union-budget-analysis-a-comparative-overview-of-the-past-four-years

As India anticipates the release of the Union Budget for the fiscal year 2024-25, scheduled to be announced by Finance Minister, Nirmala Sitharaman on February 1st, Thursday, it's an opportune moment to reflect on the fiscal trajectory of the preceding four years.

 

Four Years of Union Budgets: Trends, Figures, and Policies

 

Overview of Expenditure:

 

2020-21

The fiscal year recorded an estimated budgetary expenditure of ₹30,42,230 crores, reflecting a substantial 12.7% increase from the preceding year's figure of ₹26,98,054 crores.

 

2021-22

Building on the momentum, the expenditure surged to ₹34,83,236 crores, demonstrating a robust 13% growth compared to the previous fiscal year.

 

2022-23

The upward trajectory continued with an expenditure of ₹39,44,909 crores, indicating a 4.6% increase from the estimated expenditure of the preceding year 2021-22.

 

2023-24

 

Under the thematic backdrop of "Amritkaal", symbolizing 100 years of Independence, the Union Budget of the year 2023-24 prioritized job creation, economic revitalization and inclusive growth.

 

Aimed at eliminating exemptions on investments and promoting simplicity in taxation, the budget announced individuals earning up to ₹7 lakh a year exempt from paying any income tax under the new tax regime.

 

Key Initiatives and Policy Highlights:

 

2020-21

In line with the motto of "Sabka Saath, Sabka Vikas, Sabka Vishwas," the Union Budget of 2020-21 placed a strong emphasis on improving the lives of all citizens.  Under the theme of "Antyodaya," which is the art of faith, the budget aimed at making living easier, ensuring a clean and stable financial sector, and promoting good governance.

 

A substantial Rs. 2.83 lakh crores were allocated to the 16 action point, while Rs. 1.6 lakh crores were earmarked for the agriculture and allied sector. Rs. 1.23 lakh crores were set aside for rural development and Panchayati Raj, and a Rs. 15 lakh crore for agricultural credit, aimed at empowering farmers.

To support the blue economy, the budget aimed to increase fisheries exports by 1 crore by the year 2024-25.

 

 A notable move was the establishment of the Kisan Rail through a public-private partnership by Indian Railways, which greatly benefited farmers in transporting their produce.

 

The budget also laid out plans to construct 100 airports by 2024 under the Udaan scheme, with 68 airports already operational by 2024.

 

 

2021-22

The budget of 2021-22 had laid the initiation of flagship programs such as the PM Gati Shakti scheme, which aimed at boosting infrastructure and connectivity nationwide. Complementing this, substantial investments were directed towards enhancing skilling and livelihood opportunities. The budget set forth ambitious plans to construct 15,000 schools, integrating components of the National Education Policy to ensure holistic development and inclusive access to quality education for all.

 

The PM Atma Nirbhar Swasth Bharat Yojana was revealed, signalling a proactive approach towards public health by establishing institutions equipped to detect and combat emerging diseases.The National Monetisation Pipeline was introduced, focusing on the dedicated freight corridor, while the Jal Jeevan Mission expediated on a journey towards achieving universal water supply, addressing a fundamental need of every citizen.

 

A dedicated Agriculture Infrastructure Fund was established, undertaking a commitment to modernize agricultural infrastructure.

 

2022-23

The union budget of 22-23 had keen focus on economic corridors, skilling, healthcare, and digital initiatives.

 

Notable highlights encompassed the introduction of tax reforms, strategic investments in critical sectors, and the inauguration of the National Digital Health Ecosystem. 

 

A 30% tax on virtual assets was introduced, while eschewing reliance on borrowings from the national small savings fund or any extra-budgetary resources in 2022.

 

Amendments to the RBI Act, 1934 paved the way for the introduction of digital currency as well. Rs 51,971 crores were earmarked in the preceding year to settle liabilities of Air India.

 

The budget outlined the establishment of an open platform for the National Digital Health Ecosystem under the ambit of Ayushman Bharat Digital Mission, along with the launch of a National Tele-Mental Health Programme. Allocation of Rs 44,605 crores was designated for 5 linking projects, including Rs 1400 crore for the Ken-Betwa linking project.

 

The budget introduced the PM DeVINE initiative through the North Eastern Council. A landmark move was the announcement of sovereign green bonds to promote green infrastructure.

 

2023-24

Under the thematic backdrop of "Amritkala," symbolizing 100 years of independence, the union budget of the year 2023-24 prioritized job creation, economic revitalization, and inclusive growth.

Aimed at eliminating exemptions on investments and promoting simplicity in taxation, the budget announced individuals earning up to ₹7 lakh a year are exempt from paying any income tax under the new tax regime.

 

Comparative Insights and Fiscal Indicators

 

Despite variations in expenditure, the fiscal deficit remained a critical concern over the years.

In 2023-24, the revised fiscal deficit almost mirrored the previous year's figure, indicating challenges in managing expenditure against receipts.

 

Disinvestment Targets

 

The disinvestment trajectory fluctuated across the years, with targets being met differently each fiscal year, showcasing the complexities in divesting public assets.

 

Ministry Allocations

 

Ministry priorities witnessed shifts, reflecting evolving policy imperatives.

 

In the fiscal year 2023-24, the Ministry of Defence took centre stage with a notable budgetary allocation of 13.2%, followed by a substantial increase, witnessing the biggest jump of all years with 48.6% for the Ministry of Railways. Contrastingly, in 2022-23, allocations were directed towards the Ministry of Communications (93%), Ministry of Rural Development, Transport, and Highways (52%), and Ministry of Jal Shakti (25%).

The previous fiscal year, 2021-22, saw a significant allocation for the Ministry of Jal Shakti (64%), succeeded by the Ministry of Consumer Affairs, Food and Public Distribution (48%), and the Ministry of Communications (31%).

 

In 2020-21, the Ministry of Communications received a remarkable 129% allocation, while the Ministry of Agriculture and Family Welfare followed with 30%, and the Ministry of Home Affairs with 20%.

 

Strategic Fiscal Expansion and Policy Focus

 

The steady escalation in capital expenditure over the four-year period highlighted the government's strategic intent to encourage infrastructure, stimulate economic growth, and create employment opportunities.

 

From the inaugural budget of the third decade of the 21st century to the landmark year commemorating 100 years of independence, each budget demonstrated a nuanced approach towards addressing contemporary challenges while leveraging opportunities for sustainable development.