HomeEconomy NewsBudget 2023 likely to focus on Indian middle class, all eyes on FM’s 11 am Parliament speech

Budget 2023 likely to focus on Indian middle class, all eyes on FM’s 11 am Parliament speech

Budget 2023: In less than two hours, Union Finance Minister Nirmala Sitharaman will announce the budget for the fiscal 2022-2023 at 11 am on Wednesday at the Parliament in New Delhi. Sources have said Budget 2023 is likely to be focused on the Indian middle class.

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By Parikshit Luthra   | Kanishka Sarkar  February 1, 2023, 9:22:47 AM IST (Updated)

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Budget 2023 likely to focus on Indian middle class, all eyes on FM’s 11 am Parliament speech
In less than two hours, Union Finance Minister Nirmala Sitharaman will announce the Budget for the fiscal 2022-2023 at 11 am on Wednesday at the Parliament in New Delhi. Sources have said Budget 2023 is likely to be focused on the Indian middle class.


Prime Minister Narendra Modi, in a recent council of ministers meeting, asked ministers to highlight what the government has done and intends to do for the middle class. He told CoM that the common man should have no doubts about the government's commitment to the middle class. The Cabinet Secretary also made an exhaustive presentation in the meeting on what the government has done for the middle income group so far.

Budget 2023, the last full budget ahead of Lok Sabha elections due in 2024, shall seek to lay out reforms and measures to take India's economic growth to the projection rate of 6.8 percent amid a global slowdown.

Also Read: PM Modi says 'India first, citizen first' will drive Budget 2023 session

The finance ministry's annual Economic Survey, released on Tuesday, has forecast the economy could grow 6 percent to 6.8 percent year-on-year next fiscal year, down from 7 percent projected for the current year, while warning about the impact of global slowdown on exports.

As sources have indicated, Sitharaman’s fifth Budget presentation since 2019 shall target India’s middle class and lower middle class with the finance minister looking to play a balancing act between populism and fiscal prudence.

Also Read: When and where to watch Budget 2023 LIVE

One of the Budget announcements that the common man keenly awaits are changes to income tax structure. Sources have said that the government may introduce a new tax slab at Rs 8-10 lakh with a tax rate of 10-15 percent against 20 percent currently. This shall increase the purchasing power of the middle class. The 30 percent tax rate on income above Rs 10 lakh may also be reduced to 25 percent.

The government is also considering rationalising and reducing some cess rates while benefits under Section 80C may be increased from Rs 1.5 lakh to Rs 2 lakh. There is also a proposal to increase tax benefits under 80D.

Also Read | Budget 2023 Expectations: Industry bodies hopeful of Indirect Tax rationalisation

However, reports citing officials suggest that even as the government faces elections in key states this year and a national vote in 2024, the budget is unlikely to offer major relief to households due to fiscal constraints. They say the budget would focus on long-term growth.

Another big theme of Budget 2023 is likely to be job creation in urban areas and support to gig workers. It is likely that a scheme to support gig workers and young entrepreneurs in the country with loans may also be introduced.

Meanwhile, the government shall seek to lower its fiscal deficit while offering incentives for investment and stepping up state spending to support an economy that is caught in the global slowdown.

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FM Sitharaman is widely expected to continue that policy, and announce a 10 percent to 12 percent increase in budget allocations for health, education and rural projects, helped by a pick up in tax collections, according to Reuters.

The annual budget will continue economic reforms, said Gopal Krishna Agarwal, economic affairs spokesman of the Bharatiya Janata Party (BJP), adding "The easing of retail inflation, higher state spending and growing bank credit would help the economic recovery ahead of the national elections."

In her Budget 2023, Sitharaman could also nudge banks to support more MSMEs and so there could be announcements on interest subvention and collateral free loans for MSMEs. The outlays under the PM-Kisan Samman Nidhi programme could increase and the amount transferred to farmers could be increased from Rs 6,000 to Rs 8,000, sources have said.

Also Read: Budget 2023 | Home makers want FM to address inflation concerns, boost growth

Another major expectation is that the finance minister could announce enhanced outlay for new production linked incentive (PLI) schemes that are specifically aimed at labour intensive sectors with high export potential and which involve a large number of MSMEs as well. There is also likely to be a big infrastructure push when it comes to the capex allocation in the budget.

Track FM Nirmala Sitharaman’s Budget 2023 presentation on CNBCTV18.com’s blog minute-by-minute LIVE updates

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