Is the Interim Budget 2019 - A Development Oriented Budget
By Jyoti Singh
“THE GREATEST HAPPINESS OF THE GREATEST NUMBER IS THE FOUNDATION OF MORALS AND LEGISLATION.” – JEREMY BENTHAM.
The answer to this question is both “Yes” and “No”. Firstly, what budget is not a development oriented budget? All budgets have the primary aim of bringing about growth and prosperity in the country. Secondly, according to Jeremy Bentham, Happiness is the greatest good. Thus, this budget has targeted to make a large section of the Indian population happy. The key highlights of the Interim Budget are-
· Full tax rebate for individuals having a taxable income upto Rs.5 lac.
· No taxes for people having an income upto Rs. 6.5 lakhs if they make prescribed investments in the economy.
· Standard deduction for salaried employees has been raised from Rs. 40,000 to Rs. 50,000.
· The threshold limit for deduction of tax on rent increased from is being increased from Rs.180000 to Rs.240000.
· No tax-ability on deemed basis under the head "house property" even if an assessee has two self-occupied houses.
· To make housing more affordable, Section 80 –IBA is being extended for another year.
· Farmers owning land up to 2 hectares to get Rs.6000 per annum under PM Kissan Yojna and 75000 crore per year to be spent on PM Kisan Yojna.
· Persons working in unorganised sector and having income upto Rs.15000 per month will get pension of Rs.3,000 per month under Pradhan Mantri Shram Yogi Maandhan Yojana.
· GST registered SME will get 2% rebate on interest on loan upto 1 Cr.
· Farmers severely affected by natural calamities will get 2% interest subvention and additional 3% interest subvention on timely repayment of loan.
· . Anti-black money measures have brought Rs.1.30 lakh crore under tax net.
· The defence budget will be crossing Rs. 3,00,000 crore for the first time in the year 2019-20.
· The allocation of budget for North East in proposed to be increased by 21%.
However, the term “economic development”, as per Prof. Williamson, means the process whereby the people of a country utilize the available resources in such a way that the per capita income of the country increases. It is well understood that this is a very narrow definition to understand the very wide concept and scope of development. But even from a layman’s perspective development means over all social, economic, political and cultural growth. This particular budget seems more like a populist exercise to appease the voters, than a budget which could score points on development. It swiftly pushes scientific and technological development, industrial and commercial development, the development of IT, Telecom, transport and various other important sectors to the back of our mind by only stating extensively about the achievements and very little about the further developmental goals and ambitions of the government.
Also, India has a population of over 127 crores. However, in the financial year of 2015-16 only 3.7 Crore Indians filed income tax returns. Among those 3.7 crore individuals, only 76 lakh people declared their taxable income to be over Rs. 5 lakhs. Moreover, personal income tax itself constitutes only about 14% of the government’s earnings from taxes, of which the business tycoons, celebrities and established sportsman are the important income tax payers. Major proportions of its earnings are from corporation taxes, borrowing and other liabilities. The government has thus played a masterstroke and fooled the common man into believing that the government is working very hard to bring about the “Aache din” regime in India.
It is also to be noted that exactly 18 hours before the interim budget was read out in the parliament, India strikingly increased its GDP numbers for the last two years. It is a well known fact that in the crucial year of demonetization 2016-17 the Indian economy was wrecked and ravaged. However, the private final consumption expenditure was recalibrated from 7.3% to 8.2% in the same year, which led to the GDP bouncing 110 basis points. Similarly, in 2017-18 the agricultural growth was increased from a mind- boggling 3.4% to 5% which increased the GDP by 50 basis points. I wonder why everyone else missed the signs of such joyful rural prosperity and progress. Therefore, miraculously, a few hours before the budget was read out, India had successfully added over 3.5 lakh crore to its GDP numbers. It is a very essential fact to be considered, especially since it is the denominator for all key metrics, especially the critical fiscal deficit percentage. Having a puffed up denominator allows the government to show that given the GDP is more than the government expected it to be, the government can now overshoot the fiscal deficit.
Further, amidst the constant criticism of the opposition regarding the farmers situation in India and over 11,000 suicides in the year 2016, the government has proposed to introduce the PM kisaan Yojana, which provides rs.6000 annually to farmers owing land upto two hectares. This is probably an indirect way of government’s denial towards the loan waiver demands and a compensation for the same. The pension and various other schemes are mere repacking of the existing ones.
Thus, while one hand it does offer personal and individual benefits which will indirectly lead to development in the long run. But in the short run, it is daylight bribery to the masses by offering tax and cash lollies.
· Interim Budget 2019: the highlights, The Hindu, https://www.thehindu.com/business/budget/interim-budget-2019-here-are-the-highlights/article26147972.ece
· Interim Budget 2019 Highlights, https://cleartax.in/s/interim-budget-2019-highlights
· What is interim budget? , the Times of India, https://timesofindia.indiatimes.com/business/india-business/interim-budget-things-to-know/articleshow/67439481.cms