Will Union budget serves as precursor to Vikasit Bharat

What is Modi 3.0 government’s economic agenda? Will the Union Finance Minister Nirmala Sitharaman be able to incorporate all necessary measures in the direction of fast track reforms to turn India into Vikasit Bharat and achieve a $5 trillion economy by 2047? Will it be able to meet the requirements of the coalition governments which are expecting greater hand holding from the centre?

The task ahead for the FM is not so easy. Expectations are high and this time the Lok Sabha has a strong opposition which would find fault in everything the government does logical or illogical doesn’t matter as these days for all political parties it is politicking that is important when in opposition and they feel that role of opposition is to oppose anything, create ruckus and walk out not to point out the shortcomings of the government policies and suggest remedial measures.

However, there is a strong need for the FM to focus on increasing income opportunities, rationalising taxes, fiscal consolidation and measures to reduce deficit percentage to below 4.5%.

There is also need to ensure that the income opportunities are increased as this has been one of the issues against the Modi-led BJP government during elections.

There is need to lay special emphasis on agriculture particularly on issues like improving storage facilities, supply chains, developing dairy farming, fisheries production and opportunities for export so that the farmers can get better income. The FM needs to allocate increased allocation for Pradhan Mantri Kisan Sampada Yojana and Pradhan Mantri Matsya Sampada as well as for research and innovation.

Special focus on strengthening the agriculture and allied sectors including food processing units and horticulture is the need of the day. PM Modi has been referring to “Annadata” very frequently during his election speeches.

Another issue which the PM had laid emphasis during poll campaign was empowerment of women. “Lakhpati Didi” promise of PM. Even interim budget mentioned about it. This requires avenues for Skill development and employment avenues.

The genuine tax payers always expect the government to announce changes in the tax structure and help the common man who cannot escape paying income tax and other taxes. He is eagerly looking forward for new tax deductions that would help him plan better future for himself and set the direction of India’s economic journey.

The tax regime that was introduced in 2020 with fewer deductions made things complicated. Section 80C has remained unchanged for years. As a result the limit for deductions remained at Rs 1.5 lakh. Every budget appeals have been made for increase and rationalization of all eligible instruments but the government has been silent on this. There is also need to increase deductions on interest payments on housing loans which are self occupied. This section is most ignored by the Union Government. Similarly, changes in long term capital gains on equity investments also needs a new look.

The MSMEs are looking at the FM for some relaxations in taxes and streamlining of GST processes and greater ease of doing business. There are over 60 million registered enterprises, according to the Ministry of MSME.

Added to this, there are states like Andhra Pradesh and Bihar which are important allies of the NDA government at centre. Andhra Pradesh is in dire state of affairs and deep in debt trap. It has pinned all its hopes on the centre for providing necessary funds to put the state back on track. Bihar has to face Assembly elections. Hence the FM needs to meet their aspirations too.