Most speeches by Finance Ministers follow a predictable template – throw in a couplet here and proverb there, pay homilies to the downtrodden, poor, dalit etc., talk about poverty elimination and so on.
Buried in this poetry and the usual “2% reduction in excise on matchbox”, “3% increase in customs duty on televisions” sort of announcements that waste time and fill pages, are far reaching changes that most casual observers miss entirely.
Because of imminent arrival of GST, thankfully the excise, customs changes are negligible. And they have been pushed to the Annexure not read out item by item.
Despite merger of the railway budget with the Union Budget, not much time has been wasted on minor matters such as extension of trains, addition of coaches etc., that in any normal country a low level official will do.
Thanks Jaitley sir!
- Reducing taxes for the entry level slab is a welcome move. Perhaps the limits could have been increased. Even better if these are routinely hiked considering inflation and other factors.
- There is also yet another proposal to simplify the ITR form for them. But one has to see how “simple” this form turn out to be, by the time the bureaucrats are done with their tinkering.
- There is a plan to ‘ask states’ to remove perishables from APMC monopoly. Our farmers bear the brunt of inefficiency, sloth, harassment and corruption inherent in such state monopolies. Ideally BJP states should have taken the lead in doing this long ago.
- A million farm ponds have been constructed this year through MNREGA! This huge number should make a difference to drought management if these are real ponds and don’t merely exist on paper. MNREGA has been criticised for fake projects and leaks in the past.
- The target for PM Mudra Yojana a loan scheme primarily targeted at SMEs has been doubled to Rs.2.44 lcr having exceeding this year’s target. Hopefully these loans have been given to micro enterprises that generate thousands of jobs. FM would have done well to present some statistics on this front so the impact is not lost in fine print.
- We heard this before, but FM has repeated the shocking number of just 144k tax payers reporting income over Rs.5m many of who area salaried class who have no choice but report. Again the hope is that deposits forced into the banking system by the demonetisation will lead to better compliance. Proof will be visible next year hopefully. FM says 148k people have deposited an average of Rs.3om and this plus other deposits over Rs.500k should keep IT officials busy. The key here is to prioritise and go after the real big fish and not waste time on harassing the small fry. But knowing our babus, chances are the exact reverse will happen unless the FM and PM crack down hard on continuous basis.
- The reduction of Long term capital gain eligibility (2 years) plus the base shift should be a huge boon for many.
- Reduction in tax for smaller companies a welcome move. These are the ones that deserve help as they create a lot of job for the same investment.
- Spending on Namaami Gange plan is way below estimate, this should worry the PM whose constituency is Varanasi. For a priority project this is indeed sad.
- Reasonable limits on fiscal deficit (3.2%) have been forecast and the actual performance too has been creditable if the revised estimates are true. This should ease concerns on inflation front.
- Scrapping FIPB is a good move though sections of biased media has chosen to see this as concentration of power in PMs hands.
On the whole a balanced budget without much of big bang but without any negative aspects as well.
Implementation, as usual is the key. Devil is in the details.