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 ■ ■ chennai l thursday l february 02, 2023 l `9.00 l PAGES 22 l late city EDITION Ra i lway ta x at i o n capex D e b t b ur d e n pm awas Whopping `2.4 lakh cr CAPITAL OUTLAY No need to pay tax for income up to `7 lakh `10 lakh cr for infra development Centre to borrow record `15.4 lakh cr 66% more for urban housing Budget 2023-24 proposes `2.4 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 `7 lakh under the new tax regime, from `5 lakh earlier, and the tax slabs have been cut to five from seven. Surcharge on income above `5 cr cut from 37% to 25% Capital expenditure for infra development up 33% to `10 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 `15.4 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 `79,000 crore, while that of MGNRGA has been cut to `60,000 crore from `89,400 crore in FY23 PLEASE-ALL BUDGET THAT STAYS THE COURSE A n a ly s i s D i pa k M o n d a l @ New Delhi Income tax relief timed with polls S u 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 totalling `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 firmly on the path of fiscal consolidation. The `45-lakh crore Budget has steered clear of too many freebies and unnecessary expenditures, and yet made an allocation here and 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 P10 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 amount 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. Narendra Modi, Prime Minister C o m p ar 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 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 `3 lakh to `25 lakh Income received from insurance policies, issued on or after April 1, 2023 (other than unit linked policies), having premium or aggregate of premium exceeding `5 lakh in a year, will be taxable (except in the case of death) 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. Adani Enterprises (AEL) late on Wednesday night announced its decision not to go-ahead with its fully subscribed follow-on public offer (FPO) for `20,000 crore, a day after it barely managed to sail through. The Adani 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 refund the funds received for subscription has been initiated. The group’s stocks crashed up to 35% amidst reports that the Credit Suisse Group has assigned a zero-lending value for notes sold by Adani Ports and Special Economic Zone, Adani Green Energy and Adani Electricity Mumbai Ltd. With this fresh fall, the portto-power conglomerate’s market capitalisation (m-cap) has fallen 351,000 296,400 290,971 819,000 764,400 726,211 Rahul Gandhi, Congress 1,587,300 1,527,240 1,569,316 New common I-T return form for tax payers coming. Grievance redressal mechanism to be further strengthened Micro enterprises with turnover up to `2 crore and certain professionals with turnover of up to `50 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 Stalin: Upset over lack of new projects for TN `35,000 cr for net-zero carbon emission target R a k e s h Ku m ar @ New Delhi TAMIL Nadu Chief Minister MK Stalin on Wednesday expressed his disappointment over the union budget, stating the people of TN were pained no new projects were announced for the state. “The budget has been a huge disappointment to TN and the people of TN as usual,” he said in a statement. “It is painful no funds have been allocated even for AIIMS at Madurai,” he said. However, he welcomed the changes to the income tax regime, proposal to establish 157 nursing colleges, announcement of interest-free loans for states towards capital investment, and priority on infrastructure development. He said the new tax regime would only benefit one section and said the changes should be applicable to the old regime. Noting the union government had not accepted the demand of states, including TN, to extend GST compensation for two more years, he charged that by announcing projects and aid only for states heading to polls, the budget failed to address needs of all states.  P4 Oil marketing firms get `30K cr push I P12 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% 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 Nirmala Sith- my and provide for large-scale araman allocated `10,222 green job opportunities,” crore for the renewable she added. energy sector and `35,000 The government plans crore to the Ministry of to construct an interPetroleum & Natural state transmission sysGas for energy stortem for evacuation age 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 `1.97 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. Health outlay hiked by 3% I P14 Stocks hammered, Adani calls off FPO A rs h a d K h a n @ New Delhi 78,000 54,600 31,221 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 Source: Ernst & Young @ Chennai A m i t S U pa d h y e @ Hubballi Fiscal federalism under strain I P11 Our government that always stood with the middle class has given huge tax relief to them E X P R E S S NE W S S E R V I C E Sitharaman’s Ilkal saree was crafted in Dharwad The forced capex gamble in budget I P10 soumyadip sinha by `7.44 lakh crore in five consecutive trading sessions, translating to a loss of one-third of its total value. The combined m-cap of the Adani 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. Cut in allocation for flagship schemes in the farm sector I P14 e x p r e ss r e a d EPS, OPS factions both field bypoll candidates Chennai: The AIADMK factions led by Edappadi K Palaniswami and O Panneerselvam on Wednesday both announced candidates for the bypoll to the Erode East Assembly seat even as the ECI’s decision, to be conveyed to the Supreme Court on Friday, will shed light on whether the ‘Two Leaves’ symbol will be available for the poll. The BJP, an ally of AIADMK, has not announced which faction it will back | P4 Minor ‘beaten to death’ at TN de-addiction centre Chennai: Three people, including the owner of a de-addiction centre near Sholavaram, were detained and the centre was shut after a 14-year-old boy was allegedly beaten to death by the staff members. The minor was admitted to the centre 10 days ago and died on Tuesday night. Fifteen other boys at the centre were sent home with their parents, said the police. No arrests have been made yet | P3