It is not a Budget that sparkles, but there is a feeling of positivity running through Budget 2016-17. Whilst the rich — those earning above Rs 1 crore, are smarting under the 15 per cent surcharge on the 30 per cent, bringing their total tax liability to a mere 45.5 per cent, Mr Jaitley actually played a pale Robin Hood in “robbing” the rich to finance agriculture and rural infrastructure.
Even those who disclose their unaccounted money under yet another limited window will get away with barely 30 per cent tax, 7.5 per cent surcharge and 7 per cent penalty. The Economic Survey had created jitters among the rich who, it said, were subsidised by the government to the extent of Rs 1.03 lakh crore on just six items. There is no sign of this being cut.
In keeping with Prime Minister Modi’s vision, Mr Jaitley did a balancing act between economic realities and providing for the alleviation of rural distress. On the face of it agriculture and farmer welfare got Rs 35,984 crore of the Rs 19.78 lakh crore (just 1.81 per cent), whilst rural development got Rs 87,765 crore (4.59 per cent). When you see this against the 7th Pay Commission which is going to cost the government Rs 1 lakh crore, it seems not so equitous after all. There is also nothing for unorganised agricultural labour. Their minimum wage varies between Rs 120 and Rs 200 a day, which pales in comparison with what Class IV government employees were awarded: a minimum wage of Rs 18,000 a month (around Rs 600 a day). Where is equity?
Having said this, the Budget is forward-looking in the creation of jobs, putting more in the pockets of small taxpayers, helping small and medium enterprises, boosting start-ups, decreasing taxes for those paying rent and helping to create two lakh dalit entrepreneurs. Ease of doing business has also got a boost. Most important is the announcement on tax reforms — tax rationalisation, transparency and removing the uncertainty and arbitrariness of the tax-man — which has been underscored by a seemingly strong dispute resolution mechanism on all fronts.
This, besides ease of doing business, will help create a friendly investment climate and increase FDI. The realisation of the Budget’s noble objectives lies in implementation. It is up to the people and their representatives to turn it into reality. It has always fallen terribly short as barely 50 per cent of the schemes get fully implemented. Former RBI governor Bimal Jalan always stressed on delivery, which has always been weak. There must be a strong monitoring mechanism if the Prime Minister’s lofty vision of transforming India is to even start getting implemented.
