The Indian Budget 2022/23

The Indian national budget was released on Tuesday, earmarking more funds for transportation and defense, among others, while rolling back pandemic-era food subsidies. In the fall of 2021, Prime Minister Narendra Modi had already announced a major modernization initiative for the country’s rail transport infrastructure, which is now being funded together with provisions for roads and airports, marking the steepest increase among major budget items.

Defense spending in India has been rising quickly in India over the last decades and continues to do so in the upcoming fiscal year. However, interest payments remain the biggest budget item and have also been rising at a fast clip due to pandemic-induced debt growth. Coronavirus-related food subsidies, included in the 2020/21 budget from April onward, were rolled back. While an increase in funds for rural development compared to last year’s budget was lauded, the sum is actually a step down from the 2020/21 provision.

The budget items agriculture and tax administration are also growing. The latter is also up for a modernization push as part of the administration’s “ease of living” initiative, for example trying to reduce the time businesses have to spend doing tax compliance.