The Union Budget 2023-24 offered support to the lower-middle-class while also trying to decrease the government’s spendings. In a piece for Mint analysing the 2023-2024 Union Budget, Dr Niranjan Rajadhyaksha, Executive Director, Artha Global, writes that it has managed to pull off a balancing act between supporting the needy and maintaining its commitment to fiscal discipline.

Excerpts below:

“Two underlying themes deserve attention. First, there is continuity. The budget strategy continues to focus on gradually bringing down the fiscal deficit while pivoting towards more capital spending. Second, the political economy of the budget is directed towards middle India, especially small enterprises as well as the lower deciles of the salaried class that have had a relatively bad run in recent years.”

“The clear attempt to support micro, small and medium enterprises (MSMEs) is interesting […]. The other constituency that has been given relief is the salaried class, which has been hit by a double whammy of weak wage growth in the midst of a profit-led economic recovery and high inflation. […] The broader goal of Indian tax policy should be to collect more direct taxes while bringing down rates of indirect taxation, especially GST.”

Read the full article here.