Amidst the high expectations and anticipation, the union budget 2020 was presented today in the parliament by hon’ble finance minister of India.
As the spectators glued their eyes on television sets, watching the live telecast of the Budget speech, the vibes of anticipation and anxiety could be sensed from the Parliament House.
But with confidence and dignity, the Finance Minister presented a fairly balanced: a positive yet restrained budget.
The Budget, this year, has been important, as it has on its shoulders the responsibility to revitalize the current economic condition and to instill optimism in the sensitivities of the Industry.
With the ambitious dream of India becoming a $5 Trillion Economy, the journey towards the goal seems uphill all along. The Budget could provide the thrust of trust required to fulfill such aspirations.
The Right Intentions
Thus, the Budget this year was appropriately themed as a budget for “Aspirational India, Economic Development and a Caring Society”. The theme signifies the perspective on the economy to be an inclusive and living system of prosperity, care, and development to give the wings of aspirations to all sections of the society.
Thus it had the intent of promotion of holistic development. It had striven to steer the economy clear from the current turbulence, and living up to the expectations for sky-rocketing growth. The commitment and intent of the Budget have been to resonate with the common interests of the citizens and industries, but it could not create the big bang that was being expected. This does not take away the fact that the Budget has been congruent with the sentiments of the society and industry to move towards excellence.
A Budget well-grounded
The Budget has a populist tone, to suit the sensitivity of the common people. With a major focus on the Rural sector and the liberal slashing of the tax rates on personal income, as I had foretold in my earlier column, the budget has delivered justice to the expectations from it. The focus on the Rural sector will help in the development of a foundation for sustainable growth. The expansion of the supply chain through 'Kisan Rail' and 'Krishi Udaan' are much-welcomed moves. Provision for solar-powered pumps for irrigation, reflects the concern for sustainability. But the major reforms for landless laborers are awaited.
The tax rate cuts on Personal Income is a great initiative to catalyze the consumption by improving the disposable income of the middle class. But reducing provisions for deductions in the new tax regime (making to choose between deductions or new tax rates) can be viewed as a constraint that could control the benefits.
A mixed news for the Industries
The abolition of the Dividend Distribution Tax and adoption of the classical Dividend Taxation system can bring some respite to the corporate. No declaration on LTCG brought a little disappointment, though.
Setting up of Investment Clearance Cell to provide assist entrepreneurs, schemes to involve EXIM and SIDBI for bringing MSMEs to export markets, etc could be a great step to empower entrepreneurship. For boosting infrastructure, many Initiatives like setting up smart cities, trains and airports, and promotion of renewable sources of energy can prove to be effective. Similar Initiatives in tourism and other social and environmental concerns should be acknowledged.
But, from the other perspective, the budget has not been very much clear about the initiatives to simplify the tax systems, providing special packages to specific industries, and do much about labor and land reforms. These shortcomings have prevented an otherwise good budget from being perceived as a ground-breaking budget, taking away some of its lustre.
On the whole
From the overall tone, the budget is more or less populist, focussing on the foundations of the economy and well-intended to liberate the middle class.
If implemented as planned, it would certainly be an impactful budget and will improve the economic metrics. If not a dramatic change, the budget can still change the status-quo. However, for achieving the intended growth, the budget should be supplemented by other bold and innovative steps. Being skeptical is easy, on the other hand, seeking opportunities in adversities always leads to something phenomenal. In a nutshell, the budget is neither dissatisfying nor exceptional.