A major increase in the allocation for key schemes for the poor — such as the housing scheme, drinking water scheme and Ayushman Bharat health insurance scheme; a new Rs 15,000 crore scheme for tribals, and relaxations in the new tax regime for individual tax payers — these are the five major political messages from the Narendra Modi government in the 2023 ‘Amrit Kaal’ Budget.
As the country goes to elections next year and various key states poll this year, the Modi Sarkar has gone all-out in its last budget on welfare schemes aimed at the poor who have backed Narendra Modi as the prime minister in the last two general elections and BJP in various states. The relaxations in the new tax regime could also appeal to those who have low or moderate incomes and don’t seek exemptions.
Ghar, Paani, Ilaaj
The biggest increase has been in the PM Awas Yojana for the poor which the government is aiming to complete in 2024 and has allocated a whopping Rs 79,950 crore for the scheme, up 66 per cent from Rs 48,000 crore in 2022-23. About 2.94 crore poor people are targeted to get a home by 2024, of which 2.12 crore houses have been completed and handed over to the poor.
The third major focus in the budget is on the Ayushman Bharat health insurance scheme in which the allocation has been increased to Rs 7,200 crore from Rs 6,457 crore in the last budget. Nearly 4.5 crore poor people in the country have availed free health insurance under the scheme so far. Rs 60,000 crore has been allocated for the PM Kisan Samman Nidhi scheme for this financial year, after a cash transfer of Rs 2.2 lakh crore so far to over 11.4 crore farmers under PM-Kisan.
The government has, however, significantly reduced the allocation on MGNREGA from Rs 84,900 crore in the revised estimate in 2022-23 to Rs 60,000 crore in this year’s budget. Rs 73,000 crore was allocated to MGNREGA in the last budget and the government ended up spending much more. This will be a point on which the Congress and UPA allies could corner the BJP.
The budget has also put a clear focus on the voter constituencies — the Scheduled Castes (SC) and tribals. Finance Minister Nirmala Sitharaman has announced a new PMPVTG (Prime Minister’s Particularly Vulnerable Tribal Groups) Development Mission with an outlay of Rs 15,000 crore. The finance minister said this is to improve the social-economic condition of the particular tribal groups and saturate their habitations with basic facilities. Tribal population is high in many states going to polls this year. The allocation to Eklavya Model Residential Schools has also been nearly tripled from Rs 2,000 crore in the last budget to Rs 5,943 crore now. This is another scheme specifically aimed at tribal children.
New Tax Regime
The concessions announced in the new tax regime are expected to appeal to the young voter who may be earning a low or moderate income and does not wish to seek any exemptions. Under the old tax regime, one can still avail exemptions like 80C, provident fund and housing loan principal and interest payments. The challenge for the Narendra Modi government has been to appeal to the tax-payers to switch from the old tax regime to the new tax regime, though not many have made the move. From this year, the new tax regime has been made the default regime too.
“Persons in the new tax regime, with income up to Rs 7 lakh will not have to pay any income tax,” Sitharaman announced. The change in the income tax slabs in the new regime will also provide major relief to all taxpayers in the new regime. “An individual with an annual income of Rs 9 lakh will be required to pay only Rs 45,000 as income tax — which is only 5 per cent of his or her income. It is a reduction of 25 per cent on what he or she is required to pay now,” the FM announced.
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