The Department of Economics, Alliance University organized a panel discussion to help the audience understand the Union Budget of India presented by Finance Minister Ms. Nirmala Sitaraman. The speakers, representing academia and the corporate sector provided a diversity of insights on the budget highlighting the theoretical and practical considerations. Eminent scholars Dr. Chiranjib Sen, Visiting Faculty, Azim Premji University and Dr. N.R. Bhanumurthy, Vice-Chancellor, BASE University; and industry practitioners Mr. Bakul Sarkar, Asst. Vice President, Axis Bank and Mr. Shibabrata Mondal, CEO, Wizergos offered their opinions at the event.

The speakers highlighted that budget presented on Feb 1, 2023 is the first budget considered to be free of COVID-19 impact and the last full budget before the next Lok Sabha elections, and was not a populist budget but a pragmatic one keeping a rein on the fiscal deficit at 6.5% of GDP. Dr. Sen and Dr. Bhanumurthy agreed that the government’s decision to invest more in the form of capital expenditure (leading to investment) than in revenue expenditure (leading to consumption) will generate more output and create more employment highlighting the Multiplier Effect of the budget.

Dr. Bhanumurthy cited his own estimate where additional capital expenditure of Rs 1 would generate Rs. 2.45 additional income in the economy whereas revenue expenditure would generate less than Rs. 1 additional income. This will also help to contain the inflation within the targeted rate of 6%. On the other side, developed countries that spend more on revenue expenditure are experiencing higher inflation rate of 8% and low growth rate of 2%. They believe if the government policies are implemented properly then the economy can achieve a growth rate of 6.8%.  However, the government’s prioritization of policies like PM Awas Yojana, JAL Jeevan and away from MGNREGA etc. reflect different prioritization during PM Modi’s tenure. Furthermore, the speakers applauded the government’s decision to direct transfer payment to beneficiaries account which prevents huge leakage from the system.

On the other side, Mr. Sarkar emphasized that the centre should stress on digital payments and fintech tie-ups with banks. This boon in digital advancement comes with the curse of cyber fraud which has become widespread recently and must be seriously considered. According to Mr. Mondal, the government should act as an enabler and Laissez-faire economy i.e., to allow the market to perform. The government needs to stress on skill enhancement to allow shifts of employment between different sectors and to have a holistic and rapid growth.

All speakers agreed that to promote long run growth and to achieve the government’s objective of attracting private investments, good governance and regulation is a must, otherwise we can move into a trajectory where the prosperity will remain concentrated among the few. The event opened different perspectives on interpretation of the 2023 Union Budget.