15

Jan

New Budget May Have Certain Surprising Features

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Today’s Edition

New Delhi, 15 January 2024

Shivaji Sarkar

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The new budget may not be a glittering box but reveal a lot on the Hindutva economy driving the country on fast track. It may not be populist but may have lot for the electorate of the new India.

Being the election year, over the decades a norm has evolved of presenting an interim budget lest the incumbent government could take an advantage in the elections. That does not prevent the Union Budget 2024 come out with certain surprises as the Constitution does not have any provision for an interim statement of accounts. It will be in that sense a normal budget and the government is within its right to include any proposal.

It may spring surprises and consolidate the Hindutva stress on swadeshi led overall growth creating bonanza for investments. All sectors of industry and finances may have platter. It may go far beyond hackneyed tax reforms,

Some sections of the media announced that to lure the voters, the income tax limit would be raised to Rs 7.5 lakh. It was, however, denied later. People, however, forget that with the last raise in the limit, the effective exemption is around Rs 7 lakh. So it does not require an announcement.

Finance ministry officials indicate that the interim budget may have a waiver of tax collected at source (TCS) on individual overseas credit and debit card expenditures up to Rs 7 lakh a year. It is in the realm of speculation and helps only the most affluent.

There are hopes that in view of the impending elections and unpopularity of the vehicle scrapping policy, government might extend the lives of the vehicles, particularly car and tractors, as these hit largely the lower strata, or upcoming middle class and the farmers the most. Apart it is being said that such vehicles have the lowest emission level of around 1 percent and no way are polluters.

Western UP farmers, strong supporters of BJP, are up in arms to protect their diesel tractors. It is hurting the country’s economy. Most in the government and even in the organisations related to the NDA want that such moves that cause unpopularity must be rectified. They believe that it gives the opposition an edge on populist issues like vehicle scrapping, supposed to be an automobile makers lobby move to boost their profits.

   While putting curbs on diesel in the country, exports of diesel by private refineries including the Russian refinery in India, Nayara, have increased manifold to Europe and the US as their profits swell. Transporters and others want restrictions removed on domestic use of diesel and diesel vehicles. Repeatedly they have also said that car scrapping is unique to poor India. Nowhere in the world, even in affluent US or Europe, vehicles are scrapped and these are allowed to ply for 40 years as scrapping hurts generation of wealth.

May be a good move, and help poll more votes. None is sure it is happening now.

There is elation in the official circles about the GDP numbers that is hope to touch 7.3 percent and a four trillion level. The questions on calculating methodology are disposed off as theoretical.

Concerns have been expressed at high petrol road cess and tormenting road toll collections. The NHAI needs about Rs 1.25 lakh crore a year but the total collections are several times more in the range of Rs 7 to 10 lakh crore a year. It is stated to hurt businesses. Transporters want it replaced by an annual contribution on each truck and allowing free movement of non-commercial vehicles. Lower rates and no toll gate are also stated to check inflation and boost domestic tourism industry. These potent issues could have positive impact in the elections.

Some of the key political concerns are the poor, women, youth, farmers, and tribals, as the BJP-NDA aims a third term in office over Prime Minister Narendra Modi’s stress on inclusive growth. The Union Budget 2023 also had stressed on these sectors. Politically it is believed it had paid dividends in the recently held elections to five states in Madhya Pradesh, Rajasthan, Chhattisgarh, Telangana and Mizoram.

There are speculations that schemes meant for these sections of the society might get emphasis. Education and skill development might get attention to address the aspirations of the youth. The youth at age 18, comprising the first-time voters, are considered an asset for the sangh parivar. Similarly, many more welfare schemes for the women are likely to be formulated.

The Congress also had eyed on the issues and particularly women in Madhya Pradesh and Rajasthan apart from LPG cylinder prices. It would be interesting to watch how Finance Minister Nirmala Sitharaman, tailors her budget speech on February 1 for this focal point. Political concern for women is also for the reason that now it is believed women direct the polling trend significantly. This was earlier the male preserve in the rural India. Now vocal women are said to challenge the male domination. Often the youth and rural farm workers are swayed by the opinions of the women.

Tribals and other backward classes have stood largely by the ruling combine. It might not be surprising to see special programmes for this section. Prime Minister Modi flagging off the Vikasit Bharat Sankalp Yatra at Khunti in Jharkhand had noted that some sections which were not beneficiary of many schemes would be its concern.  It may get a substantial share of the allocations. So could be the hills and North East.

Ekalavya Model schools may get further stress to connect with the people in remote areas.

Farmers are sensitive to many new developments. Their Kisan Samman Nidhi or farmers’ pension of Rs 6000 a year may see an increase to Rs 8000. The allocation of Rs 60000 crore  a year might go up in the range of Rs 70000 crore.

Sitharaman herself has downplayed expectations stating that it would be a “bare-bone affair”. That means the major concern is to have the appropriation bill passed to keep the wheels moving till June. Practically it may focus on fiscal discipline, check on expenses limits, no major tax reforms though populist policy shift and future path reset is possible. It could do certain course corrections to address the growing debt for an economy touching four- trillion mark. Many hopes even from bare bones!

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