As usual, the government calls it a ‘dream Budget’ and Opposition a ‘nightmare”.
This leaves the common man always confused. Electronic media and stock markets only compound the confusion. The Budget this year was without its usual sheen because GST is out and old excise and service tax are there only for name sake.
Why should the Budget be kept secret when GST tax restructuring is done through publicised agenda and when the most important fiscal change of imposing long-term capital gains is leaked to market participants with exact details.
Earlier when P. Chidambaram was the finance minister, the executive was empowered to tweak customs duty anytime. So why deprive all TRU officers of their home comforts and home food, while making budget in this changed India?
While Prime Minister Narendra Modi spoke about the importance of globalisation more than convincingly than others in his speech at Davos, he seems to be more convinced by the preachers of protectionism back home in India. And why not, when the big ones are returning to it, why should India lag behind as it did by bidding late for liberalisation in mid-90s?
The Budget marks a big reversal to protectionism in recent years with increase in a number of items on customs side by sizeable percentage, apart from surcharge.
Finance minister Arun Jaitley has, therefore, placed a big bet on old war horse of “customs” for revenue, apart from the last resort of disinvestment of '80,000 crores. The skies therefore, may be bereft of Maharaja soon.
The big announcement in the Budget was the government’s offer to provide health insurance for 10 crore underprivileged families, providing health cover to nearly 50 crore. However, the question is do we have enough hospitals to cater to them?
The minister proposed to merge four government-owned general insurance companies. But will it reduce ever increasing third party insurance premium?
The government will pay 12 per cent contribution of EPFO for new employees now enterprises for 3 years. Women would contribute only eight per cent to EPFO instead of 12 per cent for three years. The reasoning of allowing women to take more salary home given by the finance minister in his Budget speech is not very convincing. Corporate tax has been lowered to 25 per cent for companies having a turnover of upto Rs 250 crore — making nearly 90 per cent companies avail this benefit. Pensioners would be allowed tax-free interest on theirs saving upto Rs 50,000.
Similarly no TDS on FD, post office Interest upto Rs 50,000 for senior citizen.
Health Insurance premuim deduction has been increased upto to Rs 50,000 for senior citizens and Rs 1 lakh for senior citizen with critical illness. They can also earn upto eight per cent interest under Pradhan Mantri Vandana Yoyana upto Rs 15 lakh of investment. Long-term capital gains of over Rs 1 lakh to be taxed at 10 per cent without
indexation benefits. The gains would be calculated from the value as on January 1, 2018. The message in this measure is to make a kill with the short term gains at 15 per cent.
The election year Budget is crucial for every government. In 2014, the then finance minister made skewed expenditure allocation of more than 20 per cent to indulge in populism in 2013 and 2014, but the UPA lost the elections.
Somesh Arora
Former Commissioner of Customs and Excise, Advocate (Amicus Rarus)
