushes the highest marginal tax rate in the latter regime. be impacted by the budget proposal. sumptive taxation for five years from FY28-FY32.
(including surcharge) to 42.74%, which is These provisions are applicable from the Unlike ULIPs, where the Act was effective It is also important to remember that once you
the highest tax rate levied in the last three financial year starting 2023-24. from the budget date (1 February 2021), the opt for presumptive taxation, you cannot claim tax
decades. The existing provisions of section 54 and new provision for traditional insurance deductions that are otherwise available to a regular
In Budget 2023, the surcharge rate of 37% section 54F of the Income-tax, 1961 allow plans is effective from 1 April 2023. taxpayer.

INDIA OFFERS A SECULAR GROWTH STORY TO INTERNATIONAL INVESTORS

EXPERT
VIEW
NIMESH SHAH
Respond to this column at
feedback@livemint.com
W
ith the government attempting to achieve a balance
between fiscal priorities, minimum populist initia-
tives, and capex drive, the FY24 budget has been in line
with expectations. Prior to the budget, we were seeking for a
growth-oriented expenditure that could support maintaining the
growth momentum, which this budget has succeeded in doing.
The government’s macroeconomic policies have been excellent
thus far. The fact that India had lower inflation in 2022 than even
the USA and as a result was in a strong macroeconomic position
is proof of this. Further strengthening India’s macroeconomic
position is the decline in crude oil prices and the near-peaking As a fund house, during the course of this year, we have been Currently, the 1-2-year portion of the curve, which is the
of the global interest rate cycle. The actions implemented in tax advising investors to invest systematically in equities, follow asset shorter end, looks fairly priced. The Reserve Bank of India (RBI)
administration that have boosted direct tax revenue and goods allocation plans and invest in debt mutual funds. The govern-
and service tax, or GST, collection are yet another significant ment has taken a number of actions over the last three years that
is now content with inflation hovering around 6% unlike previ-
ously when RBI’s monetary policy actions were focused on 4%
advantage. This has been extremely beneficial to the have helped level the playing field for debt investments. inflation. With an additional 25 bps rate hike, at a repo rate of
economy and improved income collection. India Due to this, investing in debt mutual funds over the 6.5% and average inflation of 6%, we don’t believe that rates are
continues to be one of the most structural markets long term has become quite alluring. restrictive enough to cause an economic slowdown. In fact, the
in the world because of all these initiatives. As a
The economy Given that equity markets are not cheap, it may economy will continue to expand with overall monetary policy
result, India offers a secular growth story that is will continue to be preferable for an investor considering a lump being supportive of growth.
unique among emerging and developed econo- expand with sum investment to choose offers from the asset In light of that, we believe the RBI will not reduce rates any time
mies to international investors. allocation-oriented or hybrid category, such as soon and so adding duration through the long end of the curve
monetary policy
So far, the government’s actions have sup- the multi-asset or balanced advantage category. may not be fruitful. Given this scenario, we prefer investments
ported growth momentum while concentrating being supportive We believe macro investing will be vital over the with a shorter duration as there is no additional yield available on
on reducing the fiscal deficit. Giving help to the of growth next 10 years, making products like business cycle the longer-duration assets. The other category an investor may
middle classes at the same time is probably going to funds essential. On a valuation perspective, large caps consider is the dynamic bond fund category. A savvy investor may
result in a continuation of the growth in a positive way. are better positioned in terms of market capitalization consider adding credit to the portfolio in a staggered manner.
The Indian equity markets have underperformed the than midcaps, and midcaps are better positioned than small- In conclusion, the budget is pragmatist and growth-oriented,
other markets in recent months. If Indian equities continue to caps. The potential volatility in these areas can be taken advantage helping India maintain its position as one of the world’s fastest-
underperform for a few more months, they will be valuation wise of by investing in aggressive categories like mid cap, flexi cap, growing economies.
well-positioned for the long term and offer a promising long- value, special situation, or small cap if one is using a systematic Nimesh Shah is managing director & CEO at ICICI Prudential
term investment opportunity. investment plan (SIP) and has a 3-5-year investment horizon. AMC.
18 Thursday, 2 February 2023
MuMbai
LIVEMINT.COM

KEY STAT
BUDGET POINTERS
SECURING BORDERS DEFENCE SPENDING 4.10 4.33

2
3.67 A 5.7% increase in total defence
WHY IT MATTERS Defence expenditure (in ₹ trillion)
3.19 3.40 expenditure is projected for 2023-24
2.77 2.91 (against 11.7% in 2022-23) and 8.4% in
Even as India pursues growth, it needs to protect 2.52
its borders with China and Pakistan, which 2.19 2.26 capital expenditure for the sector
2.03
continue to simmer. The share of defence in total (8.7% in 2022-23).
Central expenditure has declined from about 13% Of the total capital expenditure of THE NUMBER OF YEARS IN THE PAST
in 2012-13 to 9.8% in 2022-23. At the same time, a 10 trillion the government expects DECADE WHEN THE YEAR-ON-YEAR
greater focus on capital investments is needed to to make in 2023-24, about 16% is
INCREASE IN DEFENCE EXPENDI-
modernize the defence infrastructure. 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 earmarked for the defence sector.
TURE HAS TOPPED 10%— IN 2016-17
Data is revised estimates for 2022-23 and budget estimates for 2023-24. Source: Budget documents AND IN 2022-23.

AGRICULTURE/FERTILIZER DEFENCE POWER AND GREEN ENERGY

PROPOSALS: Allocation for MNREGA was PROPOSALS: Capital expenditure for PROPOSALS: A 19% and 35% increase in
reduced by 33%, while food processing got the defence sector has been increased budget for power and renewable energy
a big boost with budgetary allocation for by 8% to an all-time high of ₹1.62 trillion. sectors, respectively; viability gap funding
FY24 at ₹3,285 crore from ₹1,900 crore in for 4 Gwh of battery storage projects;
FY23 (RE). The budget also announced a IMPACT: CRISIL MI&A Research estimates government support of ₹8,000 crore for
slew of initiatives such an Agriculture that more than two-thirds of the total the 20,000-crore, 13-GW transmission
Accelerator Fund; intervention in crop budgeted outlay will be reserved for project in Ladakh; revamped distribution
value chains for cotton and horticulture domestic procurement, based on past sector scheme allocation doubled to
crops, and digital public infrastructure for trends. Among the services, the year-on- ₹12,000 crore; National Green Hydrogen
agriculture to improve market linkages. year growth for the Army is 14%, followed Mission gets ₹300 crore. GEC and RDSS
Agriculture credit is set to increase by 8% by the Navy (11%) and the Air Force (6%) on projects funding doubled to ₹500 crore
from FY23 levels. Animal husbandry and a high base. The Air Force accounts for the and ₹12,000 crore, respectively.
fisheries will get 39% and 38% more funds, largest share of funds with 36%, followed
respectively. by the Navy at 33%, and the Army 23%. IMPACT: The moves will boost green
1,089 defence items have been placed energy initiatives and improve distribu-
IMPACT: The budget for 2023-24 focuses under an import embargo, applicable over tion. Though the ₹300-cr for green hydro-
on long-term sustainable growth, and that the next five years, which will support the gen mission is lower than the committed
makes it a bit positive for the farm com- development of a local defence manufac- ₹19,700 cr, the ₹30,000 crore energy
munity and the overall agriculture sector. turing ecosystem, and boost exports. transition fund to OMCs will aid capex.

Net Net Net

Closing Sales Price-to- Closing Sales Price-to- Closing Sales Price-to-
Change profit Change profit Change profit
Company price growth earnings Company price growth earnings Company price growth earnings
(in %) growth (in %) growth (in %) growth
(in ₹) (in %) ratio (in ₹) (in %) ratio (in ₹) (in %) ratio
(in %) (in %) (in %)

UPL Ltd 740.20 -2.25 22.25 28.99 10.04 Bharat Electronics Ltd 94.95 6.75 34.21 52.49 20.97 Adani Green Energy Ltd 1,153.35 -5.78 35.08 13.79 196.00

PI Industries Ltd 3,031.00 1.07 30.03 43.28 32.50 Bharat Dynamics Ltd 909.6 -3.84 100.48 418.7 22.43 Adani Transmission Ltd 1,730.25 -2.46 15.47 -44.61 117.45

Coromandel International Ltd 902.00 0.84 61.47 44.63 13.46 Bharat Forge Ltd 866.85 -0.95 31.93 -26.94 28.07 NTPC Ltd 170.00 -0.67 40.23 3.77 8.70

Sumitomo Chemicals India Ltd 458.50 0.89 24.51 30.63 36.62 Solar Industries 3,965.00 -0.98 97.3 102.33 41.77 Power Grid Corp. of India Ltd 216.60 0.12 7.68 -20.52 9.59

DFPCL* 630.10 -2.72 55.62 222.51 9.13 Hindustan Aeronautics Ltd 2,363.60 -7.40 22.31 76.80 18.04 Tata Power Co. Ltd 205.85 -3.31 43.04 98.60 19.80

*Deepak Fertilizers and Petrochemicals Corp. Ltd

STEEL AND METALS BFSI MSME

PROPOSALS: Budgeted capex for 11 core PROPOSALS: Credit Guarantee Scheme PROPOSALS: Deductions for expenditure
infrastructure ministries set to rise 24% to (CGS) will be revamped for MSMEs via a can be availed only when payments are
₹8.74 trillion compared to FY23(RE) ₹9,000-crore infusion; digital infrastruc- made to MSMEs; turnover limit under
ture for agriculture, risk-based KYC, one- presumptive taxation for micro entities
IMPACT:The 24% rise in budgeted capital stop solution for identity and address raised to ₹3 crore; credit guarantee
expenditure will raise steel demand in updating via DigiLocker; and agriculture- scheme raised by 20% to ₹9,000 crore.
FY24. The budget outlay towards rolling credit target will be at ₹20 trillion, with a
stock for railways is set to rise over 150% focus on animal husbandry, dairy, fisheries IMPACT: To support timely payments, the
from the budgeted estimates of FY23 to central government will be allowing
₹37,581 crore for FY24, and encourage flat IMPACT:The CGS revamp will encourage expense deduction only when payments
steel demand, which accounts for 46% of growth of MSME credit, which has risen at are being made to MSMEs. Assuming a
overall demand. Similarly, the rise in a CAGR of 15% over the past two financial ₹3-crore turnover, 7.5% EBITDA margin and
outlay for the ministry of road transport years. The digital ecosystem will aid insti- digital transactions (6% presumptive rate),
and highways, and the mass rapid transit tutions to make informed credit decisions the hike in the presumptive taxation limit
system by 25% and 40%, respectively, will and faster KYC. Higher capex outlay, and would reduce taxable income by about
propel demand for long steel. Thus, steel disposable income of individuals will 20%. DigiLocker for MSMEs, and PAN as a
demand from the infrastructure sector, support credit growth. Agriculture credit common identifier, will further enhance
which accounts for 25-30% of overall steel growth target is set at 8% based on last their prospects for securing loans from
demand, will rise 12-14% in FY24. year’s budget target of ₹18.6 trillion. financiers, including banks.

Net Net Net

Closing Sales Price-to- Closing NII Price- Closing Sales Price-to-
Change profit Change profit Change profit
Company price growth earnings Company price growth to-book Company price growth earnings
(in %) growth (in %) growth (in %) growth
(in ₹) (in %) ratio (in ₹) (in %) ratio (in ₹) (in %) ratio
(in %) (in %) (in %)

JSW Steel Ltd 729.80 1.83 30.30 P/L 12.74 HDFC Bank 1,627.05 1.47 17.22 21.66 2.81 Gensol Engineering Ltd 950.00 -1.23 441.18 465.52 NA

Tata Steel Ltd 122.05 2.01 8.44 -55.44 9.49 ICICI Bank 846.65 1.80 23.10 41.80 2.62 KMEW Ltd* 1,189.95 -2.22 540.45 469.16 NA

Hindalco Industries Ltd 467.80 -0.16 28.27 1.93 9.20 State Bank of India 527.10 -4.80 13.79 35.69 1.44 Rhetan TMT Ltd 398.95 -4.99 4.99 58.43 NA

Steel Authority of India Ltd 88.95 -1.82 5.91 -94.23 7.66 HDFC Ltd 2,662.00 1.44 -9.99 15.17 3.40 Raghuvansh Agrofarms Ltd 365.00 -1.62 -35.59 377.08 NA

Vedanta Ltd 327.85 -1.43 28.09 -29.53 8.35 Life Insurance Corp. of India 598.80 -8.38 23.57 994.22 14.86 Prevest Denpro Ltd 335.00 -2.62 36.87 31.03 NA

P/L: profit to loss . NII: net interest income. For LIC, sales growth and price-to-earnings ratio have been used. NA: not available. *Knowledge Marine and Engineering Works Ltd

CEMENT REAL ESTATE TELECOM/IT

PROPOSALS: Budgeted capex for 11 core Outlay for PMAY, both PROPOSALS: The budget proposes 100
infrastructure ministries set to rise 24% to urban and rural, to rise a modest 3% com- labs to develop applications for 5G servi-
₹8.74 trillion against fiscal 2023RE pared to FY23 (RE) to ₹79,000 crore. ces; focus on data embassies and digital
public infrastructure for agriculture, and
IMPACT: Capex is set to rise 24% in fiscal Of the total sanctioned amount payment platforms
2024, which will boost demand for the of ₹2.02 trillion for PMAY Urban, ₹1.36
cement industry. The rise will be sharp in trillion has been spent as of January 2023. IMPACT: Setting up of 100 research and
cement-heavy roads and affordable So, nearly ₹65,000 crore is available for development labs for developing prod-
housing (PMAY-G) sectors, for which spending till fiscal 2025. To this, ₹25,000 ucts based on 5G tech will accelerate
budgeted outlay increased 25% and 12.5%, crore has been added for fiscal 2024. On deployment across key sectors, such as
against FY23 (RE) to ₹2.6 trillion and ₹0.54 the other hand, of the ₹2.39 trillion sanc- education, farming, transport and health-
trillion, respectively. The fiscal deficit cap tioned for PMAY Rural, ₹2.03 trillion has care, as well as ensure quicker revenue
for states has been fixed at 3.5% of GSDP been spent as of January. The budgeted realisation by the industry. A national data
versus 3.4% for FY23 (BE). This will lead to outlay of ₹50,000 crore in fiscal 2024 is governance policy along with a risk-based
increased impetus from states on infra- sufficient to address the funding gap. e-KYC process will facilitate the delivery
structure in a pre-election year. Demand Continued emphasis on housing and an of digital services, generating opportuni-
from infra and affordable housing is set to increase in income tax threshold for ties for domestic service providers. Data
see another year of 10-12% growth in the individuals will provide impetus to the embassies will attract greater investments
upcoming fiscal year. low-cost housing segment. in the data centre ecosystem.

Net Net Net

Closing Sales Price-to- Closing Sales Price-to- Closing Sales Price-to-
Change profit Change profit Change profit
Company price growth earnings Company price growth earnings Company price growth earnings
(in %) growth (in %) growth (in %) growth
(in ₹) (in %) ratio (in ₹) (in %) ratio (in ₹) (in %) ratio
(in %) (in %) (in %)

UltraTech Cement Ltd 7,128.80 0.56 21.85 -22.42 27.09 DLF Ltd 348.90 -2.10 4.71 32.20 30.99 Tata Consultancy Services Ltd 3,407.65 1.50 17.11 6.85 25.58

Ambuja Cements Ltd 334.60 -16.56 8.44 -22.65 22.22 Godrej Properties Ltd 1,152.00 -2.48 90.16 90.47 39.35 Infosys Ltd 1,549.45 1.06 23.50 7.21 22.54

Shree Cement Ltd 23,800.50 0.39 20.61 -61.19 34.87 Oberoi Realty Ltd 820.85 -0.05 54.23 107.85 17.57 Bharti Airtel Ltd 768.15 -0.27 22.02 164.70 28.21

ACC Ltd 1,844.40 -6.34 8.62 -44.91 17.24 The Phoenix Mills Ltd 1,366.75 -0.05 117.64 2,584.80 28.02 Vodafone Idea Ltd 6.70 -5.23 13.35 Loss NA

Dalmia Bharat Ltd 1,767.75 -0.03 21.29 -48.18 29.24 Prestige Estates Projects Ltd 410.85 -2.18 26.47 178.49 24.83 Wipro Ltd 402.55 0.94 16.21 -15.40 16.60

Loss means losses in both the periods. NA: not available.

Sales growth and net profit growth have been calculated for the first half of 2022-23 over the first half of 2021-22. Price-to-earnings ratios and price-to-book ratios are the estimates for 2023-24. Source: CRISIL,CAPITALINE, Bloomberg, BSE,
LIVEMINT.COM
Thursday, 2 February 2023
MuMbai 19

KEY STAT
BUDGET POINTERS
DATA AS EVIDENCE KEY ALLOCATIONS TO MOSPI

WHY IT MATTERS Census surveys and statistics
2019-20
Investment in planning and statistics contributes Capacity development
to contextual and accurate data collection. This, in 2020-21
MoSPI: Ministry of Statistics and
turn, should form the basis of the knowledge Programme Implementation.
2021-22
governments use to develop various schemes and Data is revised estimates for
benefits. The decennial Census did not happen in 2022-23 and budget estimates
for 2023-24.
2022-23
2021, as scheduled. Even key sample surveys have
seen a pullback. 2023-24
Source: Budget documents
15
(In ₹ crore) Allocation to core survey and
statistics under MoSPI, which had
stagnated, has been hiked 26% over
2022-23.
The pending Census looks unlikely this
fiscal too. Of the ₹3,433 crore allocated NUMBER OF DECENNIAL
in 2022-23 to the home ministry
CENSUSES—THE MOST EXHAUSTIVE
principally for Census 2021, only ₹504 DATA COLLECTION EXERCISE ON
crore was spent. In 2023-24, ₹1,504 INDIANS—THAT HAPPENED ON
0 500 1,000 1,500 2,000 crore has been allotted. SCHEDULE, BEGINNING 1872. THE
CHAIN WAS BROKEN IN 2021.

FMCG PHARMA AND HEALTHCARE ROADS

PROPOSALS: There are no major direct PROPOSALS: Budgetary allocation has PROPOSALS: Gross budgetary support
proposals for the sector, but the govern- been increased on healthcare by 12.6%, for the ministry of road transport and
ment has announced the setting up of an compared to FY23 (RE); promotion of highways increased by 25% to ₹2.59 trillion
agriculture accelerator fund; increase research and development in pharma and for FY24 from ₹2.06 trillion in FY23 (RE);
decentralised storage capacity; and medical devices; setting up nursing col- allocation to NHAI increased by 15% to
increase focus on encouraging organic leges and courses on medical devices ₹1.62 trillion in for the next fiscal, nil bor-
farming. NCCD on specified cigarettes rowing programme for NHAI to continue;
have been revised upwards by 16%. IMPACT: With the roll out of the pro- the monetisation proceeds from roads
grammes to promote R&D in pharmaceuti- expected at ₹35,000 crore; higher by 250%
IMPACT: The agriculture accelerator fund cals through centres of excellence, and from FY23 (RE)
and increasing storage capacities will bring making select ICMR lab facilities across
in modern technologies to transform India available for private sector are IMPACT: The Centre significantly
agricultural practices, boost production progressive steps towards improving increased allocation to the roads sector to
and supply chain efficiencies. Since NCCD public-private partnerships, and overall meet the completion targets for Bharat-
is a small percent of the tax structure for thrust on R&D. Setting up nursing colleges mala and NIP. NHAI achieved its ₹10,000
cigarettes, 16% hike will not have a material and introducing courses on medical devi- asset monetisation target for FY23 (RE).
impact on cigarette sales. Rise in disposa- ces will increase availability of skilled With a target at ₹35,000 crore for FY24,
ble income due to savings in personal manpower—a positive given the severe the target seems ambitious despite strong
taxation may spur consumer spending. shortage of skilled manpower in India. appetite for operational road assets.

Net Net Net

Closing Sales Price-to- Closing Sales Price-to- Closing Sales Price-to-
Change profit Change profit Change profit
Company price growth earnings Company price growth earnings Company price growth earnings
(in %) growth (in %) growth (in %) growth
(in ₹) (in %) ratio (in ₹) (in %) ratio (in ₹) (in %) ratio
(in %) (in %) (in %)

Hindustan Unilever Ltd 2,571.05 -0.25 17.79 17.95 52.02 Sun Pharma* 1,016.90 -1.75 11.58 23.83 24.87 Dilip Buildcon Ltd 209.65 -1.96 17.67 Loss 7.40

Nestle India Ltd 19,105.00 0.47 12.70 -2.70 54.34 Divi’s Laboratories Ltd 3,355.85 1.16 4.08 2.75 35.80 IRB Infra* 281.30 -1.68 5.71 292.70 21.16

Britannia Industries Ltd 4,369.30 1.19 15.72 7.36 49.03 Cipla Ltd 1,032.05 1.48 1.10 3.45 21.69 NBCC (India) Ltd 35.75 -2.46 16.22 -17.31 17.83

Dabur India Ltd 562.00 0.78 7.00 -1.20 44.18 Dr Reddy’s Laboratories Ltd 4,350.50 0.61 7.85 67.36 17.14 Rites Ltd 341.00 -5.46 12.81 12.03 12.53

Godrej Consumer Products Ltd 926.65 1.52 7.53 -21.13 42.88 Apollo Hospitals Enterprise Ltd 4,270.00 0.34 7.61 -29.30 45.65 Ircon International Ltd 57.70 -4.23 59.11 48.30 8.68

*Sun Pharmaceuticals Industries Ltd *IRB Infrastructure Developers Ltd. Loss means losses in both the periods.

PORTS AND SHIPPING SUGAR AUTOMOBILE

PROPOSALS: Identification of 100 critical PROPOSALS: Exemption on BCD levied PROPOSALS: Sharp increase in capex
transport infrastructure projects for last- on denatured ethyl alcohol imports; new outlay; identification of critical transport
and first-mile connectivity for ports, coal, co-operatives to start manufacturing by 31 projects for first- and last-mile connectiv-
steel, fertilizer, and food grain sectors, to April can be taxed at 15%; sugar co-opera- ity; relaxation in personal income tax
be taken up on priority with an investment tives permitted to claim payments made rates; and thrust on green energy.
of ₹75,000 crore, including ₹15,000 crore to farmers prior to AY17 as expenditure;
from private sector; promotion of coastal measures to promote use of biogas IMPACT: A sharp 33% increase in capital
shipping for both passenger and freight outlay, increasing commitments on infra-
segments, through the PPP mode with IMPACT: In line with the commitment for structure projects and relaxation in per-
viability gap funding. blending 20% ethanol with petrol by 2025, sonal tax rates are key positives. Thrust on
the BCD exemption will allow need-based green energy projects continues with
IMPACT: The proposals are positive for imports. The budget announcements specific budgetary allocation for old
the sector as they will increase the share regarding taxation pertain to cooperatives vehicle scrappage, energy transition, and
of coastal shipping in multi-modal trans- are not likely to have any impact on the viability-gap funding for battery storage
portation mix, thus improving capacity private sector. Measures to promote the solutions. Customs duty exemption on
utilization of ports. Furthermore, support offtake of biogas would create additional import of capital assets for manufacturing
for last-mile and first-mile connectivity at revenue streams for sugar mills, which may lithium-ion cells for battery packs will
ports will also help in easing congestion use press mud, and other by-products, for facilitate the development of the EV
and improving efficiency. generation of biogas. ecosystem and aid faster penetration.

Net Net Net

Closing Sales Price-to- Closing Sales Price-to- Closing Sales Price-to-
Change profit Change profit Change profit
Company price growth earnings Company price growth earnings Company price growth earnings
(in %) growth (in %) growth (in %) growth
(in ₹) (in %) ratio (in ₹) (in %) ratio (in ₹) (in %) ratio
(in %) (in %) (in %)

Gujarat Pipavav Port Ltd 91.75 -2.29 22.88 67.89 14.23 Balrampur Chini Mills 369.50 -2.17 -6.84 P/L 11.53 Maruti Suzuki India Ltd 8,761.05 -1.46 49.13 227.34 23.57

Adani Ports and SEZ* 492.15 -19.69 15.30 27.94 15.35 TEIL* 271.15 -4.93 22.15 687.04 12.92 Mahindra and Mahindra Ltd 1,352.20 -1.91 43.41 111.19 19.30

Cochin Shipyard Ltd 483.60 -5.44 9.60 -3.11 12.96 Dhampur Sugar Mills Ltd 216.10 -3.91 42.36 -9.66 8.51 Tata Motors Ltd 446.65 -1.22 19.13 Loss 15.52

Gateway Distriparks Ltd 62.95 -2.40 5.64 28.87 13.68 Shree Renuka Sugars Ltd 49.65 -3.87 84.38 Loss 137.57 Bajaj Auto Ltd 3,808.25 -0.28 13.32 -10.19 16.45

Mazagon Dock Shipbuilders Ltd 743.80 -6.22 41.24 236.63 14.65 EID-Parry (India) Ltd 541.45 -0.21 63.01 37.51 18.18 Eicher Motors Ltd 3,300.00 1.03 62.99 107.68 25.14

*Adani Ports and Special Economic Zone Ltd P/L: profit to loss; Loss means losses in both the periods. *Triveni Engineering and Industries Ltd Loss means losses in both the periods.

HOTELS AVIATION AND LOGISTICS CAPITAL GOODS

PROPOSALS: Focus on improving infra- PROPOSALS: Setting up 50 additional PROPOSALS: The budget proposed an
structure including last-mile and rural; airports, heliports, water aerodromes, and overall capex of ₹13.7 trillion; allocated
50 more airports and heliports to be advance landing grounds for improving ₹2.4 trillion for the Railways, and ₹35,000
revived for improving regional air connec- regional air connectivity; thrust on pro- crore towards energy transition. It also
tivity; promotion of theme-based tourist moting tourism through development of made allocations for inter-state transmis-
circuits, improving tourist security, crea- associated infrastructure; focus on first- sion system from Ladakh, reforms-linked
tion of a tourism app, and enhancing and last-mile connectivity through 100 distribution scheme, KUSUM and steps to
ease-of-doing business, apart from skill transport infra projects, with a capital promote usage of biogas and biomass-
development have been proposed. outlay of ₹75,000 crore. based energy

IMPACT: The measures announced in the IMPACT: Improvement in regional air IMPACT: The continued thrust on capital
budget are likely to boost demand for connectivity will boost domestic aviation expenditure is likely to boost the order
tourism in the medium term, which in turn sector. Furthermore, promotion of tour- books of capital goods companies, includ-
will raise demand for the hotels sector. The ism through development of tourist desti- ing EPC contractors. Higher allocations for
improvement in tourist security, availabil- nations will spur both domestic and inter- reforms-linked, result-oriented capex
ity of adequate information and skill national air travel. Thrust on first- and last- scheme; allocation of ₹35,000 crore
development will enhance tourist experi- mile connectivity will provide the neces- towards energy transition, as well as for
ence. Ease-of-doing business will lead to a sary boost to the logistics sector by ensur- ISTS from Ladakh, will also support growth
pickup in launch of new hotel properties. ing seamless movement of goods. prospects of the capital goods sector.

Net Net Net

Closing Sales Price-to- Closing Sales Price-to- Closing Sales Price-to-
Change profit Change profit Change profit
Company price growth earnings Company price growth earnings Company price growth earnings
(in %) growth (in %) growth (in %) growth
(in ₹) (in %) ratio (in ₹) (in %) ratio (in ₹) (in %) ratio
(in %) (in %) (in %)

Indian Hotels Co. Ltd 326.60 8.67 132.89 L/P 39.94 InterGlobe Aviation Ltd 2,075.25 -2.33 194.27 Loss 18.59 Siemens Ltd 2,953.95 0.84 26.92 106.41 50.10

EIH Ltd 174.65 7.48 143.95 L/P 40.07 Delhivery Ltd 304.95 1.14 25.80 Loss NA Bharat Heavy Electricals Ltd 75.60 -3.69 22.83 Loss 32.66

Chalet Hotels Ltd 354.20 0.43 155.55 L/P 33.28 Blue Dart Express Ltd 6,130.10 -2.69 31.60 74.38 30.26 Thermax Ltd 1,962.00 1.93 47.91 29.00 38.18

Lemon Tree Hotels Ltd 80.80 5.76 179.58 L/P 39.16 Allcargo Logistics Ltd 416.00 -0.73 30.24 38.00 12.77 ABB India Ltd 2,794.90 -1.12 14.30 -8.60 54.93

Mahindra Holidays* 262.85 2.50 31.17 88.07 35.48 SpiceJet Ltd 35.25 -0.56 78.80 Loss 6.81 Larsen and Toubro Ltd 2,144.55 0.92 22.63 31.30 22.06

*Mahindra Holidays and Resorts India Ltd. L/P: loss to profit. Loss means losses in both the periods. NA: not available. Loss means losses in both the periods. .

Sales growth and net profit growth have been calculated for the first half of 2022-23 over the first half of 2021-22. Price-to-earnings ratios and price-to-book ratios are the estimates for 2023-24. Source: ICRA , CAPITALINE, Bloomberg, BSE,
20 ThuRsday, 2 FebRuaRy 2023
MuMbai
LIVEMINT.COM

KEY STAT
BUDGET POINTERS
SELL TO THE WORLD INDIA'S TRADE DEFICIT

41
Budget 2023 aims to simplify the
Trade deficit from goods and services ($ bn) customs duty structure, reducing
WHY IT MATTERS 160
Producing more is one thing. To sell more, India needs to the number of rates from 21 to 13.
118
look outside. With the global economy seeing a possible 120 It also provides customs duty relief
slowdown due to rising interest rates, expanding exports
in the coming months will be a challenge. Meanwhile, for
80
126 or reductions to some sectors like
mobile phones, TV manufacturing
%
THE LIKELY Y-O-Y INCREASE IN TRADE
April-December 2022, the y-o-y growth in imports (20%) 40 and lab-grown diamonds to enable DEFICIT (IN SERVICES AND GOODS) IN
topped that in exports (14%), increasing the trade deficit. them to import essential inputs at
0 DOLLAR TERMS FOR 2022-23 IF THE
The latest figures, for December 2022, show exports 2013-14 2022-23 lower costs.
CURRENT PACE OF GROWTH IN
falling 5.3% over a year ago. Note: Trade deficit is the amount by which imports exceed exports. Data for 2022-23 for first nine months. Source: Reserve Bank of India, Department of Commerce EXPORTS AND IMPORTS CONTINUES.

Higher excise duty to marginally increase cigarette prices in FY24

Suneera Tandon In her budget speech, the FM Union Budget for FY21, when ended 2.61% up on the BSE on tations, and we expect legal cig- years,” said Abneesh Roy, exec- rettes lead to higher sales of Jefferies analysts said the
suneera.t@htlive.com proposed to increase the NCCD the duty on the lowest length Wednesday, after dip- arette players to gain utive director, institutional illegal cigarette packs. over 2% effective tax hike on
NEW DELHI on certain categories of ciga- segment was raised from ₹90 ping 6% intraday. share from the ille- equities, Nuvama Wealth Man- With the rise in tax, compa- cigarettes is a key positive for
rettes by about 16%, after per thousand sticks to ₹200, “A 16% hike in Cigarette gal ones. It also agement. nies could pass on small price ITC Ltd, considering the com-

C
ome 1 April, smoking
will not just be injurious
to your health, but will
also burn a hole in your pocket.
With finance minister Nirmala
Sitaraman’s proposal to raise
the National Calamity Contin-
gent Duty (NCCD) on ciga-
rettes, the prices are likely to go
up by 1-3%, said analysts.
almost three years.
NCCD is an excise duty lev-
ied on certain manufactured
goods at specific rates in addi-
tion to other duties of excise
chargeable on the goods under
the Central Excise Act, 1944.
To be sure, NCCD on ciga-
rettes and other tobacco prod-
ucts was last increased in the
and from ₹235 per thousand
sticks to ₹735 for the longest
segment.
However, analysts tracking
the sector, said the proposed
increase this time is likely to
have negligible impact on ciga-
rette prices.
Shares of ITC Ltd, the largest
cigarette company in India,
NCCD on ciga- lends visibility to According to Roy, legal ciga- hikes to consumers. “Net tax on pany’s strong pricing power.
rettes for FY24 companies higher volume rette firms have gained market cigarettes would increase by Tobacco and tobacco prod-
is a step in the will need growth in share from illegal players, given 0.07 a stick to 0.12 a stick, ucts contribute nearly ₹53,000
right direction to raise the FY24. Cigarette no tax hikes for two consecu- which would require a 1-3% crore to the tax revenues of the
as this will lead companies will tive years. Given the nominal price hike for cigarettes in dif- central government annually.
to a nominal tax prices need to increase overall tax hike in the budget ferent categories. The increase Formal sector companies that
increase, bringing by 2–3% prices by 2-3%— for 2023-24, we expect this in taxes is not very high and sell legal tobacco products con-
stability in taxation. not a big ask since momentum to sustain, he said. would be easily passed on by a tribute a very high proportion
This increase is lower legal cigarette prices have The industry has been of the small increase (1-3%) in prices,” of tax revenues, but account for
than the Street’s and our expec- not risen a lot over the past two view that high taxes on ciga- said analysts at ICICI Securities. only 8% of consumption.

Tourism operators
Will the Budget boost upset over cuts in
household consumption? publicity funding
Varuni Khosla ment said, but did not divulge
varuni.k@livemint.com give any further details.
NEW DELHI According to industry insid-
In rural markets, consumers ers, the Centre has missed the

B
udgetary allocation for opportunity to back the Indian
have been shying away from the tourism sector for tourism industry, considering
2023-24 have failed to that many countries like China
discretionary spending boost sentiments of the hospi- are still reeling under a covid
tality industry, including tour scare, resulting in lower footfall
operators. The Centre’s deci- of foreign tourists. “Interna-
sion to cut the outlay for over- tional travellers cannot visit
Suneera Tandon & Alisha Sachdev seas promotional activity, such China, and India should have
NEW DELHI as Incredible India campaign, taken steps to use that opportu-
by over 50%, came under criti- nity. Instead, we are going to

B
udget announcements could spur cism by industry executives. miss out since we have slashed
domestic demand for small appli- In fact, government funding our overseas tourism promo-
ances, packaged goods, as well as for overseas tourism promo- tion budget by more than half.
small cars and two-wheelers, but tions has been declining over The tourism budget depends
will do little to shore up demand the years, from ₹524 crore in on this one-line item. This year
in rural India, industry experts and analysts 2021-22 to ₹341 crore in FY23 could have been a great oppor-
said about the government’s last full-budget and ₹167 crore for FY24. How- tunity for a tourism boom for
before the general elections in 2024. ever, a large sum of money has India,” said Dipak Deva, man-
High inflation has long been plaguing the been allocated for developing aging director, Travel Corp. of
Indian household con- pilgrimage destinations, up India Ltd.
sumption, especially in 66% from ₹150 crore in Deva said he was
KEY rural markets, wherein FY23, to ₹250 expecting at least
ANNOUNCEMENTS consumers are trying to crore in FY24. Swadesh ₹750 crore for the
focus on daily expenses However, industry with a
₹2TN to supply free food while shying away from overall alloca- Darshan has majority being
grain to all Antyodaya and discretionary spending. tions for tour- bagged almost spent on digi-
priority households for the While commodity ism sector tal mediums,
next year under PMGKAY. inflation has softened of remains flat at half of the travel shows
late, cost of raw materi- ₹2,400 crore, tourism and marketing
NATIONAL CALAMITY als such as cereals, milk, compared to the budget tourism destina-
Contingent Duty on and pulses is still up FY23 outlay. That tions.“With such a
cigarettes revised upwards 25-40% over last year. said, so far in FY23 small allocation, we
by about 16%. Overall, firms were only ₹1,343 crore was can’t have a big bang
forced to pass on the spent for promoting tourism, impact on tourism. I don’t think
OVERSEAS PROMOTIONS price hikes to consum- and only ₹60 crore out of the we can go back to $30 billion
budget slashed by 51%. ers, which in turn, hurt ₹341 crore was spent on over- forex earnings that we had in
demand.Conse- seas promotions. An equivalent FY21,” Deva added.
INCREASE IN TCS from 5- quently, while sale of amount was spent on domestic The Incredible India cam-
20% for those who buy passenger vehicles was campaigns, instead of the allo- paign which started in 2002 to
foreign tour packages from at record highs in 2022, cated ₹75 crore. promote tourism has been off-
India. demand for entry-level More than 50% of the tour- line since 2020. A huge blow
cars was on a decline. ism budget has been allocated was also dealt to tour operators
ALLOCATION FOR Tourism “The adjustment in to Swadesh Darshan scheme, who help tourists plan interna-
remains same at ₹2400 cr. personal income tax The Reserve Bank of India’s bi-monthly consumer confidence surveys show that consumer confidence is improving from the lows of which was launched in 2014-15 tional holidays. Tax collected at
rates will not have too May 2021—the second wave of the covid-19 pandemic. While pent-up demand is now driving purchases of both goods and services, for integrated development of source (TCS) for Indians plan-
50 TOURIST destinations much effect on demand the question is if this momentum would sustain. theme-based circuits, as sus- ning international holidays
will be selected through for cars. (The additional tainable and responsible tour- through local travel operators
challenge mode. saving) is not such a ism destinations within India. has been increased fourfold
large amount. People So far, 76 projects have been from 5% to 20%.
have other uses for money, especially when gava said. “We see some small demand com- schemes could effectively lead to lower “The budget is progressive with a focus on sanctioned under the scheme Subhash Goyal, chairperson
they have been cutting down on necessities. ing from them scrapping of old government cash-in-hand for rural consumers who form growth, infrastructure investment and the across 13 circuits. The govern- of the Confederation of Tour-
The extra money in hand will not give them vehicles, but if the government can allocate a large majority of two-wheeler buyers. agrarian economy,” said Kamal Nandi, busi- ment said it will develop 50 ism Professionals, said the tax
extra purchasing power. Benefit for people in some funds for replacing private cars, it will “The budget proposals around capital ness head & executive vice president, Godrej new tourist sites ensuring high rate hike will hit businesses. “It
the ₹15-lakh category is not significant. The aid demand even more,” he added. expenditure, agri-credit, infra development Appliances. Large appliance sales remained standard of food, streets, secu- will result in Indian travellers
impact of negative income growth and infla- Two-wheeler demand could see a boost credit, and lower tax slabs will result in muted last year. “Along with cooling com- rity and other amenities. opting for international web-
tion has to be taken care of,” R.C. Bhargava, with lower-income groups benefitting from higher disposable income and help the modity costs, it could reverse the trend this Destinations will be devel- sites instead of domestic servi-
chairman, Maruti Suzuki, said.The budget the income tax cuts. However, the govern- growth of the auto sector,” Pawan Munjal, year,” Nandi said. oped both for foreign as well as ces to buy packages for over-
will promote investment and growth, Bhar- ment’s decision to cut spending on rural chairman and CEO, Hero MotoCorp, said. suneera.t@htlive.com domestic tourists, the govern- seas travel ,” said Goyal.

CATERING TO GROWTH, BOOSTING CONSUMPTION AND DIGITAL INDIA DREAM

EXPERT
VIEW
Sau G ata G u p ta
Respond to this column at
feedback@livemint.com
S
ince 2020, there has been a significant amount of uncer-
tainty across the world from covid-19, and its various vari-
ants, to the Russia-Ukraine war, as well as the cost-of-living
crisis across the world. In the face of these global challenges,
India has come out strong. However, FY24 is shaping into a semi-
nal year for the country’s economy as we move to the next phase
of growth. The Union Budget, therefore, has the all-important
task of furthering India’s growth story, while making the country
more resilient for the years to come.
The question is, did this budget meet this ask?
In my mind, The finance minister’s fifth Union Budget hits the spur growth in retail and fast-moving consumer goods sectors. ical and digital strengths, with an acute focus on spurring the
mark perfectly, by addressing some critical points to uptick credit A budget championing India’s growing infrastructure entrepreneurial spirit within the country. This will help the next
growth, boost consumption and growth, focus on infrastructure To paraphrase finance minister Nirmala Sitharaman, this
development and furthering the vision of digital India, along with Union Budget is a blueprint for India@100. Infrastructure devel-
generation of Indians prepare for the future, while also creating
more jobs and holistically propelling India further on the global
some key incentives for the agricultural and educational opment and growth are going to be seminal for that ‘India stage. This budget will also help sustain the momentum of ‘Make
sectors. Overall, I believe the budget has several @ 100’ vision. In my opinion, this budget has in India’, especially in the area of electronic gadgets and other
inclusive measures and policies that balance con- addressed this by focusing on the key areas that will adjacent categories.
sumer needs.
This budget aid India’s growth. First, the impressive capital The added benefits for startups operating in the agricultural sec-
Empowering a consumer-led economy also will outlay of ₹2.40 trillion for the Indian Railways, tor, has been another key standout point. I see this as the beginning
Clearly, one of the biggest takeaways from the help sustain along with the added investments towards 100 of the next phase of the Indian agricultural journey— where the
Budget for FY24 has been the revision of the tax critical infrastructure projects for key industries youth will bring modern, sustainable and more profitable farming
the momentum
slabs in the new tax regime. Extending the tax including transport, steel and coal, etc, will defi- practices and technologies to the forefront of the industry.
exemption to individuals who have an annual of ‘Make in nitely help bolster the infrastructure of the coun- With such key measures, I believe, that this Budget has accom-
income below ₹7 lakh, provides more money in India’ try. In my opinion, this will help India become plished the most important task of all — taking that crucial step
the hands of consumers, thereby helping stimulate more future forward, and create more jobs, espe- forward to grow and strengthen the Indian economy. The Union
consumption sentiment and drive growth. cially when the significant boost in capex is almost 33%. Budget FY24 can lead India towards great heights, by furthering
A higher consumption sentiment will in turn lead to Dialling up digital and entrepreneurial spirit our infrastructure, spurring consumption and creating more jobs
heightened spending behaviour across urban dna rural house- What stood out for me is how, with this budget, the finance across sectors. Overall, this Budget, with the right execution, has
holds. At the same time, revised tax slabs will incentivise Indians minister has touched upon areas such as artificial intelligence the potential to be a game-changer for the Indian economy for
to move to the new regime, as it helps them save more over the and technology in a very comprehensive manner. This Budget the next 25 years.
long term. This, I believe, will begin revitalising the economy and has provided a focus on the development of India’s AI, technolog- Saugata Gupta is MD & CEO, Marico Limited
LIVEMINT.COM
Thursday, 2 February 2023
MuMbai 21

JUBILANT FOODWORKS LIMITED

CIN: L74899UP1995PLC043677
Regd. Office : Plot No. 1A, Sector – 16A, Noida – 201301 (U.P.)
th
Corporate Office – 15 Floor, Tower-E, Skymark One, Plot No. H-10/A, Sector 98, Noida, Uttar Pradesh 201301
Contact No: +91-120-6927500; +91-120-6935400, E-mail: investor@jublfood.com, Website: www.jubilantfoodworks.com
STATEMENT OF STANDALONE AND CONSOLIDATED UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2022
(Figures-INR in Lakhs, Unless Otherwise Stated)
STANDALONE RESULTS CONSOLIDATED RESULTS
For the quarter ended For the nine months ended For the year For the quarter ended For the nine months ended For the year
Sr. ended ended
st th st
No. PARTICULARS 31 Dec 30 Sep 31 Dec 31st Dec 31st Dec 31st March st
31 Dec th
30 Sep st
31 Dec 31st Dec 31st Dec 31st March
2022 2022 2021 2022 2021 2022 2022 2022 2021 2022 2021 2022
Unaudited Unaudited Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Unaudited Unaudited Audited
1 Total Income from Operations (net) 131,664.43 128,677.18 119,350.43 384,368.11 317,321.33 433,109.98 133,181.47 130,148.92 121,077.37 388,839.99 322,014.83 439,612.29
2 Net Profit for the period/ year (before Tax, Exceptional 11,942.45 16,192.59 18,312.21 44,551.52 43,533.27 58,928.04 11,146.46 17,450.18 17,917.37 43,531.82 43,651.69 57,058.58
and / or Extraordinary items)
3 Net Profit for the period/year before Tax 11,942.45 16,192.59 18,302.53 41,887.62 42,839.98 58,195.50 11,146.46 17,450.18 17,907.69 43,531.82 42,958.40 56,326.04
(after Exceptional and / or Extraordinary items)
(Refer Note 3)
4 Net Profit for the period/ year after Tax 8,857.45 11,916.57 13,732.79 30,869.75 32,140.95 43,752.21 8,036.39 13,152.98 13,319.54 32,448.00 32,208.09 41,808.83
(after Exceptional and / or Extraordinary items)
5 Total Comprehensive Income for the period/ year
[comprising Profit for the period after Tax and Other 4,087.20 12,568.34 24,186.31 21,245.78 62,334.29 68,052.36 1,728.53 15,885.54 23,971.94 23,343.32 61,708.50 62,929.66
Comprehensive Income after Tax]
6 Equity Share Capital 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90
7 Reserves excluding Revaluation Reserve as at Balance
Sheet date 197,153.12 181,299.93
8 Earnings per share (after exceptional items)
(of INR. 2/- each) (Refer Note 4)
a) Basic (in INR.) 1.34 1.81 2.08 4.68 4.87 6.63 1.22 1.99 2.03 4.92 4.90 6.37
b) Diluted (in INR.) 1.34 1.81 2.08 4.68 4.87 6.63 1.22 1.99 2.03 4.92 4.90 6.37
Notes :
1. These unaudited financial results have been prepared in accordance with the recognition and measurement principles as laid Exceptional items in the quarter and nine months period ended 31st December, 2021 and in the year ended 31st March, 2022
down in the Indian Accounting Standards (referred to as“Ind AS”) prescribed under Section 133 of the Companies Act, 2013 read include costs incurred by the Company to support its employees, associates and their dependents during COVID-19 pandemic.
with Companies (Indian Accounting Standards) Rules as amended from time to time, to the extent applicable. The above These includes assistance to families of deceased employees and associates, vaccination of employees, associates and their
unaudited standalone and consolidated financial results were reviewed by the Audit Committee and approved by the Board of dependents, quarantine facilities for COVID-19 impacted employees and associates, etc.
st
Directors of the Company at their meetings held on 01 February, 2023. The statutory auditor’s report on review of interim th
4. During the quarter ended 30 June, 2022, the equity shares of the Company were split/ sub-divided such that each equity share
st
standalone and consolidated unaudited financial results for the quarter and nine months ended 31 December, 2022 is being having face value of INR 10/- (Rupees Ten only) fully paid-up, was sub-divided into five (5) equity shares having face value of
filed with the BSE Limited and National Stock Exchange of India Limited. th
INR 2/- (Rupees Two only) each, fully paid-up with effect from 20 April, 2022 (Record Date). The Earnings Per Share (EPS)
2. The Company’s business activity falls within a single business segment i.e. Food and Beverages in terms of Ind AS 108 on numbers of the quarter and nine months ended 31st December, 2021 and of the year ended 31st March, 2022 presented above
Segment Reporting. have been restated to give effect of the share split.
3. The Company has investment in its wholly owned subsidiary viz Jubilant FoodWorks Lanka (Private) Limited (JFLPL) having 5. The above is an extract of detailed format of unaudited financial results for the quarter and nine months ended 31st December, 2022
operations in Sri Lanka. Considering significant changes in economic environment of Sri Lanka resulting into rising inflation, filed with the Stock Exchanges under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
depletion of forex reserves, depreciation of currency, and other economic and political uncertainties, the management had 2015. The full format of the unaudited financial results are available on the Stock Exchanges websites (www.bseindia.com
th
recorded an impairment charge of INR 2,663.90 lakhs in the quarter ended 30 June, 2022 which is shown under exceptional and www.nseindia.com) and on Company’s website (www.jubilantfoodworks.com).
items in the nine months period ended 31st December, 2022. For and on behalf of the Board of Directors of
JUBILANT FOODWORKS LIMITED
Sd/-
HARI S. BHARTIA
Place: Noida CO-CHAIRMAN & DIRECTOR
st
Date: 1 February, 2023 DIN No. 00010499
22 ThurSday, 2 February 2023
MuMbai
OUR VIEW
Maximum government
may well be here to stay
The budget’s huge outlays will stretch our pandemic fiscal expansion into next year’s election
season. Given the risks of a sustained big-state policy, put it down to a political preference
T
he hypothesis that politics invaria-
bly gets in the way of economics as
national elections approach was put
to a special test by the Union Budget
for 2023-24, presented in Parlia-
ment by India’s finance minister
Nirmala Sitharaman. It was billed as our first
‘Amrit Kaal’ budget, but its context had two big
pattern-breakers. Unlike the usual half-decade
cycle of a Lok Sabha term, with sarkari largesse
kept for the final year, a pandemic had forced an
early fiscal expansion that satisfied the original
purpose of deficit spending—as a tool of eco-
nomic revival and not a revdi dispenser—but
also reduced space for the Centre to go on a
pre-poll spree (without being reckless). This
constraint, however, was accompanied by a
political rarity: the Bharatiya Janata Party’s
confidence in securing a third mandate on a trot
in 2024. Together, these argued for the econ-
omy’s long-term interests to be held above the
electoral fray. While this called for a markedly
better balanced budget for post-pandemic
stability, what we got was a cursory nod, with
the state playing allocator-in-chief of capital.
Covid had pushed the Centre’s fiscal deficit to
9.2% of GDP in 2020-21. Although our annual
gap between inflows and outgoes—likely to be
6.4% this year on an enlarged base after two lost
years—is projected half a point lower at 5.9% of
GDP for 2023-24, it still indicates an expense
bloat. The state admittedly does have a worthy
role in public welfare, climate action and other
fields. Its proliferation of programmes, how-
ever, is not just populist, but given to grandeur
in its role as an incubator of enterprise. Its infra
splurge as an investor of last resort is set to take
another leap. Its outlay on capital expenditure
has been upped by a third to ₹10 trillion, or 3.3%
It’s more pragmatic than populist in the final analysis
AJIT RANADE
T
here were several factors weighing on
expectations from the Union Budget
for 2023-24. The big one was that this
was going to be the last opportunity to
present a full budget plan before the
national elections of 2024. So, was it going to
be full-throttle populist? Or is 15 months
before elections too early to spend political
is a Pune-based economist
and fiscal capital? Thankfully, the budget is
far from populist. The fiscal deficit, targeted
below 6% of GDP, is quite realistic. Although
it could have been stretched some more,
since the fiscal situation is dire. The govern-
ment debt to GDP ratio is above 85%, and
gross borrowings of ₹15 trillion (i.e. more
than 40% of tax revenues) will take that
mountain even higher. This will keep inter-
est rates higher, the pain of which is felt most
by the biggest borrower in the system, which
is the central government. So fiscal consoli-
dation is an imperative and a perennial
missed opportunity. Another thing to
remember in a year when inflation is still
raging is that you can’t use excess spending
PTI
Sitharaman’s budget does well to
strike the Pareto efficiency mark
It pleases economists, bankers, corporates and individuals without leaving other classes worse off
MADAN SABNAVIS
is chief economist, Bank of Baroda, and
author of ‘Lockdown or Economic
Destruction?’
E
conomists always try to balance
their view with hits and misses
while analysing the budget. When
one looks at the one presented for
2023-24, it literally fits the bill of being
a Pareto optimal budget, a state when
no one really is worse off but some sec-
tions are better placed. This budget has
pleased the sensibilities of all classes.
Let us see how this has been done.
Economists will be happy that the
fiscal deficit is on a path of prudence.
The ratio is to come down from 6.4% of
gross domestic product (GDP) to 5.9%,
which means that the 4.5% mark is not
of GDP. It is expected to boost growth, multiply really far away, and if conditions across
incomes, perk up consumption, rouse ‘animal the world remain stable, it could be
achieved by 2025-26, as is currently
spirits’, ‘crowd in’ private investment and yield being targeted by the government.
a revenue upsurge that’ll help tighten the fisc Bankers will be pleased that while the
to 4.5% of GDP by 2025-26. This is plausible, deficit is at ₹17.86 trillion, the Centre’s
granted, and it sure beats the profligacy of leaky net market borrowing planned is at ₹11.8
outlays, but the pullback of this path is so slow trillion, which is similar to 2022-23’s.
This means that there will be no extra
that it transforms our covid-rescue plan into pressure on liquidity in the market,
policy as usual. This plainly reveals a political given that presently there is some strain
preference, not just in how it privileges statist in the system. This has assuaged the
projects—industrial incentives included—over bond market, as seen in yields coming
market orientation, but also how it downplays down, albeit marginally, after these
numbers were announced. This num-
the patchy results so far of our crowd-in game. ber will also provide comfort to the
It’s an inclination that will pose risks as we go Reserve Bank of India (RBI), which
along. True, government debt is off its 90%-of- comes up with its monetary policy next
GDP pandemic peak, but our payback burden is week. In fact, if takeaways of the latest
a drag on fiscal efficacy, even as today’s uneven Economic Survey are combined with the
fiscal math of the budget, RBI will be
demand scenario masks price pressures that
could flare up to make credit dearer and crowd
out the efficiency of private enterprise.
A loose fisc for too long can cause instability,
as we saw about a decade ago. The Narendra
Modi administration that took charge in 2014
had pitched for “minimum government”, with www.livemint.com
fiscal excesses to be minimized. Of course, it is
within its rights to revise its strategy in favour
of central plans. Growth does need some props, SENSEX 19,781.19 ®
ETIHAD DEAL
Jet won’t cede
after all, and state-driven value generation has
management
control: Goyal
always had its advocates. Whether it’s our best
Aviation ministry
official says the two
companies will apply
way ahead is the question we must confront.
for FIPB approval in
maybe one week
B Y T ARUN S HUKLA & ber, outpacing the benchmark
P .R . S ANJAI
·························
NEW DELHI/MUMBAI
J et Airways (India) Ltd,
And what about India’s fiscal responsibility law;
which is in advanced talks
with Etihad Airways PJSC
to sell a 24% stake, will not
cede management control to
the United Arab Emirates firm,
Jet Airways chairman Naresh
Goyal has clarified.
Etihad, with its investment
into the nation’s second-larg-
is it still relevant? It has not been scrapped,
est airline, will secure a seat on
the board of Jet Airways and
have a say in the induction of
some key executives, subject to
regulatory and security ap-
provals, consultancy Centre
for Asia Pacific Aviation said in
a Thursday report.
As a result, Goyal will relin-
but its escape hatch was exercised yet again:
quish full control and move to
a shared management struc-
ture, the 31 January report
said.
“No. Don’t worry,” Goyal
said on Friday after a meeting
with aviation ministry officials
in New Delhi when he was
queried on the matter.
“The fiscal policy stance has been to make the
Goyal met ministry officials
with Etihad chief executive of-
ficer James Hogan and other
executives. Nikos Kardasis,
chief executive officer of Jet
Airways, was not present.
The stake sale seems to be a
done deal, an aviation ministry
official said after the Friday
domestic economy more resilient to exogenous
meeting.
“Goyal introduced Etihad as
its new partner,” the official
said, requesting anonymity.
“They will move very fast on
applying to FIPB (Foreign In-
vestment Promotion Board)
now, maybe in one week.”
shocks and to mitigate the risks of global eco-
The Indian government in
nomic downturn.” Suitably reworded, though,
a stance like this can be taken anytime—come
Mint is also available for R7 with
Hindustan Times in Delhi-NCR only
health crisis or high voter visibility.
MY VIEW | MUSING MACRO
to fight inflation. It acts counter to what the unemployment and the pain of inflation.
monetary policy folks are trying to do. Given Inequality is like pollution. It is inevitable in
all these constraints, the budget has done a a market-oriented capitalist economy. But
reasonably good balancing act. beyond some reasonable level, it becomes
The second macro backdrop to this budget detrimental to economic growth, as it deters
is the global recessionary situation. Most investors and adds to social instability. So
developed economies will have zero or nega- there was an imperative for the budget to
tive growth this year. How then to respond enhance social security.
and make India more resilient? Here too, the On this point, the budget
budget has provided incentives to exports, has disappointed. The allo-
incentivized capital inflows and reduced tar- cation for the national
iffs somewhat to correct inverted duty anom- rural employment guaran-
alies. The emphasis is on strengthening tee (a proxy for unemploy-
domestic consumption spending. Invest- ment insurance) has been
ment spending too could be crowded in by
higher public spending. As such, capacity
drastically reduced. So has
the allocation for national
utilization numbers look good enough for an
upswing in private capex to begin.
health and education mis-
sions. The latter is perhaps
The third backdrop is India’s widening because these two are
income and wealth inequality. We don’t squarely in the states’
need an Oxfam report to confirm this con- domain and more action
tinuing trend. The K-shaped recovery is in could be expected in state
its third year, with consumer expenditure at budgets. The Union gov-
the top-end booming, while lower income ernment’s strategy seems focused on spend-
deciles face stagnation. Mercedes clocked ing on public goods that indirectly benefit
41% growth, but two-wheeler sales have the poor, rather than give outsight doles. Of
been declining for three years in a row, alt- course, the finance minister reminded us
hough this year saw some rebound. Airline about impressive achievements in financial
travel is booming, and so are five-star hotel inclusion via no-frill bank accounts, subsi-
services. But that cannot hide our rising dized cooking-gas cylinders, toilets and such
New Delhi, Mumbai, Bangalore, Kolkata, Chennai, Ahmedabad, Hyderabad, Chandigarh*, Pune*
EXCLUSIVE PARTNER
NIFTY 5,998.90 ®
September allowed foreign air-
lines to buy up to 49% stake in
a domestic airline firm. Jet and
Etihad has been in talks since
then but a deal is yet to be an-
nounced.
Jet’s share prices has risen
80% to `622.65 since 1 Octo-
Sensex’s 5.43% gain in that pe-
riod.
The delay is likely because of
accounting complexities and
complying with legal and fi-
nancial procedures, another
ministry official said. He too
declined to be named.
Goyal-owned Tailwinds Pvt.
Ltd controls 80% of Jet Airways
but is an overseas corporate
body. Jet Airways is, therefore,
already more than 49% con-
trolled by a foreign holding
company, but has been grant-
ed a special exemption by the
government.
Jet Airways is working on a
deal structure that will avoid
all possible tax implications,
according to an executive
working with a consulting firm
who is aware of the develop-
ment.
“Goyal would transfer his
shares from the overseas cor-
porate body Tailwinds to his
individual name,” he said on
condition of anonymity.
“There will not be any tax im-
plications as there is no sale in
this case. Earlier, OCB was
owned by Goyal, now the same
Goyal will own shares in his
name.”
In the Friday meeting, exec-
utives of Jet Airways and Eti-
had wanted to know about the
tax implications when the
share sale takes place, a third
ministry official said, who de-
clined to be named.
“The question is how to do
it. They are still exploring what
is the best way. New shares
may not invite taxes, in my un-
derstanding,” the official said,
referring to Jet Airways.
British telecom services pro-
vider Vodafone had been
slapped with an income-tax
demand notice of `11,200
crore by Indian authorities on
its 2007 acquisition of Hong
Kong-based Hutchison Wham-
poa’s stake in its Indian tele-
com business. Finance minis-
ter P. Chidambaram has said
he is looking into resolving the
tax problems involved in the
telecom deal.
If new shares are issued to
Etihad, it could dilute promot-
er Goyal’s stake.
“The top team from Etihad
Airways was here to seek the
comfort from Indian govern-
ment before signing a term
sheet with Jet Airways,” the
TURN TO PAGE 3®
It’s reasonably
successful in the
near impossible
task of squaring
the circle to
meet divergent
expectations
DOLLAR `53.19 ®
THE TOP ORDER
Glenn Maxwell of Australia was the biggest
surprise at the IPL 6 auction after he was
bought by Mumbai Indians for $1 million. The
auction was otherwise muted as only 37 out
of 108 players were picked up by teams.
The seven most expensive players
at the auction:
Cost in $ IPL team
$1,000,000
Mumbai Indians
Ajantha Mendis
(Sri Lanka)
$725,000
Pune Warriors
Abhishek Nayar
(India)
$675,000
Pune Warriors
Cattle cloning:
Part science,
part art. No
sex please
B Y J ACOB P . K OSHY
jacob.k@livemint.com
·························
KARNAL, HARYANA
S ex is an expensive waste of
time at the National Dairy
Research Institute. None in the
herds of virile buffalo and
well-hoofed cows, several of
whom have close genetic links
with prime Dutch and Swiss
cattle, have been born of so-
called natural service, as the
sexual act is quaintly de-
scribed by stoic scientists.
“Natural service is too costly
and quite unsuitable for our
purposes,” said senior scientist
Prabhat Palta, “which is ulti-
mately to improve the quality
of our cattle”.
Since 1990, when research-
ers at the institute produced
Pratham, the first buffalo to be
born anywhere in the world
through in-vitro fertilization,
researchers have slowly pro-
gressed to producing, in 2009,
Samrupa, the first cloned Indi-
an animal, followed
Shresth, a cloned bull, and
cloned cows such as Garima in
by
2010.
The second version of Gari-
ma successfully gave birth to a
TURN TO PAGE 2®
LIVEMINT.COM
THEIR VIEW
able to take a more nuanced view on the enabled the government to reallocate
repo rate, as inflation is projected to funds to capital expenditure.
come down next year. Are there any question marks here?
Corporates have always been asking The budget’s disinvestment plan could
for higher capital expenditure by the merit some discussion. The global envi-
government. This argument is strong. If ronment will be uncertain in 2023. One
the government expands its capital is not sure of how foreign investors
expenditure, then it will crowd-in would behave and whether Indian stock
private investment. This theory sounds markets would continue to show buoy-
good, though has not worked in the past ancy. Under these conditions, expect-
as corporates invest when there is profit ing to raise ₹61,000 crore from sell-offs
to be made, while the government does can be a challenge. The government has
so because it must do so as no one else is been optimistic of doing ₹60,000 crore
doing it. The capex target of ₹10 trillion in 2022-23 too, which means that there
for 2023-24 is substantial, and, as states will have to be some big-ticket sales
normally put in an equivalent amount, over the two months till March-end for
it should help move the needle. The around ₹29,000 crore.
focus is on roads and railways, which The other question is on tax buoy-
have the strongest linkages with other ancy. It has been assumed that taxes will
sectors of the economy.
Individuals too would take comfort
from some of the provisions made in
the budget. Benefits for women and
grow by 12% compared to around 15.9%
this year. Normally, this growth rate
traces that of GDP. There was unusual
buoyancy in tax collections in 2022-23
senior folks are welcome, as it protects due to high inflation and pent-up
them from the high inflation experi- demand. But can this be repeated, given
enced in the last three years. Individual that GDP growth will be 10.5% and
tax slabs have been changed, too, pro- pent-up demand could fade?
vided one goes for the new scheme. We Therefore, the revenue side may offer
can’t be sure how many would opt for it, some cause for apprehension. But the
as the response earlier was not too good. budget balances things and makes
But to the extent that people do opt for money work better by reallocating
it, there would be savings made that expenditure in favour of capital expend-
would either protect against past infla- iture so that growth processes can be
tion or add to consumption. furthered. Budgets always work on
The Union budget has been a bit assumptions of growth which can never
conservative when it comes to pro-poor be predicted in advance. Also, there are
schemes. The outlay for the Pradhan always possibilities of things going off-
Mantri Kisan Samman Nidhi scheme, track, like a war or any other disturb-
for example, has been maintained at ance, which would require the budget
₹60,000 crore, and there has clearly to be revisited. Here the supplementary
been no pitch to increase it. Similarly, demand for grants plays a role where
the food subsidy bill will be coming additional allocations can be made.
down this year by almost ₹90,000 crore The budget for 2023-24 scores well
as there has been a merger of the free on almost all these points, which is
food scheme with the public distribu- commendable. More so because there
tion system, while the National Rural were expectations that in a pre-election
Employment Guarantee scheme has a year, there could be a proclivity to get a
lower outlay. Therefore, it can be said bit loose on expenditure in pursuit of
that the budget has also been in ‘with- ‘populism’. Instead, the government
drawal of accommodation’ mode, since has steered past this cliché, stuck to a
the worst is behind us, as the Economic path of prudence and also turned
Survey has argued. This has actually growth-oriented.
Monday, February 4, 2013 Vol.7 No.30 `3.00 in Delhi­NCR/`4.00 outside Delhi­NCR 24 PAGES
Mint50: Best
MINT MONEY:
funds to bring home >14
MEDIA: Financial Times: Whose
intellectual property? >6
The first budget of
BANKING: RBI may let realtors, brokers
apply for banking licences >5
NATION: Aadhaar to be used in property
conversion >24
Amrit Kaal will build a
EURO `72.42 ® GOLD 30,235 ® OIL $116.76 ®
strong foundation for
Q3 numbers QUICK EDIT
indicate earnings
may have
A tougher
law, finally
bottomed out
See Page 4 Glenn
Maxwell
(Australia)
B Y A MI S HAH &
V YAS M OHAN
·························
F inally, the
recommendations of
the justice J.S. Verma
building a developed India.
MUMBAI
panel on sexual crimes
H as the downward trend in have now legal force. On
corporate earning ended? Sunday, President Pranab
Some fund managers think so, Mukherjee signed an
and an analysis of the results ordinance amending the
Kane Richardson Thisara Perera of 958 companies seems to criminal law dealing with
(Australia) (Sri Lanka) suggest they may be right. such matters.
Indian firms reported their What the government
fastest quarterly profit growth
in almost three years in the
and the judiciary need to
do is to ensure that
December quarter, prompting frivolous procedural
This budget will fulfil
investors to forecast that earn- requirements are not used
ings have bottomed out and to derail cases involving
are likely to rebound in the sexual crimes. No number
three months to 31 March. of “fast-track” courts can
Of the 958 companies that check this menace if legal
$700,000 $675,000 have reported earnings for the roadblocks are used to the
quarter ended 31 December detriment of the victims.
Pune Warriors Sunrisers Hyderabad
so far, net profit has gained The government’s
56.9% from a year earlier, the response, especially the
most in 11 quarters, as compa- ordinance, has come in
Sachithra Senanayake Chris Morris nies benefited from lower in- for criticism from
dreams of aspirational
(Sri Lanka) (South Africa) put costs. Net sales for these women’s groups. The
companies rose 14.8% in the charge being that not all
same period. recommendations of the
“Results have been fairly sat- Verma panel have been
isfactory and we expect an up- accepted. Not all is lost
ward revision in earnings go- for, after all, the
ing forward,” said Gopal ordinance has to be
Agrawal, chief investment of- brought before
ficer of Mirae Asset Global In- Parliament sooner or
$625,000 $625,000 vestments (India) Pvt. Ltd. later. Surely, changes,
“Going by the trend, one can amendments and
society including poor
Kolkata Knight Riders Chennai Super Kings say the earnings cycle has bot- enhancements to the law
tomed out.” can be carried out at that
stage.
Source: Mint research TURN TO PAGE 3®
AHMED RAZA KHAN/MINT
people, middle-class
people, farmers.
N A R E N D R A MOD I
like. Even the dramatic expansion in the India has only seven taxpayers for every 100
Centre’s low-cost housing scheme is in that voters. This is a sharp contrast to developed
direction, and it has the additional advan- nations, especially Scandinavian countries,
tage of being asset-creating public expendi- where the ratio is nearly even. So widening
ture. In that spirit, the increase in capital the tax base is an absolute imperative, some-
outlay, especially on roads and railways, is thing that every budget seems to ignore.
quite welcome. It constitutes one-fourth of Indeed, the share of indirect taxes in total
the budget, the highest tax collections is placed at 55% now, and has
share so far. The budget has been rising. This is regressive and cannot be
also substantially increased justified by indirect taxes like GST being
credit flow to agriculture, easy to administer and collect. The Centre’s
which too will lead to more share of GST is now at nearly ₹10 trillion, in
capital formation. addition to still-high excise duties on petrol
For the income taxpayer, and diesel.
there was good news in an
increase in the threshold
All of this is extra and disproportionately
burdensome for the poor. The budget is not
below which there is zero
tax liability. Since high
populist, but is certainly expansionist. In
that respect, it will create inflationary pres-
inflation in the past three sures, which again hurt the poor more. If this
years has eaten away real budget’s nominal growth target of 10.5% is
purchasing power, it was achieved but inflation continues to rage at
expected that tax slabs, 6%, then real growth will be too tepid to
which are nominal, would make a dent on unemployment and income
be revised. But raising the minimum level to growth of the lower deciles. It is here that the
₹7 lakh, which is 350% of the per capita budget could have done more.
income of the country (as mentioned by the But ultimately the budget is an impossibly
FM herself) makes India an outlier. None of difficult balancing act, which tries to please
the G20 countries offers income taxpayers all and often contradictory constituencies,
such a generous exemption. The Economic sort of trying to square a circle. In that, it has
Survey a few years ago had pointed out that been reasonably successful.
LIVEMINT.COM
Thursday, 2 February 2023
MuMbaI 23

MY VIEW | ThE LAsT WORD GUEST VIEW

The Union budget for 2023-24 is India’s latest budget succeeds

in hitting all the right notes
rather well placed on fiscal math It does well on promoting growth without rocking the macro boat

Total public debt will at most reach 86.9% of GDP by 31 March after three high-spend years and onshoring of off-budget items

PTI

SONAL VARMA
is chief economist, India and Asia ex-Japan,
at Nomura

INDIRA RAJARAMAN
is an economist

T
he budget for 2023-24 was presented
against a challenging macro-political
backdrop. Unlike the previous two

A
ll credit goes to Finance Minister
Nirmala Sitharaman and her team
for extraordinary fiscal performance
over three years of relentless pres-
sure from the pandemic followed by
the Ukraine war. During these three
years, past off-budget borrowings were on-shored
at the Centre, and two-thirds of the population
saw their entitlement under the Food Security Act
doubled in quantum, at zero incremental cost over
28 months in all. The doubling stands withdrawn
as of January 2023, but the original quantum will
be zero priced until December 2023.
During the current fiscal year closing on 31
March 2023, the Central fiscal deficit has held at
6.4% as budgeted, despite additional expenditure
of ₹2 trillion on food and fertilizer subsidies. It
helped that (nominal) GDP for the current year—at
₹273.08 trillion by the first advance estimate
(FAE)—was higher by ₹15 trillion than the ₹258
million projected in Union Budget 2022.
To get the consolidated government deficit
(Centre plus states) in 2022-23, we have to add on
the states’ aggregate fiscal deficit, on which there
is some uncertainty. States had a statutory fiscal
deficit cap of 3.5% of GDP in aggregate, with an
extra 0.5% conditional on power sector reforms
so onerous that only 60% of them at most were
likely to achieve it. Later in the year, states were
allowed additional borrowing to pay their dues to
pension funds for employees on the New Pension
Scheme. Altogether these make for an outer limit
on states’ aggregate fiscal deficit at 4% of GDP. A
long-term zero interest loan from the Centre to
states of ₹1 trillion was additional, but will get net-
ted out when aggregated with the Centre’s num-
bers. But states faced two negative whammies.
The Central ministry of finance ordered their off-
budget borrowings in past years (estimated at ₹6
trillion in aggregate) to be brought on-budget in a
staggered manner between this and the next
three fiscal years. States’ market borrowing
would have been reduced to accommodate this
on-shoring within their permissible fiscal deficit,
but they seem to have been cautious about utiliz-
ing even such market borrowing entitlement as
they had. This is perplexing especially in view of a
second whammy, of having been commanded to
pay off current dues and past arrears to power
sector utilities (this is independent of the power
sector reforms needed to qualify for the addi-
tional borrowing entitlement).
For now, the outer limit on the aggregate fiscal
deficit across the Centre and states is 10.4 % for
2022-23, which means the year closes (after adjust-
ing the 2021-22 closing debt to the current year’s
GDP) with a public debt level at 86.9 % of GDP at
most. This is with external debt valued at current
exchange rates, which is the right way to go; there
is a parallel lower figure with external debt valued
at historical exchange rates, which the Interna-
tional Monetary Fund (IMF) seems to be using. The
percentages for 2022-23 are subject to change
when GDP is revised at end-February and end-
May, when the third and fourth quarter GDP data
for the current fiscal year come in.
For the forthcoming 2023-24, the Centre’s fiscal
deficit is budgeted at 5.9% of GDP. States will have
a statutory cap of 3% on their deficit with an extra
0.5% conditional on power sector reforms, yield-
ing an outer fiscal deficit limit of 9.4% across the
Centre and states.
The Union budget has projected nominal GDP
growth of 10.5 %. But the Economic Survey projects
real growth for next year at 6.5 %, implying a bud-
getary expectation of less than 4% inflation. More
realistically, nominal growth next year will be
closer to 12 %. In that case, public debt will hold at
the present year’s closing level, at around 87%,
assuming that the real growth expectations of the
Economic Survey are realised.
Growth, growth, growth. That is the need of the
hour. The biggest growth booster, of course, is the
eye-popping budgetary outlay of ₹10 trillion on
infrastructure expenditure. Within this, the
provision for 50-year interest-free bullet loans to
states for capital expenditure has been raised to
₹1.3 trillion next year. However, revised estimates
show that the total budgeted ₹1 trillion in the cur-
rent year will be utilized only to the extent of
₹76,000 crore. The reason may well be that only
80% of the total was freely disbursed in accordance
with states’ tax shares as set by the Fifteenth
Finance Commission. This corresponds closely to
the revised estimate of offtake under the scheme.
The remainder of the budgetary provision was
splintered into small pieces with usage restrictions
accessible on a first-come first-served basis.
The same splintering afflicts the ₹1.3 trillion
budgeted for the next year as well. Conditionalities
and usage restrictions delay fund flow and impose
onerous reporting and inspection burdens on
both the disbursing Central department and the
reporting state government department. The
initial punch of the scheme, begun in the pan-
demic year 2020-21 to increase states’ appetite for
capital expenditure, and in particular for the com-
pletion of incomplete projects, has been lost, I fear.
But the freely disbursable component is welcome,
and will hopefully do its bit for spatially dispersed
growth across the country.
years, the boost to revenues from elevated
nominal GDP growth is unlikely to be
repeated; dark clouds owing to a global
slowdown mean India’s real growth is likely
to slow; and general elections in 2024
meant political compulsions.
In the event, the budget scores high on
multiple parameters: it has steered clear of
pre-election populism, played the right
counter-cyclical role and continued fiscal
consolidation, all the while staying the
course on medium-term reforms.
With elections coming up, the overall
focus in the budget towards the common
man, the farmer and the middle-income
class is not surprising, but there is no out-
right populism.
The changes in personal income tax rates
to incentivize more households to shift to
the new tax regime is a sound idea, although
we doubt this will boost household con-
sumption. Consumption is driven by many
factors, but job and income certainty are
paramount. A cut in taxes ends up being
saved when uncertainty is high, something
we expect in the coming year.
For agriculture, the budget has presented
excellent ideas to boost productivity by
using digital public infrastructure and set-
ting up an accelerator fund for startups,
instead of doling out freebies.
A big surprise has been the substantial
ramping up of capital expenditure to 3.3% of
GDP in 2023-24, from an already elevated
2.7% in 2022-23, and a step up from an aver-
age of 1.7% during the four years through
March 2020. This suggests the government
does not believe there is a durable pickup in
private capital expenditure yet.
We agree with this assessment. Yes, cor-
porate and bank balance sheets are
stronger, but weak global demand will
lower capacity utilization rates and delay
any pickup in private investments until
there is more certainty. Hence, we believe
higher public capital expenditure is
unlikely to crowd out private investment, as
some fear, and will instead play a counter-
cyclical role and build the infrastructure
India needs. The creation of jobs is tied
closely to the investment cycle picking up.
The broader budgetary push for infra-
structure, agriculture, manufacturing, sup-
porting MSMEs and tax rationalization are
consistent with the direction chosen over
the last several budgets. Importantly, the
budget also aims for India to achieve green
growth by reducing dependence on fossil
fuel imports, with more investments in an
Some budget assumptions could fall short
in case economic growth slows PTI
energy transition and through the country’s
green credit programme.
In the near-term, the assumptions under-
lying the 5.9%-of-GDP fiscal deficit target
for 2023-24 will get challenged as the year
progresses. The budget has assumed nomi-
nal GDP growth of 10.5% in 2023-24,
whereas we see real GDP growth at around
5.1% and nominal GDP growth at around
8.5-9.0%. The reason is simple. Industrial
production and export growth are already
on a downtrend, and as the US and Euro-
pean economies slide into recession this
year, exports will slump further. The share
of India’s exports to the US and Europe
combined at 35.5% of total exports is much
higher than to China (5.8%), which limits
direct spillovers from China’s reopening.
Weak exports will likely mean weak pri-
vate investment—hence a public capex
push is a good idea—and the impact of pol-
icy rate hikes on discretionary demand is yet
to be fully felt. Tax buoyancy is closely
linked to nominal growth and the phase of
business cycle. So, if demand moderates, as
we expect, then both nominal GDP growth
and tax revenue growth will undershoot.
The assumption on revenue expenditure
growth of only 1.2% also appears low, con-
sidering the bulk of this spending is sticky.
The available cushion from lower food and
fertilizer subsidies has already been incor-
porated in the budget estimates, which
means the risk of total expenditure ending
up higher than currently assumed. Other
assumptions on disinvestment and non-tax
revenues appear realistic, but the risks are
skewed towards a higher fiscal deficit.
The government can still meet its 5.9%
fiscal deficit target by cutting back on capi-
tal expenditure. But if growth slows, there
could be a stark trade-off between growth
and fiscal consolidation. We see these chal-
lenges in 2023-24’s second half, but manag-
ing market borrowing should not be hard.
Higher deposit rates and slower nominal
growth would mean that the incremental
credit-deposit ratio will start to moderate.
India’s monetary policy hiking cycle is also
in its final leg, and a more favourable inter-
est rate outlook should increase demand for
bonds from banks and other investors.
Overall, it’s a growth-oriented budget
aimed at ensuring India’s economic resil-
ience over the long-term—all without
rocking the macro boat.

MY VIEW | CAfE ECONOMICs

Sitharaman has managed to pull off a balancing act

target adds to the growing credibility of
NIRANJAN RAJADHYAKSHA Indian fiscal policy since 2019, perhaps one
reason why the bond market held its ground
despite the record borrowing needed to
fund the fiscal gap. However, the Reserve
Bank of India may have to occasionally step
restructuring of the food subsidy as well as
an anticipated fall in fertilizer subsidy
because of lower global crude oil prices—
which together add up to budgeted savings
of 0.8% of GDP in 2023-24—will hopefully
create adequate financial space for the gov-
will have to play a more important role to
stabilize public finances. The primary deficit
target for 2023-24 of 2.3% of GDP, down
from 3% of GDP in 2022-23, is thus a step in
the right direction. In plain English, the gov-
ernment will have to remain more focused
burden. Small enterprises have been partic-
ularly hurt by successive shocks such as
demonetization, the messy introduction of
the goods and services tax (GST) and then
the pandemic.
The other constituency that has been

N
irmala Sitharaman has presented the
last full budget of the second Naren-
dra Modi government. The finance
minister had a tricky balancing act between
stabilizing public finances and supporting
India’s economic recovery, with risks from
tilting too far on either side.
Two underlying themes deserve atten-
in over the next financial year to buy govern-
ment bonds as part of its open market opera-
tions, thus easing liquidity when it is trying
to tighten monetary policy.
I had argued in an earlier column that the
time is not ripe for a sharp fiscal correction,
given an anticipated domestic slowdown in
the year ahead as well as the dark clouds over
ernment to reduce its fiscal deficit by 0.5 on setting its financial house in order as the given relief is the salaried class, which has
percentage points while opportunity for inflating been hit by a double whammy of weak wage
increasing spending in away the burden of past growth in the midst of a profit-led economic
select areas. The budget debt narrows. recovery and high inflation. The nudge to
The eventual goal of fis- The new budget has citizens to opt for lower tax rates without any
cal policy over the rest of does well to been presented in the last exemptions will hopefully work this time
the decade should be to stretch leading up to gen- around. The amount of revenue forgone is
stabilize the ratio of public
stabilize public eral elections that are small, however. So, it will not do much to

is CEO and senior fellow at

Artha India Research Advisors,
and a member of the academic
advisory board of the Meghnad
Desai Academy of Economics.
tion. First, there is continuity. The budget
strategy continues to focus on gradually
bringing down the fiscal deficit while pivot-
ing towards more capital spending. Second,
the political economy of the budget is
directed towards middle India, especially
small enterprises as well as the lower deciles
of the salaried class that have had a relatively
bad run in recent years.
The finance minister has met the fiscal
deficit target set last year, despite a large
increase in the subsidy bill. This was possible
because net taxes to the Union government
this financial year will be around ₹1.52 tril-
lion more than what was estimated in Febru-
ary 2022. The ability to stick to the deficit
the global economy. The government will
have to support aggregate demand as con-
sumer demand weakens, business spending
on new equipment is still not robust, and
export markets are fragile. The decision to
cut the fiscal deficit by a modest half per-
centage point of gross domestic product
(GDP) is thus a reasonable one.
Unbundling the fiscal correction provides
some useful insights. The Modi government
has decided to increase its own capital
spending by ₹2.82 trillion. Tax cuts aimed at
the middle class will also mean a revenue
loss of around ₹35,000 crore. These will
largely be covered by a ₹2.4 trillion reduc-
tion in spending on subsidies. The recent
debt to GDP, which had
shot up to record levels
finances scheduled in the first half of
2024. The Modi govern-
move the fiscal needle. The broader goal of
Indian tax policy should be to collect more
because of the pandemic
shock. The burden is evi-
without letting ment has held its nerve by
not going on a directionless
direct taxes while bringing down rates of
indirect taxation, especially GST. Thank-
dent. Interest payments on the economic spending spree, though the fully, there was no move to increase import
the stock of public debt bond market will be on tariffs to deal with the wide trade deficit, an
issued by the Union gov- recovery suffer alert in case there are any implicit recognition of the fact that high
ernment now soak up pre-election fiscal import taxes are a barrier to higher exports
nearly half its net tax col- announcements outside in a world of global supply chains.
lections, leaving less money for public the budget. The past three years saw two exogenous
goods, defence, infrastructure and welfare The clear attempt to support micro, small shocks—the pandemic followed by the war
programmes. and medium enterprises (MSMEs) is inter- in Ukraine. The Indian fiscal response has
As nominal GDP normalizes, and perhaps esting, through credit guarantees, relief been better calibrated than in many other
even slips back into single digits, the govern- from security deposits forfeited for failing to major economies, and the government
ment deficit after taking interest payments execute contracts during the pandemic and seems committed to staying on the same
out of the picture—aka the primary deficit— an overall attempt to ease their regulatory path. That is welcome.
LIVEMINT.COM
Thursday, 2 February 2023
MuMbai 25

JUBILANT FOODWORKS LIMITED

CIN: L74899UP1995PLC043677
Regd. Office : Plot No. 1A, Sector – 16A, Noida – 201301 (U.P.)
th
Corporate Office – 15 Floor, Tower-E, Skymark One, Plot No. H-10/A, Sector 98, Noida, Uttar Pradesh 201301
Contact No: +91-120-6927500; +91-120-6935400, E-mail: investor@jublfood.com, Website: www.jubilantfoodworks.com
STATEMENT OF STANDALONE AND CONSOLIDATED UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND NINE MONTHS ENDED 31ST DECEMBER, 2022
(Figures-INR in Lakhs, Unless Otherwise Stated)
STANDALONE RESULTS CONSOLIDATED RESULTS
For the quarter ended For the nine months ended For the year For the quarter ended For the nine months ended For the year
Sr. ended ended
st th st
No. PARTICULARS 31 Dec 30 Sep 31 Dec 31st Dec 31st Dec 31st March st
31 Dec th
30 Sep st
31 Dec 31st Dec 31st Dec 31st March
2022 2022 2021 2022 2021 2022 2022 2022 2021 2022 2021 2022
Unaudited Unaudited Unaudited Unaudited Unaudited Audited Unaudited Unaudited Unaudited Unaudited Unaudited Audited
1 Total Income from Operations (net) 131,664.43 128,677.18 119,350.43 384,368.11 317,321.33 433,109.98 133,181.47 130,148.92 121,077.37 388,839.99 322,014.83 439,612.29
2 Net Profit for the period/ year (before Tax, Exceptional 11,942.45 16,192.59 18,312.21 44,551.52 43,533.27 58,928.04 11,146.46 17,450.18 17,917.37 43,531.82 43,651.69 57,058.58
and / or Extraordinary items)
3 Net Profit for the period/year before Tax 11,942.45 16,192.59 18,302.53 41,887.62 42,839.98 58,195.50 11,146.46 17,450.18 17,907.69 43,531.82 42,958.40 56,326.04
(after Exceptional and / or Extraordinary items)
(Refer Note 3)
4 Net Profit for the period/ year after Tax 8,857.45 11,916.57 13,732.79 30,869.75 32,140.95 43,752.21 8,036.39 13,152.98 13,319.54 32,448.00 32,208.09 41,808.83
(after Exceptional and / or Extraordinary items)
5 Total Comprehensive Income for the period/ year
[comprising Profit for the period after Tax and Other 4,087.20 12,568.34 24,186.31 21,245.78 62,334.29 68,052.36 1,728.53 15,885.54 23,971.94 23,343.32 61,708.50 62,929.66
Comprehensive Income after Tax]
6 Equity Share Capital 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90 13,196.90
7 Reserves excluding Revaluation Reserve as at Balance
Sheet date 197,153.12 181,299.93
8 Earnings per share (after exceptional items)
(of INR. 2/- each) (Refer Note 4)
a) Basic (in INR.) 1.34 1.81 2.08 4.68 4.87 6.63 1.22 1.99 2.03 4.92 4.90 6.37
b) Diluted (in INR.) 1.34 1.81 2.08 4.68 4.87 6.63 1.22 1.99 2.03 4.92 4.90 6.37
Notes :
1. These unaudited financial results have been prepared in accordance with the recognition and measurement principles as laid Exceptional items in the quarter and nine months period ended 31st December, 2021 and in the year ended 31st March, 2022
down in the Indian Accounting Standards (referred to as“Ind AS”) prescribed under Section 133 of the Companies Act, 2013 read include costs incurred by the Company to support its employees, associates and their dependents during COVID-19 pandemic.
with Companies (Indian Accounting Standards) Rules as amended from time to time, to the extent applicable. The above These includes assistance to families of deceased employees and associates, vaccination of employees, associates and their
unaudited standalone and consolidated financial results were reviewed by the Audit Committee and approved by the Board of dependents, quarantine facilities for COVID-19 impacted employees and associates, etc.
st
Directors of the Company at their meetings held on 01 February, 2023. The statutory auditor’s report on review of interim th
4. During the quarter ended 30 June, 2022, the equity shares of the Company were split/ sub-divided such that each equity share
st
standalone and consolidated unaudited financial results for the quarter and nine months ended 31 December, 2022 is being having face value of INR 10/- (Rupees Ten only) fully paid-up, was sub-divided into five (5) equity shares having face value of
filed with the BSE Limited and National Stock Exchange of India Limited. th
INR 2/- (Rupees Two only) each, fully paid-up with effect from 20 April, 2022 (Record Date). The Earnings Per Share (EPS)
2. The Company’s business activity falls within a single business segment i.e. Food and Beverages in terms of Ind AS 108 on numbers of the quarter and nine months ended 31st December, 2021 and of the year ended 31st March, 2022 presented above
Segment Reporting. have been restated to give effect of the share split.
3. The Company has investment in its wholly owned subsidiary viz Jubilant FoodWorks Lanka (Private) Limited (JFLPL) having 5. The above is an extract of detailed format of unaudited financial results for the quarter and nine months ended 31st December, 2022
operations in Sri Lanka. Considering significant changes in economic environment of Sri Lanka resulting into rising inflation, filed with the Stock Exchanges under Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
depletion of forex reserves, depreciation of currency, and other economic and political uncertainties, the management had 2015. The full format of the unaudited financial results are available on the Stock Exchanges websites (www.bseindia.com
th
recorded an impairment charge of INR 2,663.90 lakhs in the quarter ended 30 June, 2022 which is shown under exceptional and www.nseindia.com) and on Company’s website (www.jubilantfoodworks.com).
items in the nine months period ended 31st December, 2022. For and on behalf of the Board of Directors of
JUBILANT FOODWORKS LIMITED
Sd/-
HARI S. BHARTIA
Place: Noida CO-CHAIRMAN & DIRECTOR
st
Date: 1 February, 2023 DIN No. 00010499
26 Thursday, 2 February 2023
MuMbai
LIVEMINT.COM

Adani dollar
bonds could Govt takes ‘pragmatic’ view
face further
pressure
on disinvestment targets
Gopika Gopakumar
gopika.g@htlive.com
The govt has shelved disinvestment of BPCL, which was expected to bring in ₹50k-60k crore Other banks continue to lend against Adani debt. MINT

A
dani group’s overseas
bonds could face a big-
ger rout as rating agen-
cies examine the companies’
debt risk and banks take a rel-
ook at providing leverage
against these bonds.
The yields on Adani Green
Energy’s dollar bonds matur-
ing in 2024 for instance spiked
to 24% on Wednesday from
7.3% on 24 January, since the
US-based Hindenburg
Research alleged that the
Gulveen Aulakh
gulveen.aulakh@livemint.com
Credit Suisse wealth
unit halts margin
T
he government has set a
lower disinvestment target
for FY24 at ₹51,000 crore as
compared with the previous
financial year, while also
lowering the revised estimates from
loans on Adani debt
FY23 to ₹50,000 crore from the ear- Bloomberg banks kept the level
lier target of ₹65,000 crore, according feedback@livemint.com unchanged as of now, with one
to the budget documents issued on of those offering lending of

group used a web of firms in
tax havens to overstate reve-
nue and stock prices.
Credit Suisse is the first
bank to pull the trigger as it
stopped accepting bonds of
Adani group as collateral
against the leverage to its pri-
vate banking clients, accord-
ing to a Bloomberg report. The
Swiss lender’s private banking
arm assigned a zero-lending
value for notes sold by Adani
Ports and Special Economic
Zone, Adani Green Energy
and Adani Electricity Mumbai
Ltd.,said the report.
Fund managers believe that
this move may cause other
banks to follow suit, reducing
the leverage against these
bonds. In contrast, Credit
Suisse’s in-house brokerage
upgraded Adani Ports & SEZ to
outperform from neutral,
based on attractive valuation.
“When there is a leverage
reduction, there is a margin
call immediately and those
investors will have to top-up
the margin and make up for
the difference. or they will
have to sell the bonds. When
one large house like Credit
Suisse reduces the leverage on
these bonds, there will be
some ripple effect and several
other banks could reduce the
leverage from 70-80% to
30-40%,” said Bala Swaminat-
han, CEO and founder,
SAIML.
“The market is pricing the
Adani bonds at 30% YTM,
that’s the risk premium they
have built in,” he said.
C
Wednesday. redit Suisse Group AG between 75% and 80% for
“Disinvestment is based on market has stopped accepting Adani Ports and Special Eco-
conditions and other factors, there- bonds of Gautam nomic Zone dollar bonds,
fore a practical and prudent target has Adani’s group of companies as according to the people. A
been kept,” Tuhin Kanta Pandey, sec- collateral for margin loans to its potential trigger for lowering
retary, department of investment and private banking clients, a sign could be any rating down-
public asset management (DIPAM) that scrutiny of the Indian grade, one of the people said.
said during the finance minister’s tycoon’s finances is growing Bank of Singapore—the pri-
press conference on Wednesday, after after allegations of fraud by vate banking unit of Oversea-
the union budget presentation. short seller Hindenburg Chinese Banking Corp., Sing-
He had told Mint in a recent inter- Research. apore’s second-largest len-
view that disinvestment should be The Swiss lender’s private der—is continuing to offer
looked at from the point of view of banking arm has assigned a margin loans for up to 70% of
reforms and employment creation zero lending value for notes the value of Adani dollar
instead of only capital generation. sold by Adani bonds, some of
“It should be looked at from the Ports and Special When a private the people said.
point of view of reforms. If you have to Economic Zone, bank cuts lending “In determin-
keep your fiscal deficit in control and Adani Green value to zero, ing the LTV that is
still be able to put capex and social sec- The government has outlined plans to sell its shares in IDBI Bank, Shipping Corporation of India, BEML and Container Energy and Adani clients have to given to the client,
tor expenditure, you’ve got to be rais- Corporation of India through strategic sales where it will also transfer management control. Electricity Mum-
MINT
top up with cash we take into con-
ing money apart from revenue. So, bai Ltd, according sideration various
non-tax revenue is important, and had collected ₹31,106 crore as of 1 Feb- among a slew of other stake sales. The advanced stages, and the proceeds to people familiar or another form parameters such
then disinvestment is miscellaneous ruary, the majority of which had come government aims to invite financial may come in this fiscal year itself. with the matter, of collateral as the rating of the
capital receipts. But generating from the public listing of Life Insur- bids for the stake sale in IDBI Bank, However, the overall proceeds are who asked not to bond, duration
resources is a small part of the story; ance Corporation of India which sold which will spill over to FY24 even as it unlikely to meet the target set for be identified dis- and concentra-
it’s how productivity enhancement 3.5% stake for ₹20,516 crore. proceeds with the disinvestment fol- FY23. cussing private information. It tion as well as the prevailing
takes place in the economy,” he The government has shelved had previously offered a lend- market conditions (price,
said last month. LOWERING EXPECTATIONS the strategic disinvestment of ing value of about 75% for the liquidity, volatility),” said Alex-
Mint reported on 10 November Bharat Petroleum Corp. Ltd, Adani Ports notes, one of the andre Lotfi, Bank of Singa-
that the government plans to go GOVT has achieved PLANS are to go for THE govt seeks to DISINVESTMENT of which was expected to bring in people said. pore’s chief risk officer.
for a realistic disinvestment target 48% of its
disinvestment target
a realistic target in
FY24, lower than
sell its shares in IDBI
Bank, SCI, BEML and
Pawan Hans is also
hanging fire after
₹50,000-60,000 crore. The dis- When a private bank cuts The corporate empire of
in FY24, lower than FY23, since it of ₹65,000 crore in FY23, following Container litigation against investment of Central Electronics lending value to zero, clients Adani, Asia’s richest man, was
had missed targets set for prior FY23 as of 18 Jan missed targets Corporation of India winning bidder Ltd has also been scrapped, Mint typically have to top up with thrown into turmoil after Hin-
financial years. reported earlier. cash or another form of collat- denburg Research alleged in a
The most recent was the ₹1.75 The disinvestment of Pawan eral and if they fail to do so, report that the group used a
trillion target for FY22 which was The government has achieved 48% lowing the demerger of non-core Hans is also hanging fire following liti- their securities can be liqui- web of firms in tax havens to
revised downwards to ₹78,000 crore of its disinvestment target of ₹65,000 assets of Shipping Corp. and BEML. gation against the winning bidder. dated. overstate revenue and stock
in the revised estimates in the union crore of FY23 as of 18 January, the eco- In addition, the government will According to the budget docu- A Credit Suisse spokes- prices. Bonds of the group
budget last year. nomic survey tabled in Parliament on seek expressions of interest for Con- ments, capital receipts from moneti- woman didn’t immediately plumbed record lows after the
The actual proceeds for FY22 were Tuesday showed. cor following engagements with zation and other transactions outside comment. A representative at allegations, though they’ve
a dismal ₹13,627 crore, primarily The government has outlined plans investors in recent road shows. But of disinvestment have been pegged at Adani Group said it has no rela- since recouped some losses
owing to the disruptions caused by to sell its shares in IDBI Bank, Ship- this, too, may take a more concrete ₹10,000 crore for FY24 and the tionship with Credit Suisse’s after Adani Enterprises Ltd.
covid-19 pandemic. ping Corporation of India, BEML and shape only in FY24. revised target for FY23 has been private bank. completed a $2.5 billion share
According to details from the Container Corporation of India Disinvestments through strategic increased to ₹10,000 crore as well, Other banks continue to sale with support from existing
department of investment and public through strategic sales where it will sales of HLL Lifecare Ltd and Projects compared to actual proceeds of ₹1,011 lend against Adani debt. At shareholders and institutional
asset management, the government also transfer management control, and Development India Ltd are in crore in FY22. least two European private investors.

In surprise U-turn, FM strikes balance between prioritizing growth, fiscal prudence

Adani Enterprises FROM PAGE 1 capital expenditure acts as a
growth multiplier. The budget
lenging global environment.
“Although changes to the tax
to be more towards consump- also proposed ₹1.3 trillion of regime will forego some tax
withdraws FPO tion-driven and less towards
savings-driven kind of policy,”
Bhanumurthy said, adding
50-year interest-free infra-
structure loans to the states
from ₹1 trillion allocated last
revenue, the budget predicts
largely buoyant revenue on
the back of strong nominal
FROM PAGE 1 that it could put some pressure year. The capex allocation at GDP growth and gains from
on the banking sector. 3.3% of GDP is almost three the tax administration. This
Stocks such as Adani Ports, Growth projections for times the outlay in 2019-20. will help to mitigate pressures
which hit a 52-week low of India have been cut both by “Investments in infrastruc- on debt affordability from
₹459.50, Adani Enterprises, Indian and global agencies. ture and productive capacity increasing debt servicing costs
Ambuja Cements, ACC and According to the IMF’s have a large multiplier impact associated with rising interest
Adani Total Gas plumbed, World Economic Outlook on growth and employment. rates,” Guzman said.
erasing a combined ₹1.84 tril- update, growth in India is set After the subdued period of The budget also saw a
lion worth of investor wealth to slow from 6.8% in 2022 to the pandemic, private invest- renewed push to digitization,
in group stocks on Wednes- 6.1% in 2023 before rebound- ments are growing again. The including the setting up of a
day. The damage over the past ing to 6.8% in 2024. budget takes the lead once National Financial Registry to
five days to the group’s market The World Bank has esti- again to ramp up the virtuous enhance data availability for
cap has been to the tune of mated that India’s economic cycle of investment and job robust credit assessment and
₹7.56 trillion, and after growth will slow to 6.6% in the creation… This substantial the rolling out of a National
Wednesday’s rout cost Adani Group founder financial year (April to March) increase in recent years is cen- Data Governance Policy to
founder Gautam Adani ceding Gautam Adani. AP 2023-24 from an expected tral to the government’s efforts encourage R&D by using the
the richest Indian title to RIL 6.9% in the current fiscal. Finance minister Nirmala Sitharaman and other members of the finance ministry leave the ministry to enhance growth potential Aadhaar and Digi Locker plat-
chairman Mukesh Ambani. Ports, Adani Enterprises, ACC Compared with four prior- building to present the budget in Parliament in New Delhi on Wednesday. BLOOMBERG and job creation, crowd-in pri- forms to simplify individual
Adani slipped to the world’s and Ambuja Cements are con- ity areas identified in the bud- vate investments, and provide address reconciliation and
15th richest person on the For- cerned about the fallout from get last year, the finance min- ness to support small busi- income tax regime to ₹3 lakh tively to the budget, with a cushion against global head- verification across all regula-
bes Billionaire list, having seen the Hindenburg report, which ister outlined seven for nesses. from ₹2.5 lakh. In a relief to Sensex ending 158 points winds,” said Sitharaman in the tors.
his net worth erode by $14 bil- has resulted in their rushing 2023-24, calling those the It included an additional high earners, the budget also higher on Wednesday, even as budget speech. The agriculture sector,
lion to $74.7 billion. Adani for the exit all at once,” said “Saptrishi”, which include infusion of ₹9,000 crore in the proposed to cut the highest insurance stocks ended lower The budget extended the which is estimated to grow by
Ports plunged by 19.2% to one of the fund managers cited inclusive development, reach- Credit Guarantee scheme surcharge rate of 37% to 25% in with the finance minister pro- highest ever outlay for the 3.5% in 2022-23, saw a push in
₹495.15, Ambuja Cements fell above. Unlike stocks traded ing the last mile, infrastructure from 1 April 2023, with a the new tax regime, which posing to limit tax exemptions Railways, at ₹2.40 trillion, the budget with an increase in
by 16.7% to ₹334.10, ACC only on the cash market, those and investment, financial sec- reduction in the cost of the covers those earning ₹5 crore for insurance proceeds in the about nine times the outlay outlay in the form of an 11%
declined by 6.19% to ₹1,846.45 traded on both cash and deriv- tor, youth power, green guarantee by 1%. Providing and above. budget. made in 2013-14. The alloca- hike in agriculture credit tar-
and Adani Total Gas by 10% to atives segments—Adani Ports, growth, and unleashing the relief to MSMEs, Sitharaman “After a long time, personal While the budget aspires to tion under PM Awas Yojana get to ₹20 trillion for the next
₹1,897.40. Adani Enter- economy. announced that in cases of fail- income tax has been given a ease systems further and was also increased by 66% to fiscal year with a focus on ani-
Adani Enter- The damage over prises, ACC and To promote self-reliance ure by them to execute con- substantial improve compli- over ₹79,000 crore. The mal husbandry, dairy and fish-
prises was the top the past five A m b u j a and encourage domestic man- tracts during the covid period, change which Sitharaman ance while push- Union budget also announced eries. It also saw the
traded stock on days to the Cements—don’t ufacturing, Sitharaman cor- 95% of the forfeited amount will benefit the corrected the ing investments 50 new airports and helipads announcement of new
NSE at ₹3,436 group’s market have any price rected the inverted duty struc- relating to bid or performance middle class. The inverted duty and raising con- while focusing on infrastruc- schemes, including the “Aat-
crore, followed circuits, which ture on major items by reduc- security would be returned to new tax regime is structure on major sumption, an S&P ture development with higher manirbhar Clean Plant Pro-
by Ambuja
cap has been to gramme” to boost the availa-
means their pri- ing import duties on raw them by government and gov- “attractive as it
items by reducing Global Purchas-
allocations for key sectors.
Cements and the tune of ces can swing materials. ernment undertakings. gives a greater ing Manager’s “Fiscal consolidation has bility of disease-free, quality
Adani Ports being ₹7.56 trillion more wildly. It includes duty reduction In what may increase the rebate and eases import duties on Index for manu- not been kept on the back planting material for high-
the third- and The promoter on camera lenses for mobile disposable income of individ- compliance. It raw materials facturing burner. We have attended to it. value horticultural crops with
fourth most- pledge in Adani phones and an extension of uals to support consumption, also provides for released on We are respecting the glide an outlay of ₹2,200 crore and a
traded stocks by value at Ports, for instance, stands at concessional duty on lithium- the finance minister increased simplified and Wednesday path we gave to ourselves two scheme for fishers called Prad-
₹2,775 crore and ₹2,536 crore, 19.25% after a further 3.25% ion cells for batteries for the slab, up to which no smaller slabs,” the finance showed moderation in num- budgets ago,” Sitharaman said. han Mantri Matsya Sampada
respectively. was pledged on 27 January and another year. income tax is payable to ₹7 minister said during a post- bers to a three-month low in Global rating agencies Yojana, with a targeted invest-
The rout in the frontline 31 January. Sitharaman also extended lakh from ₹5 lakh a year from budget press conference. January to 55.4 from 57.8 in lauded the balance in the bud- ment of ₹6,000 crore.
Adani stocks had a cascading The increase in shorting the customs duty exemption 2023-24 under the new She added that there was a December as output and sales get. Christian de Guzman, sen- The budget has tried to
effect on PSU bank stocks like increased to the extent that on importing capital goods income tax regime, which will need to make the new tax growth slackened. ior vice-president of Moody’s please all constituencies while
State Bank of India, Bank of Ambuja Cements F&O con- and machinery required to be the default now. The new regime attractive to make The 33% increase in capital Investors Service, said that the trying not to look expansion-
Baroda and Punjab National tracts remain banned for trad- manufacture lithium-ion cells income tax regime introduced more taxpayers shift to it but expenditure outlay in FY24 to narrower deficit forecast in the ary. However, the real test of
Bank, which slipped 5-8%. ing in the segment as it crossed for batteries used in electric in 2020-21 does not allow for added that the older tax calcu- ₹10 trillion captured the gov- Union budget underscores the the proposals could be seen in
The outlook for the Group an exchange threshold in vehicles. any deductions related to lation system based on exemp- ernment’s emphasis on government’s commitment to the coming months when the
stocks remained gloomy even terms of the number of out- The budget introduced insurance and investments. tions would continue for those growth and job creation, as longer-term fiscal sustainabil- ruling dispensation would
after Wednesday’s rout. standing shares being held by steps to cut compliances and She also hiked the minimum who still prefer it. private spending remained ity and supports the economy taste the voter power during
“The investors in Adani clients. promote ease of doing busi- threshold under the old The markets reacted posi- lacklustre. The government’s amid high inflation and a chal- elections.
LIVEMINT.COM
Thursday, 2 February 2023
MuMbai 27

HAFFKINE BIO PHARMACEUTICAL CORPORATION LIMITED

(Procurement Cell)
Tel No. 022-24100478
E-mail - procurementcell@haffkinemumbai.com
Acharya Donde Marg, Parel, Mumbai 400 012 (INDIA)
Date : 30/01/2023. TENDER NOTICE
Managing Director, (Procurement Cell), Haffkine Bio Pharmaceutical Corporation Ltd., Mumbai invites tenders in two envelope systems from
eligible bidders for following items for various Health Institutions in Maharashtra.
Sr. Tender Name of Description Date of Pre Bid Period of Sale and Bid Opening
No. No. Meeting Preparation of bid &
bid submission
1. RT 2- 4475 Purchase of Instrument & From 02.02.2023 25.02.2023
Equipment 10.00 am to 23.02.2023 at
09.02.2023 upto up to 14:00 hrs 14:00 hrs.
2. RT 1- 4474 Purchase of Instrument & 11:00 a.m. From 02.02.2023 04.03.2023
Equipment 10.00 am to 02.03.2023 at
up to 14:00 hrs 14:00 hrs.
3. RT- 4344, Purchase of Instrument & 10.02.2023 upto From 03.02.2023 27.02.2023
RT 1- 4348, Equipment 11:00 a.m. 10.00 am to 24.02.2023 at
RT- 4473 up to 14:00 hrs 14:00 hrs.
4. RT- 4662, RT- 4800, Purchase of Instrument & 15.02.2023 upto From 08.02.2023 03.03.2023
RT- 4778, RT- 4782 Equipment 11:00 a.m. 10.00 am to 01.03.2023 at
up to 14:00 hrs 14:00 hrs.
For detailed information, the interested bidders may visit the website https://mahatenders.gov.in
For e-tendering help/ information, please contact.
Website:- https://mahatenders.gov.in Sd/-
Contact No.1800-233-7315,91-7878107985, (Dr. Sunil Pundge)
+91-7878107986, + 91-7878007972 and +91-7878007973 Manager Equipment,
Email - eproc.support@maharashtra.gov.in Haffkine Bio Pharmaceutical Corporation
DGIPR/2022-2023/ROC 5605 (Procurement Cell), Mumbai Ltd.,

HAFFKINE BIO PHARMACEUTICAL CORPORATION LIMITED

(Procurement Cell)
Tel No. 022-24100478
E-mail - procurementcell@haffkinemumbai.com
Acharya Donde Marg, Parel, Mumbai 400 012 (INDIA)
Date : 31/01/2023. TENDER NOTICE
Managing Director, (Procurement Cell), Haffkine Bio Pharmaceutical Corporation Ltd., Mumbai invites tenders in two envelope systems from
eligible bidders for following items for various Health Institutions in Maharashtra.
Sr. Tender Name of Description Date of Pre Bid Period of Sale and Bid Opening
No. No. Meeting Preparation of bid &
bid submission
1. RT- 4899 Purchase of Instrument & 09.02.2023 upto From 02.02.2023 15.02.2023
Equipment 11:00 a.m. 10.00 am to 13.02.2023 at
upto 14:00 hrs 14:00 hrs.
2. RT- 4894, Purchase of Instrument & 13.02.2023 upto From 07.02.2023 17.02.2023
RT- 4892, Equipment 11:00 a.m. 10.00 am to 15.02.2023 at
RT- 4893 up to 14:00 hrs 14:00 hrs.
3. RT- 4814, RT- 4815, Purchase of Instrument & 13.02.2023 upto From 08.02.2023 17.02.2023
RT- 4686, Equipment 11:00 a.m. 10.00 am to 15.02.2023 at
RT- 4813 up to 14:00 hrs 14:00 hrs.
4. RT- 4697, Purchase of Instrument & 16.02.2023 upto From 13.02.2023 20.02.2023
RT- 4702 Equipment 11:00 a.m. 10.00 am to 17.02.2023 at
up to 14:00 hrs 14:00 hrs.
For detailed information, the interested bidders may visit the website https://mahatenders.gov.in
For e-tendering help/ information, please contact.
Website:- https://mahatenders.gov.in Sd/-
Contact No.1800-233-7315,91-7878107985, (Dr. Sunil Pundge)
+91-7878107986, + 91-7878007972 and +91-7878007973 Manager Equipment,
Email - eproc.support@maharashtra.gov.in Haffkine Bio Pharmaceutical Corporation
DGIPR/2022-2023/ROC 5607 (Procurement Cell), Mumbai Ltd.,