Finance Minister Nirmala Sitharaman presented the first Budget in her lifetime. Earlier in the last two years, if his main goal was to keep the wheel of the economy moving in any way during the Corona period, this time the goal is to increase the speed of the economic engine and reach the goal quickly. Prime Minister Narendra Modi on Tuesday remarked in Parliament that India’s budget is being watched by the whole world with interest. While presenting the last budget, keeping in mind the target of the next 25 years, he announced the lifelong journey till 2047. Although from that point of view, the finance minister did not step out of the norm in this budget. Perhaps: The finance minister was not seen batting so aggressively as he presented this last full-fledged budget, leaving the shell of conservatism with nine state assemblies and then the 2024 Lok Sabha polls in mind.
Earlier, the economic survey released by his ministry on January 31 showed a very promising picture of the country’s economy. In this financial year, the largest foreign investment in the service sector was about 848 crore dollars. Around Tk 31,000 crore has been collected from demonetisation till mid-January, which is 48% of the target (65,000 crore). On the other hand, personal income tax and GST. The revenue collected from is encouraging.
The economy is expected to grow at 6.5% or more. So this time the situation was favorable for the finance minister to take some important and policy decisions. But keeping in mind the upcoming polls, Janmohini could not go beyond the policy.
Like other budgets, in this year’s budget too, the finance minister has given special importance to seven areas (Sapta Rishi) such as integrated development, infrastructure development, greening, economic sector, self-reliant clean plant program.
Finance Minister claimed credit for providing free ration during Corona and its aftermath. With that, he acknowledged the role of agriculture in India and laid special emphasis on agriculture in this budget. 65% of the country’s population lives in villages and 47% are farmers. Keeping that in mind, he has given special importance to agriculture and fish farmers. 2,516 crore for computerization of 63,000 Primary Agricultural Credit Cooperative Centers and Rs 6,000 crore from Pradhan Mantri Matsya Samada Yojana for fisheries. Talked about creating a National Digital Library for children and teenagers.
PBTG said to build housing in the next three years for socio-economic development of the people. 15,000 crores has been collected in this case. He also announced the establishment of 740 Eklavya model schools for 3.5 lakh tribal students within the next three years. The Prime Minister increased the allocation to the Awas Yojana by about 66% to Rs 79,000 crore. However, the allocation of 100 days of work has decreased.
Pradhan Mantri Kushal Vikas Yojana 4.0 has been launched with the aim of increasing the work skills of the country’s youth. Besides, Mahila Samman Savings Certificate will pay interest at the rate of 7.5% per annum on a maximum deposit of Tk 2 lakh. However, the money deposited in this scheme cannot be withdrawn before two years. The maximum investment amount for senior citizens has been doubled from Tk 15 lakh to Tk 30 lakh.
However, the most interesting aspect of this budget is the change in personal income tax rate. For those who pay tax under the new system, exemption up to Rs 7 lakh has been given through the amendment of Section 87A of the Income Tax Act. However, there is no change in this regard in the old scheme, i.e. the exemption is as before up to 5 lakhs. The tax rate and steps are the same in the old scheme. But the new scheme has also changed in this regard. The maximum income tax rate is kept at nil up to 3 lakhs, 5% from 3 lakhs to 6 lakhs, 10% from 6 to 9 lakhs, 15% from 9 to 12 lakhs, 20% from 12 to 15 lakhs and 15 lakhs. If higher, this rate is 30%. The maximum surcharge has also been reduced from 37% to 25%.
The new income tax scheme was introduced in 2020 and the old tax structure remained unchanged since 2014. 50% of the country’s income tax payers are salaried. Income tax rates have been changed to meet their long-standing demands. This change has undoubtedly brought some hope to the middle class taxpayers of the country. But in this case, as much as there was a roar, what happened to the rain? Because till now those with income above 5 lakhs generally preferred to stay in the old scheme as certain investments (eg HBL, LIC, PF etc) were exempted. This time, in the new scheme, after 6 lakhs, different tax rates may have been tried to bring some harmony with the old one.
The estimated expenditure allocation in this year’s budget is Rs 45,03,097 crore, of which capital expenditure is Rs 10,00,961 crore. In order to sustain the economic growth, the capital sector has been allocated about 37.4% more than the revenue sector.
The Hon’ble Finance Minister has killed many birds with one stone by providing various benefits for agriculture, fisheries, tribals, women and above all middle class tax payers through this budget. With this now let’s see how much Narendra Damodar Das Modi could harvest in the 2024 polls from the land prepared by the Finance Minister.