Dinesh Kamath's Editorial 'Not a bad budget' that was published in Newsband

Not a bad budget

Budget 2017 came up within three months of the Central government’s purge of high-value currency notes. Union Finance Minister Arun Jaitley provided a glimpse of a larger plan to prevent regeneration of black money, apart from funding the sops announced a month ago by Prime Minister Narendra Modi for vulnerable sections of society.

The tax rate for small and medium enterprises has been slashed to 25%. For corporates, though, there is no road map on lower tax rates. In addition, halving the personal income tax rate from 10% to 5% for those in the lowest tax slab of ₹2.5 lakh to ₹5 lakh.

Mr. Jaitley hinted saying the demonetisation has helped transfer resources from tax-evaders to the government. He has granted infrastructure status to affordable housing, together with a few changes in the tax treatment to incentivise builders.

The railway budget was subsumed by the overall exercise for the first time. The Railways have a long list of tasks, starting with acquisition of advanced signalling for train control and, as the Budget notes, elimination of level crossings for smooth operations. Replacement of carriages of old design with the better-engineered Linke-Hofmann Busch coaches would cost at least ₹10,000 crore. On the commercial side, passenger tariffs are to be calculated taking into account costs, social obligations and competition from other modes of transport. The railways are expected to provide safe, comfortable and affordable travel for all.

With just one more full-year Budget likely before the 2019 Lok Sabha elections, the Modi government must now focus on implementation of all the promises. Adequate attention should have been paid to Education as a whole and Primary health care.

Overall the budget of 2017 is better than previous years and it has cared for all sections of societies. But, Mr. Jaitley has not uttered a thing about the employment of Youth section, especially those who belong to rural and remote areas.

It appears to be a well-crafted Budget which hopefully would have positive impact on all sections of society. But while the budget presented may sound positive on many grounds, the taxation on middle clas and lower sections is still a cause of worry. By not substantially increasing corporate tax, the budget may be a pro- rich one.

FM's vision is undoubtedly for clean growth. FM has touched almost every aspect of an Indian's life. This he has done in the past too. So, every Budget should, in fact, begin by analysing what was achieved from amongst the numerous promises made in the previous Budget. This Budget too makes a good reading, with lots of philosophies and verbal gymnastics. But, the life of an Indian will remain what it is. At least, the FM could have acknowledged the sacrifices of the Nation in the wake of demonetisation. One expected the FM to thank the Bank Staff for the ordeal they underwent day & night to keep the sanity of the Nation intact.

That India needs to grow from bottom upward, so that the 950 million poorer sections (which include Farmers, Village artisans, landless labor, tribals etc) in over 650,000 villages/ slums/settlements etc are able to enjoy a minimum decent sustainable living standard. This should be one of the most important Development themes in any budget. As usual, this budget too has nothing to offer on that. Currently, these 950 million people account for just less than 15% of the GDP, enjoying about one-third of that as real incomes - leading to a per capita annual real income of less than Rs.9,500. This budget too simply talks and looks at the 25% of the "others", and thereby forcing the majority to continue to live in dilapidated situations.