Budget & its Affects
The Finance Minister had a tough time in tinkering with different variables in his budget presentation. Perforce he had to take a bitter pill for curing the ills of our economic system otherwise it would have created imbalance in the economic health of our country. The fiscal deficit is one area which adversely affects the overall economy has been marked for tackling.
Reducing subsidies by 2 % of the GDP is a welcome step. These subsidies, more often than not, are siphoned off before reaching to the grass root targeted / intended masses thus adding burden on the exchequer and giving fuel to already uncontrolled fiscal deficit (5.1 % of GDP).
Promise of cheaper fund availability to the corporate world is a welcome step. It is a must because the interest rates have been revised upward by RBI for more than 13 times in recent times.
Promise of curbing black money and keep a strict check on people stashing their funds in tax havens outside the country are welcome steps if followed up vigorously.
More incentives have been given to agriculture sector and services which has shown upward movement. Farmers should be made aware of the agricultural insurance linked schemes.
Tax exemption up to Rs. 2 lacs is a welcome step but it should have been in the range of Rs. 2.5 to 3 lacs with the rampant inflation as a benchmark.
Equity Saving Scheme of Rs. 50,000/- with 3 years’ parking period is a welcome step for tax exemption.
Although 6.9 % in GDP is not so healthy yet taking into account the global cues, it is not as bad as compared with other economies. Some countries in EU are experiencing worse case scenario and will in all probability affect global economies. India cannot remain immune to these economic deceleration.