Union Budget: Little attention for North East
Source: Chronicle News Service / Prof Chinglen Maisnam

Imphal, February 01 2023: First let me make general comment on the Union Budget 2023-24 which has received little attention in a state like Manipur.

The Union Budget 2023-24 comes at a time when the Indian economy is slowing down.

The primary focus of the Union Budget, however, revolves around the expenditure cut-deflationary policy.

The budget squeezes the expenditures to reduce the fiscal deficit.

It is, thus, a contractionary budget.

The budget should have addressed the core issues of job generation and increasing domestic demand.

The increase in BE for 2023-24 over the RE for 2022-23 is a mere 7 per cent.

The philosophy underlying the budget appears to be the reduction in the revenue and fiscal deficits relative to the GDP.

It has to be achieved, however, not through additional resource mobilization but through a contraction on public expenditure relative to GDP when there is economic slowdown.

The contraction on public expenditure relative to GDP is 14.92 % from 15.33 % .

Thus, there is a decrease in government expenditure.

The budget reduces the MGNREGS allocation by 33 per cent.

Food subsidy is cut by Rs 90,000 crore, fertilizer subsidy by Rs 50,000 crore and petroleum subsidy by Rs 6,900 crore.

Rs 9255 crore allocated for health in the previous budget remained unspent.

Similarly, Rs 4297 crore remained unspent in the education sector.

The remuneration for 1CDS Scheme workers sees no increase.

The Gender Budget is 9 per cent of the expenditure.

The PM Kisan Fund allocation is reduced from Rs 68,000 crore to Rs 60,000 crore.

This budget continues to further squeeze resource transfers to the state governments.

The RE for 2022-23 shows that these transfers were equal to what was transferred in 2021-22 .

Further conditionalities have been imposed on state governments for accessing loans.

It is to be mentioned here that the North Eastern region depends on central funding for many of its basic needs and also for development works.

The state governments of the region depend heavily on the central assistance and thus efforts to create economic and physical infrastructure by the states themselves are too little.

However, no major plans have been announced for the North-eastern Region which badly needs industry and infrastructure in the wake of India's Act East Policy.

The budget proposal has largely unseen the appalling need for expansionary fiscal transfer to the State Governments in general arid State Governments of the North-eastern Region in particular.

What is more important is that the burden of lesser tax revenues is being sought to be transferred to states.

The budget needs to address the critical issue of the region; The budget should substantially increase public investments in the region.

* Prof Chinglen Maisnam is with the Economics Department at MU .

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