Budget expectations FY2023-24 – small dreams, huge impact
People are aware of the imminent recession in some countries, but are fed up of the slowdown since Covid. Expectations are small, and the government will do well to not offer any excuse.
The middle class has almost lost all hope. Will they finally get some respite this year?
It is the time of the year when Indians (notably the middle class) start dreaming of a better life – lower taxes, low inflation, better basic infrastructure and jobs. Weeks later they will be faced with huge disappointment and return to the daily grind again.
The Central government is not always at fault. The benefits offered by the centre are not visible on the ground due to the interruption by state governments, most of who lack planning and spending, and work full time to strengthen their respective parties. It is time to question why don’t people place importance on state budgets.
However, since it is Budget time, we spoke with some people from various sections of the society and place on record their expectations – small ones this time.
Income tax – Nearly, 10 years ago the idea was propounded that India could be a tax-free country like some in the Middle East, raising hopes that the NDA government will at least bring down taxes, especially considering high inflation and GST on virtually everything people buy.
Instead, taxes seem to have grown and a lakh per month salary becomes just around 70,000 – grossly insufficient to maintain a family, especially in the cities where rent, commuting, education and healthcare costs have surged in the past 10 years.
In its manifesto, the BJP said that it is guided by “the principle of lowering the tax rate and improving compliance; thereby broadening of the tax base.” How about extending the net to the three sectors mentioned above – housing rent, fuel prices, education, and healthcare – where massive evasion of tax on income is rampant?
Saurav Jha, working in Chennai, said, “The house owner mentions only 50% of the rent he collects in the rent agreement, while allotting the rest to ‘maintenance’. Even small items like fan are placed on maintenance list. All this to evade income tax on his second house. Moreover, I cannot file for the full amount of rent from office and lose both ways.”
D. Pooja from Hyderabad says, “Education costs have soared in the past few years. Further, the hidden costs – compulsory tuitions in school, books, uniforms, transport, food, etc costs are unaccounted for. These are not exempted in income tax of the salaried.”
Ditto healthcare. The hidden costs including spiralling diagnostics have made life difficult for people across India. Moreover, insurance companies do not cover or hesitate to cover health of the elderly. The premiums are very high and unaffordable.
Ratandeep Singh from Delhi says, “The government should ask the insurance companies to reduce the premiums or incentivise them to do so. Further, it is important for insurance companies to cover daycare and OPD, which are money sucking in case of dialysis and other care.”
Regarding fuel prices, there has been no respite from high prices which has also led to high inflation. While the government is doing well to popularise Electric Vehicles (EVs), costs are still high and the incentives need to be raised to help people adopt to the technology faster.
Under these circumstances, the government should raise the income tax exemption limit to at least Rs.12 lakh per annum per family, is MDDTimes’ view after going through the needs of people. The maximum cut should be 20% given 33% or a third deduction of one’s income is unfair.
Other manifesto laggards include:
Farmer income – The promise was to double farmer income by 2022. The deadline has passed and the target looks unlikely anytime soon. It is important for the government to raise the MSP for all crops significantly and promote agri-based/food processing industries, especially along the river belts. This will enable agri-based states to prosper and halt shrinking farmland and migration.
India as third largest economy – The manifesto promises making India a 5 trillion USD economy, while the current GDP is around 3.5 trillion – a huge shortfall. Despite government claims, the barriers to entry into MSME remains very high and unscalable for the educated youth without any financial backing. Red tape and dysfunctional websites are to be blamed. It is obvious what needs to be improved. Getting into exports remains unimaginable for the common man.
Start-ups – The various schemes to promote start-ups aren’t visible on the ground. For example, an aspiring entrepreneur has to bang at the doors of a CA to even register his company. Moreover, the seed capital of minimum Rs.1 lakh is unnecessary. Many state governments are partly to be blamed for the state of affairs.
Tourism – India holds great promise in this sector, and the increase in number of airports and better trains are positive. However, promotion is very low and quality mediocre. To compare, a person looking to fly to Asia is more likely to land up in Japan, Thailand, or even Sri Lanka. Pakistan, despite its terrorism, has managed to lure tourists by focussing on its mountains and treks.
The government needs to identify key focus areas like medical tourism, wildlife, spiritual, mountains, desert and coasts, and promote on a large scale in Europe, etc. Government tourist hotels need to be scaled up to world-class levels. Importantly, it is important to develop tourist circuits and train people in the region to welcome tourists and ensure a great stay via media campaigns. Police, security volunteers and district administrations have an important role to play.
One could mention regular areas for development like infrastructure, need for major business hubs in the Northeast (eastern India actually, with several gateways to Burma and Southeast Asia), government jobs (with pension!), and GST reforms that could help reduce it. Also, for the need to lower housing loan rates for the middle class.
However, one special mention has to be on work-from-home (WFH). Like it or not, WFH is a long-term trend and here to stay as benefits far outnumber the cons. This has the potential to transform India and make it the knowledge hub and the back office of the world. The government should formulate policies to enable permanent WFH. Companies must be incentivised and a mechanism put in place so that a part of income tax also goes to the states from which the employee is working.
Sanjana Tiwari from Bihar said, “WFH could solve a plethora of problems like elderly and child care, better mental health, more savings, and decongest cities. Importantly, it could again make our towns prosperous and fit with more educated people working towards improvement of the towns. It could foster joint families again and prevent the real India from dying.”
Big wish-list? Definitely no.
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