Union Finance Minister Nirmala Sitharaman on Wednesday presented the Union Budget for 2023-24 (Apr-Mar) in the Lok Sabha. Team FPJ spoke to industry experts from various fields. We spoke with Jehangir B Gai, who has won National Youth Award for Consumer Protection, to help understand how commoners will gain and lose from the budget. Here's what he had to say.
The flip side
What is most distressing is that the budget does not give any priority to healthcare even though India is amongst some of the countries which has the lowest spending on healthcare. The budget does not allocate any funds for setting up of hospitals or to strengthen the infrastructure of existing hospitals, despite the cost of healthcare being beyond the reach of the common man. Surprisingly, the pharmaceutical industry, which is generally known for its malpractices, has been given incentives for research and development.
The budget gives concessions in Customs duty for imported camera lenses for mobile phones and lithium-ion batteries. From the consumer perspective, this may marginally benefit the manufacturer, but it is unlikely to have any impact on the market price of mobile phones. Ironically, while lithium-ion batteries are being given an impetus, these very batteries are environmentally damaging as they give off toxic substances when discarded.
The budget provides for scrapping of old government vehicles to pave the way of purchase of new vehicles which would be eco-friendly. The cost of this replacement will be borne by the taxpayer. If old vehicles are detrimental to the environment, the budget should have provided for remission in taxes applicable to new vehicles so that existing vehicle owners could opt for the newer models. The budget is silent about the cost of petrol, LPG and other fuels, so it is unknown how it will affect consumers.
The budget recognises that the diamond industry is shifting from genuine diamonds to lab-grown diamonds due to depletion of natural resources. Unless the government brings in some form of checks and regulations, diamond traders will profiteer at the cost of the consumer by palming these lab grown diamonds as genuine ones.
The positive side
The budget provides for recovery of dividends and shares transferred to the Investor Protection and Education Fund. This is a blessing for those who have inadvertently lost their investment and money to the Fund. The raising of the taxable income limit from Rs2.5 lakh to Rs3 lakh coupled with increase in rebate from Rs5 lakh to Rs7 lakh will benefit the taxpayer. Similarly, the presumptive tax limit for professionals has been increased from Rs50 lakh to Rs75 lakh. So now they will be able to treat half the amount of their gross receipts as taxable income and pay tax thereon at the appropriate slab rate.
The existing highest tax rate of 42% will stand lowered to 39% due to a lowering of the rate of surcharge. The limit for leave encashment on retirement of non-government salaried employees was fixed at Rs3 lakh in 2022. It has now been increased to Rs25 lakh.
Senior citizens will benefit due to enhancement of investment limit under the Monthly Income Scheme from Rs15 lakh to Rs30 lakh. For others, the limit for single account holders has been increased from Rs4.5 lakh to Rs9 lakh, while for joint account holders, the limit has been raised from Rs9 lakh to Rs15 lakh.
A special one-time small savings scheme has been formulated for women which will allow them to invest up to Rs2 lakh and earn interest at 7.5% per annum, with a provision for partial withdrawal.
The crux of the matter is...
While the budget focuses on growth and capital investment, it has neglected healthcare. There are benefits for the salaried class and professionals. However, from the consumer view point, the budget is not likely to bring down the cost of goods and services.
