GD Monday - 'The Union Budget 2016 Is A Disappoinment' - Week 11

Imran Khan

The annual general Budget of India for fiscal year 2016-2017 was presented in parliament on 29 Feb, 2016 by Finance Minister Mr. Arun Jaitley. This budget is being termed as pro-poor, pro- rural and pro-farmer. Everyone had high expectations from this budget considering the political and economical events that happened over the past one year. It's been a long time since a budget actually concentrated on the lifeline of India - farmers and villages. The budget proposes to double the income of farmers by 2022. About 36 thousand crore has been earmarked for farming sectors. About 5 lakh acres of land to be brought under the purview of organic farming. It also proposed cut in excise duty on irrigation pumps and soil nutrients besides slashing import duty on cold storage related equipments. The budget proposed 100% electrification of villages by May 2018. These all are healthy signs and shows that government is actually concerned about the farmers and rural areas. MGNERGA has be allocated highest ever budget of Rs. 38,500 crore. So there will be more jobs in rural sector. The government is hoping that growth and prosperity in rural India will augment GDP and hence healthy economy. As for the common man, they will feel pinch in their wallet - at least in initial days. The budget proposed 0.5% Swachh Bharat cess and 0.5% Krish Kalyan cess - to fund farming initiatives. But this additional cess will help in speeding up the reforms in farming sector and will result in high yield and low cost of the farming products and hence will cost less to the common man. In addition there is no change in tax slabs - meaning if your income has increased compared to last year, you might have to pay more taxes if your tax slab changes. The tax slab should have been increased to match the inflation. Today, all of us are concerned about our health and environment. Pollution levels are increasing day by day. To control this, budget proposed 5% excise duty on cars above 10 lakh. In addition there would be pollution tax of 1% on petrol and CNG cars and 2.5% on diesel vehicles. But the petrol and diesel prices have been cut down. So common man will not feel the heat of these additional taxes. Middle class people buying home for the first time would be happy since homes less than 60 meters are exempted from paying duty. To combat shortage of medicines and their exorbitant prices, Government will set up 3000 generic medicine stores. Considering the increase in people suffering from renal failure, governments to set up new and affordable dialysis centres. New health cover for senior citizens will soothe their nerves. Corporate industry would have mixed feelings to this budget. Corporate tax has been fixed at 29% for companies having turnover of less than 5 crore. For start-ups - 3 year tax holiday is incorporated between 2016 - 2019. New manufacturing companies to be taxed at 25% plus surcharge. 100% FDI in food retail will result in global giants investing more money in India. Government has increased EPF contribution to new employees for first 3 years Overall, it is an average budget. To some extent this budget has met expectations of Indians, though no big ticket projects have been announced. If implemented properly, this budget should result in putting the Indian economy on the path of development.

1 Mar 2016, 03.06 PM