Budget & expectations

Once more an annual event had happened without much fanfare. All armchair experts made their own demands on the social media as to what is their expectation from this annual tamasha. Some has made their statutory or mandatory noises for or against this exercise looking at it from which side of their piece of bread is buttered. The persons who were saying that an increase of 100 in price of lentils is exorbitant but a reduction in tax to the tune of 15000 is too little. That is the irony of this annual exercise. Some say that the budget lacks imagination. Some say that Modi does not have economists or taxation experts to support him prepare the budget. Every one seem to forget that the exercise is done by the bureaucrats who have been doing it for many years; the colour and content differ based on the priorities of the party in power in that year and also the compulsions of the party based on the happenings, The CEA (Chief Economic Adviser) to the government is a seasoned economist and the MOF has many stalwarts who had been shaping the budgets for the past many years. The persons at the top level in Secretary or Jt. Secretary are getting changed or transferred. But the lower level people who actually work on the budget in the budget team remain more or less the same and who are in the know of things about the macro economics, taxation or law. There were a few comments doing rounds in the social media about what are likely reactions from many quarters of politics, business, finance,media etc. from yesterday (31/01/2017) morning. Most of which are standard and there was absolutely no change in the reaction from such sources except a few words here and there. Otherwise the sum and substance was the same. With election in a few states around the corner, you cannot expect a budget to be devoid of attention to rural areas, more sops to the populist schemes, enhanced allocation to poverty alleviation programmes etc. The one thing that stand out like a sore thumb is the 5% tax for the first slab which could have been avoided by increasing the base slab to 4 lakhs and retaining the tax at 10% for the first slab from 4 to 10 lakhs ( or even tinkering with the slab itself). This way the salaried would have felt relieved. With the introduction of GST around the corner during the next fiscal, there had been not much of change in respect of various duties and taxes. The DeMon effect could have been rewarded a little more by giving some more sops to the common man both salaried and non salaried. Why keep the agriculture out of the income tax when slowly the country has moved away from agrarian economy to industrial economy beats me. This has paved the way for Singhs, Pawars, Patels, Gandhis, Badals and name any one to declare their entire wealth as income out of agriculture and get it totally exempt. What agriculture activity done by these politicians can be explained to common folk for them emulate these political bigwigs to reap similar benefit of income from agriculture. By keeping a significant segment of income generation and a major component of GDP out of income tax, the country and the government have opened a way to evade tax on any amount of income either legally or illegally. No one can be wiser.