On 1 Feb 2017, the finance minister Mr. Arun Jaitley will unveil the 2017 Union Budget of India. There is a lot of buzz on what the budget has in store and how it will affect individuals, businesses and the nation at large.
The IMF [International Monetary Fund] WEO [World Economic Outlook] Update of Jan 2017 forecasts for next fiscal year were trimmed by 0.4 percentage point due to the temporary negative consumption shock induced by cash shortages and payment disruptions associated with the recent currency note withdrawal and exchange initiative. Against the backdrop of the domestic economy spinning around demonetization and the upcoming GST (Goods and Services Tax) which is regarded as a game changing development for the Indian economy – a dream budget is much awaited. The key reason that this year’s budget is significant is because to bring economic growth back on track, it is essential to boost consumption. Hence, the 2017 budget presents an opportunity to increase consumption by leaving more money in the hands of the consumers.
So what is a dream budget? For a working professional, this usually means a very simple equation:
The possibility to TAKE-HOME MORE money and
The opportunity to SPEND LESS, which means
The ability to SAVE MORE
All with an objective of a better quality of life today and tomorrow
It is no different for me as a working mom with a corporate job. With the cost of living exponentially increasing (including cost of daily essentials, to fuel, to education, to finance, to entertainment), there is the constant desire to find ways to save more.
So while the experts, bankers, policy makers, businesses share their views on complex budgetary issues, I wear a different hat in this post. One of a working mom who aspires to create and maintain a quality of life in line with my personal priorities. So, what are the Top asks I would like to see in this year’s budget, or rather what my dream budget is?
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To take-home more money – The key asks:
Reduced personal income tax rates, so the take home income is higher
Higher exemption for medical treatment of self / family- The medical reimbursement provided by employers is tax free up to Rs. 15,000. With escalating medical care costs and rise in the nature and frequency of medical illnesses, the limit for self and family to be increased – to say Rs 30,000 for individual and Rs. 50,000 for family
LTA Exemption made annual – With the increase of work stress related ailments, annual holidays are becoming necessary to energize and recharge oneself. However, family holidays can be expensive, and so an LTA exemption on the travel expenses (currently 2 journeys in a block of 4 years’ time window) incurred by self and your family to any place in India on a yearly basis will be eagerly accepted.
Higher tax exemption limits on interest paid towards home loan repayment – A significant portion of the expenditure of any salaried individual who is a homebuyer is the monthly interest expenses. The current exemption of Rs. 2 lakhs is as a deduction for the interest paid towards the housing loan for a self-occupied house property. The deduction limit can be increased to the actual interest paid or a higher fixed amount (say Rs. 5 lakhs). In 2016, additional exemption of Rs. 50,000 for housing loans up to Rs. 35 lakh was announced provided cost of house is not above Rs. 50 lakh. This could be applied irrespective of the cost of house.
To Spend Less Money – The key asks:
Conveyance / Transport allowance has a limit of Rs 1,600 per month. With increasing fuel costs, and longer commutes this can be increased to R 4,000 per month or more
Lower education costs or an increase in the Income Tax deduction for School / Education fees, which is currently pegged in a common category under section 80C. A separate category and limit exclusively for education expenditure will be useful
GST – Once formalized and approved, this would ensure standard taxation and relief for us as consumers since a mandatory component in our regular spending is towards Service tax. Also, GST Exemption towards essential spending like medicines would be good.
Lower interest rates for home loan
With the drive towards cashless economy, potential financial / tax benefits for using and accepting electronic payments will also be welcome
In addition to the above, as a mother and someone who dreams of a better tomorrow for India, provisions in the budget for the below will be critical for Digital India
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Improved Infrastructure – this is fundamental to the pace of scale of growth for any country. In the context of India, investments to improve existing infrastructure in Tier 1 cities (specifically road and transportation) and building new world-class infrastructure in Tier 2 and 3 cities will be important as they will pave the way for future economic development and new business growth
Affordable quality education – investments in improving the overall literacy index – from access to primary education, teacher training, leveraging digital / mobile technologies for education delivery and grading & focused reforms on improving the quality of education at all levels will be important (high-school, college, post-graduate and research)
Cleaner and Greener India – again fundamental to human existence and sustenance is the environment and ecology we are part of. Funds and focus towards the Swachch Bharath initiative and action on the same will be critical for our children to even survive in the future
HealthCare for the masses – investments in research to lower costs of healthcare and enable access to affordable quality healthcare to the masses will also be important. Special consideration for senior citizens in terms of pro-active healthcare using technology and structured programs designed for long-term medical care in case chronic medical ailments like renal failure will be critical
Improved Social Security – public welfare, law & order are key elements in social security. This affects what and how we conduct our lives, and how we raise our children. As a working mom, this is an area where I hope to see budget allocation and action on.
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Next gen. technology for mass upliftment – technology has the power to make everyday tasks faster, efficient and cheaper. With a 1.2 bn population in India, I honestly believe that transformation in India can be enabled, catalyzed and powered by smart investments in next generation technologies. It would be great to see budgetary commits and focused efforts on areas like –
* robotics for home and infrastructure maintenance,
* using AI (Artificial Intelligence) / machine learning for areas around efficient records management ,
* technology to augment existing processes to up-skill / cross-skill of youth / legacy skills to improve employment ratio,
* customized education / learning programs based on personalized learning approaches,
* video analytics for crowd surveillance and emergency welfare, blockchain / distributed ledger technologies for digitization of electronic healthcare records, land registry papers, legal paperwork and provenance in supply chain.
That’s my wish list. What is yours? Let us see what the Finance Minister unveils tomorrow.. The countdown has begun.
(The article is authored by Nischala Murthy Kaushik. She is a marketer, writer / columnist and mom. The views and opinions expressed in this article are those of the author only)