Even as India celebrated its 75th Republic Day with the themes of ‘Viksit Bharat’ and ‘India – Mother of Democracy’, Union Finance Minister Nirmala Sitharaman’s interim budget speech on February 1 reflected India’s aspirations to become a developed economy by 2047, the year which marks 100 years of Independence.
True to her earlier statement, no spectacular announcements were made as this is an interim budget, as opposed to a full budget. Tradition requires that no major policy decisions are announced in the interim budget.
Sitharaman’s speech resonated with the government’s mission to make India a self-reliant nation, to achieve economic development that is all-inclusive and sustainable, and made references to the achievements of the government over the last decade.
With no changes in the direct tax or indirect tax rates proposed, is there something for the common folk to savour? Yes, there are. The decision to withdraw age-old direct tax demands is a welcome one, given that many demands belong to the distant past, as old as 1962. The government has decided to let go of its claims involving sums up to Rs 25,000 till FY2009-2010 and up to Rs 10,000 from FY2010-2011 to FY2014-2015. This is expected to benefit about 10 million taxpayers.
In a move that aligns with the goal of sustainable development and making India a net zero nation by 2070, under the rooftop solarisation scheme, around 10 million households will be enabled to receive 300 units of free electricity every month, giving a savings of Rs 15,000-18,000 annually from solar power and from selling surplus power to distribution companies.
Under the PM Awas Yojana-Grameen, which is close to achieving a target of 30 million houses, 20 million more houses will be targeted over the next five years. A scheme to encourage housing for the middle class is announced to help ‘deserving sections’. The target under the Lakhpati Didi Scheme to provide skill training to women through self-help groups has been increased to 30 million from 20 million.
With the government upping its capex spend by a good 11 per cent for the next year and the focus on improving transportation infrastructure under the Gati Shakti scheme, the public can experience its trickle-down effects in the form of improved infrastructure and quality of living. The cervical cancer vaccination scheme for girls aged 9-14 years will benefit the masses. Further, travellers and tourists have a reason to cheer with the proposal to upgrade 40,000 normal rail bogies to Vande Bharat standards.
Those owning electric vehicles (EVs) are familiar with the unsatisfactory EV charging infrastructure with problems arising from incompatible batteries, chargers, and other hassles despite the rising demand for EVs. There is a profound need for strengthening the charging infrastructure, and this has found a place in the government’s proposals.
The ‘tech-savvy youth’ can benefit from the proposal to set up a corpus of Rs 1 lakh-crore to provide long-term financing or refinancing with long tenors and low or nil interest rates with the aim of fostering research in ‘sunrise domains’. Those running new startups can relax as the incorporation period for seeking exemption expiring this March, is extended by a year. However, all startups are not eligible for this exemption as there are various criteria to be fulfilled.
The interim budget aims at a fiscal deficit of 5.1 per cent of the GDP for FY2024-2025 in alignment with the fiscal consolidation targets of the government. The stock markets did not have many reasons to cheer. The aam aadmi must wait till after the elections to see if their demands like higher deductions for home loan interest or higher upper limits for ‘affordable housing’, or simplification of the GST structure will be met.
Usha Ganapathy Subramanian is a Chennai-based practising company secretary.
(Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH).