The ‘Big Bang’ 2015-2016 Union Budget

The Indian audience has always had a high expectation of the Union Budget. India comprises several communities like businessmen, industrialists, entrepreneurs, senior citizens and the tax payers. And each of these groups wait with baited breath when the incumbent government unveils the Union Budget for the nex fiscal year in the Indian Parliament. This year too with the Modi government at the Centre, it was no different. In fact, the Budget was characterized by high degree of hopefulness and an expected turnaround in the growth trajectory.

When the Union Budget for the 2015-2016 was presented in the Indian Parliament by the honorable Finance Minister – Mr. Arun Jaitely, what ensued was a bag of mixed reactions and responses to the Budget. Amidst the list of expectations from a government that came into power by a majority mandate of the Indian electorate, only few of them were fulfilled.

Even though the credibility of the Indian economy has been stealthily improving and the inflationary pressure has been tipping backwards, there were lot of expectations that the new government would roll out a slew of measures to boost the Indian economy and benefit the tax payers and citizens of India.

One of the most important segment of tax – tax slabs – were expected to revise upwards. But the government made no changes to the tax slabs. The tax slabs were revised by the previous government in the previous budget. Experts have opined that by revising the tax slabs, tax liability of the tax payers would have been reduced, and the tax payers would have had additional funds to invest, which could have been channelized as consumption or investments. This has been hailed as a bad move. And the tax payers are definitely disappointed by this move.

Considering the importance of infrastructure growth, it was assumed that the government would dole out some additional benefits for the new homebuyers as well as for the existing borrowers of home loan. However, the government has not given any such special tax provisions to the new homebuyers or existing homebuyers on home loans.

But the ingenuity of the Budget lies in the fact that the government is seeking to scale up infrastructure and plugging in the leakages in subsidies. Moreover, instead of merely formulating measures to increase taxes, they are aiming to manage the cash inflows. To fund the prime infrastructure projects, the government is seeking to divest ailing PSUs and betting on achieving double digit growth. The additional thrust is on addressing the urgent need for infrastructure development, to ensure that millions of Indians are employed and consumer and consumption base is exponentially increased.

The devolution of higher share of Budget for smoother and improved relation between Centre and State is being hailed as a good move by the government, as this will ensure better coordination and healthy co-operation between Centre and State. Furthermore, the States will be empowered to solve their issues without interference from the Centre. Consumption expenditure will be given an impetus with the JAM Trinity (Jan Dhan, Aadhar and Mobile). Disbursement will be improved and leakages in subsidies will be reduced.

Another positive measure of fostering growth of SMEs in the country and entrepreneurship by focusing on ‘Make in India’ will definitely give a fillip to domestic manufacturing. Food manufacturers will be benefitted by the thrust that is given to increase agricultural productivity and farm incomes.

All in all, this Budget certainly provides a clear roadmap on the potential high inclusive growth. It aims to make the Indian economy more robust, business environment for investor friendly and economic growth more inclusive. It is now up to the Modi government to convert this vision into ground realities.  

Suman Singh (have 111 posts in total)

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