Union Budget 2023: Capital expenditure to be hiked by 33% to Rs 10 trillion

Budget 2023: PAN cards will be used as a common identifier for all government schemes, the FM said in her Budget speech

The Centre will hike the capital expenditure (capex) outlay for 2023-24 by 33 per cent to Rs 10 trillion, Finance Minister Nirmala Sithraman said on Wednesday. In her Budget 2023 speech, she also said that the outlay for the PM Awas Yojana will be hiked by 66 per cent to Rs 79,000 crore. 

The Centre has also identified 100 critical transport infrastructure projects for implementation. 

This is the highest outlay for capex ever. In FY23, the capex outlay was Rs 7.5 trillion. The new outlay will amount to 3.3 per cent of the gross domestic product (GDP). 

Ranen Banerjee, Partner and Leader, Economic Advisory Services, PwC India said, "The Union Budget ticks all the expected boxes viz. pump-priming the economy with 33 per cent higher capex allocation; pushing consumption by encouraging taxpayers to adopt the new tax regime with lower taxes and consume the additional money in hand rather than using savings to lower the tax burden in the old regime; and sticking to the fiscal consolidation path with the fiscal deficit target being brought down to 5.9 per cent. The highest tax rate on personal income has also been brought down to address concerns on flight of HNIs."

The Centre also proposed 50 new airports for increased connectivity. Also, Rs 10,000 crore will be set aside for the development of urban infrastructure. 

FM Sitharaman said that the increased capital outlay for infrastructure will "crowd in" private investment in India. Experts had hoped for a 20-30 per cent hike in the capes. 

"Newly established infrastructure finance secretariat will assist all stakeholders in more private investment," Sitharaman said. 

Also, an expert committee will be set up to make the infrastructure classification and financing framework suitable for Amrit Kaal. Also, three centres of excellence will be established for "Make AI in India" to boost the use of artificial technology. 

The capital outlay for railways has been raised to Rs 2.40 trillion for FY24. 

FM Sitharaman also said that states and cities will be encouraged to take up urban planning.

Moreover, FM Sitharaman said that the process of KYC will be simplified further. PAN cards will be used as a common identifier for all government schemes.

Moreover, teachers training will be reenvisioned through innovative pedagogy, curriculum transaction, continuous professional development dipstick survey and iCT implementation. The district institute of education and training will be developed as vibrant institutes of excellence for this purpose. 

Shantanu Rooj, CEO and founder at TeamLease Edtech said, "The Indian education system has always complained of non-availability of quality teachers. The current impetus on recruiting a large number of teachers and creating a sustainable teachers training program equipping them with multilateral skills will go along way in improving the quality of education in Indian schools. The government must also create a performance management system where there is a hope of rising and a fear of falling for all teachers. This initiative, along with the PLI scheme, will help strengthen the Make in India initiative by creating a ready pool of trained resources. Recruiting teachers and providing them with relevant skills such that they can impart the right knowledge and skills will help in building employable youth in India."

The year-on-year increase of 33 per cent is only marginally lower than last year's 35 per cent jump.
 

"After a subdued period of the pandemic, private investments are growing again," Nirmala Sitharaman said in parliament, referring to the Covid-19 crisis.

"The budget makes the need once again to ramp up the virtuous cycle of investment and job creation. Capital investment is being increased steeply for the third year in a row by 33 per cent to Rs 10 trillion", she added.