A budget with ‘the JOSH’

The Union Budget 2019 presented at the beginning of this month created a lot of noise, and according to me, is more positive than dismal. As the last budget of the Modi government before the general elections, it has given the right direction to the Indian economy. Our economy today is vibrant, growth-oriented yet rewarding towards citizens (taxpayers) who are responsible for building a New India. The fiscal numbers and maths by now is well known and debated, so let me delve upon the non-monetary benefits that a budget like this has on people.

The budget has for the first time recognized three sections of society who have often felt left out or marginalized. This is in spite of their contribution to the overall economy. The measures presented by our Finance Minister clearly show that this government will recognize and reward certain sections of the society directly.

2% Loan subvention for MSME loans upto INR 1 crore

The MSME sector has been this government’s focus, and the announcement will go a long way in boosting their business competitiveness. Large businesses have enjoyed bank credit since long; however, MSMEs have always suffered due to meager capital and high-interest costs. With a 2% subvention, it will free up working capital needs and also help them borrow more. With an allocation of Rs. 975 crore, all MSMEs having GST are eligible for this scheme. This measure complements the government’s push to purchase from MSMEs through the e-portal drive and mandatory purchase rules set for public sector units (PSU).

Today, the MSME sector needs capital and credit that is fast, simple and does not burden the business. Statistics show that most small businesses get entangled in higher borrowings and the circle of increased interest payouts. With GST and measures as this, the larger goal of formalization of the informal economy will be realized faster. Additionally, this measure is another step in recognizing the MSME sector whose contribution, be it, as a percentage of GDP, employment creation or overall economic activity is often lost due to its unorganized nature.

Direct cash transfer under PM KISAN SAMMAN NIDHI

For the first time, the small and marginalized farmer will get Rs. 6,000/- in his bank account as a direct transfer. It removes the worry of leakage with the recipient directly getting this amount without any questions asked and second, it neutralizes the middlemen be it junior-level government officers or local elected village leaders, thereby, eliminating the chances of corruption.

While critics may question the Rs. 75,000 crore that has been allocated to reach 12 crore farmers as a poll measure, it makes each recipient a possible consumer who will purchase and spend this money. It will have a boosting effect on rural and agri-spending, ultimately benefitting the economy. For every farmer with less than 2 acres of land ownership, the program starts retrospectively from December 2018. A small and marginal farmer often toils the land of large landowners or works on contract farming, thus, recognizing his or her contribution to India’s growth is a measure of showing respect and recognition.

No tax up to Rs. 5 lacs for individual income

In the last decade or so, the common man (middle-class people) had often felt left out by successive governments when it came to tax relief. This budget has done justice to this large population which works tirelessly in small businesses or as junior employees in large enterprises. The effective tax benefit may go up to Rs. 6.5 lakh of income with due savings. It is a calculated move as this savings will get reflected in either increased spending by such beneficiaries or be saved through various financial schemes. It will act as a stimulus for large sections of people to spend and save more.

During the budget speech, the finance minister mentioned that a salaried person up to Rs. 7.00 lakh of annual income from FY 19 will come under the zero-tax bracket, in case, they make investments in specified schemes. This section of the middle class needed relief. As mentioned by the government, this is a start and going ahead this limit will be increased. In today’s time of spiraling costs and better aspirations, a large section of society will be able to live in a more fulfilled manner due to this measure.

The above three measures salute the hard work of sections of society who often go unnoticed and unrewarded. The government’s budget sops are also not doled or inflation oriented, instead, all the above measures will give a significant boost to real spending or savings. Since the announcement, experts like economists and analysts have reviewed the budget repeatedly from a fiscal and economic perspective. However, I feel, this budget has for the first time gone much ahead than providing financial relief to create a sense of recognition for the real yet unnamed citizens who contribute to our economy.

Hence, I call this a budget with the right “JOSH”! Rewarding the aspirations of millions of Indians who silently work towards creating a powerful nation, through economic and societal upliftment.

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