India ramps up spending in last budget ahead of election

By Riddhima Talwani, Kripa Jayaram and Sumanta Sen

NEW DELHI (Reuters) – India’s government on Wednesday unveiled a $550 billion budget for the next fiscal year that starts on April 1, with a plan for record capital spending while reining in the fiscal deficit.

Prime Minister Narendra Modi’s party, which faces elections in key states this year and a national vote in 2024, has been under pressure to create jobs in the country of 1.4 billion where many have struggled to gain employment and a decent wage.

Below are some key figures in graphics from the budget presented by Finance Minister Nirmala Sitharaman.

WHERE WILL THE MONEY COME FROM TO FUND SPENDING?

The government is targeting revenue receipts growth of 12% to 26.32 trillion rupees.

Graphic: Where will the money come from? – https://www.reuters.com/graphics/INDIA-BUDGET/zjpqjweqwvx/chart.png

TAX REVENUE

For the year, the government is targeting 11.4% growth in net tax revenue to 23.3 trillion rupees.

Graphic: India’s tax revenue- https://www.reuters.com/graphics/INDIA-BUDGET/akveqmqdkvr/chart.png

MARKET BORROWING

Gross market borrowing is estimated at 15.43 trillion rupees ($189 billion), while net borrowing is seen at 11.81 trillion rupees.

The net borrowing excludes 781 billion rupees of bonds given to states on account of compensation for a shortfall in goods and services tax, reducing the repayments due next year.

New Delhi also aims to switch bonds worth 1 trillion rupees next year, after switching bonds worth 1.03 trillion rupees this year.

Graphic: India’s gross market borrowings – https://www.reuters.com/graphics/INDIA-BUDGET/zjpqjwjgnvx/chart.png

DIVESTMENT RECEIPTS

The government expects to raise 510 billion rupees from stake sales in various state-run companies.

Graphic: India disinvestment receipt- https://www.reuters.com/graphics/INDIA-BUDGET/lgvdknkdmpo/chart.png

SPENDING SURGES

The government raised its spending target by 7.5% to 45.03 trillion rupees for 2023/24.

Graphic: Where the money will go?- https://www.reuters.com/graphics/INDIA-BUDGET/znvnbkbwmvl/chart.png

CAPITAL EXPENDITURE

The government will spend 10 trillion rupees on longer-term capital expenditure in 2023/24, extending a strategy adopted to revive growth in the aftermath of the COVID-19 pandemic.

The allocation is higher than the 7.5 trillion rupees budgeted for the current year. The year-on-year increase of 33% follows last year’s 35% jump.

Graphic: India’s capital expenditure to increase by 33%- https://www.reuters.com/graphics/INDIA-BUDGET/akveqmqydvr/chart.png

MAJOR SUBSIDIES

The government cut major subsidies by 28% to 3.75 trillion rupees for the next fiscal year.

Graphic: India budget cuts expenditure on major subsidies- https://www.reuters.com/graphics/INDIA-BUDGET/klvygdgxgvg/chart.png

FISCAL DEFICIT

The government will target a budget deficit of 5.9% of GDP for 2023/24, down from this year’s 6.4%. A Reuters poll had pegged the budget gap at 6% of GDP.

Graphic: India’s fiscal deficit India’s fiscal deficit- https://www.reuters.com/graphics/INDIA-BUDGET/zdpxdndwwpx/chart.png

(Compiled by Aftab Ahmed; Editing by Kim Coghill)