Most important thing for a middle class family in the Union Budget is the changes in Income Tax slabs and rates apart from other fiscal benefits in healthcare and employment. With coronavirus pandemic severely impacting lives across the world unprecedented ways such as to salary cuts and job losses, the middle class and upper middle class are looking up to Union Finance Minister Nirmala Sitharaman to announce measures to help increase savings.
A Mumbai-based pandemic-hit family facing issues such as coping up with a job loss, loss in business and dealing with the online academic sessions of their kids share their expectations from the Union Budget 2021.
The way people spend or save their money changed due to economic uncertainties. Work from home has become a 'new normal' for salaried employees. To boost the pandemic-battered economy, the Budget 2021 must focus on more job creation voices 42-year-old Vinita Bhatia. "I worked for a media conglomerate, which used COVID-19 as a convenient excuse for retrenching, and there I lost my job. This is despite PM Narendra Modi urging big corporates to avoid firing people. This put a lot of mental and financial strain on my family and me. Paying an ongoing house loan added to this challenge. We decided not to opt for the moratorium as paying interest on deferred interest was not a viable proposition, especially at a time when income was inconsistent," said Vinita, a resident of Malad.
Vinita has two kids, daughter Nishita (18) and son Shlok (14). Vinita's husband Manoj Bhatia (45) owns a retail business, which too was shut for months due to pandemic-induced lockdown.
Vinita said, "In this Budget, I expect the government to come up with plans to boost job creation, not just at the entry level or for PSU companies, but even in the private sector. Corporates should be incentivised for hiring people, and these employees should be employed for a minimum of a year. The government should also focus on permitting higher FDI in media and entertainment to allow more companies to cover the lost fiscal ground and also invest in hiring manpower across the board. It should extend every possible support to this sector, which has been badly affected by the pandemic, be it by reducing paper import cost, etc. I am also expecting an Income Tax exemption slab threshold to be increased substantially for all working professionals, so that they can either save the money or use it to buy necessary products. Consumers should be encouraged to spend more on consumer durables, laptops, mobile phones, etc, with lowered GST on these products. These will push more money into the economy, which will have a circular benefit."
Vinita suggested that, the balance sheet of companies that laid off people since March 2020 should be scrutinised to see if they used the pandemic for their vested interests and a fine should be levied on them to discourage these practices.
The Bhatia family is looking forward to the bank FD rates to be increased by at least 70 per cent. "Currently, it is extremely unviable to invest in bank FDs. While the Postal Banks offer marginally better interest rates, the have terrible infrastructure and the people working there need to get regular crash courses on using technology. More tax saving instruments must be provided to working professionals, so that they make a wider range of safe investments," said Vinita.
For Manoj, his retail business remained closed from March 2020 till June 2020, hitting the family's financial situation even harder. "It also disrupted the working capital flow in my business. While we have resumed business, it is not at pre-COVID levels. Moreover, I sell on various ecommerce platforms, which used COVID as an excuse to stretch payments cycles for vendors like me. While financial sops are announced for MSMSE, the direct impact is hardly felt. There should be some instantaneous tax benefits for small retailers, like a tax holiday. There should be a standardised GST for all consumer electronics and durables and it should ideally be in single digits. This will encourage more people to buy it, an impetus that is desperately needed. I would also want some standardisation for ecommerce platforms, which protects the vendors selling there, just like it supports customers. Ecommerce companies should pay their suppliers every week or 10 days. An arbitration panel should look into customer returns and rejects policy, because many online buyers buy products, use it and then send it back for flimsy reasons." Manoj said.
"Moreover, the current GST law has explicitly excluded e- commerce businesses from composition scheme, which should be reversed. Many ecommerce platforms deduct around 1% as Tax Collected At Source, and also charge us for commission and other things. This 1% should be waived off now," Manoj added.
Manoj expects a cap on petrol and diesel prices, which he thinks will be a relied to many.
The couple’s daughter Nishita has had her own set of problems during the pandemic. "The travel and tourism course that I had enrolled for had internship opportunities. But since this sector was badly affected during the pandemic, we students did not get any good internship opportunities. This will affect our overall scores. As a student, I would appreciate if 2020-21 is converted into a gap learning year, where students are not graded for their performance. Instead, their performance can be ranked in the next 2021-22."
Apart from this Nishita is expecting to see, better health care system and a good mediclaim policy in place ad a tax exemption on that.
Shlok says, "I hate online classes and could not pay attention throughout the year. I really wish that the government says that the studies done in online classes during 2020-21 don’t matter and we can repeat the same in the coming year in physical classes. Also, I am a sports lover and it is expensive to get professional coaching. I want the government to open well equipped coaching centers in every part of city for good players, especially football and cricket, so that I do not have to travel very far. I also want 5G network to become a reality in this budget and at low prices."
What the Bhatia Family expects from the Union Budget 2021
* A boost in job creation
* Bank FD rates to be increased by atleast 70%
* Income Tax exemption slab threshold to be increased for all working professionals
* A cap on Petrol and Diesel prices
* Year 2020-21 should be converted into a gap learning year
* better health care system / infrastructure and a good mediclaim policy and tax exemption on that
* 5G network to become a reality