Union Budget 2023-24 Analysis

Budget Highlights
▪ Expenditure: The government proposes to spend Rs 45,03,097 crore in 2023-24, which is an increase of 7.5% over the
revised estimate of 2022-23. In 2022-23, total expenditure is estimated to be 6.1% higher than the budget estimate.
▪ Receipts: The receipts (other than borrowings) in 2023-24 are expected to be to Rs 27,16,281 crore, an increase of
11.7% over revised estimate of 2022-23. In 2022-23, total receipts (other than borrowings) are estimated to be 6.5%
higher than the budget estimates.
▪ GDP: The government has estimated a nominal GDP growth rate of 10.5% in 2023-24 (i.e., real growth plus inflation).
▪ Deficits: Revenue deficit in 2023-24 is targeted at 2.9% of GDP, which is lower than the revised estimate of 4.1% in
2022-23. Fiscal deficit in 2023-24 is targeted at 5.9% of GDP, lower than the revised estimate of 6.4% of GDP in 2022-
23. While the revised estimate as a percentage of GDP was the same as the budget estimate, in nominal terms, fiscal
deficit was higher by Rs 94,123 crore (increase of 5.7%) in 2022-23. Interest expenditure at Rs 10,79,971 crore is
estimated to be 41% of revenue receipts.
▪ Ministry allocations: Among the top 13 ministries with the highest allocations, in 2023-24, the highest percentage
increase in allocation is observed in the Ministry of Railways (49%), followed by the Ministry of Jal Shakti (31%), and
the Ministry of Road Transport and Highways (25%).
Main tax proposals in the Finance Bill
▪ Changes in the new income tax regime: The number Table 1: Current and proposed tax slabs
of tax slabs has been reduced from six to five. Table 1 Tax Rate Current Income Slab Proposed Income Slab
compares the current tax income structure with the Nil Up to Rs 2.5 lakh Up to Rs 3 lakh
proposed income tax structure. The surcharge on the 5% Rs 2.5 lakh to Rs 5 lakh Rs 3 lakh to Rs 6 lakh
income when it exceeds Rs 5 crore will be reduced 10% Rs 5 lakh to Rs 7.5 lakh Rs 6 lakh to Rs 9 lakh
from 37% to 25%. Currently, those with income up to 15% Rs 7.5 lakh to Rs 10 lakh Rs 9 lakh to Rs 12 lakh
Rs 5 lakh can avail a rebate and not pay any taxs; this 20% Rs 10 lakh to Rs 12.5 lakh Rs 12 lakh to Rs 15 lakh
limit has been raised to Rs 7 lakh. Further, the standard 25% Rs 12.5 lakh to Rs 15 lakh -
30% Above Rs 15 lakh Above Rs 15 lakh
deduction will be available under the new tax regime.
▪ Changes in tax exemptions: The tax exemption for news agencies set up solely for the collection and distribution of
news will be removed.
▪ Charitable trusts are required to apply 85% of their income within the year to avail income tax exemption. From April
2023, if a charitable trust donates to another charitable trust, only 85% of such a donation would be considered as
application of income.
▪ Presumptive taxation: The upper limit on turnover for MSMEs to be eligible for presumptive taxation has been raised
from Rs 2 crore to Rs 3 crore. The upper limit on gross receipts for professionals eligible for presumptive taxation has
been raised from Rs 50 lakh to Rs 75 lakh.
▪ Co-operative societies: The income tax rate for new co-operative societies engaged in manufacturing activities has been
lowered from 22% to 15% (plus 10% surcharge).
▪ Capital gains: Capital gains from sale of residential property can be deducted to the extent of purchase or construction of
another residential property. The deduction will be capped at Rs 10 crore.
▪ Life insurance: Income from investments in life insurance policies will be taxable if premium of Rs 5 lakh has been paid
in any year. The amount paid upon the death of the policy holder will continue to be exempt from income tax.
▪ Online Games: Winnings from online games will be subject to 30% tax deductible at source.
▪ Startups: Startups incorporated within a time-period and meeting other conditions can deduct up to 100% of their profits;
the end of this period has been extended from March 31, 2023 to March 31, 2024. In addition, the period within which
losses of startups may be carried forward has been extended from seven to ten years.
▪ Indirect Taxes: Customs duty on several items have been changed. On a few items such as gold, platinum, and
aeroplanes the amount of cess has been increased with a corresponding decrease in customs duties.
▪ CGST: The CGST Act will be amended such that input tax credit will not be available for goods and services purchased
for use in activities related to corporate social responsibility.

February 1, 2023
PRS Legislative Research ◼ Institute for Policy Research Studies
3rd Floor, Gandharva Mahavidyalaya ◼ 212, Deen Dayal Upadhyaya Marg ◼ New Delhi – 110002
Tel: (011) 43434035, 23234801 ◼ www.prsindia.org
 Union Budget 2023-24 Analysis PRS Legislative Research

Policy Highlights
▪ Legislative proposals: Amendments will be made to the Banking Regulation Act, 1949, Banking Companies
(Acquisition and Transfer of Undertaking) Act, 1970, and the Reserve Bank of India Act, 1934 to improve bank
governance and enhance investors’ confidence. Several measures will be taken to improve business activities in the
Gujarat International Finance Tech-City International Financial Services Centre (GIFT IFSC). For instance, the IFSC
Authority Act, 2019 will be amended to provide for arbitration and ancillary services in GIFT IFSC, and avoiding dual
regulation under the Special Economic Zones Act, 2005.
▪ Infrastructure: The scheme providing 50-year interest free loans to state governments will be made available in 2023-
24 also with an outlay of Rs 1.3 lakh crore. 100 critical transport infrastructure projects for last and first mile
connectivity for various sectors such as ports, coal, steel will be taken up. This will have an investment of Rs 75,000
crore including Rs 15,000 crore from private sources.
▪ Urban Development: An Urban Infrastructure Development Fund will be established for development of urban
infrastructure by public agencies in tier-2 and tier-3 cities. The Fund will be managed by the National Housing Bank
and is expected to have an annual allocation of Rs 10,000 crore. States and cities will be encouraged to undertake urban
planning reforms such as efficient land use and transit-oriented development. Cities will be incentivised to improve their
credit worthiness for municipal bonds through property tax reforms and setting aside user charges.
▪ Agriculture: An Agriculture Accelerator Fund will be set up to encourage agri-startups in rural areas. A sub-scheme of
PM Matsya Sampada Yojana will be launched with an investment of Rs 6,000 crore to support fishermen, fish vendors,
and MSMEs. Decentralised storage capacity will be set up for farmers to store their produce. PM Programme for
Restoration, Awareness, Nourishment and Amelioration of Mother Earth (PM-PRANAM) will be launched to
incentivise states/UTs to promote balanced use of chemical fertilisers and alternative fertilisers.
▪ Energy and Environment: A Green Credit Programme will be notified under the Environment (Protection) Act, 1986
to incentivise environmentally sustainable actions by companies, individuals, and local bodies, and help gather
additional resources for such actions. Battery Energy Storage Systems with 4,000 MWh capacity will be supported with
viability gap funding.
▪ Research and Development (R&D): Three centres of excellence for R&D in Artificial Intelligence will be established
in select educational institutions. 100 labs will be set up in engineering institutions for developing applications using 5G
services. A National Data Governance Policy will be released to enable access to anonymised data. A programme to
promote research and innovation in pharmaceuticals will be taken up through centres of excellence.
▪ Health: Nursing colleges will be started along with all existing 157 medical colleges. In order to eliminate sickle cell
anaemia by 2047, a Mission will be launched covering seven crore people in the age group 0-40 in affected tribal areas.
▪ Finance: A National Finance Information registry will be set up for accessing all financial and ancillary information. A
small savings scheme, Mahila Samman Savings Certificate will be launched for two years. Further, the deposit limit for
senior citizens savings scheme will be increased from Rs 15 lakh to Rs 30 lakh.
▪ Governance: The KYC process will be simplified and financial sector regulators will be encouraged to have a KYC
system. A Unified Filing Process will be set up for submitting information to different government agencies. A
Voluntary Settlement Scheme will be launched to settle contractual disputes of government and its undertakings. The
financing system of certain schemes will be changed from input-based to result-based on a pilot basis.

February 1, 2023 -2-

 Union Budget 2023-24 Analysis PRS Legislative Research

Budget estimates of 2023-24 as compared to revised estimates of 2022-23

▪ Total Expenditure: The government is estimated to spend Rs 45,03,097 crore in 2023-24. This is an increase of 7.5%
over the revised estimate of 2022-23. Out of the total expenditure, revenue expenditure is estimated to be Rs 35,02,136
crore (1.2% increase) and capital expenditure is estimated to be Rs 10,00,961 crore (37.4% increase). The increase in
capital expenditure is due to an increase in capital outlay on transport (including railways, roads and bridges, and inland
water transport) by Rs 1,28,863 crore (36.1% increase). Expenditure on total capital outlay is estimated to be Rs 8,37,127
crore in 2023-24, an increase of 35% over the revised estimates for 2022-23.
▪ Total Receipts: Government receipts (excluding borrowings) are estimated to be Rs 27,16,281 crore, an increase of 11.7%
over the revised estimates of 2022-23. The gap between these receipts and the expenditure will be plugged by borrowings,
budgeted to be Rs 17,86,816 crore, an increase of 1.8% over the revised estimate of 2022-23.
▪ Transfer to states: The central government will transfer Rs 18,62,874 crore to states and union territories in 2023-24, an
increase of 8.9% over the revised estimates of 2022-23. Transfer to states includes devolution of Rs 10,21,448 crore out of
the divisible pool of central taxes, grants worth Rs 6,86,773 crore, and special loans worth Rs 1.3 lakh crore for capital
expenditure.
▪ Deficits: Revenue deficit is targeted at 2.9% of GDP, and fiscal deficit is targeted at 5.9% of GDP in 2023-24. The target
for primary deficit (which is fiscal deficit excluding interest payments) in 2023-24 is 2.3% of GDP. The revised estimate
for the revenue deficit target has increased from the budgeted estimate in 2022-23. The revised fiscal deficit target for
2022-23 has remained the same, despite higher receipts. In 2022-23, the central government’s revenue deficit is expected
to be 4.1% of GDP against a budget estimate of 3.8% of GDP.
▪ GDP growth estimate: The nominal GDP is estimated to grow at a rate of 10.5% in 2023-24.

Table 2: Budget at a Glance 2023-24 (Rs crore)

Actuals Budgeted Revised Budgeted % change (2022-23
2021-22 2022-23 2022-23 2023-24 RE to 2023-24 BE)
Revenue Expenditure 32,00,926 31,94,663 34,58,959 35,02,136 1.2%
Capital Expenditure 5,92,874 7,50,246 7,28,274 10,00,961 37.4%
of which:
Capital Outlay 5,34,499 6,10,189 6,20,204 8,37,127 35.0%
Loans and Advances 58,376 1,40,057 1,08,070 1,63,834 51.6%
Total Expenditure 37,93,801 39,44,909 41,87,232 45,03,097 7.5%
Revenue Receipts 21,69,905 22,04,422 23,48,413 26,32,281 12.1%
Capital Receipts 39,375 79,291 83,500 84,000 0.6%
of which:
Recoveries of Loans 24,737 14,291 23,500 23,000 -2.1%
Other receipts (including disinvestments) 14,638 65,000 60,000 61,000
Total Receipts (excluding borrowings) 22,09,280 22,83,713 24,31,913 27,16,281 11.7%
Revenue Deficit 10,31,021 9,90,241 11,10,546 8,69,855 -21.7%
% of GDP 4.4% 3.8% 4.1% 2.9% -29.3%
Fiscal Deficit 15,84,521 16,61,196 17,55,319 17,86,816 1.8%
% of GDP 6.7% 6.4% 6.4% 5.9% -7.8%
Primary Deficit 7,79,022 7,20,545 8,14,668 7,06,845 -13.2%
% of GDP 3.3% 2.8% 3.0% 2.3% -23.3%
Sources: Budget at a Glance, Union Budget Documents 2023-24; PRS.

Expenses which bring a change to the government’s assets or liabilities Budgeted vs Actual Disinvestment (in Rs crore)
(such as construction of roads or recovery of loans) are capital expenses, 2,00,000
and all other expenses are revenue expenses (such as payment of salaries 1,50,000
or interest payments). In 2023-24, capital expenditure is expected to
increase by 37.4% over the revised estimates of 2022-23, to Rs 1,00,000
10,00,961 crore. Revenue expenditure is expected to increase by 1.2% 50,000
over the revised estimates of 2022-23 to Rs 35,02,136 crore.
0
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17

2018-19
2019-20
2020-21
2021-22
2022-23
2017-18

Disinvestment is the government selling its stakes in Public Sector

Undertakings (PSUs). In 2022-23, the government is estimated to meet
77% of its disinvestment target (Rs 50,000 crore against a target of Rs Budget Estimate Actual Disinvestment
65,000 crore). The disinvestment target for 2023-24 is Rs 51,000 crore.
Note: Actual data for 2022-23 is revised estimate.
Sources: Union Budget Documents (various years); PRS.

February 1, 2023 -3-

 Union Budget 2023-24 Analysis PRS Legislative Research

Receipts Highlights for 2023-24

▪ Receipts (excluding borrowings) in 2023-24 are estimated to be Rs 27,16,281 crore, an increase of 11.7% over the revised
estimates of 2022-23.
▪ Gross tax revenue is budgeted to increase by 10.4% over the revised estimates of 2022-23, which is about the same as the
estimated nominal GDP growth of 10.5% in 2023-24. Corporation tax and income tax are estimated to increase at the same
rate as the nominal GDP (10.5%). Excise duties (mainly imposed on petroleum products) are expected to rise by 5.9% in
2023-24. GST revenue is budgeted to increase at a higher rate (12%). The net tax revenue of the central government
(excluding states’ share in taxes) is estimated to be Rs 23,30,631 crore in 2023-24, which is 11.7% over the revised estimates
for 2022-23.
▪ Devolution to states from centre’s tax revenue is estimated to be Rs 10,21,448 crore in 2023-24, an increase of 7.7% over
the revised estimates of 2022-23. In 2022-23, the devolution to states increased by Rs 1,31,756 crore, from an estimate of Rs
8,16,649 crore at the budgeted stage to Rs 9,48,405 crore at the revised stage (16%).
▪ Non-tax revenue is estimated at Rs 3,01,650 crore in 2023-24, an increase of 15.2% over the revised estimate of 2022-23.
▪ Capital receipts (excluding borrowings) are targeted at Rs 84,000 crore, a marginal increase of 0.6% over the revised
estimates of 2022-23. Recoveries of loans and advances were 64% higher in the revised estimates of 2022-23 at Rs 23,500
crore compared to budget estimates of Rs 14,291 crore.

Table 3: Break up of central government receipts in 2023-24 (Rs crore)

Actuals Budgeted Revised Budgeted % change 2022-23 RE
2021-22 2022-23 2022-23 2023-24 to 2023-24 BE
Gross Tax Revenue 27,09,135 27,57,820 30,43,067 33,60,858 10.4%
of which:
Corporation Tax 7,12,037 7,20,000 8,35,000 9,22,675 10.5%
Taxes on Income 6,96,243 7,00,000 8,15,000 9,00,575 10.5%
Goods and Services Tax 6,98,114 7,80,000 8,54,000 9,56,600 12.0%
Customs 1,99,728 2,13,000 2,10,000 2,33,100 11.0%
Union Excise Duties 3,94,644 3,35,000 3,20,000 3,39,000 5.9%
Service Tax 1,012 2,000 1,000 500 -50.0%
A. Centre's Net Tax Revenue 18,04,794 19,34,771 20,86,662 23,30,631 11.7%
Devolution to States 8,98,392 8,16,649 9,48,405 10,21,448 7.7%
B. Non Tax Revenue 3,65,112 2,69,651 2,61,751 3,01,650 15.2%
of which:
Interest Receipts 21,874 18,000 24,640 24,820 0.7%
Dividend 1,60,647 1,13,948 83,953 91,000 8.4%
Other Non-Tax Revenue 1,79,540 1,34,276 1,48,342 1,81,382 22.3%
C. Capital Receipts (without borrowings) 39,375 79,291 83,500 84,000 0.6%
of which:
Disinvestment 13,627 65,000 50,000 51,000 2.0%
Receipts (without borrowings) (A+B+C) 22,09,281 22,83,713 24,31,913 27,16,281 11.7%
Borrowings 15,84,521 16,61,196 17,55,319 17,86,816 1.8%
Total Receipts (including borrowings) 37,93,802 39,44,909 41,87,232 45,03,097 7.5%
Sources: Receipts Budget, Union Budget Documents 2023-24; PRS.

▪ Indirect taxes: The total indirect tax collections are estimated to be Rs 15,29,200 crore in 2023-24. Of this, the
government has estimated to raise Rs 9,56,600 crore from GST. Out of the total tax collections under GST, 85% is
expected to come from central GST (Rs 8,11,600 crore), and 15% from the GST compensation cess (Rs 1,45,000 crore).
▪ Corporation tax: The collections from taxes on companies are expected to increase by 10.5% in 2023-24. In 2022-23,
corporate tax collection is expected to be 16% higher than the budget estimate (Rs 7,20,000 crore).
▪ Income tax: The collections from income tax are also expected to increase by 10.5% in 2023-24 to Rs 9,00,575 crore.
Income tax collection is expected to be 16.4% higher than the budget estimate in 2022-23.
▪ Non-tax receipts: Non-tax revenue consists mainly of interest receipts on loans given by the centre, dividends, license fees,
tolls, and charges for government services. Dividend receipts were lower in 2022-23 than originally budgeted mainly on
account of lower dividend from Reserve Bank of India. In 2023-24, non-tax revenue is expected to increase by 15% over the
revised estimates of 2022-23.
▪ Disinvestment target: The disinvestment target for 2023-24 is Rs 51,000 crore. This is a marginal increase of 2% over
the revised estimate of 2022-23 (Rs 50,000 crore). In 2022-23, the receipts from disinvestment are expected to be 23%
lower than the budget estimate.
February 1, 2023 -4-
 Union Budget 2023-24 Analysis PRS Legislative Research

Expenditure Highlights for 2023-24

▪ Total expenditure in 2023-24 is expected to be Rs 45,03,097 crore, which is an increase of 7.5% over than the revised
estimate of 2022-23. Out of this: (i) Rs 14,67,880 crore is proposed to be spent on central sector schemes (4% increase
over the revised estimate of 2022-23), and (ii) Rs 4,76,105 crore is proposed to be spent on centrally sponsored
schemes (a 5.4% increase over the revised estimate of 2022-23).
▪ The government has estimated to spend Rs 2,34,359 crore on pension in 2023-24, which is 4.3% lower than the revised
estimate of 2022-23. In addition, expenditure on interest payment in 2022-23 is estimated to be Rs 10,79,971 crore,
which is 24% of the government’s expenditure. In 2023-24, interest payments are expected to increase by 14.8% as
compared to revised estimates of 2022-23.

Table 4: Break up of central government expenditure in 2023-24 (Rs crore)

Actuals Budgeted Revised Budgeted % change (2022-23
2021-22 2022-23 2022-23 2023-24 RE to 2023-24 BE)
Central Expenditure 29,13,970 30,06,111 32,82,936 35,13,761 7.0%
Establishment Expenditure of Centre 6,93,272 6,92,214 7,34,619 7,44,339 1.3%
Central Sector Schemes 12,09,950 11,81,084 14,11,729 14,67,880 4.0%
Other expenditure 10,10,748 11,32,813 11,36,588 13,01,542 14.5%
Grants for CSS and other transfers 8,79,832 9,38,797 9,04,296 9,89,337 9.4%
Centrally Sponsored Schemes (CSS) 4,54,366 4,42,781 4,51,901 4,76,105 5.4%
Finance Commission Grants 2,07,435 1,92,108 1,73,257 1,65,480 -4.5%
of which:
Rural Local Bodies 40,312 46,513 41,000 47,018 14.7%
Urban Local Bodies 16,147 22,908 15,026 24,222 61.2%
Grants-in-aid 20,272 23,294 22,135 24,466 10.5%
Post Devolution Revenue Deficit Grants 1,18,452 86,201 86,201 51,673 -40.1%
Other grants 2,18,031 3,03,908 2,79,138 3,47,752 24.6%
Total Expenditure 37,93,801 39,44,909 41,87,232 45,03,097 7.5%
Sources: Budget at a Glance, Union Budget Documents 2023-24; PRS.

Expenditure by Ministries
In 2023-24, the ministries with the highest allocations account for 55% of the estimated total expenditure. Of these, the
Ministry of Defence has the highest allocation in 2023-24, at Rs 5,93,538 crore. It accounts for 13.2% of the total budgeted
expenditure of the central government. Other ministries with high allocation include: (i) Road Transport and Highways (6%
of total expenditure), (ii) Railways (5.4%), and (iii) Consumer Affairs, Food, and Public Distribution (4.6%). Table 5 shows
the expenditure on Ministries with the 13 highest allocations for 2023-24 and the changes in allocation as compared to the
revised estimate of 2022-23.
Table 5: Ministry-wise expenditure in 2023-24 (Rs crore)
Actuals Budgeted Revised Budgeted % change
2021-22 2022-23 2022-23 2023-24 (2022-23 RE to 2023-24 BE)
Defence 5,00,681 5,25,166 5,84,791 5,93,538 1.5%
Road Transport and Highways 1,23,551 1,99,108 2,17,027 2,70,435 24.6%
Railways 1,35,242 1,40,367 1,62,312 2,41,268 48.6%
Food and Public Distribution 3,06,571 2,17,684 2,96,523 2,05,765 -30.6%
Home Affairs 1,68,791 1,85,777 1,93,912 1,96,035 1.1%
Chemicals and Fertilisers 1,54,789 1,07,715 2,27,681 1,78,482 -21.6%
Rural Development 1,61,643 1,38,204 1,82,382 1,59,964 -12.3%
Agriculture and Farmers' Welfare 1,22,836 1,32,514 1,18,913 1,25,036 5.1%
Communications 51,545 1,05,407 1,05,478 1,23,393 17.0%
Education 80,352 1,04,278 99,881 1,12,899 13.0%
Jal Shakti 83,467 86,189 74,029 97,278 31.4%
Health and Family Welfare 84,470 86,201 79,145 89,155 12.6%
Housing and Urban Affairs 1,06,840 76,549 74,546 76,432 2.5%
Other Ministries 17,13,022 18,39,751 17,70,613 20,33,419 14.8%
Total Expenditure 37,93,801 39,44,909 41,87,232 45,03,097 7.5%
Sources: Expenditure Budget, Union Budget 2023-24; PRS.

▪ Railways: Allocation is estimated to increase by Rs 78,956 crore (48.6%) in 2023-24, over the revised estimate of 2022-
23. This is mainly on account of increased capital outlay on commercial lines.

February 1, 2023 -5-

 Union Budget 2023-24 Analysis PRS Legislative Research

▪ Jal Shakti: Allocation to the Ministry of Jal Shakti is estimated to increase by Rs 23,249 crore (31.4%) in 2023-24,
driven by an increase in the allocation for Jal Jeevan Mission.
▪ Road Transport and Highways: Allocation in 2023-24 is estimated to increase by Rs 53,408 crore (24.6%), on account
of an increase on capital outlay on roads and bridges (24.5%).
▪ Allocation towards the Ministries of Consumer Affairs, Food and Public Distribution, and Chemicals and Fertilisers have
decreased mainly on account of a reduction in food subsidy and fertiliser subsidy. We discuss the expenditure on
subsidies below.
Expenditure on Subsidies
In 2023-24, the total expenditure on subsidies is estimated to be Rs 4,03,084 crore, a decrease of 28.3% from the revised
estimate of 2022-23 (Table 6).
▪ Food subsidy: Allocation to food subsidy is estimated at Rs 1,97,350 crore in 2023-24, a 31.3% decrease over the revised
estimate of 2022-23. A higher level of food subsidy was budgeted in 2021-22 and 2022-23 mainly on account of Pradhan
Mantri Garib Kalyan Ann Yojana, which provides for free additional foodgrains to eligible beneficiaries to mitigate the
impact of COVID-19. The provision of additional foodgrains was discontinued in December 2022.
▪ Fertiliser subsidy: Expenditure on fertiliser subsidy is estimated at Rs 1,75,100 crore in 2023-24. This is a decrease of
Rs 50,120 crore (22.3%) from the revised estimate of 2022-23. Fertiliser subsidy for 2022-23 was increased substantially
in response to a sharp increase in international prices of raw materials used in the manufacturing of fertilisers.
▪ Other subsidies: Expenditure on other subsidies includes interest subsidies for various government schemes, subsidies
for the price support scheme for agricultural produce, and assistance to ship building research and development, among
others. In 2023-24, the expenditure on these other subsidies is estimated to decrease by 30% over the revised estimate of
2022-23.
Table 6: Subsidies in 2023-24 (Rs crore)
Actuals Budgeted Revised Budgeted % change
2021-22 2022-23 2022-23 2023-24 (2022-23 RE to 2023-24 BE)
Food subsidy 2,88,969 2,06,831 2,87,194 1,97,350 -31.3%
Fertiliser subsidy 1,53,758 1,05,222 2,25,220 1,75,100 -22.3%
Petroleum subsidy 3,423 5,813 9,171 2,257 -75.4%
Other subsidies 57,758 37,773 40,495 28,377 -29.9%
Total 5,03,907 3,55,639 5,62,080 4,03,084 -28.3%
Sources: Expenditure Profile, Union Budget 2023-24; PRS.

Expenditure on Major Schemes

Table 7: Scheme wise allocation in 2023-24 (Rs crore)
Actuals Budgeted Revised Budgeted % change (2022-23
2021-22 2022-23 2022-23 2023-24 RE to 2023-24 BE)
Pradhan Mantri Awas Yojana 90,020 48,000 77,130 79,590 3.2%
Jal Jeevan Mission/National Rural Drinking Water Mission 63,126 60,000 55,000 70,000 27.3%
PM-KISAN 66,825 68,000 60,000 60,000 0.0%
MGNREGS 98,468 73,000 89,400 60,000 -32.9%
National Education Mission 25,305 39,553 32,612 38,953 19.4%
National Health Mission 32,958 37,160 33,708 36,785 9.1%
Modified Interest Subvention Scheme* - 19,500 22,000 23,000 4.5%
Saksham Anganwadi and POSHAN 2.0 18,382 20,263 20,263 20,554 1.4%
Pradhan Mantri Gram Sadak Yojana 13,992 19,000 19,000 19,000 0.0%
AMRUT and Smart Cities Mission 13,868 14,100 15,300 16,000 4.6%
National Livelihood Mission-Ajeevika 10,177 14,236 13,886 14,129 1.7%
Guarantee Emergency Credit Line to MSME borrowers 7,445 15,000 10,500 14,100 34.3%
Pradhan Mantri Fasal Bima Yojana 13,549 15,500 12,376 13,625 10.1%
Swachh Bharat Mission 5,050 9,492 7,000 12,192 74.2%
Reform Linked Distribution Scheme 814 7,566 6,000 12,072 101.2%
Note: The Modified Interest Subvention Scheme replaced the scheme for interest subsidy for short term credit to farmers (the actual expenditure towards this
scheme is Rs 21,477 crore in 2021-22).
Sources: Expenditure Profile, Union Budget 2023-24; PRS.

▪ Pradhan Mantri Awas Yojana (rural and urban components taken together) has the highest allocation in 2023-24 at Rs
79,590 crore. This is an increase of 3.2% over the revised estimate of 2022-23. As compared to the revised estimates of
2022-23, the allocation for the rural component of the scheme has increased by 13% and the urban component has
declined by 13% in 2023-24. For 2022-23, the allocation towards the scheme has been increased by 60.7% as compared
to the budget estimates.

February 1, 2023 -6-

 Union Budget 2023-24 Analysis PRS Legislative Research

▪ The Jal Jeevan Mission has the second highest allocation in 2023-24 at Rs 70,000 crore, an increase of 27.3% over the
revised estimate of Rs 55,000 crore in 2022-23.
▪ Allocation for PM-KISAN has been kept constant at Rs 60,000 crore, and for MGNREGS has been reduced by 33% to Rs
60,000 crore.
▪ Some other schemes with a comparatively higher increase in allocation in 2023-24 include: (i) Reform Linked
Distribution Scheme (101.2%), (ii) Swachh Bharat Mission (74.2%), and (iii) Guarantee Emergency Credit Line to
MSME borrowers (34.3%).
Loans to states for capital expenditure
▪ The Centre has budgeted Rs 1.3 lakh crore for special interest-free loans to states for capital expenditure. The revised
estimates for 2022-23 at Rs 76,000 crore were lower than the budgeted Rs 1 lakh crore.
Expenditure on Scheduled Caste and Scheduled Tribe sub-plans and schemes for welfare of women, children and
North Eastern Region
▪ Programmes for the welfare of women Table 8: Allocations for women, children, SCs, STs and NER (Rs crore)
and children have been allocated Rs % change
Actuals Revised Budgeted
3,27,010 crore in 2023-24, an increase of (2022-23 RE to
2021-22 2022-23 2023-24
6.3% over the revised estimate of 2022- 2023-24 BE)
23. These allocations include Welfare of Women 2,09,528 2,18,487 2,23,220 2.2%
programmes being implemented across Welfare of Children 73,199 89,008 1,03,791 16.6%
all ministries.
Scheduled Castes 1,21,614 1,52,604 1,59,126 4.3%
▪ The allocation towards scheduled castes
and scheduled tribes in 2023-24 is Scheduled Tribes 83,921 94,293 1,19,510 26.7%
estimated to increase by 4.3% and 26.7%, North Eastern Region (NER) - 72,540 94,680 30.5%
respectively. The budget for road works Sources: Expenditure Profile, Union Budget 2023-24; PRS.
under allocation for welfare of scheduled
tribes has increased by 265% in 2023-24 as compared to revised estimate of 2022-23. The allocation towards North
Eastern Region is estimated to increase by 30.5% in 2023-24 over the revised estimates of 2022-23.

Fiscal Responsibility and Budget Management targets

The Fiscal Responsibility and Budget Management (FRBM) Act, 2003 requires the central government to progressively
reduce its outstanding debt, revenue deficit and fiscal deficit, and give three year rolling targets. Note that the Medium-Term
Fiscal Policy Statement has not provided rolling targets for budget deficits since 2021-22. In the Budget speech, the finance
minister reiterated the government’s aim to reduce fiscal deficit to below 4.5% of GDP by 2025-26.
Fiscal deficit is an indicator of borrowings by the Table 9: FRBM targets for deficits (as % of GDP)
government for financing its expenditure. The estimated Actuals Revised Budgeted
fiscal deficit for 2023-24 is 5.9% of GDP. 2021-22 2022-23 2023-24

Revenue deficit is the excess of revenue expenditure over Fiscal Deficit 6.7% 6.4% 5.9%
revenue receipts. Such a deficit implies that the Revenue Deficit 4.4% 4.1% 2.9%
government needs to borrow funds to meet recurring Primary Deficit 3.3% 3.0% 2.3%
expenses which may not provide future returns. The Sources: Medium Term Fiscal Policy Statement, Union Budget 2023-24; PRS.
estimated revenue deficit for 2023-24 is 2.9% of GDP.
Primary deficit is the difference between fiscal deficit and interest payments. It is estimated to be 2.3% of GDP in 2023-24.
Fiscal Deficit: Budgeted vs Actual (% of GDP) 8% Revenue Deficit: Budgeted vs Actual (% of GDP)
10%
8% 6%
6%
4%
4%
2% 2%
0%
0%
2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23

2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22
2022-23

Budgeted Actual Budgeted Actual

Note: Data for 2022-23 is revised estimate.

Sources: Budget at a Glance, Union Budget (multiple years); PRS.

February 1, 2023 -7-

 Union Budget 2023-24 Analysis PRS Legislative Research

▪ In the 2022-23 budget, the government estimated the fiscal deficit to be at 6.4% of GDP, and the revenue deficit to be at
3.8% of GDP. As per the revised estimates for 2022-23, the ratio of fiscal deficit to GDP is estimated to be the same as
budget estimate despite fiscal deficit being higher in nominal terms by Rs 94,123 crore (5.7% overshooting). This was
due to GDP growth being higher than estimated.
▪ Outstanding Liabilities: The central government’s outstanding liabilities declined from 51% in 2012-13 to 48% in 2018-
19. From 2019-20 onwards, outstanding liabilities have been increasing, and reached a high of 61% in 2020-21. They
declined to 57% in 2021-22, and are expected to remain at that level in 2023-24.
▪ Outstanding liabilities is the accumulation of borrowings over the years. A higher debt implies that the government has
a higher loan repayment obligation over the years.
▪ The interest payments as a percentage of revenue receipts increased from 36% in 2011-12 to 42% in 2020-21. As per the
budget estimates, this figure is expected to marginally reduce to 41% in 2023-24.

Outstanding liabilities (% of GDP) Interest payments as % of Revenue Receipts

70% 61%
57% 57% 57% 42% 40% 41%
60% 45%
51% 51% 50% 50% 48% 48%
48% 51% 40% 36% 36% 37% 37% 37% 35% 37% 38% 36% 37%
50% 35%
40% 30%
25%
30% 20%
20% 15%
10% 10%
5%
0% 0%
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22

2023-24 BE
2022-23 RE

2011-12
2012-13
2013-14
2014-15
2015-16
2016-17
2017-18
2018-19
2019-20
2020-21
2021-22

2023-24 BE
2022-23 RE
Note: RE is revised estimate and BE is budget estimate.
Sources: Economic Survey 2022-23, Union Budget Documents 2023-24; PRS.

DISCLAIMER: This document is being furnished to you for your information. You may choose to reproduce or redistribute this report for non-commercial
purposes in part or in full to any other person with due acknowledgement of PRS Legislative Research (“PRS”). The opinions expressed herein are entirely
those of the author(s). PRS makes every effort to use reliable and comprehensive information, but PRS does not represent that the contents of the report are
accurate or complete. PRS is an independent, not-for-profit group. This document has been prepared without regard to the objectives or opinions of those
who may receive it.

February 1, 2023 -8-