Friday, March 29

Nirmala Sitharaman presents the Budget 2023 in Parliament

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Nirmala Sitharaman, the Finance Minister of India, arrived at the announcement of the state budget on February 1 in a red sari – the color symbolizing an active beginning and renewal in Hinduism. In an hour and a half speech, she touched on seven priorities for which the main spending of the next year will be directed, announced a reduction in the tax rate and proclaimed the entry of the Indian economy into a new era of development. “We have entered Amrit Kaal,” Sitharaman said.

25 years of India’s development should represent a metaphorical opening of the ways for the prosperity of universal prosperity – this is how Amrit Kaal (two words translated from Sanskrit as “immortal elixir” and “time”) is defined in Indian sacred texts. For the first time, Narendra Modi announced a new way of development of Indian society in 2021 during the celebration of the 75th anniversary of India’s Independence. By the centenary of the country’s sovereignty, according to the Prime minister, it is necessary to come to Atmanirbhar Bharat, that is, to an Independent India, with the help of innovations in various spheres of society. And the economy, as the main life force of any state, obviously had to be subjected to resolutions in the early years of the “immortal period”.

“Our vision of Amrit Kaal includes an economy based on technology and knowledge, with strong public finances and a reliable financial sector. To achieve this, jan-bhagidari (approx. – public participation) through sabka saat, sabka prayas (approx. – the efforts of all) is important,” Sitharaman said in determining the new contours of the implementation of the Union Budget.

Despite the fact that the Finance Minister has already used the rhetoric of Amrit Kaal in her speech at a similar announcement last year, this time, along with the project and analysts’ forecasts, her words sound more than tangible. Even with very modest forecasts, the fulfillment of the set goals can become a stepping-stone for bringing India’s economy to the rank of one of the first in the world.

“If the reforms lead to the fact that the growth trajectory in India exceeds 6.5%, and this possibility is Citius, Altius and Fortius (approx. – Faster, Higher and Stronger) cannot be excluded, the corresponding figures will be higher. Even with relatively modest indicators, this means that India will become the third largest economy in the world after the United States and China, and this will naturally affect India’s global influence,” said Bibek Debroy, Chairman of the Economic Advisory Council to the Prime Minister of the Government of India. His words, quoted by The Business Standard, indicate a truly new stage in the development of the state economy.

Within the framework of 7 priorities (comprehensive development, achievement of goals, infrastructure and investments, potential disclosure, green growth, youth empowerment, financial sector), it was announced the introduction of new opportunities for representatives of different groups and the creation of appropriate funding funds to support them. Thus, Amrit Kaal will mark the development of gender equality for Indian women: 8.1 million rural self-help groups will receive the legal status of collectives and enterprises. Priorities for the development of the education sector are also expanding – 38,800 school teachers will be employed under the Ekalavya Model Residential Schools program. Finally, in the near future, the Indian government plans to make India a Global Millet Center. Its goal will be not only to increase the incomes of local farmers by increasing yields, but also to ensure food security around the world. Thus, within the framework of its state budget, India ensures the provision of an action program within the framework of the International Year of Millet proclaimed by the UN General Assembly.

Despite all the more than progressive provisions outlined at the February 1 meeting, they turned out to have quite a few critics. The scandal with the shares of Adani Group, a conglomerate selling commodities, overshadowed the last announcement: the American Hindenburg Research (specializing in the study of short sales) accused the group of companies of “brazen manipulation of stocks and accounting fraud for decades.” Because of the accusations, the sale of shares of the Adani Group Company flew down.

“We are shocked that Hindenburg Research published a report on January 24, 2023, without making any attempt to contact us or verify the actual matrix. The report is a malicious combination of selective misinformation and outdated, unsubstantiated and discredited allegations that have been verified and rejected by India’s highest courts,” Jugeshinder Singh, the conglomerate’s chief financial officer, said in response to the charges.

Such an event in the Indian business environment was difficult to predict, therefore, it can be considered an extraordinary situation, which in the future will not affect the implementation of the planned budget goals. However, it is simply impossible to deny that India will not be influenced by the current world situation. Now the IMF forecasts an annual slowdown in economic growth to 2.7%, as well as an extremely slow decline in the inflation rate. All this, according to the expert of The Indian Express Udit Misra, will lead to the fact that the plans announced by the budget will be broken about the global decline in the level of state revenues.

“… What is the basis of this assumption of the Minister of Finance? Well, she will have to look at the GDP growth rates in the current fiscal year (2022-23) and approve her plans. Nevertheless, the current fiscal year will end in March. So, how can the FM find out what the growth rates will be?”, The Indian Express writes about this.

Thus, it is still extremely difficult to say whether all the provisions of the Union Budget for 2023 will be implemented. However, Amrit Kaal is a long–term national development project that involves changing the plans put forward for a short period. Therefore, the new Indian project, which will come into force this spring, can be considered as a step for the realization of prospects for the development of Atmanirbhar Bharat.

The author of the article is Sofia Chernopyatova

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