Manohar Manoj
Considering it as the last regular budget before the Lok Sabha elections next year, most people expected that Finance Minister Nirmala Sitharaman would only make a series of populist announcements in her budget speech. But on the one hand, the Finance Minister presented concrete gifts for the two big political pressure groups of the country i.e. the poor class and the middle class, but at the same time, he also showed the vision graph of many new factors of India’s future development and its budget provisions. Under the electoral populist steps, the previously announced plan to provide free food grains for the next one year at a cost of two lakh crore rupees to the poor has also been mentioned in the budget, on the other hand, the income tax limit of the middle class which has been five lakhs for a long time has been enhanced to 7 lahks through an alternative tax system.
The Finance Minister struck a tremendous election stroke to increase the tax from Rs 5 lakhs along with this, the income tax slabs have been restructured in such a way that a person with an annual income of up to Rs 15 lakh will ultimately have to pay only 10 per cent i.e. Rs 1.5 lakh tax. The maximum operational rates of income tax have been reduced from 43 per cent to 39 percent. But apart from these two steps, this time’s budget was pointing towards all those new areas of the country and those development priorities, which will somewhere create the story of the coming era of the Indian economy.That’s why in this budget, the finance minister has included inclusive development, green development, green energy, cooperative development, digital development, natural farming and land reclamation, tribal upliftment, start-up development, financial and marketing incentives for MSMEs, livestock dairy fisheries development, many steps like energy security, skill development, judicial reform and electronic court, basic infrastructure and heavy capital expenditure in railways and PM Awas Yojana and pollution prevention were also mentioned in his budget speech and the budget amount was also announced for the same. For this, the budget directly outlined an alternative vision of India’s development for the next twenty-five years by introducing several innovation schemes, financial incentives and an unprecedented increase in budgetary allocations.
For example, zero carbon emissions by the next year 2075, to make the country a hub of electronic vehicles in the next five years, to computerize 63 thousand primary cooperative societies of the country at a cost of Rs. Issuance of loan of lakh crore rupeesAnd it has been said to secure 30 percent of the total loan for MSMEs. Like the last time, this budget has also come with more emphasis on start-ups, it has been talked about increasing the scope of this business in villages and agriculture, as well as an ambitious program has been made for the skill development of 47 lakh youth of the country by setting up 30 Skill India International Centers in the country, a unique thing has been said to impart training on subjects like robotics, 3D printing, drone operation, and coding.
Capital investment in railways has been an area of utmost priority for the Modi government, for which a provision of about Rs 2.5 lakh crore has been kept in this budget, which is almost nine times more than in the last nine years. Keeping in view the future development of capital infrastructure facilities, an important announcement has been made by the Finance Minister that now the Center will provide interest-free loans to the states for the next fifty years for their infrastructure development. Another important announcement is that in this budget, an unprecedented increase of 66 percent in the budget allocation for PM Awas Yojana, the total budget amount has been kept at Rs 79 thousand crore. Overall, in this budget, the government has kept the amount of capital expenditure at about seven and a half lakh crores and for the upcoming years around 10 lakhs crore, which is three times more than in the last four years. It is worth mentioning that in the current financial year, the government has estimated to receive about nine lakh crore from direct taxes and about 11 lakh crore from GST and indirect taxes.With this fiscal balance, it is expected that the debt-to-GDP ratio will decrease in the coming years as compared to the present. That’s why, after about three years, the details of the government’s fiscal deficit for the current financial year and the next two financial years, given by the Finance Minister, now seem to be turning from despair to hope, that is, the current year’s fiscal deficit will be 6.4 percent, but next year it will be reduced to 5.9 percent and after that, it has been said to bring it down to 4 percent by 2025-26.The strategy of the Finance Minister for the budget got fixed when the government found a sort of mixed economic conditions of India’s getting a road map of a 6 to 7 percent growth rate of the Indian economy presented by the Economic Survey and the possibility of a recession in the global economy at the external level. It was clear. The strategy was that the Finance Minister would control the public debt by balancing her revenue expenditure by encouraging the collection of direct taxes and indirect taxes and on other hand, would prevent the fiscal deficit from increasing further.Significantly, had the Modi government not announced free ration for the poor at a cost of two lakh crores keeping the next elections in mind, it could have further reduced the fiscal deficit and public debt. The government was already giving importance to administrative reforms through digital governance and e-governance, but this time the budget has also talked about bringing several judicial reforms. For example, setting up an electronic court at a cost of seven thousand crores, the fine and bail amount of poor prisoners should be borne by the government. Bringing amendments to about 45 commercial laws, returning the confiscated funds of MSME companies, speedy resolution of contract disputes and starting a new training program for the government employees, and teachers through Mission Karmayogi is a new reform announcement of the budget.
In order to promote manufacturing industries, along with exemption in customs duty on imported mobile devices, exemption on import of lithium battery, a key input of electric vehicles, has been extended till next year. Overall, this budget has come as a symbol of a new optimism over the pessimism that has emerged from the growth rate decline due to demonetization and desegregation in the last five years of the Modi government. These things have been possible for the government by the higher growth rate and also because of soaring consumption expenditure, resultantly increased revenue collection figures.