Madame Finance Minister, here’s our Rs 45.7 lakh crore shadow budget with three champions
NEW DELHI, JAN. 29: There are budget wish lists. There are sectoral spending estimates. Then there are income and expenditure projections with achingly specific detail on fiscal deficit. But few venture on a complex, national accounting exercise, which looks and talks exactly like a union budget. In a first, this newspaper gave it a shot.
The Shadow Budget 2024 explored if there are any different and efficient ways of maximising income and expenditure. Turns out, there aren’t many.
painstakingly punched in the numbers and proposed, what he calls, a business-as-usual budget for FY24.
Sood’s sums include an exhaustive account of revenue and spending, broken down all the way to department-wise revenue and capital expenditure allocations, alongside the receipts budget comprising tax, non-tax revenue and debt and capital receipts. Given the uncertain global conditions, he pegged real GDP growth at a conservative 6% in FY24.
In all, expenditure budget was set at Rs 45.67 lakh crore, an increase of 11.1% over FY23’s revised estimates of Rs 41 lakh crore, up from the budget estimate of Rs 39 lakh crore. As a percentage of GDP, FY24 expenditure stood at 15.2%. Gross tax revenue will likely increase by 13.1% at Rs 34.40 lakh crore. He proposed no changes to personal income taxes but expects FY24 budget to tinker with the long-term capital gains tax.
Within indirect taxes, GST will likely retain its star performance with a 14.3% growth, while customs and excise duties together will likely fetch a handsome Rs 5.7 lakh crore revenue. Still, borrowings are estimated to jump 4.8% to Rs 17.85 lakh crore, while fiscal deficit is pegged at 5.9% in FY24. A similar 50-60 bps deficit correction next two years should help meet the 4.5% target by FY26. Subsidy outgo will likely moderate at Rs 4.25 lakh crore, or 1.4% of GDP, while capital spend could increase by a neat 13.3%. At Rs 8.15 lakh crore, it accounts for 2.67% of GDP.
FM likely to live within means
Elections often produce populist budgets. But Anil K Sood, founder, IASCC, sees pragmatism written all over Union Budget 2024.The reasons aren’t hard to find. According to Sood, though the prevailing economic conditions warrant higher spending, the government is likely to live within its means, like it has been doing over the past few years.
His proposed Rs 45.7 lakh crore-expenditure budget has three champions — food and primary healthcare, rural and urban infrastructure development, and higher capex for a growth-oriented economy. All three need cash, so he urged the government to borrow without hesitation. An average Indian household is yet to recover from the post-pandemic shocks.
An accountant’s view of life, focusing on artificial fiscal deficit target makes a bad situation worse, he reasons. Much like Finance Minister Nirmala Sitharaman, the Shadow Budget makes capex as its cornerstone, allocating a neat sum of Rs 8.09 lakh crore, a 13.3% increase over FY23. But the similarities end there. When it came to department-wise allocations, Sood’s sums vary from that of the government’s.
Unlike the Union Budget that cut a big cheque for roads and highways, Sood lowered the sum and redirected the savings elsewhere. Still, it saw a 13% jump over FY23. Defence got a 14.4% boost at Rs 1.8 lakh crore, which is huge as capex allocations remained in single digits until now.
-TNIE
