Kerala Demographic Challenge and the Way Forward

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#opinion Kerala is a state that is often considered one of the best places to live in India. It ranks high on multiple indices of the NITI Aayog and boasts impressive Human Development Indicators such as literacy rate, healthcare, education, and low corruption. This success is attributed to the contributions of visionary leaders, irrespective of political affiliation, as well as public participation in socio-politics, policymakers, subject experts, the erstwhile Travancore Kingdom, and many others. This collective effort has led to what is known as the Kerala Model of Development. The state is among the top ten in terms of both GDP and per capita income. Despite Kerala's significant progress in quality of life and human development parameters, there are other fronts where this success is lacking. Today, Kerala is in the news for negative reasons such as a financial crisis, decreased revenue, rising debt, high unemployment, brain drain, and other challenges. While some issues are ov
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Takeaways from Indian Financial Budget 2023

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On February 1st 2023, the Finance Minister of India, Mrs Nirmala Sitharaman presented the financial budget for the financial year 2023-2024. It was a well-sought-after budget this time as the world is recovering from the biggest pandemic of the century as well as the war in Ukraine. On 31st January, the minister submitted the Economic Survey for the year 2022-2023. The Minister and the Government deemed the budget as the first budget of Amrit Kaal indicating a change in India's era. PM Modi also spoke on the same during his address. 

Also Read- Kerala State Financial Budget 2023



Major announcements from the Budget Speech 

  1. Fiscal Deficit target- 5.9%
  2. Pradhan Mantri Awas Yojana share to rise 66% to Rs 79,000 crore
  3. Tax deduction limit raised for State govt employees for NPS fund to be increased to 14%
  4. 100 critical transport projects to be built. 
  5. Senior citizens' savings scheme cap increased from ₹ 15 lakh to ₹ 30 lakh
  6. Rs 5,300 crore assistance for the Upper Bhadra project in Karnataka.
  7. SEZ Act to be replaced with new legislation for investment and support to companies
  8. SEBI to oversee the National Institute of Securities Markets
  9. Rs 15,000 crore mission for safe housing, sanitation, drinking water and electricity for tribals
  10. Capital investment outlay to be 3.3% of GDP in 2024.
  11. COVID era Food programme stopped this year 
  12. The effective capital expenditure of the centre is Rs 13.7 lakh crore. 
  13. Rs 2.4 lakh crore to improve and maintain the railways
  14. The education budget raised to Rs 11.3 lakh crore rupees
  15. The health budget raised to Rs 8.895 lakh crore 
  16. Gross borrowing limit- Rs15.43 lakh crore 
  17. Expected 10.5% growth rate
Major Takeaways 
  • Shortest Budget Speech ever- 87 minutes. 
  • The budget again was read from a digital tablet. 
  • The first budget of Amrit Kaal was a phrase used by the Minister and the government
  • No Income Tax till Rs 7 lakh. 
  • Changes in the Taxation system- Rebate limit increased from Rs 5 lakh to Rs 7 lakh a year
    1. Rs 0-3 lakh - no tax
    2. Rs 3-6 lakh - taxed at 5%
    3. Rs 6-9 lakh - taxed at 10%
    4. Rs 9-12 lakh - taxed at 15%
    5. Rs 12-15 lakh- taxed at 20%
    6. Above Rs 15 lakh - taxed at 30%
  • The Highest ever budget allocation for railways. 
  • Basic customs duty cut from 21% to 13%
  • The highest hike in the defence budget. 
  • Taxes on cigarettes hiked by 16 %

Cheap vs Costly 



Startups

  1. New cooperatives to attract a lower tax rate of 15 per cent.
  2. Agriculture-based rural startup support. 
  3. 100 joint commissioners for disposal of small appeals. 
Railways
  1. Rs 2.4 lakh crore outlay which is the highest ever.
  2. Full electrification by 2023
Roadways
  1. 100% mechanical sewage drudge from manhole to machine mode in cities
  2. National Gati Shakti Framework 
  3. Rs 2.7 lakh crore to the Ministry of Road Transport and Highways
Digital Push 
  1. Rs 4,795.24 crore for the Digital India Programme
  2. 30 Skill India International Centres
  3. Open-source digital public infrastructure for farmers
  4. New national digital library for children and adolescents 
  5. DigiLocker for use by businesses and charitable trusts
  6. 100 labs to develop apps using 5G services to be set up in engineering institutions
  7. 3 centres of excellence for artificial intelligence in top institutions
  8. National data governance policy- Simplified KYC process
  9. Digital Ecosystem for Skilling and Livelihood (DESH) Stack e-portal
  10. Permanent Account Number (PAN) will be used as a common identifier for all digital systems
Technology 
  1. Battery energy storage systems of 4000 MWh will be supported
  2. 'Make AI work for India'- Three Centers of Excellence for Artificial Intelligence
  3. Green Credit programme for EV charging
  4. One crore farmers to get assistance to adopt natural farming
  5. Green Hydrogen Mission 
  6. ₹35,000 crores for priority capital investment toward energy transition and net zero objectives
Criticisms 
There is widespread criticism mainly from the opposition that the budget is corporate-friendly, anti-poor and exclusion of the mass majority of the country. Principal opposition party Congress called it Over promise and under deliver budget. Certain states were ignored and received nothing from the budget. The medical sector which India is a leader in has been ignored here. They also raise the question of welfare. Even the question of whether last year's promises were fulfilled or not remains a question. 

Analysis 
We can see that there is a massive push for infrastructure, development, transportation etc. Especially given that there is an election season coming up later this year, starting from Karnataka in the south to Rajasthan in the North, the government has enhanced the spending after two successive pandemic years. Special mention of tribals indicates the political push ahead of the crucial election season. When the world is grabbed by the post-pandemic uncertainty and the anxiety of a recession, the fundamentals of the Indian economy remain strong. Despite the Russia-Ukraine war and the fears of the ghost of inflation, India till now looks forward to keeping its consistency in beating inflation. 
 
The post-withdrawal of Agri reforms last year, the government has tried to include a lot of incentives for the agricultural sector. The reduction of custom duty costs on mobile phone parts and EV parts will boost Make In India. Like last year, this is a digital budget, with a lot of push for technology and digital initiatives. This is an important push for progressiveness and modernisation which India has been craving for years. There is no strong change of policy in the case of cryptocurrency and other forms of digital assets. Enough importance has also been given in the fight against Climate Change through the use of technology. The reduction in Income Tax is a relief for the middle class. We hope India will achieve good economic growth and this budget will pave for a better future. 

Credits- MoneyControl, NDTV, ThePrint, Hindustan Times, Reuters, The Indian Express, Bloomberg Quint.

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