Daily Current Affairs

Highlights of the Union Budget 2023-24 (GS Paper 3, Economy)

Why in news?

• The Union Minister of Finance and Corporate Affairs recently presented the Union Budget 2023-24 in the Parliament.

 

Priorities:

• It listed seven priorities of the Union Budget and said that they complement each other and act as the ‘Saptarishi’ guiding through the Amrit Kaal. They are as follows:

1. Inclusive Development
2. Reaching the Last Mile
3. Infrastructure and Investment
4. Unleashing the Potential
5. Green Growth
6. Youth Power
7. Financial Sector

 

The highlights of the Budget are as follows:

PART A

• Per capita income has more than doubled to ₹1.97 lakh in around nine years.
• Indian economy has increased in size from being 10th to 5th largest in the world in the past nine years.

 

Outlay:

• Atmanirbhar Clean Plant Program with an outlay of ₹2200 crore to be launched to boost availability of disease-free, quality planting material for high value horticultural crops.
• 157 new nursing colleges to be established in co-location with the existing 157 medical colleges established since 2014.
• Centre to recruit 38,800 teachers and support staff for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students over the next three years.
• Outlay for PM Awas Yojana is being enhanced by 66% to over Rs. 79,000 crore.
• Capital outlay of Rs. 2.40 lakh crore has been provided for the Railways, which is the highest ever outlay and about nine times the outlay made in 2013-14.
• Urban Infrastructure Development Fund (UIDF) will be established through use of priority Sector Lending shortfall, which will be managed by the national Housing Bank, and will be used by public agencies to create urban infrastructure in Tier 2 and Tier 3 cities.
• Entity DigiLocker to be setup for use by MSMEs, large business and charitable trusts to store and share documents online securely.
• 100 labs to be setup for 5G services based application development to realize a new range of opportunities, business models, and employment potential. 
• 500 new ‘waste to wealth’ plants under GOBARdhan (Galvanizing Organic Bio-Agro Resources Dhan) scheme to be established for promoting circular economy at total investment of Rs 10,000 crore. 5 per cent compressed biogas mandate to be introduced for all organizations marketing natural and bio gas.
• Centre to facilitate one crore farmers to adopt natural farming over the next three years. For this, 10,000 Bio-Input Resource Centres to be set-up, creating a national-level distributed micro-fertilizer and pesticide manufacturing network.
• Pradhan Mantri Kaushal Vikas Yojana 4.0, to be launched to skill lakhs of youth within the next three years covering new age courses for Industry 4.0 like coding, AI, robotics, mechatronics, IOT, 3D printing, drones, and soft skills.
• 30 Skill India International Centres to be set up across different States to skill youth for international opportunities.
• Revamped credit guarantee scheme for MSMEs to take effect from 1st April 2023 through infusion of Rs 9,000 crore in the corpus. This scheme would enable additional collateral-free guaranteed credit of Rs 2 lakh crore and also reduce the cost of the credit by about 1 per cent.
• Central Processing Centre to be setup for faster response to companies through centralized handling of various forms filed with field offices under the Companies Act.
• The maximum deposit limit for Senior Citizen Savings Scheme to be enhanced from Rs 15 lakh to Rs 30 lakh.
• Targeted Fiscal Deficit to be below 4.5% by 2025-26.

 

Agriculture:

• Agriculture Accelerator Fund to be set-up to encourage agri-startups by young entrepreneurs in rural areas.
• To make India a global hub for 'Shree Anna', the Indian Institute of Millet Research, Hyderabad will be supported as the Centre of Excellence for sharing best practices, research and technologies at the international level.
• ₹20 lakh crore agricultural credit targeted at animal husbandry, dairy and fisheries.
• A new sub-scheme of PM Matsya Sampada Yojana with targeted investment of ₹6,000 crore to be launched to further enable activities of fishermen, fish vendors, and micro & small enterprises, improve value chain efficiencies, and expand the market.
• Digital public infrastructure for agriculture to be built as an open source, open standard and inter operable public good to enable inclusive farmer centric solutions and support for growth of agri-tech industry and start-ups.
• Computerisation of 63,000 Primary Agricultural Credit Societies (PACS) with an investment of ₹2,516 crore initiated.
• Massive decentralised storage capacity to be set up to help farmers store their produce and realize remunerative prices through sale at appropriate times.

 

Health:

• Sickle Cell Anaemia elimination mission to be launched.
• Joint public and Private Medical research to be encouraged via select ICMR labs for encouraging collaborative research and innovation.
• New Programme to promote research in Pharmaceuticals to be launched.

 

Infrastructure:

• Rs. 10 lakh crore capital investment, a steep increase of 33% for third year in a row, to enhance growth potential and job creation, crowd-in private investments, and provide a cushion against global headwinds.
• Aspirational Blocks Programme covering 500 blocks launched for saturation of essential government services across multiple domains such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure.
• Rs. 15,000 crore for implementation of Pradhan Mantri PVTG Development Mission over the next three years under the Development Action Plan for the Scheduled Tribes.
• Investment of Rs. 75,000 crore, including Rs. 15,000 crore from private sources, for one hundred critical transport infrastructure projects, for last and first mile connectivity for ports, coal, steel, fertilizer, and food grains sectors.
• New Infrastructure Finance Secretariat established to enhance opportunities for private investment in infrastructure.

 

Education:

•  District Institutes of Education and Training to be developed as vibrant institutes of excellence for Teachers’ Training.
• A National Digital Library for Children and Adolescents to be set-up for facilitating availability of quality books across geographies, languages, genres and levels, and device agnostic accessibility.
• Rs. 5,300 crore to be given as central assistance to Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for drinking water.
•  ‘Bharat Shared Repository of Inscriptions’ to be set up in a digital epigraphy museum, with digitization of one lakh ancient inscriptions in the first stage.
• iGOT Karmayogi, an integrated online training platform, launched to provide continuous learning opportunities for lakhs of government employees to upgrade their skills and facilitate people-centric approach

 

Urban Planning:

• Encouragement to states and cities to undertake urban planning reforms and actions to transform our cities into ‘sustainable cities of tomorrow’.
• Transition from manhole to machine-hole mode by enabling all cities and towns to undertake 100 percent mechanical desludging of septic tanks and sewers.

 

Governance:

• More than 39,000 compliances reduced and more than 3,400 legal provisions decriminalized to enhance Ease of Doing Business.
• Jan Vishwas Bill to amend 42 Central Acts have been introduced to further trust-based governance.
• Three centres of excellence for Artificial Intelligence to be set-up in top educational institutions to realise the vision of “Make AI in India and Make AI work for India”.
• National Data Governance Policy to be brought out to unleash innovation and research by start-ups and academia.
• One stop solution for reconciliation and updation of identity and address of individuals to be established using DigiLocker service and Aadhaar as foundational identity.
• PAN will be used as the common identifier for all digital systems of specified government agencies to bring in Ease of Doing Business.
•  Phase-3 of the E-Courts project to be launched with an outlay of Rs. 7,000 crore for efficient administration of justice.
• A unified Skill India Digital platform to be launched for enabling demand-based formal skilling, linking with employers including MSMEs, and facilitating access to entrepreneurship schemes.
• Direct Benefit Transfer under a pan-India National Apprenticeship Promotion Scheme to be rolled out to provide stipend support to 47 lakh youth in three years.

 

R & D:

• R & D grant for Lab Grown Diamonds (LGD) sector to encourage indigenous production of LGD seeds and machines and to reduce import dependency.

 

Energy:

• Annual production of 5 MMT under Green Hydrogen Mission to be targeted by 2030 to facilitate transition of the economy to low carbon intensity and to reduce dependence on fossil fuel imports.
• ₹35000 crore outlay for energy security, energy transition and net zero objectives.
• Battery energy storage systems to be promoted to steer the economy on the sustainable development path.
• 20,700 crore outlay provided for renewable energy grid integration and evacuation from Ladakh.

 

Environment:

• “PM Programme for Restoration, Awareness, Nourishment and Amelioration of Mother Earth” (PM-PRANAM) to be launched to incentivize States and Union Territories to promote alternative fertilizers and balanced use of chemical fertilizers.
•  ‘Mangrove Initiative for Shoreline Habitats & Tangible Incomes’, MISHTI, to be taken up for mangrove plantation along the coastline and on salt pan lands, through convergence between MGNREGS, CAMPA Fund and other sources.
• Green Credit Programme to be notified under the Environment (Protection) Act to incentivize and mobilize additional resources for environmentally sustainable and responsive actions.
• Amrit Dharohar scheme to be implemented over the next three years to encourage optimal use of wetlands, enhance bio-diversity, carbon stock, eco-tourism opportunities and income generation for local communities.

 

Tourism:

• At least 50 tourist destinations to be selected through challenge mode; to be developed as a complete package for domestic and foreign tourists.
• Sector specific skilling and entrepreneurship development to be dovetailed to achieve the objectives of the ‘Dekho Apna Desh’ initiative.
• Tourism infrastructure and amenities to be facilitated in border villages through the Vibrant Villages Programme.
• States to be encouraged to set up a Unity Mall for promotion and sale of their own and also all others states’ ODOPs (One District, One Product), GI products and handicrafts.

 

Financial sector:

• National Financial Information Registry to be set up to serve as the central repository of financial and ancillary information for facilitating efficient flow of credit, promoting financial inclusion, and fostering financial stability. A new legislative framework to be designed in consultation with RBI to govern this credit public infrastructure.
•  Financial sector regulators to carry out a comprehensive review of existing regulations in consultation with public and regulated entities. Time limits to decide the applications under various regulations would also be laid down.

• To enhance business activities in GIFT IFSC, the following measures to be taken. 
• Delegating powers under the SEZ Act to IFSCA to avoid dual regulation.
• Setting up a single window IT system for registration and approval from IFSCA, SEZ authorities, GSTN, RBI, SEBI and IRDAI.
• Permitting acquisition financing by IFSC Banking Units of foreign bank.
• Establishing a subsidiary of EXIM Bank for trade re-financing.
• Amending IFSCA Act for statutory provisions for arbitration, ancillary services, and avoiding dual regulation under SEZ Act
• Recognizing offshore derivative instruments as valid contracts.
• Amendments proposed to the Banking Regulation Act, the Banking Companies Act and the Reserve of India Act to improve bank governance and enhance investors’ protection.
• Countries looking for digital continuity solutions would be facilitated for setting up of their Data Embassies in GIFT IFSC.
• SEBI to be empowered to develop, regulate, maintain and enforce norms and standards for education in the National Institute of Securities Markets and to recognize award of degrees, diplomas and certificates.
• Integrated IT portal to be established to enable investors to easily reclaim the unclaimed shares and unpaid dividends from the Investor Education and Protection Fund Authority.

 

Savings:

• To commemorate Azadi Ka Amrit Mahotsav, a one-time new small savings scheme, Mahila Samman Savings Certificate to be launched. It will offer deposit facility upto Rs 2 lakh in the name of women or girls for tenure of 2 years (up to March 2025) at fixed interest rate of 7.5 per cent with partial withdrawal option.
• The maximum deposit limit for Monthly Income Account Scheme to be enhanced from Rs 4.5 lakh to Rs 9 lakh for single account and from Rs 9 lakh to Rs 15 lakh for joint account.
• The entire fifty-year interest free loan to states to be spent on capital expenditure within 2023-24. Part of the loan is conditional on States increasing actual Capital expenditure and parts of outlay will be linked to States undertaking specific loans.
•  Fiscal Deficit of 3.5% of GSDP allowed for States of which 0.5% is tied to Power sector reforms.

 

Revised Estimates 2022-23:

• The total receipts other than borrowings is Rs 24.3 lakh crore, of which the net tax receipts are Rs 20.9 lakh crore.
• The total expenditure is Rs 41.9 lakh crore, of which the capital expenditure is about Rs 7.3 lakh crore.
• The fiscal deficit is 6.4 per cent of GDP, adhering to the Budget Estimate.

 

 Budget Estimates 2023-24:

• The total receipts other than borrowings is estimated at Rs 27.2 lakh crore and the total expenditure is estimated at Rs 45 lakh crore.
• The net tax receipts are estimated at Rs 23.3 lakh crore.
• The fiscal deficit is estimated to be 5.9 per cent of GDP.
• To finance the fiscal deficit in 2023-24, the net market borrowings from dated securities are estimated at Rs 11.8 lakh crore.
• The gross market borrowings are estimated at Rs 15.4 lakh crore.

 

Pradhan Mantri PVTG Development Mission to be launched with an outlay of Rs.15000 crore

(GS Paper 2, Social Justice)

Why in news?

• Recently, the Union Minister for Finance and Corporate Affairs, tabled the Union Budget 2023-24.
• In order to improve socio-economic conditions of the particularly vulnerable tribal groups (PVTGs), the Finance Minister stated that the Pradhan Mantri PVTG Development Mission will be launched.

 

Details:

• The Pradhan Mantri PVTG Mission will be launched as part of ‘Reaching The Last Mile’, one of the seven Saptarishi priorities enlisted in 2023 Budget.
• There are 75 PVTG groups in India that will benefit from this scheme.

 

Pradhan Mantri PVTG Development Mission:

• This will saturate PVTG families and habitations with basic facilities such as safe housing, clean drinking water and sanitation, improved access to education, health and nutrition, road and telecom connectivity, and sustainable livelihood opportunities.
• Rs.15,000 crore will be made available to implement the Mission in the next three years under the Development Action Plan for the Scheduled Tribes.

 

Eklavya Model Residential Schools:

• 38,800 teachers and support staff will be recruited for the 740 Eklavya Model Residential Schools, serving 3.5 lakh tribal students in the next three years.

 

Aspirational Districts and Blocks Programme

• The Aspirational Blocks Programme has been launched covering 500 blocks for saturation of essential government services across multiple domains such as health, nutrition, education, agriculture, water resources, financial inclusion, skill development, and basic infrastructure.

 

PM Awas Yojana

• The outlay for PM Awas Yojana is proposed to be enhanced by 66 per cent to over Rs.79,000 crore.

 

Water for Drought Prone Region

• In the drought prone central region of Karnataka, central assistance of Rs.5,300 crore is proposed to  be given to Upper Bhadra Project to provide sustainable micro irrigation and filling up of surface tanks for drinking water.

 

Bharat Shared Repository of Inscriptions (Bharat SHRI)

• A ‘Bharat Shared Repository of Inscriptions’ will be set up in a digital epigraphy museum, with digitization of one lakh ancient inscriptions in the first stage.

 

Support for poor prisoners

• In order to provide support to poor persons who are in prisons and unable to afford the penalty or the bail amount, the required financial support will be provided.

Are diamonds made in a laboratory better than naturally-occurring ones?

 

Why in news?

• The 2023 Union Budget shines special attention on laboratory-grown diamonds (LGD).
• In her Budget speech, Finance Minister said that the sector has “high employment potential” and announced a number of schemes to promote their research and development in India.

What are laboratory-grown diamonds?

• As the name suggests, LGD are manufactured in laboratories, as opposed to naturally-occurring diamonds. However, the chemical composition and other physical and optical properties of the two are the same.
• Naturally-occurring diamonds take millions of years to form; they are created when carbon deposits buried within the earth are exposed to extreme heat and pressure.
• On the other hand, LGDs are mostly manufactured through two processes – high pressure, high temperature (HPHT) method or Chemical Vapour Deposition (CVD) method.
• Both HPHT and CVD methods of growing diamonds artificially begin with a seed — a slice of another diamond. In the HPHT method, the seed, along with pure graphite carbon, is exposed to temperatures around 1,500 degrees Celsius and extremely high pressure.
• In the CVD method, the seed is heated to around 800 degrees Celsius inside a sealed chamber filled with a carbon-rich gas. The gas sticks to the seed, gradually building the diamond.
• Scientists working at a General Electric research laboratory in New York are credited with the creation of the world’s first-ever LGD in 1954.

 

Are LGDs better than naturally-occurring diamonds?

• Visually and chemically, the two are the same. However, the environmental footprint of a diamond grown in a laboratory is much lesser than that of a naturally-occurring diamond.
• It takes ten times more energy to extract a natural diamond from the earth than it takes in creating one above the ground.
• Open-pit mining, one of the most common methods of mining naturally-occurring diamonds, involves moving tonnes of earth and rock to extract these precious stones.

 

Provisions regarding LGDs in the 2023 Budget:

• India is a global leader in cutting and polishing natural diamonds, but as its resources are becoming scarce, the industry is shifting towards LGDs.
• The 2023 Union Budget promises to reduce the basic customs duty on seeds used in the manufacture of lab-grown diamonds in a bid to popularise their production in India, the duty on seeds for rough LGDs will be reduced from 5% to nil. The change will come into effect starting February 2, 2023.
• A five-year research grant will also be provided to one of the Indian Institute of Technologies (IITs) for research and development in the field of LGDs.
• It also proposed the creation of new tariff lines to help in better identification of a number of products, including synthetic diamonds. The aim of the move is to help facilitate trade as well as to have clarity on availing concessional import duty.