Regardless of which political party comes to power, there is now a set pattern in which the government’s policy making works. When a new government gets voted to power in the centre, in the first year it is all about meeting foreign heads of state, visiting them in their country, first in the Asian region, then Europe and America, Second and third year is all about pampering the industrialist, investors, holding investor summits and giving them sops and fourth and fifth year it’s all about farmers, weaker sections and the rural poor!
BJP led NDA government has followed exactly this set formula. First year of this government it was all about foreign dignitaries, second and third was about the corporate world getting concessions under schemes like make in India etc and now that the government is in its fifth year, the budget (the biggest policy exercise of the government) talks only about the farmers and the poor!
On some fronts the budget has done well, such as control on fiscal deficit is better compared to last year. Concessions in tax for the middle class are bolder than previous years and some reforms in the direct and indirect tax structure are a welcome move but whether the government will be able to deliver some of the promises made in this budget is the big question. For instance all that is being announced for farmers seems perhaps difficult to deliver. Announcements such as the setting up of Kamdhenu commission to help develop animal husbandry sector seems to have come too late in the tenure of this government and unless the NDA government returns back to power, this announcement would turn out to be meaningless.
It is very obviously an election year budget with the government reaching out to rural masses and announcing sops for them. But schemes like the pension proposal for the poor workers from unorganised sector seem a little too farfetched. If a poor labourer starts putting Rs100 per month in this scheme from the age of 25 or 30 he will be able to get pension of Rs3000 per month from the age of 60. The value of that amount about 30 years from now would be negligible!
Among the positive take-aways in the budget the most welcome move by the Finance Minister of course is the reforms in tax structure and decision of making it more transparent. Not taxing on notional income of a second house of the tax payer and allowance to distribute the capital gains roll over of one property into two properties are both very good and positive decisions by FM Goyal.
The corporate sector has welcomes many provisions in the budget. They feel that the additional savings coming out of tax concessions and other measures will give an impetus to the consumers to go for more consumption and that will give boost to sales nationally.
Over all one can say that the budget is dominated this year by very obvious political considerations, Finance Minister has tried to keep most sections of the society happy. Certain reforms and changes announced by the finance minister are most welcome but some of the targets set by him seem a little too farfetched and difficult to achieve.
