CHENNAI ■ MADURAI ■ VIJAYAWADA BENGALURU ■ KOCHI ■ HYDERABAD ■ VISAKHAPATNAM ■ COIMBATORE ■ KOZHIKODE ■ THIRUVANANTHAPURAM ■ BELAGAVI ■ BHUBANESWAR ■ SHIVAMOgGA ■ MANGALURU ■ TIRUPATI ■ TIRUCHY ■ TIRUNELVELI ■ SAMBALPUR ■ HUBBALLI ■ DHARMAPURI ■ KOTTAYAM ■ KANNUR ■ VILLUPURAM ■ KOLLAM ■ TADEPALLIGUDEM ■ NAGAPATTINAM ■ THRISSUR ■ KALABURAGI ■ ■ THRISSUR l thursday l February 02, 2023 l `9.00 l PAGES 14 l city EDITION Ra i lway ta x at i o n capex Debt burden pm awas Whopping L2.4 lakh cr CAPITAL OUTLAY No need to pay tax for income up to L7 lakh L10 lakh cr for infra development Centre to borrow record L15.4 lakh cr 66% more for urban housing Budget 2023-24 proposes C2.4 lakh crore as capital outlay towards infrastructure investment for Indian Railways. This is the highest ever allocation and nine times more than what was given in 2013 Personal income tax rebate limit raised to C7 lakh under the new tax regime, from C5 lakh earlier, and the tax slabs have been cut to five from seven. Surcharge on income above C5 cr cut from 37% to 25% Capital expenditure for infra development up 33% to C10 lakh cr, which is 3.3% of the GDP. Govt’s continued focus on infrastructure development will enable economic growth as well as create more jobs The government plans to borrow a record C15.4 lakh crore from dated securities in FY24 to meet its expenditure requirement to prop up the economy. This is 34% of the total budgeted income in FY24 The outlay for PM Awas Yojana has been raised by 66% to C79,000 crore, while that of MGNRGA has been cut to C60,000 crore from C89,400 crore in FY23 PLEASE-ALL BUDGET THAT STAYS THE COURSE A n a ly s i s D i pak M o n d a l @ New Delhi Income tax relief timed with polls Su n i t h a Nat t i If there’s luck in the last helping, it arrived in good measure on Wednesday Fi. nance Minister Nirmala Sitharaman emerged as the ultimate accounting bar mitzvah, making the government’s last full Budget before general elections, a Budget for the bourgeois. If modern dictionaries define bourgeois as the middle class, the old world Marxism reserved it for capitalists. Slice it whichever way you want, Sitharaman unabashedly catered to both the classes, and the poor. Importantly it supports India’s aspi, rations of a middle-income economy and , so for Sitharaman and team, this Budget is as much about winning 2024 as marching beyond towards India@100. Until now, the middle-class’ wait for tax breaks was like the world’s search for Vitamin-D and sunshine. That search ended with the FM announcing an unexpected tax bonanza, foregoing `35,000 crore revenue. This isn’t a significant sum, and could have been offered earlier. But, generosity comes blazing during elections and as they say nearer the bone, sweeter the meat. , Of the `45 lakh crore expenditure Budget for FY24, the actual increase is only `3.16 lakh crore. Of this, revenue expenditure jump of all 84 ministries is just `43,000 crore, as if coming from the Treasury’s coin purse. Among the priority list, capital expenditure is number one, two and three. Whatever is in the rest of the list is far behind. Capex saw wheelbarrows of currency notes totaling `10 lakh crore, which perhaps Sitharaman hopes will have an electrifying effect like the Kantara cry (Voooooooooo) that echoes long after the movie watching. The allocation will help withstand global headwinds should the world step on the next banana skin and slip into a slowdown, if not a recession. Gross tax revenue growth is pegged at 10.4%, not the cheeriest at all. But of late, the gap between Budget estimates and actuals are as far apart as grandmothers’ teeth. Under promising and over delivery is a good strategy but that doesn’t apply to , national accounting, whose credibility lies on FM’s fiscal marksmanship. As for fiscal deficit, markets get anxious just by rattling the sword in its sheath, so the FM set herself a fantastic chase in her hands anchoring deficit at 5.9% for FY24. The biggest setback was privatisation. The government remains wedded to the idea, but like married couples, they are taking some time apart. Delivering one fantastic Budget is much; two many; three impossible. But not for Sitharaman. If Budget 2021 redefined her role as FM, the latest one takes it further. Balancing income, expenditure and debt is as challenging as aligning one’s mind, body and soul. More so, during crises. With plenty of practice, she has showed the world how prudence can be the biggest weapon. INSIDE at first look, Budget 2023-24 may appear populist. But on closer examination, it turns out not to be the case. The smart packaging by Union finance minister Nirmala Sitharaman and her team at the North Block has made it look populist but remain on the path of fiscal consolidation. The `45lakh crore Budget has steered clear of too many freebies and unnecessary expenditures, and yet made an allocation here and allocation there to please all sections. The Budget turns out to be an exercise on expenditure and tax rationalisation. The government has tightened its belt on the fiscal front with the fiscal deficit target for FY24 brought down to 5.9%, a 50 basis-point reduction from FY23. While the overall expenditure in FY24 has seen a 7.5% rise over the revised estimate for FY23, bulk of the increase is due to a sharp uptick in capital expenditure or capex — spending for infrastructure and asset creation. The capex spending in 202324 has been increased by 33% to `10 lakh crore from `7.3 lakh crore (revised estimate) in FY23. Capital expenditure has almost trebled since 2019-20. “This substantial increase in recent years is central to the government’s efforts to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds,” Sitharaman said in her Budget speech. Revenue expenditure — administrative expenses used for paying salaries, pensions and subsidies — has seen only a modest 1.25% increase over the revised estimate for Proving John Kenneth Galbraith Wrong I P6 FY23. The fertiliser and food subsidy bill is budgeted at a lower level in FY24 than the revised estimate of FY23. Among other major cuts in allocation is for MNREGA, where the allocation for the next financial year is kept at `60,000 crore, down from `90,000 crore (revised estimate) for FY23. “A higher non-interest and non-subsidy revenue expenditure would provide the much-needed support to the economy recovery,” said India Ratings in a note. Income tax payers – especially the salaried class – have something to cheer, but all the benefits are reserved for the new tax regime, which was not gaining traction. Notably, the upper limit for income tax rebate has been increased from `5 lakh to `7 lakh for those who opt for the new tax regime. Also, the surcharge on income above `5 crore has been reduced from 37% to 25%, bringing down the highest personal income tax rate from 42.7% to 39%. The basic exemption limit has also been raised from `2.5 lakh to `3 lakh. While the government has extended some tax benefits, it has also tried plugging the loopholes used by tax evaders. One of the moves includes removing tax exemptions on withdrawal from all insurance schemes if annual premium is above `5 lakh crore. The Budget pegs the nominal GDP to grow at 10.5% to `302 lakh crore in FY24, slightly lower than what the Economic Survey report had estimated (11.1%). The government has pegged the gross tax revenue to grow at 9.5% to `33.6 lakh crore over the revised FY23 estimate of `30 lakh crore. It means, the new financial year might not be able to drive revenue growth like FY23. A m i t S U pa d h y e @ Hubballi Karnataka can take pride in the General Budget presented by Union Finance Minister Nirmala Sitharaman on Wednesday for at least two reasons. The minister is a Rajya Sabha member from Karnataka and the saree she chose to wear while presenting the Budget was made in the state. The handwoven Ilkal silk saree, which is 5.5 metres long and weighs about 900 gm, was made by experts using kasuti (embroidery) art in Dharwad. Aarati Hiremath, founder of Aarati Crafts in Dharwad, said the special saree was woven in 10 days. The order was placed by the local office of the ministry of textiles. The saree carries designs of chariots, gopuras, peacocks and lotus. Aarati said she was only told that the saree is required for the office of the finance minister. “I was thinking it could be for gifting it to someone. But ever since we saw Nirmalaji in that saree while presenting the Budget, my phone has not stopped ringing. The ministry had placed the order for the saree beforehand, giving us enough time to work on the it. The bill too was cleared by the ministry before the product was ready,” she said. Rukaiya Bandunavar, the artist who worked on the saree, says it’s a huge honour for her and many co-artists. “We carefully weaved the designs on the saree. It takes time to craft each design and complete the saree,” she explained. “This gesture of the minister will surely encourage rural woman workers,” said Aarati. Cut in govt’s flagship Cut in govt’s flagship farm schemes IIP10 farm schemes P10 Our government that always stood with the middle class has given huge tax relief to them Narendra Modi, Prime Minister C o m pa r i n g n e w & o l d ta x r e g i m e s Gross annual income 700,000 1,000,000 2,000,000 3,500,000 5,500,000 Individual (up to 60 years) Taxable income as per current 700,000 1,000,000 2,000,000 3,500,000 5,500,000 concessional tax regime Taxable income as per proposed 650,000 950,000 1,950,000 3,450,000 5,450,000 concessional tax regime (after standard deduction) Taxable income as per old regime 547,600 587,600 1,557,600 2,952,600 5,197,600 (after considering various deductions) Income tax payable As per current Concessional tax regime 33,800 As per proposed Concessional tax regime --As per old tax regime 22,901 78,000 54,600 31,221 351,000 296,400 290,971 819,000 764,400 726,211 Budget has no vision to create jobs, no plan to tackle inflation, no intent to stem inequality. One per cent richest own 40% of wealth Rahul Gandhi, Congress 1,587,300 1,527,240 1,569,316 Source: Ernst & Young Encashment of earned leave up to 10 months of average salary, at the time of retirement in case of non-govt employee to increase from existing C3 lakh to C25 lakh Income received from insurance policies, issued on or after April 1, 2023 New common IT (other than unit linked return form for policies), having premium tax payers coming. or aggregate of premium exceeding C5 lakh in a year, Grievance redressal mechanism to be will be taxable (except in further strengthened the case of death) Micro enterprises with turnover up to C2 crore and certain professionals with turnover of up to C50 lakh can avail the benefit of presumptive taxation This Budget is not futuristic, totally opportunistic, antipeople and anti-poor. It will benefit only one class of people... will not help address unemployment issue Mamata Banerjee, TMC Thumbs down for SilverLine and AIIMS `35,000 cr for net-zero carbon emission target E x p r e s s Ne w s Se r v i c e @T’Puram Sitharaman’s Ilkal saree was crafted in Dharwad The forced capex The forced capex gamble in budget I IP6 gamble in budget P6 soumyadip sinha for green fuel, green energy, green farming, green mobility , one of the major highlights of green buildings, green equipBudget 2023-24 was the focus on ment, and policies for efficient green energy. Reiterating In- use of energy across various dia’s commitment to meet the economic sectors. These green target of achieving net-zero growth efforts help in reducing carbon emission by 2070, Union carbon intensity of the econofinance minister Niramala my and provide for large-scale Sitharaman allocated green job opportunities,” `10,222 crore for the reshe added. newable energy sector The government plans and `35,000 crore to the to construct an interMinistry of Petroleum & state transmission sysNatural Gas for enertem for evacuation gy storage projects. The government’s and grid integration The Budget has ear- efforts since 2014 of 13 GW energy in Lahave ensured for marked `297 crore for dakh with an investthe National Green all citizens a better ment of `20,700 crore, quality of living Hydrogen Mission. including Central supand a life of The FM said the govport of `8,300 crore. dignity. The per ernment would facili- capita income has It will also support tate transition of the more than doubled battery energy storage economy to low-carsystems with a total to K1.97 lakh bon intensity, reduce capacity of 4,000 MWh dependence on fossil Nirmala Sitharaman, through viability gap Finance Minister fuel imports and make funding. the country assume The finance ministechnology and market leader- ter said that the Centre will ship in this sunrise sector. take forward the vehicle scrapShe said the country targets ping policy mentioned in Budgto produce 5 mmt green hydro- et 2021-22 by allocating adegen by 2030. The Cabinet had in quate funds to scrap old vehicles January 2023 approved `19,700 of the central government. crore for the National Green States will also be supported in Hydrogen Mission. “We are im- replacing old vehicles and amplementing many programmes bulances, Sitharaman added. The budget has ended up as a major disappointment for Kerala as none of its major demands were met. The budget is not in line with the principles of cooperative federalism, Chief Minister Pinarayi Vijayan said. “No efforts were made to maintain regional balance. It does not try to resolve growing economic disparities; rather it only strengthens centralisation of wealth to corporates. There are many preconditions for the interest-free loans given to states for capital expenditure,” he said.  The cut in allocation for the employment guarantee scheme and food subsidy has come as a setback for the state while the positive takeaway would be a hike in import duty on compound rubber. Kerala’s demand for SilverLine, AIIMS, a special package for the revival of the plantation sector, rehabilitation schemes for emigrant returnees has also been ignored.  Finance Minister K N Balagopal said the budget announcement that the fund sanction for centrally-sponsored schemes would be on the basis of results could be an attempt to infringe on the state’s right to such funds. Good news for Good news for senior citizens I P9 senior citizens I P9 Rake s h K u m a r @ New Delhi Insurance sector Insurance sector disappointed I P9 disappointed I P9 Tax on overseas tour packages goes up by steep 20% I P11 Stocks hammered, Adani calls off FPO Case registered against lawyer Saiby Day’s sinkhole Adani Enterprises  28.45% Adani Ports and SEZ  19.69% Adani Total Gas  10% Adani Green Energy  5.78% Adani Wilmar  4.99% Adani Power  4.98% Adani Transmission  2.46% Ambuja Cements  16.56% ACC  6.34% NDTV  4.98% A r s h a d K h a n @ New Delhi Adani Enterprises late on Wednesday night announced its decision not to goahead with its fully subscribed follow-on public offer (FPO) for `20,000 crore, a day after it barely managed to sail through. The Group’s stock prices got hammered earlier in the day with AEL shares closing 28% lower at `2,128.70. This was below the FPO price band of `3,112-3,276 per share. Gautam Adani, chairman, Adani Enterprises, said, “Today the market has been unprecedented, and our stock price has fluctuated over the course of the day . Given these extraordinary circumstances, the Company’s board felt that going ahead with the issue will not be morally correct.” He added that the process to repay the funds received for subscription has been initiated. The combined m-cap of the group stocks now stands at `11.76 lakh crore, down from `19.20 lakh crore, which was the closing value on January 24. With this, Adani lost his Asia’s richest billionaire title to Mukesh Ambani, chairman of Reliance Industries Ltd. The FIR was registered at the Ernakulam Central police station after The police on Wednesday slapped a preliminary inquiry by the police cheating and corruption found certain evidence linkcharges on lawyer Saiby Jose ing Saiby to the charges, a Kidangoor in the cash-forstatement from the state poverdict scam. An FIR has lice headquarters said. The been registered and a special initial probe was held after team constituted to investithe High Court registrar sent gate the allegations that a letter to the state police Saiby had collected money Saiby Jose Kidangoor chief seeking a probe into the from clients on the pretext of allegations. bribing High Court judges to get faThe police have booked him under vourable verdicts. Section 7(1) of Prevention of CorrupP Ra m d a s & A j ay K a n t h @Kochi tion Act and Section 420 of Indian Penal Code. “The special investigation team will collect the statements from the lawyer and those who have raised allegations against him,” said a senior police officer. Earlier, the High Court vigilance unit had found several instances of Saiby collecting huge sums of money from clients by taking the names of Justice P V Kunhikrishnan, Justice A Muhamed Mustaque and Justice ● More on P4 Ziyad Rahman A A.