Budget Special
New Delhi, 2 February 2021
Union
Budget
DREAMS,
MASSES EXCLUDED
By Shivaji
Sarkar
The Union Budget 2022
introduces digital crypto currency, gives incentives to farmers, industry and
leaves out the wage workers high and dry as direct income tax remain untouched,
giving no relief to the common man or salaried class.
Union Finance
Minister Nirmala Sitharaman expects to create 60 lakh jobs under the
productivity-linked-incentive (PLI) scheme in 14 sectors. The Government hopes
that it has the potential to create additional production Rs 30 lakh crore, a
bit high of an expectation amid a subdued Economic Survey that does not show
much enthusiasm for “spend and enjoy”.
The MSMEs, who are in
a critical stage, get into about Rs 2 lakh crore largely credit support. But it
is to be seen whether they would be able to have the benefit and thrive at all.
What is being offered is not enough.
Sitharaman’s expenses
rise marginally to Rs 39.44 lakh crore from Rs 37.70 lakh crore in 2021-22. Her
borrowings increase to Rs 16.61 lakh crore from Rs 15.91 lakh crore. Fiscal
deficit at 6.9 percent, reduced from budgeted 9.2 percent, in 2021-22; has come
down to 6.4 percent.
The growth figures
projected at 9 percent, though coincides with the International Monetary Fund
projections has a catch of minus seven percent growth two years back. Still the
actual has to come back to the 2019 level.
The roadmap is to be
created through capital expenditure, introduction of 5G communication
technology, the Central Bank Digital (crypto) Currency, massive purchase of
paddy and wheat from farmers and the master plan for roads and highways.
The FM says she is setting the pace for India’s ‘Amrit Kal’ -75th year
of Independence -- and eyed economic
growth for India over the next 25 years.
Of course, she has
extended a number of tax benefits to the lowering or rationalizing many rates
for different industry players. She says that there were discrepancy in rates
and she has just brought it to the realistic level.
The government has
massively increased capital expenditure target to Rs 7.5 lakh crore from Rs 5.5
lakh crore in the last Budget for FY23. It is expected to give an overall
boost to economy and create jobs. The basic thrust of job creation of would be through
investment in infrastructure creation. It works as per the psyche that more the
infrastructure prospecting finances from banks more would be the need for
employing people. This year expenses were at 2.48 lakh crore.
Along with the
Budget, Finance Minister Nirmala Sitharaman announced that the Reserve Bank of India
will roll the out the Central Bank Digital Currency (rupee) using blockchain
and other technologies. “This will give a big boost to the economy”, she says.
It makes international transfer of money, capital, easy. This can have many
businesses done without touching the formal transaction routes. Capital inflow
and outflow becomes simpler. In a way it integrates the country with the
international crypto currency, whose pros and cons are being studied.Many
governments are yet to accept the crypto but in the parallel market it is
becoming an accepted currency.
Keeping an eye on the
elections and the recent farmers’ agitation, that led to withdrawal of three
farm bills, she announced higher allocation of procurement of wheat and paddy
under MSP operations. She spends Rs 2.37 lakh crore and hopes this would have a
better impact on the farmers lives. The question is whether it will? Stressing
on the international year of millet, she hopes to diversify the food habits and
give the famers more options for growing different crops. However, the expected
rise of the PM Kisan pension has not happened.
The Finance Minister’s
hope to have 60 lakh jobs in a year, a reminiscence of the days of Atal Behari
Vajpayee, in an economy that has yet to come out of the Covid-19 syndrome, is
an optimistic move. It, however, requires that much of consumption and
manufacturing recovery. The industry has weightage of 28 percent in GDP
calculation. Still the income recovery is at a low and sudden boost to
consumption is a highly placed expectation.
Proposing some minor
direct tax reforms, Finance Minister Nirmala Sitharaman on Tuesday quoted
Mahabharata's Shanti Parva while presenting the Union Budget 2022-23. “The king
must make arrangements for the welfare of the populace by way of abandoning any
laxity and by governing the state in the line of Dharma,” Sitharaman said.
Her assessment of
having a mere 3.8 crore income tax payee is also not correct. In this country
everyone pays a high indirect tax of approximately 40 percent even the 82
percent who are not in the income tax net. She knows that that the tax by
individuals is at a high of 30 percent plus cess against the corporate tax of
22 percent. The mismatch is truly illogical.The only levy as of now for
taxpayers is that they will be able to file an Updated Return on payment of
additional tax. This updated return can be filed within two years from the end
of the relevant assessment year. Further, if the person misses out on reporting
any form of income, there is a window to correct this mistake.
The earning salaried
classes are about 3.75 crore and they all are in the tax net. The compliance is
full specially in a situation where there has been income contraction in the
private sector and corporate are paying low taxes compared to individuals. Tax
evasion, as she says is more a myth. Interestingly they also pay GST, which
brings Rs 1.40 lakh crore in January 2022.
Overall the budget
has dreams, euphoria, indirect aspirations at growth like the stress on
drinking water projects, 28,000 crore to housing projects, national digital
health system, railway projects and the like.
Vast sections of the
population are excluded. The sections struck by extreme poverty, migrant
labourers do not have a strong prescription. It was expected to be a
dream real job generating budget with lots of gifts for the citizens.As the
budget is, it would be moderate on consumption, average on growth and the pace
would be possibly as good as it was this year. INFA
(Copyright, India
News & Feature Alliance)
|