This is a fantastic roadmap that unifies and works towards the aspirations of every individual and segment of India’s demography
This last budget of the current government is a dream budget. The NDA came to power five years back with the promise of a clean government, good governance, job creation, and the provision of the basic necessities of life to all Indian citizens. Each of these promises has been substantially met.
Today, for the first time, all Indians can have a realistic hope of having a roof over their head, electricity and gas stoves in their homes, food on the table, water in the tap, access to toilets and roads, a bank account, a mobile connection, education for their children, and, overall, a life of dignity.
Many of the programmes undertaken by the government over the past five years will lead to these hopes being fulfilled fully within the next two years.
Having focussed on reigning in double-digit inflation numbers to a low of 2.19% in December 2018, the government has not lost track of GDP growth.
This has been achieved without overspending, which could have led to an untenable deficit. From being the 11th largest economy in the world in 2013-14, we are today the 6th largest in the world.
Despite many negative narratives run by vested interests, the government has performed phenomenally. GST has brought in efficiency and collections are picking up every month. Demonetisation has broken the back of the black economy and, coupled with the digitisation of the collections systems, indirect tax filers have grown by an unprecedented 80% and collections have gone up by almost 90%. India has also undergone a remarkable transformation in infrastructure development with substantial improvements in coverage and quality of roads, railways, ports, and airports.
The fiscal situation is very much under control as the deficit stands at 3.4% for 2018-19. It is to be noted, however, that, excluding the planned disbursal for the PM Kisan Yojana (Rs20,000 crore for 2018-19 and Rs75,000 crore for 2019-20), the fiscal deficit would meet the targetted 3.3% for this year and 3.1% for the following year.The quality of spending by the NDA has certainly gone up over the years, and the fears of the government having to dip into RBI’s books, which were spread due to vested interests, has been proven to be unfounded. The debt management has been good with borrowings for the year being within a healthy range.
This budget has been well structured to meet the aspirations of most sections of society. 12 crore small and marginal farmer families have been provided a direct annual income support of Rs6,000 and 42 crore unorganised sector workers will benefit from a large new pension scheme providing a monthly pension of Rs3,000. The Ayushman Bharat scheme launched last year will further provide medical treatment to 50 crore people. The defence sector has been given a good leg up. The middle-class has been provided a tax rebate on income up to Rs5 lakh and the salaried class have got an increased standard deduction of Rs50,000. These measures have been very much in line with what were the expectations of the Indian people.
But while everybody has something to cheer for, start-up entrepreneurs are yet to get relief from the dreaded “angel tax” (section 56(2)(viib)), a tax on capital receipts from Indian investors if it is above the fair market value of the shares. The DIPP has called several start-ups and investors for a roundtable on February 4 in Delhi and the CBDT actioned the recent DIPP circular and made its partial relief retrospective. The finance minister should have addressed this issue. This was a golden chance for the government to redress the largest thorn in the side of ‘Start-Up India’. Hopefully, relief is only deferred and will not be denied.
Crores of new middle-class people have come into the SIP program for the first time ever and are yet to see any great appreciation in their holdings. It was a premature move to introduce the capital gains tax and hence was widely expected to be removed, but the lack of its abolishment has created some disappointment.
The finance minister brought to the fore the advancements in the economy over the NDA term, and how it has laid the path for India to grow into a $5 trillion economy in the next 5 years. The vision statement presents a well-rounded, inclusive, and progressive approach towards a “modern, technology-driven, high growth, equitable, and transparent India”.
This is, quite objectively, a fantastic roadmap that unifies and works towards the aspirations of every individual and segment of India’s demography. Every political party should form a consensus with and work towards this common goal of the holistic growth of all segments of our nation.
Despite this being an interim budget for the government, it has all the foresight of a full-fledged budget. Some people have criticised it as an election budget, which it undoubtedly is, as the party is gearing up for elections in May. Overall, this has been a great budget for the aam aadmi—the farmers, the middle class and the vulnerable sections. The finance minister has done an impeccable job in articulating our progress towards laying a strong foundation and must be congratulated for setting the stage for the next phase of growth for India.
-The author is Chairman, Aarin Capital Partners. With contributions from Yash Baid, Head of Research, 3one4 Capital