A Sensible, Conservative Budget By Jaitley
New Delhi: The budget proposals presented by Union Finance Minister Arun Jaitley on Wednesday were carefully designed without moving out of the comfort zone. They can be described as conservative. While the proposals would cheer up the salaried sections, there is nothing for the youth to be happy about. The farm sector was promised more funds and loans but there was no word about the continuing suicides by farmers or about waiver of farm loans. It is not a bold budget. It is safe budget which has no risky proposal. The total layout of the budget is Rs 21.47 lakh crores for 2017-2018.
However, had there been any promise to waive farm loans, it would have been criticized as a move aimed at getting farmers’ votes in the five States that are going to polls. Similarly had the government made any proposal to put money in Jan Dhan Yojana Accounts, as popularly expected, it would have been flayed as abusing public exchequer in order to win over the poor in the ensuing elections. The government has desisted from these two temptations. Though the philosophy of the ruling dispensation is against subsidies or waiver of any loans, the putting money in Jan Dhan Yojan Accounts was well in its policy which is transferring cash to the poor instead of subsidies or doles.
Positive takeaways from the budget proposals: 1. Capping of cash donations to political parties at Rs 2,000 instead of the prevailing Rs 20,000. 2. Reduction in income tax rate 3. Increase in expenditure on health and education. 4. Improved layout for rural infrastructure. 5. Greater loan facilities for Dalits, women and minorities. 6. Focus on housing for the poor. 7. Digitalization of transactions. 8. Increasing the farmers’ income by 200 percent in five years. 9. Incentives for small and medium industries in terms tax concession.
The negative aspects are: 1. Lack of focus on employment creation 2. No word about the impact of demonetization. 3. Absence of mention about the fact that farmers have been committing suicide since 1998 and their problems remain unresolved. No creative idea was thrown up which helps in going to the rescue of the hapless farmers. 4. No word on public sector banks which have been languishing in poor health due to disproportionately nonperforming advances.
PM Pats FM
After two hours taken by Arun Jaitley for presenting the budget proposals, Prime Minister Narendra Modi has taken good time to give his take on the budget proposals. He presented a positive picture of the budget which, according to him, is expected to help the people who are backward and downtrodden. Prime Minister Narendra Modi has commended the proposal. He complimented Arun Jaitley and his colleagues. He said the budget would improve conditions in rural area, agriculture and other sector. Modi described the budget as historic, a uttam budget. It would modernize the railways. Safety of the passengers would be given priority. He said the proposals are aimed at increasing the income of farmers. He said the budget would bring change in the quality of lives of the people in rural areas. He said there are measures expected to bring people in unorganized sectors into organized sectors. Higher allocation would be made for Mahatma Gandhi NEREGA. He reiterated that the government’s war against black money would continue unabated. The PM said there is special emphasis on youth and creation of jobs, the opposition leaders pointed to the absence of any such emphasis. Employment generation would receive special focus. He said digital economy would be the focus area of the government. He described the income tax cut by 50% for those who have annual income of less than Rs 5 lakh as a bold move by the FM. Overall, the budget has shown the government’s commitment to the poor, said Modi.
As Rahul Gandhi, AICC Vice President, said while the nation was expecting fireworks in the budget it turned out to be a damp squib. He said there is no word about creation of employment for the youth and the budget was silent on waiver of farm loans. He said the budget has no vision and no roadmap.
The proposal to bring down the amount of cash donations to political parties from Rs 20,000 to Rs 2,000 is good. But there is no guarantee that this provision would not be taken advantage of by the political parties to accept the cash from a number of persons since there is no limit on the number of donors. If there is a mechanism in place to see that even those who donate Rs 2,000 in cash are accounted for and their names and other details are recorded, there could be some transparency and subsequent reduction in black money.
Though there were no direct references to proposal that would be obviously seen as politically motivated and aimed at getting votes in the ensuing elections, the repeated mention of poor, women and minorities is seen as election rhetoric. The FM said the government proposed to build one crore house for the houseless poor by 2019. He proposed to increase the layout for PM Awas Yojan to Rs 23,000 crore.
Jaitley said there was an increase in Direct Tax collections by 34 % after demonetization. Holding period for LTCG for Land & Building reduced to 2 years. 5 % tax exemption would be extended to companies having turnover below Rs 50 crores.
The middleclass and the salaried class would be happy to know that income less than Rs 3 lakhs would not be taxed. Income upto Rs 5 lakh would attract a tax of 5 percent instead of 10 percent as is the practice so far. As GST (Goods and Services Tax) is about to be implemented soon, there was no major changes in indirect taxes were proposed. He said the GST is almost ready for implementation as a consensus was reached among all the States after a prolonged and detailed discussion in a spirited way.
Unmanned Railway Crossings To Disappear
A ‘Rail Raksha Sanraksha Koch’ with a corpus of Rs 1 lakh crore in the course of five years would be created, according the FM. Unmanned railway crossing would disappear before 2020. Railway line to the extent of 3,500 km will be commissioned in 2017-18, said Arun Jaitley. He said 500 railway stations would be made convenient for the differently-abled with lifts and escalators. There would be solar plants at more railway stations. All trains would have bio-toilets and a Coach Mitra facility would come up. Service charge on tickets booked at IRCTC would be withdrawn. The tariffs would be fixed basing on the competition and quality of service, said the FM.