Finance minister presenting union budget for 2020-21 has said the budget is to boost the income and enhance purchasing power of citizens. She acknowledged that Indian spirit of entrepreneurship has weathered several storms over the centuries, inspires and motivates her. She further dedicating the budget to provide “Ease of Living” to all citizens said India will march towards corruption free and policy-driven good governance. In her endeavor to achieve these goals she made slew of announcements.
For farmers such as liberalisation of farm markets, removing of distortions in farm and livestock markets, extensive use of solar energy in farming, creating warehousing facilities at block/taluka level.For youths – new education policy, establishing government medical colleges at district level, online institution offering degree level courses, apprenticeship embedded diploma/degree courses, Investment Clearance Cell to provide end to end facilitation and support, including pre-investment advisory, information related to land banks and facilitate clearances at Centre and State level, for entrepreneurs launching of NIRVIK scheme for exporters, to provide higher insurance coverage, reduction in premium for small exporters and simplified procedure for claim settlements. Digital refund to exporters the duties and taxes levied at Central, State and local levels.
Speaking about Indian Railways, five major measures have been announced by FM they include re-development of four station and operation of 150 passenger trains to be done through PPP mode and more Tejas type trains to be introduced for to connect iconic tourist destinations. However since 2017 rail budged is merged with union budget the fate of announcement is not known to citizens as there is no action taken report presented before the house or voters.FM has proposed to pursue States and Union Territories to replace conventional energy meters by prepaid smart meters in the next 3 years, if it is acted upon without widespread consultation with all stake holders, this step will robe the consumers opportunity to check and raise objections to faulty reading and billing faced by consumers very often.
FM highlighting that fairness and efficiency of tax administration are the important aspect of ease of living and ease of doing business assured business community that government enshrine in the statutes a Taxpayer Charter and committed to take measures to free them from harassment of any kind. This is welcome step however our past experience on similar announcements earlier one has to wait to see positive change in attitude at bottom level of tax administration.
FM has claimed to introduce new and simplified personal income tax regime wherein income tax rates are significantly reduced for the individual taxpayers who forgo certain deductions and exemptions and announced withdrawal of about 70 exemptions without explaining the reasons or how those exemptions have achieved their goals. New tax slab appears to be just eyewash. Concessional income tax rate is given to new electricity generation units and cooperative societies however partnership firms are not included, why we fail to understand. Relaxation in threshold limit for tax audit without relaxing the prescribed presumptive profit limit, there is no real relaxation in compliance burden as claimed.
Removing dividend distribution tax is a welcome step but taxing dividend at the hands of recipient is uncalled for, I presume the dividend shall be taxed at recipient end above the threshold limit of 10 lakhs as announced in 2016 budget.
To sum-up I can safely say this budget goes nowhere, it is directionless, majority of announcements are without details. This budget for sure cannot be termed as growth oriented budget. No plan of recovery from economic slowdown, no roadmap to overcome basic cause of economic slowdown.