Macroeconomic factors, global inflation, recession and geopolitics are some of the factors that will sway the union budget in either direction. But this is also the last budget before the country gears up for Lok Sabha polls, and common Indians will be eagerly looking for provisions directly affecting them. Beyond all other considerations, 'roti, kapda aur makaan', (clothing, food and housing), are the basics that link the government's budget with household budgets.
How much an Indian family spends on flour, dal, eggs, milk and gas, determines how other commodities will appear among kitchen expenses. What they spend on clothing throughout the year, determines the response to annual Diwali sales or spending in the wedding season. Rent and home loan EMIs can significantly alter the way a family or individual spends on everything else.
So beyond other aspects, here's a breakdown of how Budget 2023 is going to affect your expenses for roti, kapda aur makaan.
Less subsidies on your plate?
The Indian government's spending on food and fertiliser subsidies even as the Russia-Ukraine war increased prices, helped it contain prices of vegetables, pulses and other commodities. But it ended up spending 70 per cent more on food and fuel, than the earlier budget estimates, which means it needs to reduce fiscal pressure for the year to come.
Budget 2023, is expected to come with a significant reduction of $17 billion in subsidies provided for food and fertiliser. The higher input cost for agriculture will definitely have an impact on food prices in the market and kirana stores. After erratic rains affected crops last year, the El Nino climatic condition can also worsen food inflation.
Alterations for your wardrobe?
For Budget 2022, the government had increased fund allocation to the textile sector by 8.1 per cent, but India has a long way to go to improve manufacturing. This year, the industry is anticipating a cotton shortage, and seeks changes in duties for import and export, as global demand has slowed down and domestic sales are also struggling due to sluggishness in rural markets.
The sector now seeks a fund for the cost stabilisation of cotton, along with another PLI scheme as an alternative to tech upgradation. It also wants the government to do away with 11% import duty on cotton, and to restore duty free imports against exports. The response to these demands will determine which cost incentives apparel makers will be able to pass on, and make clothing cheaper for consumers.
Accomodating the need for affordable housing
Real estate prices have been rising across Indian cities, and higher interest rates which increase borrowing costs as well as EMIs aren't helping common homebuyers. The sector is rooting for higher tax exemptions for people on the higher interest they pay on EMIs for home loans. They also seek tax rationalisation to reduce rental costs, and revising a cap in metro cities to Rs 1 crore, so that people can access credit-linked subsidies for affordable homes.
Reduction of GST on supplies such as cement and steel, will also impact the construction cost, that can allow developers to provide low-cost housing. These factors collectively have the potential to make Budget 2023, homeowner friendly.
Through the above breakdown, common Indians can focus on the announcements which will directly impact their day to day expenses, when inflation is still looming.
