INTRODUCTION: 

SPEECH BY PROMINENT PERSONALITIES (PM, PRESIDENT, UN OFFICIAL et. al)/RECOGNITION IF ANY:

• First budget of the Amrit Kaal lays a strong foundation for the aspirations and resolutions of a developed India:  PM MODI

• “Taxpayers are not just sources of revenue, they are also our partners in nation-building”. President Droupadi Murmu

• While the making of the budget may be an annual routine, its effects are continuous and momentous, affecting the economy and the life of the nation: Former PM Jawahar Lal Nehru
• The budget is not just a statement of financial resources; it reflects the vision, priorities, and the development agenda of the nation: EX-VP M. Venkaiah Naidu

CURRENT DEVELOPMENT: HIGHLIGHTS OF BUDGET 2023-24

• Theme: Focus on inclusive development - Sabka Sath, Sabka Vikas with Seven National Priorities (SAPTRISHI)

• Inclusive Development: a) Agriculture- Make India a global hub for 'Shree Anna' (Millets); Atmanirbhar Clean Plant Programme; Digital Public Infrastructure b) Education & Skilling: National Digital Library c) Health: Mission to eliminate Sickle Cell Anaemia by 2047

• Reaching ‘Last Mile’: Aspirational Blocks Programme; PM PVTG Development Mission; Water for Drought Prone Region

• Infrastructure & Investment: Increase in Capex for Infra by 33% to Rs 10 Lakh Cr; Support to States - 50 years interest free loan.

• Unleashing the Potential: Jan Vishwas Bill; Centres of Excellence for AI; National Data Governance Policy

• Green Growth: National Green Hydrogen Mission (19,700 crores outlay); Bhartiya Prakritik Kheti Bio-Input Resource Centres; GOBARdhan Scheme

• Youth Power: Pardhan Mantri Kaushal Vikas Yojan 4.0; National Apprentice Promotion Scheme
• Financial Sector: Credit Guarantee for MSMEs; Financial Information Registry; Small Savings Schemes - Mahila Samman Savings Certificate.
• GST Collections: For the first time, gross GST collection has crossed ₹1.75 lakh crore mark in April 2023.

DATA/FACT:

KEYWORDS:

• BODY: One nation, One Tax; Social contract; Tax as an Economic glue; Bounties for the Well Off; Monetise & Modernise; Low Equilibrium Trap; Shrinking ‘Fiscal Space’/’Fiscal Footprint’;
• CONCLUSION: 

• Tax Reforms: From ‘Tax Terrorism’ to ‘Tax Transparency’; From ‘Web of Taxes’ to ‘Seamless, painless and faceless’ Tax System; From Disputes to Trust: ‘Vivaad Se Vishwas’
• Fiscal Policy & Consolidation: From ‘Fiscal Bonfire’ to ‘Fiscal Prudence’/ ‘Fiscal Marksmanship’; “3 T Test” of fiscal stimulus to be effective: Timely, Temporary and Targeted.
• Subsidies Management: From Dole to Development; From ‘Wasteful’ Expenditure to ‘Welfare’ Expenditure; From ‘Culture of giveaways’ to ‘Culture of Empowerment’.

COMMITTEES RECOMMENDATIONS/NATIONAL OR INTERNATIONAL REPORTS:

• NK SINGH committee for FRBM act: recommended Debt-to-GDP ratio: 60%; bring down the fiscal deficit to 2.5% by 2023; Escape Clause in exceptional circumstances; 
• C Rangarajan Committee: suggested Outcome budgeting, emphasized on fiscal discipline, subsidy rationalization, and efficient resource utilization to stimulate economic growth and development.

GOVT SCHEMES, POLICIES, AND INITIATIVE:

• Reforms in the budget process: Eliminated distinction between Plan and non-plan spending; consolidated Railway and General Budgets; Advanced the Budget date, Introduced Zero-based, outcome and gender-based budgeting etc.
• Taxation Reforms: Transparent Taxation – Honoring the honest Platform – Seamless, Faceless, Paperless, Reduce Tax litigations (Vivaad se Vishwas); Digitisation (E-Way Bill, TIN, e-Sahyog); Innovative taxation (Taxing Virtual Digital Assets)
• Subsidy Reforms: DBT (PAHAL, PM Kisan Yojana), Public Financial Management System (PFMS); ‘Give it up’ campaign.

EXAMPLES/CASE STUDIES:

• National: Public Financial Management System which offers a dependable and efficient real-time decision support platform; “Single Treasury Account” for central Ministries and departments.
• Local level: GIS based property tax monitoring (Surat, Gujarat); Municipal Bond Market: Pune’s Pathbreaking Success to raise revenues.
• International: Innovative Municipal Landfill Taxes (UK); Rationalising Fossil Fuel Subsidies via public information campaign and programme of cash and in-kind transfers (Indonesia).

CONCLUSION

• Budget transparency, openness about policy intentions, evidence backed formulation, and implementation – is at the core of good governance agenda.
• Budget reform has to go further, to incorporate a ‘multi-year time horizon’ & shift to outcome-linked expenditure management, as had been recommended by a committee headed by C Rangarajan in 2011.

LOW EQUILIGRIUM TRAP

FISCAL CONSOLIDATION: FISCAL MARKSMANSHIP

PRINCIPLES OF EFFECTIVE TAXATION

GST: CHALLENGES & WAY FORWARD