Budget Reaction: Bad For Investment Sector, 'Meh' For Cryptocurrency And Silent On Defence And Environment, Anmol Soin
In an exclusive interview with BW Businessworld, Anmol Soin, Managing Editor, Initiative for Policy Research & Analysis, shares his views on the Budget introduced on February 1st. Edited excerpts:
There will be a BW Report Card – On a scale of 1 to 10, how do you rate the budget?
I would give it a solid 6.5. This is a budget that has left me with mixed emotions. There were solid theoretical measures and some that even seem beyond the realm of possible (from an implementation perspective). On the other hand, for MSMEs and infrastructure, I see this as a very positive budget. I think at the end of the day, they wanted a safe and non-controversial budget because they’ve had their fill of drastic policy reform in the short term. The country is still reeling from demonetization and GST, maybe this was a good thing.
Do you feel this is an election budget?
No. I know that talk of rural areas, farmers and others make it seem like it. But the measures put into place for those “vote bank” segments are not populist or easy to understand. So, it may just be policy for results, not a policy for votes.
Is the jobs/ employment issue adequately addressed in the Union Budget?
Not directly. Not as much as I would have hoped. There is bound to be a spill-over with the infra, consumer goods and healthcare boosts that will lead to rural and semi-urban job creation. However, I think in the budget and the pre-budget announcement, the government almost sounds content with its progress with job creation. I think that the revamped NSDC might be useful for the employment issue. But that’s beyond the budget. I don’t see anything that will help in a big way.
Is the rural distress/ agriculture crisis adequately addressed in the Budget?
Addressed, yes. Adequately addressed- Time will tell. The raising of the minimum price offered to farmers for crops, solid investment in agricultural markets. Irrigation projects, a mini-solar market for surplus rural solar energy generation and lots of talk of infrastructure for the rural agrarian economy- Fingers crossed. Farmers have had a very rough three years and they’ve protested actively in 2017. In the coming year, if they’re happier- I am happier for them.
How does the budget look in terms of sustainable development and climate change efforts?
Hollow. Nothing really worth saying. Bit of a shocker since the government sends mixed signals all the time about climate change.
How do you summarise the Union Budget, in a few hundred words?
Excellent work on holding your ground on the salaried. It’s an unpopular move and one that would have been a bit wasted, given the need to prop up the MSME after GST. Not just the income tax slabs, Standard Deduction of Rs 40,000 for salaried employees. However, benefit of transport allowance of Rs 19,200 and Medical Reimbursement of Rs 15,000 under Section 17(2) are being withdrawn. Thus net benefit to salaries class is just about Rs 5,800. Not a big fan of the new health and education cess, I still don’t know what came out of the Swacch Bharat Cess. Education cess is being increased from 3 to 4 % to be known as Education and Health cess. I love that companies have to file returns even if they report losses. The government’s new flagship National Health Protection Scheme, which could target as many as 500 million people for up to 500,000 rupees a year and if it works, it’s solidly needed. The positioning on cell phones and tech customers is interesting. Will the consumer pay more for i-phones or will we finally force Apple to make in India? Bad for the investment/financial sector, “meh” for crypto-currency and silent on defence and the environment. The RBI won’t really like this budget. High spending, little information on how the revenues will come in and readjustment of the fiscal deficit- Anticipate the GST slabs and other cesses to be revaluated. Well, here we are. One year to 2019. Fingers crossed
