‘Justice’ to the unemployed, low-interest educational loans and no ‘angel tax’ on those who provide capital to new entrepreneurs are all aspects of this year’s budget!
Even if we say no , Finance Minister Nirmala Sitharaman must be tired due to the political turmoil and party fallout caused by it in the last few months. At least it seemed so from his budget speech today. A more serious expression on his face than usual and his speech very manageable for his reputation. Reading is also flat. The familiar aggressiveness is missing and there is not even the least enthusiasm. It was like that. It was predicted that the budget would be overshadowed by the defeat in the recently held Lok Sabha elections. Finance Minister Nirmala Sitharaman took utmost care that he would not miss it. The ‘resolve’ to shower popular slogans on the unemployed, women, farmers etc. can be seen in these slogans of the Finance Minister. There is nothing wrong with that. Every finance minister and his government is doing this. At such a time, it is necessary to analyze how much of this rain is real and how much is like a ‘rain dance’, which is organized in five-star hotels these days.
The first part of Nirmalabai’s budget explains the challenges facing the country with reference to the global discussion on nine issues. These nine sections are declining productivity in agriculture, employability and skills, inclusive human development, manufacturing and services sector, urban development, energy and infrastructure, research and next generation economic reforms. It gives true reading pleasure; However, while promoting those issues, the question of who are the real beneficiaries behind them does not remain in the mind. For example, if the central government is suddenly concerned about renovating old buildings in cities, one wonders if it has anything to do with Asia’s largest slum redevelopment project. Another thing about energy. Alternative energy sector seems to be encouraged by the Center continuously. A similar question arises regarding that area. While talking about transformation in agriculture, the finance minister comments on new varieties of crops. Should the central government pay attention to this issue? Because even today many private companies are in the field of seed supply. That is, why should the Center feel the need to interfere in what is being handled smoothly by the private sector? If anyone has a doubt that this is related to the Andhra Pradesh companies in the seed industry, what is wrong?
Another topic that has been emphasized in the budget is employment. Finance Minister announces three schemes to eradicate unemployment, welcome. There are some innovative points in it. For example, the government will pay one month’s tuition fee for those who take their first step in the employment sector, or allow the big companies that provide such employment to pay for this through ‘CSR’. Congratulations to the government for that. In this regard, Congressmen criticize that these issues have been taken from their ‘Naya’ letter. Some have even thanked the Finance Minister for taking notice of Congress’s ‘justice’ letter. Finance Minister himself or at least BJP should give an explanation on this. In the budget, the government also wants to do something about facilities like residential complexes in industrial estates for the workers. It’s not his job. Some things are better left to the market and its competitors. The government should see how the economic and social support for the industries will remain. But there is no need to increase the responsibilities that the government does not fulfill by paying attention to issues such as workers’ houses. The budget’s efforts to make education loans cheaper are highly commendable. Also, the Center wants to do something to increase the proportion of women in the employment sector and for the overall skill development of the employees. These are also commendable points.
The Pre-Budget Economic Survey Report has expressed serious concerns about agriculture and employment. Both these topics are very dear to the political talks on both sides. The ruling party will say how much and what we are doing for these constituents and the opposition will accuse the government of inaction. In such a case, it is desirable to take the basis of statistics instead of going into this verbatim. If we take it as such, it can be seen that the budget allocation made by the same government for agriculture sector five years ago was 5.44 percent. It seems to have fallen to 3.15 percent this year. The provision for education seems to have increased from Rs 95,854 crore to Rs 1 lakh 25 thousand 638 crore this time. But that’s half true. To accomplish this, a comparison of gross national income and provision for the education sector is necessary. If so, it can be seen that the government is not ready to spend anything more than three percent for education.
However, the causality of some issues in this budget is not understood. For example short term and long term capital gains tax. Recently, RBI Governor Shaktikanta Das commented on the saving habits of Indians. Indians are famous for savings in the world. But recently, this amount of savings has decreased and many people tend to invest through mutual funds. It’s better to be like that. Due to this, there is a flood of investment in the capital market. This being the case, what is the reason for making harmful changes to the Capital Gains Tax instead of giving relief to it? This will dampen the enthusiasm of investors. It’s a different story if you want it to fall. But it is illogical to levy such a hefty tax on annual returns of more than half a lakh on investment when one side is trying to increase investors. Also, it can be seen from the details of the budget that the facility of ‘indexing’ which has been available till now while levying ‘capital gains’ on land-jumla, gold coins and other assets is being cancelled. If so, there is room to suspect that ‘inherit’ is getting in through the back door. The government has to disclose more in this regard.
Apart from this, the government deserves praise for finally removing an irrationality. This tax discrepancy was related to ‘Angel Tax’. Raising loans and capital is difficult for new entrepreneurs. Either the product is unknown and the promoters are also new. At such times, those who invest in such new projects are called ‘Angel Investors’. He is like an angel for those industries. But the same finance minister started levying tax on it for a few years. It was a contradiction to call India the ‘capital of startups’ and to tax those who provide capital to startups. ‘Loksatta’ also highlighted it many times through editorials. It is good that this controversy has ended today.
Apart from this, the most noticeable thing in the budget is the scheme and fund bailout given by the Center to the states of Andhra Pradesh and Bihar. These two states are held by ‘Telugu Desam’ and ‘Janata Dal’ respectively and the support of both these parties is essential for Prime Minister Narendra Modi to stay in power. Then there was a doubt that these states would get a favorable measure from the Centre. It turns out to be truer than expected. In fact, it is not a pity that those states got more. If those states play a major role in maintaining the central government’s reservoirs, it is inevitable that they will also get some more water from that reservoir. However, in this budget, the election-like Maharashtra has been called on the pea axis, but it is painful. It is certain that this matter will be troublesome for the rulers of the state in the future. The Olympic Games will begin in Paris in the next two days. The budget is such a rare sum in the face of Olympic competitions. ‘Loksatta’ achieved it. ‘More dynamic, more sublime, more powerful’ is the motto of the Olympics. Presented at the Olympics of governance, today’s resolution is inevitably described as ‘more political’.
