Budget 2023 For Competitive examination Download Pdf

byhomeacademy •
0

 

  • The Union Finance Minister Nirmala Sitaraman tabled the Economic Survey for the Financial Year 2023, after the President’s address.
  • The Economic Survey 2023 highlighted that India’s economic recovery from the pandemic is complete and the economy is expected to grow in the range of 6% to 6.8% in the coming financial year 2023-24.
  • Budget  is the government’s blueprint on expenditure, taxes it plans to levy, and other transactions which affect the economy and lives of citizens.
  • According to Article 112 of the Indian Constitution, the Union Budget of a year is referred to as the Annual Financial Statement (AFS).
  • The Budget Division of the Department of Economic Affairs in the Finance Ministry is the nodal body responsible for preparing the Budget.




  • Components of the Budget: There are three major components—
  • expenditure
  • receipts and
  • deficit indicators.
  • Depending on the manner in which they are defined, there can be many classifications and indicators of expenditure, receipts and deficits.
    • ExpenditureBased on their Impact on Assets and Liabilities: Capital expenditure is incurred with the purpose of increasing assets of a durable nature or of reducing recurring liabilities. Consider the expenditure incurred for constructing new schools or new hospitals. All these are classified as capital expenditure as they lead to creation of new assets. Revenue expenditure involves any expenditure that does not add to assets or reduce liabilities.Expenditure on the payment of wages and salaries, subsidies or interest payments would be typically classified as revenue expenditure. Depending on the Manner in which it Affects Different Sectors: Expenditure is also classified into (i) general services (ii) economic services, (iii) social services and (iv) grants-in-aid and contribution. The sum of expenditure on economic and social services together form the development expenditure. Economic services include expenditure on transport, communication, rural development, agricultural and allied sectors. Expenditure on the social sector including education or health is categorised as social services.Again, depending on its effect on asset creation or liability reduction, development expenditure can be further classified as revenue and capital expenditure.
    ReceiptsThe receipts of the Government have three components — revenue receipts, non-debt capital receipts and debt-creating capital receipts. Revenue receipts involve receipts that are not associated with increase in liabilities and comprise revenue from taxes and non-tax sources. Non-debt receipts are part of capital receipts that do not generate additional liabilities. Recovery of loans and proceeds from disinvestments would be regarded as non-debt receipts since generating revenue from these sources does not directly increase liabilities, or future payment commitments. Debt-creating capital receipts are ones that involve higher liabilities and future payment commitments of the Government.
    Fiscal DeficitFiscal deficit by definition is the difference between total expenditure and the sum of revenue receipts and non-debt receipts. It indicates how much the Government is spending in net terms.Since positive fiscal deficits indicate the amount of expenditure over and above revenue and non-debt receipts, it needs to be financed by a debt-creating capital receipt. Primary deficit is the difference between fiscal deficit and interest payments. Revenue deficit is derived by deducting capital expenditure from fiscal deficits.
  • N.K.Singh Committee Recommendations
  • Debt-GDP ratio:
    • The debt to GDP ratio should be 38.7% for the central government, 20% for the state governments together by FY 2022 – 23.
  • Fiscal deficit-GDP ratio:
    • The government should target a fiscal deficit of 3% of the GDP in the years up to 31st March 2020 cut it to 2.8% in 2020-21 and to 2.5% by 2023.
  • Revenue deficit-GDP ratio:
    • Revenue deficit-to-GDP ratio has been envisaged to decline steadily by 0.25 percentage points each year from 2.3% in 2016-17 to 0.8% in 2022-23.
  • Recommended enacting a new Debt and Fiscal Responsibility Act after repealing the existing Fiscal Responsibility and Budget Management (FRBM) Act, and creating a fiscal council.
  • India's economic growth in FY23 is being led by private consumption and capital formation, generating employment.
  • Global growth is projected to decline in 2023, but India's growth is expected to be swift in FY24 with a vigorous credit disbursal and capital investment cycle.
  • The expansion of public digital platforms and measures such as PM GatiShakti, the National Logistics Policy, and the Production-Linked Incentive schemes will support economic growth and boost manufacturing output.




  • What were the Major Fiscal Developments Related to Revenue?
  • Context:
    • During the fiscal year 2023, the Union Government's finances showed resilience, which was a result of various factors like the increase in direct taxes and Goods and Services Tax (GST) revenues.
  • Revenue Growth and Performance:
    • From April to November 2022, the Gross Tax Revenue experienced a YoY growth of 15.5%, which was primarily driven by the strong growth of both direct taxes and GST.
    • GST has established itself as a vital source of revenue for the central and state governments, as seen from the YoY growth of 24.8% from April to December 2022.
    • Over the years, the Centre's Capex has steadily increased from 1.7% of GDP (FY09 to FY20) to 2.5% of GDP in FY22.
      • To prioritise spending on Capex, the Centre incentivized the state governments through interest-free loans and increased borrowing limits.
      • The increased Capex, particularly in infrastructure-intensive sectors such as roads and highways, railways, housing, and urban affairs, has substantial positive effects on medium-term growth.
  • Towards Sustainable Debt-to-GDP ratio:
    • The government's strategy of focusing on Capex-led growth will keep the growth-interest rate differential positive, resulting in a sustainable debt-to-GDP ratio in the medium run.
  • What was the Status of Monetary Management and Financial Intermediation?
  • Context:
    • The Reserve Bank of India (RBI) started its monetary tightening cycle in April 2022, and since then, they have raised the repo rate by 225 basis points.
      • This has led to a decrease in surplus liquidity and improved the balance sheets of financial institutions, making it easier for them to lend money.
    • It is expected that the growth in credit offtake will continue and be sustained by an increase in private capital expenditure, which will start a virtuous cycle of investment.
  • Performance and Growth:
  • How Prices and Inflation was Regulated in 2022-23?
  • Context:
    • In 2022, India experienced three phases of consumer price inflation. During the first phase, from January to April, inflation peaked at 7.8% due to the war between Russia and Ukraine and crop shortages caused by heat waves in some parts of the country.
      • However, prompt actions by the government and the Reserve Bank of India helped bring inflation under control, with a decline to 5.7% by December.
  • Bottlenecks:
  • Regulatory Measures:
    • The government adopted a multi-pronged approach to control the increase in prices, which included: reducing the export duty of petrol and diesel, bringing the import duty on major inputs to zero, imposing export ban on wheat products and export duty on rice, and reducing the basic duty on crude and refined palm oil.
    • The government's timely policy intervention in the housing sector, along with low home loan interest rates, boosted demand in the affordable housing segment and attracted more buyers in FY23.
  • RBI’s Forecast:
    • The RBI forecasts higher domestic prices for cereals, spices, and milk in the near future, mainly due to supply shortages and rising feed costs.
      • The changing climate around the world is also increasing the risks of higher food prices.
  • What is the Status of Social Infrastructure and Employment in India during 2022-23?
  • Context:
    • The government increased its spending on the social sector. The twin pillars of education and health are being strengthened to form human capital.
      • Overall, the government's social sector spending increased from Rs. 9.1 lakh crore in FY16 to Rs. 21.3 lakh crore in FY23.
  • Social Infrastructure:
    • Education:
      • The National Education Policy 2020 is expected to enrich the nation's growth and development prospects.
      • The government's efforts have led to improvements in enrollment ratios and gender parity in schools.
    • Healthcare:
      • In FY23, the government's budgeted spending on the health sector was 2.1% of GDP, up from 1.6% in FY21.
      • As of January 4, 2023, nearly 22 crore people have benefited from the Ayushman Bharat Scheme, and over 1.54 lakh health and wellness centres have been established across the country.
    • Poverty Alleviation:
    • Aadhaar and Co-Win:
      • Aadhar played a critical role in developing the Co-WIN platform and administering over 2 billion vaccine doses. 
    • Aspirational Districts Programme:
  • Employment:
    • Labour Force Participation: Labour markets have recovered from the effects of Covid-19, with unemployment rates falling from 5.8% in 2018-19 to 4.2% in 2020-21.
      • The Rural Female Labor Force Participation Rate has risen from 19.7% in 2018-19 to 27.7% in 2020-21, which is a positive development.
    • eShram Portal: The eShram portal was created to create a national database of unorganised workers, and as of December 31, 2022, over 28.5 crore workers were registered.
    • Jam Trinity and DBT: The JAM trinity, combined with Direct Benefit Transfer (DBT), has brought marginalised people into the formal financial system, empowering them.
  • How was India’s Economic Performance in Climate Change and Environment?
  • Context:
  • Performance and Goals:
    • India has also committed to reduce emissions intensity of its GDP by 45% by 2030 from 2005 levels.
    • Another target has been set to achieve about 50% cumulative electric power installed capacity from non-fossil fuel-based energy resources by 2030.
      • India has already achieved its target of 40% installed electric capacity from non-fossil fuels ahead of 2030 and the likely installed capacity from non-fossil fuels will be more than 500 GW by 2030.
      • This would lead to a decline of average emission rate by around 29% by 2029-30 (compared to 2014-15).
    • A mass movement LiFE– Lifestyle for Environment was launched at the Glasgow climate summit at UNFCCC COP26.
    • In Nov 2022, India’s first Sovereign Green Bonds (SGrBs) Framework was issued. RBI auctioned two tranches of ₹4,000 crore SGrBs.
    • The survey also highlighted India's plans to be energy independent by 2047, by relying on green hydrogen through the National Green Hydrogen Mission.
    • The survey shows that India is becoming a favoured destination for renewables with investments standing at USD 78.1 billion in the past 7 years.
  • How was India’s Economic Performance in Agriculture and Food Management?
  • Context:
    • India’s agriculture sector has witnessed a robust average annual growth rate of 4.6% over the last six years. This enabled agriculture to contribute significantly towards the country's overall growth, development and food security.
  • Performance:
    • In recent years, India has emerged as the net exporter of agricultural products, with exports in 2021-22 touching a record USD 50.2 billion.
    • Agri sector saw buoyant growth due to the following measures taken by the govt:
  • Private investment in agriculture increased to 9.3% in 2020-21. Institutional credit to the Agri sector continued to grow to Rs. 18.6 lakh crore in 2021-22.
  • Foodgrains production in India saw sustained increase and stood at 315.7 million tonnes in 2021-22.
  • The National Agriculture Market (e-NAM) Scheme has established an online, competitive, transparent bidding system to ensure farmers get remunerative prices for their produce (covering 1.74 crore farmers and 2.39 lakh traders).
  • Under Paramparagat Krishi Vikas Yojana (PKVY), organic farming is being promoted through Farmer Producer Organisations (FPO).
  • India stands at the forefront to promote millets after the UNGA, in its 75th session in 2021, declared 2023 the International Year of Millets (IYM).
  • How was India’s Economic Performance in the Industrial Sector?
  • Context:
    • The Economic Survey 2022-23 showed a rise of 3.7% of overall Gross Value Added (GVA) by the Industrial Sector (for the first half of FY 22-23) which is higher than the average growth of 2.8% achieved in the first half of the last decade.
  • Performance:
  • Credit to both MSMEs and large industries have shown double digit growth (MSMEs by 30% since Jan 2022).
  • India’s electronics exports have risen nearly threefold, from US $4.4 billion in FY19 to US $11.6 Billion in FY22 with India becoming the second-largest mobile phone manufacturer globally.
  • Foreign Direct Investment (FDI) flows into the Pharma Industry have risen four times, from US $180 million in FY19 to US $699 million in FY22.
  • Production Linked Incentive (PLI) schemes were also introduced across 14 categories, with an estimated capex of Rs. 4 lakh crore over the next five years, to plug India into global supply chains.
  • Over 39,000 compliances have been reduced and more than 3500 provisions decriminalised as of January 2023 by amending the Companies Act 2013.
  • To further enhance India’s integration in the global value chain, ‘Make in India 2.0’ is now focusing on 27 sectors, which include 15 manufacturing sectors and 12 service sectors.
  • How was India’s Economic Performance in the Services Sector?
  • Context:
    • The Services Sector in India is expected to grow at 9.1% in FY23, compared to 8.4% (YoY) in FY22.
  • Performance:
    • Robust expansion in PMI (Purchasing Managers' Index) services has been observed since July 2022.
    • India was among the top ten services exporting countries in 2021, with a share of 4% in world commercial services exports.
    • India’s services sector has been resilient even throughout the Covid-19 pandemic and amid geopolitical uncertainties due to higher demand for digital support, cloud services, and infrastructure modernization.
    • In the real-estate sector, there was sustained growth, leading to pre-pandemic housing sales levels, with a 50% rise between 2021 and 2022.
    • In the tourism sector, hotel occupancy rate improved from 30-32% in April 2021 to 68-70% in November 2022 showing signs of revival with increasing foreign tourist arrivals in FY23.
    • Digital platforms are transforming India’s financial services; India’s e-commerce market is projected to grow at 18% annually through 2025.
  • How was India’s Economic Performance in the External Sector?
  • Context:
    • Owing to the recent geopolitical developments, India's external sector has been facing considerable global headwinds.
    • However, India has diversified its markets and increased its exports to Brazil, South Africa and Saudi Arabia.
  • Performance:
    • India's current account balance (CAB) recorded a deficit of US$ 36.4 billion (4.4% of GDP) in the second quarter (Q2) of FY23 in contrast to a deficit of US$ 9.7 billion (1.3% of GDP) in Q2 of FY22.
      • This was mainly due to a higher merchandise trade deficit of US$ 83.5 billion and an increase in net investment income outgo.
    • To increase its market size and ensure better penetration, in 2022, India signed CEPA with UAE and ECTA with Australia.
    • India is the largest recipient of remittances in the world receiving US$ 100 bn in 2022.
      • Remittances are the second largest source of external financing after service export.
    • As of December 2022, India’s Forex Reserves stood at US$ 563 bn covering 9.3 months of imports (this is a decline from 13 months of imports in FY 21-22).
      • Despite this, India was the 6th largest foreign exchange reserves holder in the world.
  • How was India’s Economic Performance in the Digital Public Infrastructure?
  • Context:
    • India's Digital Public Infrastructure (DPI) can add around 60-100 basis points (BPS) to India's potential GDP growth rate.
    • In the immediate future, platforms such as Open Network for Digital Commerce (ONDC), Open Credit Enablement Network (OCEN) will open avenues for e-commerce market access and credit availability for smaller businesses and strengthen the expected economic growth.
  • Performance:
    • Unified Payment Interface (UPI):
    • Telephone and Radio - For Digital Empowerment:
      • Total telephone subscriber base in India stands at 117.8 crore (as of Sept,22), with 44.3% of subscribers in rural India.
        • More than 98% of the total telephone subscribers are connected wirelessly.
        • As of March 2022, India’s overall teledensity (number of telephone connections per 100 people) in India stood at 84.8%.
  • Economic Survey states that a landmark achievement in telecommunications in India was the launch of 5G services.
  • Prasar Bharati, India’s autonomous public service broadcaster, broadcasts in 23 languages, 179 dialects from 479 stations and reaches 92% of India’s total area and 99.1% of the total population.
  • Digital Public Goods:
    • Schemes like MyScheme, TrEDS, GEM, e-NAM, UMANG have transformed India’s market place and has enabled citizens to access services across sectors.
    • Open Credit Enablement Network aims towards democratising lending operations while allowing end-to-end digital loan applications.
    • National AI portal has published 1520 articles, 262 videos, and 120 government initiatives and ‘Bhashini’ is being viewed as a tool for overcoming the language barrier.
    • The bouquet of digital public infrastructure products like e-RUPI, e-Way Bill etc. have ensured real value for money to consumers while reducing the compliance burden for producers.
  • What is the Production Linked Incentive scheme (PLI)?
  • About:
    • The Indian government's introduction of the PLI scheme in 14 key manufacturing sectors is a significant step towards achieving its strategic vision for the manufacturing industry.
      • With a budget of ₹1.97 lakh crore, the scheme is well-designed to encourage growth and sustainability in the targeted industry through various incentives and support measures.
    • Launched in March 2020, the scheme initially targeted three industries:
      • Mobile and allied Component Manufacturing
      • Electrical Component Manufacturing and
      • Medical Devices
  • Targeted Sectors:
    • The 14 sectors are mobile manufacturing, manufacturing of medical devices, automobiles and auto components, pharmaceuticals, drugs, specialty steel, telecom & networking products, electronic products, white goods (ACs and LEDs), food products, textile products, solar PV modules, advanced chemistry cell (ACC) battery, and drones and drone components.
  • Incentives Under the Scheme:
    • The incentives given, are calculated on the basis of incremental sales.
      • In some sectors such as advanced chemistry cell batteries, textile products and the drone industry, the incentive to be given will be calculated on the basis of sales, performance and local value addition done over the period of five years.
    • The emphasis on R&D investment will also help the industry keep up with global trends and remain competitive in the international market.
  • How PLI is Creating a Growth Ecosystem in India?
  • Reducing Dependency on Imports: This shift in the manufacturing landscape could have significant implications for global trade, reducing dependency on a single-source country and diversifying the sources of production.
  • Meeting the Demand: Increased production volumes are meeting consumer demand, particularly in the telecom and networking sectors with faster adoption of 4G and 5G products.
    • The PLI scheme for large-scale electronics manufacturing (LSEM) saw successful results, with 97% of mobile phones sold in India now being made in India. As of September, 2022, the PLI scheme for LSEM attracted investments of ₹4,784 crore and generated 41,000 additional jobs.
  • Reducing Carbon Footprint: The PLI scheme's emphasis on green technologies will reduce the carbon footprint and position India as a pioneer in green policy implementation.
  • Boosting Free Trade Agreements: Improved productivity is boosting free trade agreements for better market access and increased sales are driving demand for better logistical connectivity.
  • Frontlining Rural India: The government of India is working closely with states to help industries and artisans in rural areas become part of the country's growth story.




  • Follow Home Academy on social media
  • For notes visit website www.homeacademy.in 






Tags:
homeacademy

Home academy is JK's First e-learning platform started by Er. Afzal Malik For Competitive examination and Academics K12. We have true desire to serve to society by way of making educational content easy . We are expertise in STEM We conduct workshops in schools Deals with Science Engineering Projects . We also Write Thesis for your Research Work in Physics Chemistry Biology Mechanical engineering Robotics Nanotechnology Material Science Industrial Engineering Spectroscopy Automotive technology ,We write Content For Coaching Centers also infohomeacademy786@gmail.com

Post a Comment (0)
Previous Post Next Post