Finance Minister Nirmala Sitharaman has reached Parliament House after meeting President Ramnath Kovind. There will be a cabinet meeting in which the budget will be approved. After this, the Finance Minister will present the budget at 11 am. This will be his third budget. Both the general public and the business world have high expectations from this budget. The reason for the hope is his statement of 18 December last year. He said that this time the budget would not have come in the last 100 years. In the Economic Survey presented in Parliament on 29 January, many indications have been given for this. If the budget is according to these signs, then these special things can be seen in it …
Krishnamurthy Subramanian, the chief economic advisor who prepared the economic survey, had said, “The time has come when the government should increase its spending and reduce the tax burden on the people.” However, private companies are not yet in a position to increase spending. Therefore, the government will have to increase expenditure. But the government lacks money to spend. Therefore, the expectation of tax relief is also less. The upside is the discussion of imposing corona-cess, even if it hits high earners and companies.
The government will increase revenue by imposing corona cess on the super rich.
Oxfam estimates that if 4% tax is levied on the 954 richest families in India, then the revenue can be equal to 1% of GDP i.e. around 2 lakh crore rupees. The money received from such cess or surcharge remains with the central government, the states do not get a share from it.
Exemptions may increase in new tax system
Last year, a new system of income tax was introduced. There is no other exemption other than NPS i.e. National Pension System. Therefore very few people chose this option. The government has not given any data for this. The Finance Minister can give any data about this today.
To make the new arrangement attractive, tax exemption on PF, LTC and donation can be given. Corona may also have an impact on some announcements. For example, due to expenses related to work from home, the limit of standard deduction can be increased from Rs. 50 thousand for the employed people. The tax benefit on the health insurance premium can also be increased under section 80D. Investment limit under 80C is 1.5 lakh rupees. The government has received suggestions to increase this too.
Health care spending may double due to corona, healthcare spending
is likely to increase the most. The corona vaccine is estimated to cost 25-30 thousand crores. The last health budget was Rs 67,484 crore. This can be doubled. In the National Health Policy 2017, the Center aimed to spend 2.5-3% of GDP on healthcare. But it could only reach 1.5% in 2019-20. According to World Health Statistics, India ranks 179th in the ranking of 189 countries in terms of government spending on health.
If the government increases the budget on healthcare, people’s expenditure will
be saved , 65% of the total out of pocket on health goes. According to the survey, if the government increases the spending, then the out of pocket expenses of people will be reduced to 30%.
The target of agricultural loans may be 19 lakh crores
, keeping in mind the farmer movement, special attention can be given to farming and farming. 6,000 rupees are received every year under the PM Kisan Yojana. It can increase by Rs 2,000. A new target of Rs 19 lakh crore can be set for agricultural loans. It was Rs 15 lakh crore last year.
Discounts may increase on affordable homes. In
order to increase demand in the economy, incentives can be given on buying affordable homes. If nothing else, like the previous year, the government can extend the additional rebate on interest up to Rs 1.5 lakh for another year. That is, in the income tax calculation, the rebate of 2 lakh rupees in interest on home loan was increased to a total of three and a half lakh rupees.
Students have been
emphasizing on online studies for almost a year because of free smartphone and tablet corona. According to the survey, two years ago 36.5% of rural students had smartphones, laptops or computers, now 61.8% have them. To increase this, a scheme of giving smartphones and tablets for free to the students of the village can be brought.
Unorganized sector workers have been affected more due to the scheme Corona can come for migrant laborers . The International Labor Organization released the Global Wage Report 2020-21 in December. Accordingly, the salary in the organized sector has come down by 3.6%, but the earnings of the unorganized sector employees have decreased by 22.6%. On the other hand, profitability of listed companies has increased by 25% due to retrenchment of employees and other expenses. There may be some announcements in the budget to bring migrant laborers under social protection.
Import duty may increase for self-
reliant India Import duty can be increased on certain things under the Self-Reliant India Campaign. Last time too, duty was increased on many things including mobile phones, electronics and electrical parts. Goods coming from abroad are expensive due to increase in import duty. This increases sales of goods manufactured in the country. GST rules can be made easier for small traders.
Last year, the stock market fell by around 2.5% on the
budget day, there are a lot of fluctuations in the stock market on the budget day. In the last 6 budgets of Modi government, 4 times the market has been in loss. They also included an interim budget. Last year, on the budget day (1 February), the market closed down by 2.43%.
Subramanian , the chief economic advisor like the performance of India’s recovery team of the economy, had said that the rapid recovery of the Indian economy is similar to the performance of the Indian cricket team in Australia. He said this in the context of how India won the 4-match series 2–1 after the entire team was dismissed for just 36 runs.