Union Budget 2012-13: Crucial or Non-crucial
Union Budget, often succeeds Economic Survey every year, is the forward looking economic statement which reflects the macro & micro economic aspects of the economy and the strategies and course of actions taken by the Govt. in the form of allocations, schemes & outlays to bolster growth & development process. Economic Survey can be seen as the balance sheet of the previous year's economic and social transactions within the economy, showing various assets and liabilities in various sectors of the economy. Every year, before the budget presentation, there is so much talks about what the govt. has in the offing for the common man which sometimes gets culminated with rejoice and sometimes with despair. This year's budget has invoked mixed reactions from various communities which raises a debate whether the introduced reforms are crucial or just rhetoric. Let's start with the tax reforms which are considered to be the most significant part of the budget as it affects the 'middle-income'economy directly. Exemption limit for the salaried persons has been raised from Rs. 1,80,000 to Rs. 2,00,000 which surely can't be considered a substantial increase because this year people were expecting higher exemption on the back of high inflation & rising food prices. But by looking at the higher fiscal deficit figures of the order of 5.9% of the GDP, the move looks reasonable as the govt. is trying to boost the average tax collection to compensate the deficit problem. In the Financial Sector, QFIs (Qualified Financial Investors) are allowed to invest in the corporate and govt. bond market marks a welcome move that might see large FII inflows, which got subdued after the recession in the wake of slow recovery in US markets and Europe sovereign debt crisis, which would strengthen the investors' sentiments in the market but due to the fluctuating nature of portfolio investments, the approach has be cautious. Early implementation of DTC and GSTNetwork would be the landmark events to watch out for in this fiscal.
In the social sector, widening the reach of "Aadhaar"in 200 identified districts and linking social welfare schemes with the biometric platform (e.g. NREGS & PDS) could well be the unprecedented move towards the social inclusion process. The allocation of 5.75 lakh crore to the agriculture & allied sector, aimed at achieving the much touted 4% growth in the sector for which the economy has been yearning since the announcement of last 5-year plan, could bring in efficient markets and handsome returns to the farmers. Allowing 100% and 51% FDI in single-brand and multi-brand retail respectively hasn't achieved a consensus yet but the parliament would surely look to come up with a cognitive outcome keeping the impacts of the move on the unorganized sector and the farming community. Increase in excise duty from 10% to 12% has caused worries in the industry as the declaration would likely to hit the manufacturing sector dearly. Increase duty on artificial gold ornaments has attracted wrath from jewelers across the country. Every change has its costs as well as benefits, it's up to us to minimize costs and maximize benefits. This year's budget has some goodies to offer which might well work out to be the hit of the year. Universalization of RTE & NFSB will pose a daunting task in front of the Govt. but the success lies in the integrated community-driven effort and by making sure that being a responsible citizen of the country, each one of us should do one's bit to reduce corruption in our daily life and brings in transparency so that the agenda which the Govt. has set forth to achieve, could do so in a holistic manner.
-Himanshu Dhumash
