Ananya Bhupesh Dubey

Economics Project
Grade 12D
‘Government Budget’
Batch: 2023-2024
 Government Budget

Introduction:
The government budget is an annual fiscal statement depicting the revenues and expenditures
for a financial year that is often moved by the legislature, sanctioned by the Chief Executive or
President, and given by the Finance Minister to the country. The budget is also known as the
Annual Financial Statement of the nation. It describes in detail the estimated receipts and
proposed expenditures and disbursements of the government under various heads for the
financial or fiscal year.
The government budget gives an estimate of the fiscal policies - taxation and public expenditure
policies. Budget also gives the actual financial accounts for the previous year and the revised
estimates of the current year. The two types of budgets are:-

a)Union Budget - Union budget is the budget prepared by the central government for the
country as a whole.Till 2016 the Union budget was divided into two parts 1) Railway
budget and 2)General budget.
The Railway Budget showed the details of estimated receipts and proposed expenditure by the
Railway Ministry. The General Budget showed the financial plan for the entire economy,
describing in detail the estimated receipts and proposed expenditure for the economy as a
whole.

b)State Budget - India follows a federal system of government with the Central government and
the State government. Therefore, every state government in India prepares its own budget.
State budget is prepared by the state government, for example the budget of the government of
Gujarat.

Current Year’s Budget:

Expenditure: The government proposes to spend Rs 45,03,097 crore in 2023-24, which is an

increase of 7.5% over the revised estimate of 2022-23. In 2022-23, total expenditure is
estimated to be 6.1% higher than the budget estimate.

Receipts: The receipts (other than borrowings) in 2023-24 are expected to be to Rs 27,16,281
crore, an increase of 11.7% over revised estimate of 2022-23. In 2022-23, total receipts (other
than borrowings) are estimated to be 6.5% higher than the budget estimates.

Capital Receipts: Capital receipts (excluding borrowings) are targeted at Rs 84,000 crore, a
marginal increase of 0.6% over the revised estimates of 2022-23. Recoveries of loans and
advances were 64% higher in the revised estimates of 2022-23 at Rs 23,500 crore compared to
budget estimates of Rs 14,291 crore.
▪ Receipts (excluding borrowings) in 2023-24 are estimated to be Rs 27,16,281 crore, an
increase of 11.7% over the revised

Ministry Revised 2022-23 Budgeted 2022-23 % change (2022-23 RE to

2023-24 BE)
(lakh crore) (lakh crore)

Defence 5.84 5.94 1.5%

Road Transport and 2.17 2.70 24.6%

Highway

Railway 1.62 2.41 48.6%

Food and Public 2.96 2.06 -30.6%

Distribution

Home Affairs 1.93 1.96 1.1%

Chemical and 2.27 1.78 -21.6%

Fertilizers

Rural development 1.82 1.60 -12.3%

Agriculture and 1.18 1.25 5.1%

Farmers Welfare

Communications 1.05 1.23 17.0%

Education 0.99 1.12 13.0%

Highlights of the Budget:

There were several highlights of the Budget of 2023-2024 some of the highlights are listed
below:-

This year's budget was based on ‘Vision for Amrit Kaal’ and the ‘7-Saptarishi(priorities)’ . The
Vision for Amrit Kaal comprised the following:-
➔ Opportunities for citizens with focus on the youth
➔ Growth and Job creation
➔ Stable and Strong Macro-Economic environment
The 7-Saptarishi that were decided upon for working towards Amrit Kaal are as follows:-
➔ Inclusive development
➔ Reaching the last mile
➔ Youth Power
➔ Financial Sector
➔ Green Growth
➔ Unleashing Potential
➔ Infrastructure and Investment

Other highlights mentioned in the budgets were:-

➔ GDP: The government has estimated a nominal GDP growth rate of 10.5% in 2023-24
➔ Ministry allocations: Among the top 13 ministries with the highest allocations, in
2023-24, the highest percentage increase in allocation is observed in the Ministry of
Railways (49%), followed by the Ministry of Jal Shakti (31%), and the Ministry of Road
Transport and Highways (25%).
➔ Legislative proposals: Amendments will be made to the Banking Regulation Act, 1949,
Banking Companies Act, 1970, and the Reserve Bank of India Act, 1934 to improve
bank governance and enhance investors’ confidence. Several measures will be taken to
improve business activities in the Gujarat International Finance Tec-City International
Financial Services Centre (GIFT IFSC). For instance, the IFSC Authority Act, 2019 will
be amended to provide for arbitration and ancillary services in GIFT IFSC, and avoid
dual regulation under the Special Economic Zones Act, 2005.
➔ Urban Development: An Urban Infrastructure Development Fund will be established for
development of urban infrastructure by public agencies in tier-2 and tier-3 cities. The
Fund will be managed by the National Housing Bank and is expected to have an annual
 allocation of Rs 10,000 crore. States and cities will be encouraged to undertake urban
planning reforms such as efficient land use and transit-oriented development.
➔ Energy and Environment: A Green Credit Programme will be notified under the
Environment (Protection) Act, 1986 to incentivise environmentally sustainable actions by
companies, individuals, and local bodies, and help gather additional resources for such
actions. Battery Energy Storage Systems with 4,000 MWh capacity will be supported
with viability gap funding.

Sectors:

There were also several changes added to different major sectors of India. Let's take a look in
these different sectors:-

1. Agricultural Sector - Agriculture includes crops, horticulture, milk and animal husbandry,
aquaculture, fishing, sericulture, aviculture, forestry, and related activities. Agriculture
and allied sectors like forestry, logging and fishing accounted for 23% of GDP, and
employed 59% of the country's total workforce. It is India’s largest source of
employment. According to international comparisons it has been revealed the average
yield in India is generally 30% to 50% of the highest average yield in the world.
Agriculture sector in India holds the record for second-largest agricultural land in the
world. India has the world's largest cattle herd (buffaloes), largest area planted to wheat,
rice, and cotton, and is the largest producer of milk, pulses, and spices in the world. It is
the second-largest producer of fruit, vegetables, tea, farmed fish, cotton, sugarcane,
wheat, rice, cotton, and sugar. According to Inc42, the Indian agricultural sector is
predicted to increase to US$ 24 billion by 2025. The Indian food and grocery market is
the world’s sixth largest, with retail contributing 70% of the sales.

2. Infrastructure Sector - India's infrastructure and transport sector contributes about 5% of

its GDP. India has a road network of over 63.73 lakh kilometers as of 2023, the
second-largest road network in the world only behind the United States. Infrastructure
sector is a key driver for the Indian economy. The sector is highly responsible for
propelling India’s overall development and enjoys intense focus from the Government for
initiating policies that would ensure time-bound creation of world class infrastructure in
the country. Infrastructure sector includes power, bridges, dams, roads, and urban
infrastructure development. In other words, the infrastructure sector acts as a catalyst for
India’s economic growth .In order to meet India’s aim of reaching a US$ 5 trillion
economy by 2025, infrastructure development is the need of the hour. The government
has launched the National Infrastructure Pipeline (NIP) combined with other initiatives
such as ‘Make in India’ and the production-linked incentives (PLI) scheme to augment
the growth of the infrastructure sector. India is expected to become the third-largest
construction market globally by 2022. The Indian logistics market is estimated to touch
US$ 320 billion by 2025. The overall infrastructure capex is estimated to grow at a
 CAGR of 11.4% over FY 21-26. Investment in infrastructure contributed around 5% of
the GDP in the 10th five year plan as against 9% in the 11th five year plan.

3. Health Care - Healthcare has become one of India’s largest sectors, both in terms of
revenue and employment. Healthcare comprises hospitals, medical devices, clinical
trials, outsourcing, telemedicine, medical tourism, health insurance and medical
equipment. The Indian healthcare sector is growing at a brisk pace due to its
strengthening coverage, services, and increasing expenditure by public as well private
players. The Indian healthcare sector is expected to record a three-fold rise, growing at a
CAGR of 22% between 2016–22 to reach US$ 372 billion in 2022 from US$ 110 billion in
2016. By FY22, Indian healthcare infrastructure is expected to reach US$ 349.1 billion.
In the Economic Survey of 2022, India’s public expenditure on healthcare stood at 2.1%
of GDP in 2021-22 against 1.8% in 2020-21 and 1.3% in 2019-20.

4. IT Sector - The IT & BPM sector has become one of the most significant growth catalysts
for the Indian economy, contributing significantly to the country’s GDP and public
welfare. The IT industry accounted for 7.4% of India’s GDP in FY22, and it is expected to
contribute 10% to India’s GDP by 2025. According to the National Association of
Software and Service Companies (Nasscom), the Indian IT industry’s revenue touched
US$ 227 billion in FY22, a 15.5% YoY growth. According to Gartner estimates, IT
spending in India is expected to increase to US$ 101.8 billion in 2022 from an estimated
US$ 81.89 billion in 2021. The IT industry added 4.45 lakh new employees in FY22,
bringing the total employment in the sector to 50 lakh employees. Exports from the
Indian IT industry stood at US$ 149 billion in FY21. Export of IT services has been the
major contributor, accounting for more than 51% of total IT export (including hardware)

5. Automobile - The Indian automobile industry has historically been a good indicator of
how well the economy is doing, as the automobile sector plays a key role in both
macroeconomic expansion and technological advancement. The two-wheelers segment
dominates the market in terms of volume. India enjoys a strong position in the global
heavy vehicles market as it is the largest tractor producer, second-largest bus
manufacturer, and third-largest heavy truck manufacturer in the world. India’s annual
production of automobiles in FY22 was 22.93 million vehicles.The Indian passenger car
market was valued at US$ 32.70 billion in 2021, and it is expected to reach a value of
US$ 54.84 billion by 2027 while registering a CAGR of over 9% between 2022-27. The
Indian automotive industry is targeting to increase the export of vehicles by five times
during 2016-26. In FY22, total automobile exports from India stood at 5,617,246.
Moreover the industry attracted Foreign Direct Investment equity inflow (FDI) worth US$
 33.77 billion between April 2000-September 2022, accounting for 5.48% of the total
equity FDI during the period.

6. Education - India has the largest population in the world in the age bracket of 5-24 years
with 580 million people, presenting a huge opportunity in the education sector. India
holds an important place in the global education industry. India has one of the largest
networks of higher education institutions in the world. The educational sector has also
embraced the Education 4.0 revolution, which promotes inclusive learning and increased
employability. The government has implemented policies like the NEP, which will be fully
implemented over the course of this decade starting from 2021-22, and will have a
strong focus on high-quality vocational education.The education sector in India was
estimated to be worth US$ 117 billion in FY20 and is expected to reach US$ 225 billion
by FY25. India has over 250 million school-going students, more than any other country.
India had 38.5 million students enrolled in higher education in 2019-20, with 19.6 million
male and 18.9 million female students.From April 2000-June 2022, Foreign Direct
Investment (FDI) equity inflows stood at US$ 7.92 billion in this sector.

7. Railway - The Indian railway system is regarded as the foundation and lifeblood of the
economy. Indian railways span over thousands of kilometers practically covering the
entire nation, making it the fourth largest in the world after the US, China and Russia.
India's railway network is recognised as one of the largest railway systems in the world
under single management. The railway network is also ideal for long-distance travel and
movement of bulk commodities, apart from being an energy efficient and economic
mode of conveyance and transport. Indian Railway network with over 22,593 operating
trains (9,141 freight and 13,452 passengers) with a daily passenger count of 24 million
passengers and 203.88 million tonnes of freight. In FY22 passenger traffic stood at 3.54
billion as compared to 1.28 billion in FY21. India’s export of railways has grown at a
CAGR of 31.51% during 2010-18 to US$ 507.90 million. Exports of railways in 2021
stood at US$ 633.27 million. Revenue growth has been strong over the years. Indian
Railways’ revenue reached US$ 5.21 billion in the third quarter of FY23.

8. Manufacturing Sector : India is the third most sought-after manufacturing destination in

the world and has the potential to export goods worth US$ 1 trillion by 2030.
Manufacturing is emerging as an integral pillar in the country’s economic growth, thanks
to the performance of key sectors like automotive, engineering, chemicals,
pharmaceuticals, and consumer durables. The Indian manufacturing industry generated
16-17% of India’s GDP pre-pandemic and is projected to be one of the fastest growing
sectors. With 17% of the nation’s GDP and over 27.3 million workers, the manufacturing
sector plays a significant role in the Indian economy. Through the implementation of
 different programmes and policies, the Indian government hopes to have 25% of the
economy’s output come from manufacturing by 2025. India’s manufacturing exports for
FY22 reached an unprecedented US$ 418 billion, an overall growth of more than 40%
compared to the US$ 290 billion from the previous year. India is gradually progressing
on the road to Industry 4.0 through the Government of India’s initiatives like the National
Manufacturing Policy which aims to increase the share of manufacturing in GDP to 25
percent by 2025 and the PLI scheme for manufacturing which was launched in 2022 to
develop the core manufacturing sector at par with global manufacturing standards.

Impact of Budget on Sectors:

1. Agriculture - In the Union Budget Rs. 1.25 lakh crore (US$ 15.9 billion) has been
allocated to the Department of Agriculture, Cooperation and Farmers’ Welfare. Rs. 8,514
crore (US$ 1.1 billion) has been allocated to the Department of Agricultural Research
and Education. The government has launched Atma Nirbhar Bharat horticulture plant
clean programme to boost production of high quality horticulture plants. The Prime
Minister of India launched the Pradhan Mantri Kisan Samman Nidhi Yojana (PM-Kisan)
and transferred Rs. 2,021 crore (US$ 284.48 million) to bank accounts of more than 10
million beneficiaries . As per the Union Budget 2021-22, Rs. 65,000 crore (US$ 8.9
billion) was allocated to Pradhan Mantri Kisan Samman Nidhi (PM-Kisan). With a budget
of US$ 1.46 billion, the ‘Production-Linked Incentive Scheme for Food Processing
Industry’ has been approved to develop global food manufacturing champions
commensurate with India's natural resource endowment and to support Indian food
brands in international markets. Under Pradhan Mantri Formalisation of Micro Food
Processing Enterprises, an outlay of Rs. 10,000 crore (US$ 1.27 billion) over a period of
five years from FY21 to FY25 has been sanctioned.

2. Infrastructure - Under Budget 2023-24: Capital investment outlay for infrastructure is

being increased by 33% to Rs.10 lakh crore (US$ 122 billion), which would be 3.3% of
GDP and almost three times the outlay in 2019-20. To realize the vision of “Make A-I in
India and Make A-I work for India '', three centers of excellence for Artificial Intelligence
will be set-up in top educational institutions. The Digital Public infrastructure for
agriculture will be built as an open source, open standard and interoperable public good
that will enable inclusive, farmer-centric solutions through relevant information services
for crop planning and health. 11.7 crore household toilets constructed under SBM . 50
additional airports, heliports, water aerodromes and advanced landing grounds will be
revived for improving regional air connectivity. An Urban Infrastructure Development
Fund (UIDF) will be established through use of priority sector lending shortfall, which will
be managed by the National Housing Bank, and will be used by public agencies to
create urban infrastructure in Tier 2 and Tier 3 cities. The Awas Yojana budget estimate
for 2023-’24 constitutes an allocation of Rs. 25,103 crore (US$ 3 billion) to Pradhan
 Mantri Awas Yojana-Urban and Rs. 54,487 crore (US$ 6.5 billion) to Pradhan Mantri
Awas Yojana-Gramin.

3. Health Sector -

In the Union Budget 2023-24:

● Under the Union Budget 2023-24, the Ministry of Health and Family Welfare has been
allocated Rs. 89,155 crore (US$ 10.76 billion), an increase of 3.43% compared to Rs.
86,200.65 crore (US$ 10.4 billion) in 2021-22.
● Pradhan Mantri Swasthya Suraksha Yojana (PMSSY) was allocated Rs. 3,365 crore
(US$ 0.41 billion)
● Human Resources for Health and Medical Education was allotted Rs. 6,500 crore (US$
780 million).
● The National Health Mission was allotted Rs. 29,085 crore (US$ 3.51 billion).
● Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) was allotted Rs.
7,200 crore (US$ 870 million).
● Rs. 5,156 crore (US$ 675.72 million) was allocated to the newly announced PM-ABHIM
to strengthen India’s health infrastructure and improve the country’s primary, secondary
and tertiary care services.

In July 2022, the World Bank approved a US$ 1 billion loan towards India's Pradhan
Mantri-Ayushman Bharat Health Infrastructure Mission. In order to promote medical
tourism in the country, the government of India is extending the e-medical visa facility to
the citizens of 156 countries. In May 2022, the Union Government approved grants for
five new medical colleges in Gujarat with a grant of Rs. 190 crore (US$ 23.78 million)
each. These colleges will come up in Navsari, Porbandar, Rajpipla, Godhra and Morbi. In
September 2021, Prime Minister Mr. Narendra Modi launched the Ayushman Bharat
Digital Mission. The mission will connect the digital health solutions of hospitals across
the country with each other. Under this, every citizen will now get a digital health ID and
their health record will be digitally protected.

4. IT sector - In the Union Budget 2023-24, the allocation for IT and telecom sector stood at
Rs. 97,579.05 crore (US$ 11.77 billion). In September 2022, the new
Telecommunications Bill 2022 was published for public consultation by the Ministry of
Communications as a move toward creating a new telecom framework in India. In
August 2022, the Indian Computer Emergency Response Team (CERT-In), in
collaboration with the Cyber Security Agency of Singapore (CSA), successfully planned
and carried out the "Synergy" Cyber Security Exercise for 13 countries to build network
resilience against ransomware attacks. In June 2022, STPI Director General Mr. Arvind
Kumar stated that exports through STPI units have increased from Rs. 17 crore (US$
 2.14 million) in FY12 to Rs. 5.69 lakh crore (US$ 71.65 billion) in FY22.In May 2022, it
was announced that Indians can now avail their Digilocker services through Whatsapp to
get easy access to their official documents.

5. Automobile - In the Union Budget 2022-23, the government laid out the following
initiatives:
a. The government introduced a battery-swapping policy, which will allow drained
batteries to be swapped with charged ones at designated charging stations, thus
making EVs more viable for potential customers.
b. India’s National Highways would be expanded by 25,000 km in 2022-23 under
the Prime Minister’s Gati Shakti Plan.

In November 2021, the Union Government added >100 advanced technologies,

including alternate fuel systems such as compressed natural gas (CNG), Bharat Stage
VI compliant flex-fuel engines, electronic control units (ECU) for safety, under the PLI
scheme for automobiles. In September 2021, Minister of Road Transport and Highways,
Mr. Nitin Gadkari, announced that the government is planning to make it mandatory for
car manufacturers to produce flex-fuel engines.

In September 2021, the Indian government issued a notification regarding a PLI scheme
for automobile and auto components worth Rs. 25,938 crore (US$ 3.49 billion). This
scheme is expected to bring investments of over Rs. 42,500 (US$ 5.74 billion) by 2026
and create 7.5 lakh jobs in India. In August 2021, Prime Minister Mr. Narendra Modi
launched the Vehicle Scrappage Policy, which aims to phase out old polluting vehicles in
an environmentally safe manner.

The Indian government has planned US$ 3.5 billion in incentives over five years until
2026 under a revamped scheme to encourage the production and export of clean
technology vehicles. In July 2021, India inaugurated the NATRAX, which is Asia’s
longest high-speed track and the fifth largest in the world.

6. Education - In Union Budget 2023, it was announced that District Institutes of Education
and Training to be developed as vibrant institutes of excellence for teachers’ training. In
Union Budget 2023, it was announced that a National Digital Library for Children and
Adolescents to be set-up for facilitating the availability of quality books across
geographies, languages, genres and levels, and device-agnostic accessibility. 100% FDI
under automatic route is allowed in the Indian education sector. In July 2022, Prime
Minister Mr. Narendra Modi inaugurated a three-day Akhil Bharatiya Shiksha Samagam
at Varanasi to discuss how the implementation of the National Education Policy 2020
can be taken further across the country . As per the Union Budget 2022-23, allocation
 towards the Samagra Shiksha Scheme has increased by around 20.3%, from Rs.
31,050.16 crore (US$ 4.16 billion) in FY22 to Rs. 37,383.36 crore (US$ 5.01 billion) in
FY23. The National Education Policy (NEP) 2020 emphasis on early childhood care and
education. The 10+2 structure of school curricula is to be replaced by a 5+3+3+4
curricular structure corresponding to different ages.

In February 2022, the Central Government approved the “New India Literacy
Programme” for the period FY 22-27 to cover all the aspects of adult education to align
with the National Education Policy 2020 and Budget Announcements 2022-23.

7. Railway - Under the Union Budget 2023-24, capital outlay of Rs. 2.40 lakh crore (US$
29 billion) has been allocated to the Ministry of Railways, which is the highest ever outlay
and about nine times the outlay made in 2013-14. Indian Railways launched a new
tourism product i.e. theme based tourist circuit train - ‘Bharat Gaurav’ to showcase
India’s rich cultural heritage and magnificent historical places.

In the Union Budget 2022-23:

a. The government allocated Rs. 140,367.13 crore (US$ 18.40 billion) to the
Ministry of Railways.
b. Indian Railways will develop new products and efficient logistics services for
small farmers, and small and medium enterprises. It will also take steps towards
integration of postal and railway networks to provide seamless solutions for
movement of parcels.
c. 100 PM-GatiShakti Cargo Terminals for multimodal logistics facilities will be
developed over the next three years.
d. Multimodal connectivity between mass urban transport and railway stations will
be facilitated on priority.
e. 2,000 km of network will be brought under Kavach, the indigenous technology for
safety and capacity augmentation.
f. ‘One Station-One Product’ concept will be popularized to help local businesses
and supply chains.
g. The new & upgraded version of Vande Bharat Express between Gandhinagar
Capital & Mumbai Central was inaugurated by Prime Minister Mr. Narendra Modi
on September 30, 2022.

8. Manufacturing Sector - In the Union Budget 2023-24:

 a. Startups incorporated within a time-period and meeting other conditions can
deduct up to 100% of their profits; the end of this period has been extended to
March 31, 2024. In addition, the period within which losses of startups may be
carried forward has been extended from seven to ten years.
b. As per the Union Budget 2023 – 23, the income tax rate for new co-operative
societies engaged in manufacturing activities has been lowered from 22% to
15%.
c. The upper limit on turnover for MSMEs to be eligible for presumptive taxation has
been raised from Rs 2 crore to Rs 3 crore. The upper limit on gross receipts for
professionals eligible for presumptive taxation has been raised from Rs 50 lakh to
Rs 75 lakh
d. Expenditure on fertilizer subsidy is estimated at Rs 1,75,100 crore in 2023-24.
This is a decrease of Rs 50,120 crore (22.3%) from the revised estimate of
2022-23.
e. The Centre will facilitate one crore farmers to adopt natural farming. For this,
10,000 Bio-Input Resource Centres will be set-up, creating a national-level
distributed micro-fertilizer and pesticide manufacturing network.
f. To further deepen domestic value addition in manufacture of mobile phones, the
finance minister announced relief in customs duty on import of certain parts and
inputs like camera lens. The concessional duty on lithium-ion cells for batteries
will continue for another year. Basic customs duty on parts of open cells of TV
panels has been reduced to 2.5%.
g. By 2030, the Indian government expects the electronics manufacturing sector to
be worth US$ 300 billion.

Niti Aayog

The Planning Commission of India supervised the five-year plan for the economic development
of the country. However, in 2014, the 65-year-old Planning Commission was dissolved and a
think tank – NITI Aayog (National Institution for Transforming India) took its place. The NITI
Aayog (National Institution for Transforming India), is a think tank of the Government of India
established on 1 January 2015 as a Commission to give suggestions to the Governments at the
central and state levels with relevant strategic, directional and technical advice across the
spectrum of key elements of policy / development process. The Prime Minister of India heads
the Aayog as the Ex-officio Chairperson. Currently Subrahmanyam. Shri B.V.R is the vice
chairperson of the NITI Aayog.

NITI Aayog means:-

● A group of people that the Government entrusts for formulating and regulating policies
concerning the transformation of India.
● A Commission assists the Government in both social and economic issues.
 ● An institution with experts
● A body that actively monitors and evaluates the implementation of the Government’s
programs and initiatives.

Seven Pillars of NITI Aayog:

1. Pro-People: Full fill aspiration of society as well as individual.

2. Proactive: In anticipation of and response to citizen needs.
3. Participation: Involvement of all
4. Empowering: Women in all aspects
5. Equity: of opportunity for the youth.
6. Transparency: Making government visible and responsive
7. Inclusion of All: SC, ST, OBC, Minorities, Gareeb, Gaon and Kisan.

Functions of Niti Aayog:-

➔ Cooperative and Competitive Federalism - Primary platform for operationalizing

Cooperative Federalism by enabling States to have active participation in the
formulation of national policy, as well as achieving time-bound implementation of
quantitative and qualitative targets.
➔ Shared National Agenda - Evolve a shared vision of national development
priorities and strategies, with the active involvement of States. This will provide the
framework ‘national agenda’ for the Prime Minister and Chief Ministers to
implement.
➔ State’s Best Friend at the Centre - Support States in addressing their own
challenges, building on strengths and comparative advantages. This will be
through coordination with Ministries, championing their ideas at the center,
providing consultancy support and building capacity.
➔ Decentralized Planning - Restructure the planning process into a bottom-up
model.
➔ Vision & Scenario Planning - Design medium and long-term strategic frameworks
across all sectors.
➔ Network of Expertise - Main-stream external ideas and expertise into government
policies and programmes through a collaborative community of national and
international experts, practitioners and other partners. This would entail being the
Government's link to the outside world.
➔ Knowledge and Innovation hub - Be an accumulator as well as disseminator of
research and best practices on good governance, through a Resource Centre
which identifies, analyses, shares and facilitates replication of the same.
➔ Harmonization - Facilitate harmonization of actions across different layers of
government through communication, coordination, collaboration and
convergence amongst all stakeholders. The emphasis will be on bringing all
together on an integrated and holistic approach to development.
 ➔ Conflict Resolution - Provide a platform for mutual resolution of inter-sectoral,
inter-departmental, inter- state as well as center-state issues.
➔ Coordinating interface with the World - Be the nodal point for strategically
harnessing global expertise and resources from multilateral platforms , nations
etc.
➔ Internal Consultancy - Offer an internal consultancy function to central and state
governments on policy and program design, specialized skills such as structuring
and executing Public Private Partnerships.
➔ Capacity building - Enable capacity building and technology up-gradation across
government, benchmarking with latest global trends and providing managerial
and technical knowhow.

Role of NITI Aayog:-

➔ To evolve a shared vision of national development priorities, sectors and strategies

with the active involvement of States.
➔ To foster cooperative federalism through structured support initiatives and
mechanisms with the States on a continuous basis, recognizing that strong States
make a strong nation.
➔ To develop mechanisms to formulate credible plans at the village level and
aggregate these progressively at higher levels of government.
➔ To ensure, in areas that are specifically referred to, that the interests of national
security are incorporated in economic strategy and policy.
➔ To pay special attention to the sections of our society that may be at risk of not
benefiting adequately from economic progress.
➔ To design strategic and long-term policy and programme frameworks and
initiatives, and monitor their progress and their efficacy. The lessons learned
through monitoring and feedback will be used for making innovative
improvements, including necessary mid-course corrections.
➔ To provide advice and encourage partnerships between key stakeholders and
national and international like-minded think tanks, as well as educational and
policy research institutions.
➔ To create a knowledge, innovation and entrepreneurial support system through a
collaborative community of national and international experts, practitioners and
other partners.
➔ To offer a platform for the resolution of inter-sectoral and inter­departmental
issues in order to accelerate the implementation of the development agenda.
➔ To maintain a state-of-the-art resource center, be a repository of research on good
governance and best practices in sustainable and equitable development as well
as help their dissemination to stake-holders.
➔ To actively monitor and evaluate the implementation of programmes and
initiatives, including the identification of the needed resources so as to strengthen
the probability of success and scope of delivery.
 ➔ To focus on technology upgradation and capacity building for implementation of
programmes and initiatives.
➔ To undertake other activities as may be necessary in order to further the
execution of the national development agenda, and the objectives mentioned
above.

Finance Commission

The Finance Commission is a constitutional body for the purpose of allocation of certain
revenue resources between the Union and the State Governments. It was established under
Article 280 of the Indian Constitution by the Indian President. It was created to define the
financial relations between the Centre and the states. It was formed in 1951. The core
responsibility of the Finance Commission of India is to evaluate the state of finances of the
Union and State Government, suggesting the share of taxes between them, formulating the
principles determining the share of taxes between the States.

President after two years of the commencement of Indian Constitution and thereafter every 5
years, has to constitute a Finance Commission of India. It shall be the duty of the Commission
to make recommendations to the President in relation to the:

● the distribution between the Union and the States of the net proceeds of taxes
which are to be, or maybe, divided between them and the allocation between the
States of the respective shares of such proceeds;
● the principles which should govern the grants in aid of the revenues of the States
out of the Consolidated Fund of India;
● any other matter referred to the Commission by the President in the interests of
sound finance
● The Commission shall determine their procedure and shall have such powers in
the performance of their functions as Parliament may by law confer on them

In India the Finance Commission consists of a total 5 members of which one is the
Chairman of the commission and other 4 members of the commission are appointed by
the president.

Functions of the Finance Commission:-

The Finance Commission makes recommendations to the president of India on

the following issues:

➔ The net tax proceeds distribution to be divided between the Centre and the
states, and the allocation of the same between states.
➔ The principles governing the grants-in-aid to the states by the Centre out of the
consolidated fund of India.
 ➔ The steps required to extend the consolidated fund of a state to boost the
resources of the panchayats and the municipalities of the state on the basis of the
recommendations made by the state Finance Commission.
➔ Any other matter referred to it by the president in the interests of sound finance.
➔ The Commission decides the basis for sharing the divisible taxes by the center
and the states and the principles that govern the grants-in-aid to the states every
five years.
➔ Any matter in the interest of sound finance may be referred to the Commission by
the President.
➔ The Commission’s recommendations along with an explanatory memorandum
with regard to the actions done by the government on them are laid before the
Houses of the Parliament.
➔ The FC evaluates the rise in the Consolidated Fund of a state in order to affix the
resources of the state Panchayats and Municipalities.
➔ The FC has sufficient powers to exercise its functions within its activity domain.
➔ As per the Code of Civil Procedure 1908, the FC has all the powers of a Civil Court.
It can call witnesses, ask for the production of a public document or record from
any office or

Role of Finance commission:-

The role of the Finance Commission is advisory in nature only and therefore, not
binding upon the government. It is up to the Government to implement its
recommendations on granting money to the states. To put it in other words, ‘It is
nowhere laid down in the Constitution that the recommendations of the
commission shall be binding upon the Government.

Conclusion

I think this year’s government budget is a step towards holistic development. The government
has brought in major schemes, reforms and necessary changes in this budget. The government
has launched a campaign to tackle economic problems prevalent in India one at a time and look
towards ground based development of India. Initiatives like Amrit kaal, ‘Sabka Saath Sabka
Vikas’, Samaveshi Vikaa etc are all very important for the overall development in India and will
be seen as beneficial in the long run of the country. Government has also allocated a lot of
resources to each ministry and sector for development and to bring in reforms. In this budget
the government has reserved and allocated a lot of funds for looking over the necessary
technological development needed in the sectors and the country. The budget also specifies
individual sector goals for accelerating the Indian economy. Committees like Niti Aayog and
finance commission also add to the efficiency of the economic functioning by guiding and
maneuvering the government, sectors and the agents. These committees are a great help for
improving and advancing the already existing budget and functioning. They help overview the
development and provide effective criticism. Overall the Indian Union Budget of 2023-24 is an
holistic budget which aims for improving and accelerating the Indian economy.