For the financial year 2023-2024, union finance of India will present the Union Budget on 1st February 2022. Therefore, many speculations and suggestions are floating on the air about the upcoming Union Budget right now in India.
The Union Budget of India presentation is a mandatory duty performed by the Indian government at the Parliament before the commencement of every financial year following the Constitution of India’s Article 112. The Union Budget is announced for the upcoming fiscal year, starting on 1st April and ending on 31st March of next year. Union Budget of India is always presented first in the assembly of the union cabinet in India. The General Budget is presented in Lok Sabha by the Minister of Finance, who makes a speech introducing the Budget.
After Independence, the first Union Budget of India was presented by the then finance minister RK Shanmukham Chetty. Previous year Union Budgets such as 2021-22 or 2012-2013 all are available here, or anyone can download pdf of the Indian Budget from this link
The Union Budget comprises details about the anticipated receivables and payables of the government for a particular, fiscal year. This budget statement is divided into two significant parts-capital budget and revenue budget.
- Capital budget
Capital budget accounts for government-related capital payments and receipts. Capital receipts include loans from the public or the Reserve Bank of India (RBI). In contrast, capital payment includes expenses incurred towards health facilities, development and maintenance of equipment, as well as educational facilities.
- Revenue budget
As the name suggests, a revenue budget accounts for all the revenue expenditures and receipts. A fiscal deficit in a union budget is equal to the difference between the total revenue and total expenditure of the government. If the Expense is less than the revenue, the government will be in surplus.
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Understanding the importance of a Union Budget
The Union Budget’s general objective is for the country’s speedy recovery and balanced economic growth coupled with social justice and equality. The key objectives that highlight the importance of the Union Budget in India are specified below:
Proper distribution of resources
The industries of a country are the responsible players who create job opportunities for that country’s population. Every sector needs government support to survive at a critical time or flourish during the economic boom. Considering the industry’s potential, the government must employ the available resources in the country’s best interest.
Reduce unemployment and poverty level
Job creation is the country’s economic growth wheel, so the Union Budget’s objective is to create more job opportunities and wipe out poverty. The government directs the union budget about how to accommodate a vast number of Indian youths in different jobs.
Reduce wealth and income inequalities
The Union Budget of India aims to lower the disparity between the different income groups in the country through subsidies and taxes. It supports a high tax rate levied on the wealthy class, which reduces their disposable income. On the other hand, a lower tax rate is charged to the lower-income group to ensure they have sufficient cash in hand, resulting in demand for goods and services in the market. It helps to boost the economy in all clusters of a country.
Keep a check on prices.
The Union Budget support from government controls economic fluctuations as well by handling inflation and deflation, thus bringing about economic stability. During inflation, surplus budget policies are implemented, while deficit budget policies are devised during deflation. This aids in maintaining price stability in the economy.
For the financial year 2023-2024, union finance of India will present the Union Budget on 1st February 2022. Therefore, many speculations and suggestions are floating on the air about the upcoming Union Budget right now in India.
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A digest of important speculations and suggestions for the 2023 union budget are:
- As per the sources from Reuters, Government is considering lowering rates under the new income tax regime and could introduce revised slabs. Although the new tax regime has simplified the tax regime process without paperwork, people still need to accept it as a tax relief process.
- While it offers lower headline taxation for lower income groups, it has yet to gain popularity as it does not permit around 70 basic exemptions that were promised to deliver under the old tax regime.
- According to Sanjeev Jain, Joint Managing Director, Akums Drugs and Pharmaceuticals, the global market size of pharmaceutical products is predicted to surpass the $1 trillion mark in 2023. So, it is essential to allocate funds to research, innovation, formulation, and API in the healthcare sector. Secondly, India is also considered a Powerhouse of pharmaceutical manufacturing, and it has become essential to become a member of PICS to raise its GMP standard. To execute this, India needs to uplift the level of research and innovation, quality manufacturing, and strict regulation in this sector. The upcoming Budget will likely focus on preventive healthcare, provided a significant upsurge in non-communicable and lifestyle diseases. According to an EY FICCI report, the Indian pharmaceutical industry is expected to touch $130 billion by delivering new innovative therapies to patients. Consequently, incentivizing API manufacturers and reducing GST and import duty are crucial factors that can boost the health sector’s growth.
- The government is expected to provide low-cost credit schemes for the MSME sector, which suffered a considerable loss during the pandemic.
- India’s energy sector is also expecting several initiatives in this upcoming Budget. RPV Prasad, Envision Wind power Technologies, said to Economics times that the Energy sector is anticipating certain tax adjustments. The government can encourage the energy sector to generate renewable energy by granting favorable tax on income generated by selling renewable energy certificates by Section 115 BBG. REC should be treated as a carbon credit. In addition, reducing import duty, country-level fixed trade policy, and implementing the PLI scheme can boost renewable energy generation by bringing down installation costs.
We are keeping an eye on the updates of the union budget in FY 2023-2024. Please keep checking our website to get updates every day.
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