India Budget Carves out a Green, Digitalized, and Inclusive Growth Path
India’s Union Budget 2023-24 presented by Finance Minister Nirmala Sitharaman, envisages to push the country’s green growth agenda powered by a strong digital push.
The budget, which is the last full budget of the current government led by Prime Minister Narendra Modi before the parliamentary election slated for next year, sets out the vision for next 25 years, showcasing opportunities for citizens with focus on youth, growth and job creation along with strong and stable macroeconomic environment.
Seven key priorities outlined in the budget are: inclusive development, reaching the last mile, youth power, infrastructure and investment, unleashing the country’s potential, the financial sector, and green growth.
“Our vision for the Amrit Kaal includes technology-driven and knowledge-based economy with strong public finances, and a robust financial sector,” Sitharaman said in her budget speech. The 25-year period leading to 2047 when India completes 100 years of Independence has been termed Amrit Kaal by the government.
Companies called the budget balanced and progressive, aiming to position India as the world’s next growth engine.
Understandably, this budget has built upon the successes of the wide-ranging reforms and policies that have helped India perform well in tackling the COVID-19 pandemic and emerge with bright economic outlook.
Unique world-class digital public infrastructure spearheaded by Aadhaar, Co-Win and UPI, health and pharma prowess led by COVID-19 vaccination drive at an unparalleled scale and speed, and proactive role in frontier areas like achieving climate related goals, mission LiFE and National Hydrogen Mission all signify India’s emergence as a leader in defining the world’s sustainable growth trajectory.
To meet the target set by Prime Minister Modi of attaining net zero emissions by 2070, the budget stresses green growth, which will be catalysed by an all-round push to promote “green fuel, green energy, green farming, green mobility, green buildings and green equipment” along with the policies for efficient use of energy across sectors.
This will present opportunities for investment and expansion not only for the existing players, but also for the prospective companies looking at India to expand their businesses.
Prioritizing research and innovation in cutting-edge technologies—including artificial intelligence and pharma—with the help of industry partnership is also a move that is expected to get further boost in coming years to support economic growth.
The strong, all-round digital push in the budget clearly shows the government’s intention to consolidate and capitalise the gains in this area. Steps like National Data Governance Policy, simplification of know your customer (KYC) process, one-stop solution for identity and address updating, common business identifier, unified filing process (portal for sharing of information and returns with multiple agencies), and Entity DigiLocker (secured digital locker for small- and medium-sized companies to store documents for sharing with regulators, banks and other business entities) will help the public and companies in dealing with various requirements in meeting identification and filing obligations.
Investors and companies across the board will also keenly watch the government’s plan to simplify, ease and reduce cost of financial compliances for which regulators will carry out a comprehensive review of existing laws.
While these are progressive and forward-looking steps in the budget, the biggest push to growth will come through the steep 33% increase in the capital investment outlay to INR 10 trillion ($122.3 billion)—3.3% of the GDP. This will support growth and job creation besides crowding-in private investment. It will also provide a cushion against global headwinds.
Overall, the budget is seen by experts and analysts as consolidating the position of the Modi government ahead of several state elections this year and finally the parliamentary poll in 2024.
This report capturing the overall framework of the budget also covers major announcements for identified key sectors.