There were great expectations from the budget for supporters it has been a great budget, for opponents it is not a so good budget. Many economist and industry captains have liked the budget. Dr. Bhalla thinks it is the best budget since 1991.
My take is that there are many good things in this budget the results of many things will be visible in the years to come. I hope GST is rolled out next year as planned. It has got delayed inordinately already. I am happy with the road map for Corporate Tax for the next 4 years. Lowering rates and doing away with numerous exemptions is a move that was discussed for long but was not put into practice. Hopefully this will happen now.
Individual tax rates are unchanged but additional investment of Rs.50k for contribution to pension funds has been provided. This is going to benefit only people in the higher income bracket. I do not think people with income of Rs.10 lakhs will benefit if they are already investing Rs.1.5 lakhs and enjoying tax benefit for home loan interest. Most in this income range will also have many other obligations as children education which is quite expensive for most. I doubt if they will have spare cash for another Rs.5k for this investment. People having income of more than Rs.10 lakhs will take this benefit surely and will save tax.
Same could be the case with the enhanced deduction offered for health insurance. I wonder how many in lower income group take benefit of Rs.15k available now. Additional Rs.10k offered now will also benefit those in higher income slab.
I therefore think that tax free income of Rs.4.44 lakhs is not for people in lower income slabs. Most working people will surely get benefit of doubling of transport allowance.
I would prefer the government exempting all people earning up to Rs.5 lakhs from Income tax completely. Those above this level can be taxed from Rs.3 lakhs onwards. May be the FM can try this next year.
I see no reason to bury DTC. I was hoping it will be implemented by the FM. I hope next year he will take a re-look and move to EET and at the same time lower taxes the same way he has done with Corporate Tax this year.
I don’t know if we need to invest money in more IITs & IIMs before stabilizing the new ones that have come up in the last few years. Just opening more of these many put more pressure on quality.
I hope the scheme of gold monetization will become successful. Though, the past experience is not encouraging at all. Indians do not like paper gold is a fact.
More investments in infrastructure are welcome. Hopefully the money will be utilized and will help kick start the economy. But one must realise that these projects take a long time planning and the starting of actual execution. May be the majority of the money allotted will be used for ongoing projects and there completion at the earliest.
I am baffled with the need for MUDRA. I think this could have been done through the existing banking system itself. Banks have ample funds to lend as of now.
The tax free infrastructure bonds seem to have made a comeback. Why was it discontinued this year is not explained. However this measure will be used by people in high income bracket and not many in lower income bracket even though they generate better returns than a Bank FD.
Since more funds are getting devolved on states from this year, there has to be a mechanism in place to make sure states use these funds for creating infrastructure and on socially important areas like education, housing, health etc. The Central government should also now persuade state governments to lower taxes on petroleum products that are very high in many states. This will give relief to many and may reduce the cost of public transport as well.
Over the years I have realized that a budget is intent. It is the plan for the next financial year. It may be better to look at the outcome budget one year from now. That is the time when we will know how good the budget has been. So it is better to wait for one year for comprehensive comments on Budget.
Let us hope the FM succeeds in what he wishes to do, because if he does we as a country will benefit. All the very best Mr. Jaitley and the government!