There’s not a lot that can be said about this budget and I guess that’s not a bad thing. The Union Budget for 2017-18 is in line with the BJP’s changed political stance of wooing the poor and shedding its image. Honest taxpayers and tax evaders should be treated differently.For starters, reducing small companies’ (turnover under Rs 50 crores) income tax from 30% to 25% is a very welcome move. India’s economy moves mainly on four wheels-government spending, consumption, exports and private investment. This Budget focuses only on the first two.
The windfall from oil has gone into renovating the government finances and good times may end if crude prices keep inching up. India’s companies, even the cash rich, are not investing. Welfare carries its costs: more government, more taxes. Worse, the extended hand does not reach the needy. Since infrastructure is still not ready for direct cash transfers. It is not enough to say “farmers’ income will be doubled in five years” without answering how and when .The government is showing them the way to new markets. Job creation through MNREGA is welcome but Jaitley need not take much pride in making the “highest-ever” allocation for this UPA scheme. Instead the focus should be on plugging the leakages. MNREGA, say critics, is a needless burden on the taxpayer and a 2013 government audit found fault with its implementation.
The budget’s rural, MSME, housing and infrastructure thrust would hopefully perk up consumption and employment generation. The grant of infrastructure status to affordable housing will help lower the costs for builders and attract buyers, while the steps to reduce the capital gains tax for property sellers may wake up the sleepy real estate sector. Individuals and MSMEs have been granted tax relief, possibly to compensate them for the pain of demonetization. Jailtey has not hurt any section but lost an opportunity for hard decisions. It is a same budget that does not inflict pain on anyone and is fiscally sound but falls below expectations of those looking for something transformative.