An India TV illustration
Shattering her own record from last year for delivering the longest budget speech on record, Union Finance Minister Nirmala Sitharaman spoke at length for nearly two hours thirty-seven minutes as he presented the much awaited budget in Parliament on Saturday. While the markets were quick to react to the announcement that the government would miss its fiscal deficit targets in the current financial year by 0.5 percentage point, a fact also remains that the government has tried to offer the young workers and budding entrepreneurs a reason to celebrate by offering a bevy of initiatives.
Revised income tax slab
One of the major takeaways of this year’s budget that will bring smiles on the faces of lakhs of Indians is the government’s decision to revise the income tax slabs, entailing doing away with the tax for those earning up to Rs 5 lakh an year. The finance minister also proposed revised income tax rules for professionals and workers making up to Rs 15 lakh an year, provided they are ready to let go of 70 other exemptions. What exactly these exemptions will be remains to be seen.
At her post-budget briefing after she delivered her budget speech, Sitharaman told media persons that the revised income tax rates would benefit the low-income groups the most.
An attempt to bring smiles on faces of first-time home owners
A major stimulus has been provided in this year’s budget to the idea of owning a home, an issue close to the hearts of India’s youth. The data collected by the government at the time of 2011 Census projected that 34.33 per cent of Indians will be in the age bracket 15-24 in 2020, which translates into around 40 crore Indians.
In her budget speech, the finance minister extended the deadline for first-time home owners to avail additional Rs 1.5 lakh interest deduction on housing loans till March 31, 2021. Besides, the government has also announced the extension of tax holiday for affordabale housing projects beyond March 31, 2020, which will go a long way toward meeting the government’s objective of “Housing for All.”
While economic experts have given thumbs-up to the proposal, concerns have also been expressed that the buyer sentiment could have been addressed better.
A stimulus to entrepreneurship and employment-generation
Even as the opposition leaders, including former Congress President Rahul Gandhi, have taken the budget with a pinch of salt saying that it does little to address the question of unemployment, the fact remains that the government is striving hard to turn India into a nation of entrepreneurs. The push towards entrepreneurship and employment generation has been reflected in the Economic Survey as well as the speech of the finance minister.
A major push has been delivered to the ‘Make in India’ campaign, an initiative close to the Prime Minister himself, by hiking the import duties on foreign products such ranging from footwear, furniture, ekectronics and handicraft items among others.
The move is expected to majorly impact $56 billion of imports into India, majorly from China.
At the same time, Sitharaman announced major investments into job generating sectors such as tourism. The government has said that it planned to invest Rs 2,500 crore in the tourism sector in the financial year, which coupled with the push to the UDAN scheme and plans to connect regional Indian cities with other parts could contribute problems of employment in Tier 2 and 3 towns and cities.
Rs 99,300-crore investment in the education sector
A sum of Rs 99,300-crore has been earmarked for the education sector in this year’s budget, besides the government’s approval of allowing foreign direct investment into the crucial sector.
Sitharaman also announced a degree-level full-fledged online education programme to be offered by India’s top 100 institutes, new courses in 150 universities by 2026 as well as proposal to attack a medical college to district hospitals, among other major initiatives announced for uplifting India’s education sector.
Further simplification of the GST regime
Building on its monumental achievement to have been able to introduce a ‘One Nation One Tax’ Goods and Services Tax (GST) during its first term in power, the government announced that simplified GST rules will come into effect from April 2020.
Stating in her speech that the GST cuts had helped Indian households to save four per cent of their average monthly spending, which translated into accrued annual benefit of approximately Rs 1 trillion.
A finance ministry statement in the morning informed the public that the central and state governments had collected around Rs 1.11 trillion in GST receipts in January, the third straight month of GST collections crossing the Rs 1 trillion-mark.
