Budget 2023: 'Expect more allocation for rural expenditure this year'

 

• Budget 2023: Prabhudas Lilladher said in a recent report that it expects higher allocation for rural spending including MNREGA, food security and rural infra, PM housing, piped water and sanitation.

Budget 2023 is just around the corner and expectations are running high from the government considering that it is the last full budget before the 2024 Lok Sabha elections. While the middle salaried class is expecting some relaxation in the income tax slab, senior citizens want the minimum tax slab to be increased.

A widespread expectation from the government led by Prime Minister Modi is to continue on the path of fiscal prudence while focusing on infrastructure development.

Prabhudas Lilladher in a recent report said it expects higher allocation for rural spending including MNREGA, food security and rural infra, PM housing, piped water and sanitation, which will improve employment, rural income and rural demand .

“The 2023 budget will be the last full budget before the 2014 Lok Sabha elections. We are confident that the current year's budget will have some concrete steps on rural development and credit availability, MGNREGA, PM housing, food security, some tax exemptions for the middle class, renewed emphasis on infrastructure development, energy transition and higher education etc. will be renewed," Amnish Agarwal, head of research at Prabhudas Lilladher, said in the report.

The brokerage expects India's GDP to grow by 6.7% as high frequency indicators such as government capex, trade, transport, hotels, financial services, agriculture are doing well. Meanwhile, the manufacturing and mining segments are currently slow.

Rural demand is a major trigger for overall growth as around 65% of the population lives in rural India, but accounts for only 30% of consumption in the economy.

“The fiscal deficit by November 2022 stood at 58.9% of the full-year target owing to higher government capex, flat revenue expenditure and moderation in customs duty collections. Government has taken up supplementary demands (1.2-1.3% of GDP) on account of fertilizer subsidy, PM Garib Kalyan Anna Yojana, OMC deficit, MNREGA and PM housing, capex of railways and roads etc., which widens the fiscal deficit to around 6.7 Will give -7% of GDP," the brokerage report said.