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Emerging Market Investor

Date & Time

Monday Mon, 30 Jan 2023


Bangalore International Centre
7, 4th Main Road, Domlur II Stage
Bangalore, Karnataka 560071 India
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The 2023 Union Budget of India will be presented in a few days. While economists and analysts predict trends, pick apart the nuances and poke holes into the budget, how many of us actually understand what any of it means? In preparation for the announcement, we have crafted a session, a budget basics of sorts, for those of us who need it explained, slowly and simply.

The session will focus on:

  • What is the purpose of the budget?  What is the history of budgets in Independent India?  Why does it have the place of importance it seems to enjoy?
  • Comparing the National budget to a household/joint-family – similarities and differences
  • Top-line, Bottom-Line and everything in between
  • What are a few things to keep an eye on? What directly impacts us? What indirectly impacts us? Can the government take important steps without announcing in the budget?
  • Should I join the budget party? Or should I just get the highlights on Instagram and head out with friends.

Everyone, no matter how young and uninformed (it’s better if you are), is welcome! No question is too basic or too silly – remember the gap between profound and simplistic favours the right-brain!

Post event and Post budget notes

At the BIC session, Narayan Ramachandran made an inspired guess of likely 5.8-5.9% fiscal deficit and considerable increase in capital expenditure which turned out to be prophetic. We asked him for his quick summary on the budget in the light of his session. That is set out below.

Total Budget Size:  Approx 45 L Crores
Fiscal Consolidation:  Fiscal deficit down to 5.9% from 6.4%(RE) with a promise to taper down to 4.5% in 2 years.  Effective revenue deficit is still -1.7%

Continued redirection of Capital Formation: Direct capital expenditure 33% increase to 10 L Crores and indirectly to 13.7 L Crores  (with some money allocated to states)
Tax Collection Trend: Improves to the high end of the band at 11.1% of GDP for 22-23 (RE) and 23-24 E
Defence Expenditure Rises:  By 6% to 4.3 L Crores
Transport Expenditure Rise By 32% to 5.2 L Crores
Assume prices from Russia / Belarus normalises: Single largest annual expenditure item is fertilizer subsidy with Rs. 1.75 L Crores ( Rs. 50,000 crore less than 2022-23(RE) of Rs. 2.25 L Crores)
Assumes prices normalises for Food grains: Food subsidy declines from Rs. 72,000 Crores to Rs. 60,000 Crores.
Phasing our MNREGA: Spending reduced by over 30% to Rs. 60,000 Crores
The decline in Food and Fertilizer subsidy between 22-23 and 23-24 of Rs. 62,000 Crores more than compensates for the loss of income from some middle-class tax cuts (FM’s claim of about Rs. 35,000 Crores needs to be validated)
Demystifying the hype:  PLI subsidy is only 1200 Crores
Incentivising staying on here:   The reduction in surcharge on very high income is most likely to reduce tax-based emigration
Tax Slab and Rate reduction: Widely reported so not repeated here
Odd-ball introduction: Screening for Sickle-Cell Anemia (particularly among tribals)
Overall Assessment:  A competent, ‘don’t rock the boat” budget, with a little bit for everyone.  Positive and continued trend towards capital formation and fiscal consolidation.


Narayan Ramachandran

Emerging Market Investor

Narayan Ramchandran is father of two girls, husband of writer, social entrepreneur, columnist and emerging market investor. He worked on Wall Street (mostly at Morgan Stanley) for over 20 years, most recently as head of global emerging market investing and then country head of Morgan Stanley in India.

Narayan is co-founder and Senior Fellow at the Takshashila Institution.  He received a B.Tech. in chemical engineering from the Indian Institute of Technology Bombay and an M.B.A. from the University of Michigan. He is a Chartered Financial Analyst (CFA). He writes a fortnightly column titled “A Visible Hand” for The Mint Newspaper.