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Budget 2023: Expect higher outlays for infrastructure sectors

While increased outlays for projects and missions to accelerate infrastructure creation are required, Budget 2023 should also address impediments to the speedy implementation of plans

January 20, 2023 / 03:04 PM IST
Now that many of the issues around financing infrastructure have been addressed all eye on Union Budget 2023. (Representative image)

Now that many of the issues around financing infrastructure have been addressed all eye on Union Budget 2023. (Representative image)

Three confident predictions about the Union Budget 2023 would be, first, infrastructure sectors would get even higher funding, second, that it would be a continuation of the strategy followed over the last few years by the Union Finance Minister, and third, there would be much media hype around the Budget announcements.

While the Union Budget is essentially an income and expenditure statement, it has become a mini- ‘State of the Union’ address. The attendant media hype helps in focusing attention on the various budget announcements for current and previous years. Discerning analysts would understand that both Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman have, over the last four years, made the direction of future budgets abundantly clear. Hence a reading of the previous two budget speeches is highly recommended for all even before February 1.

In addition, as part of the Budget papers comes a summary of actions taken on previous budget announcements. Last year, after the budget, the PM and FM participated in a series of sectoral online interactions with public and private stakeholders, to get inputs on better implementation of budget announcements. I was privileged to be part of two such interactions on infrastructure and finance, and was impressed by the openness of both elected and appointed officials to our suggestions.

On the fiscal front, a significant development was an increase in government revenues, largely due to three factors: increasing formalisation of the economy, stable and predictable tax rates, and better enforcement of tax and non-tax revenues. All three factors are interlinked and re-enforce each other.  GST revenues are sustainably high, denoting the formal economy doing well. As an indicator of the informal economy, traffic and toll revenues are rising, now that toll collections are almost entirely digital. There is higher ease of doing business, especially on Union government matters. Digitalisation with India’s public digital infrastructure is a success story for the world to emulate, in this year of India’s G20 Presidency. In addition, low tax rates for the corporate sector has had a virtuous impact. Hence in 2023, the Union government has more money to spend. As a corollary, we can look forward to higher outlays for infrastructure sectors.