A day after Finance Minister #ArunJaitley presented the Union Budget, there is a broad consensus cutting across all sections of the political diaspora, the media and the public in general that it is a balanced budget. Not historic not landmark but a good one. Yes it is historic in the sense that for the first time post independence, the Railway Budget has been merged with the General Budget. It is a landmark budget due to an indirect tax ambit for a few months after which we will have the goods and services (GST) tax coming into effect. With a few states bound for elections in a couple of days, some observers expected the Budget to be more populist and announce a slew of freebies for the common man. Also coming as the Budget was less than three months after a controversial move to demonetise high value currency notes, some felt the budget could be used to win back some disgruntled citizens. So a few brownie points must go to the government for not giving in.
In fact all the drama that took place did so before the Budget was presented. Everyone was on the tenterhooks when a few hours before the schedule of the Union Budget, a senior member of the Parliament from Kerala E Ahamed died of a cardiac arrest. Rule books were hastily taken out and previous precedents of such occurrences were looked at. As the opposition made a feeble protest asking for the budget to be postponed, the ruling party quoted an incident dating back to the time of Prime Minister Indira Gandhi when the budget had been presented in a similar situation. The final decision was left to the Speaker who decided that things would go ahead on schedule. The #2017Budget was also one of the shortest what with the twelfth Five Year Plan ending on March 31st this year. As a result plan & non planned was done away with only steps taken in regards to revenue & capital expenditure were announced.
For the year 2017-2018 the total monies allocated under the Budget is 21.47 Lakh crores. And on top ofit the government will borrow close to 5.8 lakh crores adding to the ever growing debt. The good part is that of this, 3.9 lakh crores will go towards infrastructure. Though there was little mention by the FM of details on the net result of #Demonetisation nor of the expected additional income from the ferreting out of black money the after effects of this can be clearly seen in the thrust on small industry and the rural India in Budget 2017. The 5% cut in corporate tax (from 30 to 25) for businesses with annual turnover of up to 50 crores, carry forward of the MAT (minimum alternate tax) and more breathing space for startups to claim the 3 year tax holiday are moves to boost the small industries. For #RuralIndia worst hit by demonetisation allocation under #MNREGA is up to an all time high of 48,000 crores. As is spending on health and education in the hinterlands.
For the salaried class, #Budget2017 has a clear message. The more you earn, the more tax you pay. So for those with annual income of less than 3 lakhs, there is virtually no tax. While if you earn between 10-50 lakhs p.a. you pay a whopping 30% in tax. Service tax non-existent in the 1990s has emerged as the Big Daddy of all taxes. To curb corruption in public life, cash transactions above 3 lakhs have been banned as have all cash donations to political parties that are above Rs 2000. But till corporate funding of elections stops, there will be no respite. As regards to the #RailwayBudget with more focus on railway safety and no mention of the ‘Bullet Train’ seems like the government has finally got it’s priorities right. All in all, Budget 2017 is a small step in the right direction. Nothing more.