On February 1, 2023, the Union Budget was tabled by the Finance Minister in the parliament. The budget this year was critical for many reasons. It is the last full-fledged budget of the Modi 2.0 government before the general election scheduled in 2024. Apparently, FinMin offered a wholesome budget, focusing on the growth of critical sectors like agriculture, Fintech, etc. In this article, we will cover the sectors, besides agriculture, energy, and Fintech, that have received growth impetus from the government in the 2023 budget.
Impact on the major sectors
Railways: It’s been a very positive budget for the Indian railway as it received the highest capex boost of 2.40 lakh crore (75% increase) compared to 1.40 lakh crore in the last fiscal. Sitharaman said it is 9x the amount given in 2013-14.
The capex boost will be a real game changer, allowing for new infrastructure, modernisation of stations, and upgraded safety and security measures for the passengers. The budget has proposed capex to build 35 hydrogen fuel-based trains, 4,500 newly designed automobile passenger coaches, 5,000 LHB coaches, 58,000 wagons, and the modernisation of 1,275 railway stations. The government will undertake 100 critical infrastructure projects for last and first-mile connectivity for the smooth transportation of critical raw materials.
Defence: The FinMin has proposed a total outlay of ₹5.94 lakh crore towards the defence sector, marking an increase of 13% from last year. Currently, the government is focusing on foreign defence equipment and technology. The capex allocation towards modernisation and infrastructure development has increased 57% to ₹1.62 lakh crore from 2019-20. The Border Road Organisation (BRO) projects received a hike of 43% to ₹5000 crores, while DRDO’s budget increased by 9%.
Tourism: The tourism industry has seen a significant uptick post-Covid. The government has revealed its plans to develop fifty more tourist destinations and build ‘unity malls’ in the state capitals to promote handicrafts and products with Geographical Indication (GI) status. Sitharaman mentioned that tourism will go into a mission mode in her budget speech. However, the allotted capex for the sector remained unchanged from the last year at ₹2,400 crores.
Government has outlined a plan to incentivise tourism for the middle class with skill and entrepreneurship development under the ‘Dekho Apna Desh’ scheme.
Education and skill enhancement: The education sector received a marginal increase of 8% in budget allocation for FY 23-24. The Finance Minister announced ₹1.12 lakh crore of funds for FY24 against ₹1.04 lakh crore last year. The capital allotment for the government’s largest educational scheme ‘Sarva Shiksha Abhiyan’ remained unchanged.
Additionally, the government will recruit 38,800 teaching and support staff for the 740 Eklavya Model Residential Schools for educating tribal children in the next three years.
Infrastructure: The capital allocation for the infrastructure industry is hiked 33% to ₹10 lakh crore. The newly established infrastructure finance secretariat will play a pivotal role in attracting private investments in infrastructure projects.
Retail Industry: The government has cut the import duty on several items, including TV panels and specific inputs for mobile phone manufacturing.
The government has revamped MSME’s credit guarantee fund to ₹9000 crores, an increase of 20% from the last budget. It will enable the MSMEs to access an additional collateral-free credit of ₹2 lakh crore. The new credit guarantee scheme will come into effect from April 1, 2023.
EV: After attaining 200% growth last year, the EV sector had high hopes from this year’s budget. In her budget speech, the Finance Minister emphasised giving more impetus to green energy and electric vehicles. She announced custom duty exemptions for lithium-ion batteries and introduced more sops to boost vehicle scrappage. Custom duty is exempted for capital goods and machenaries required to manufacture lithium-ion cells to promote green mobility.
You can read our other articles on Union Budget 2023 below.
- Rural Revival: Navigating Budget 2023 For A Thriving Rural Economy
- Renewable Energy Rises As Champion Of Sustainable & Green Growth: Budget 2023
- A Comprehensive Look At The 2023 Union Budget’s Impact On Agriculture
- Announcements Regarding The Fintech Sector – Budget 2023
The sectors mentioned above will see significant growth in the coming days, prompted by the impetus provided in the Union Budget 2023. If you are an investor in stocks, you can consider shares from these sectors going forward.
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