
The increase in income tax slab to the middle class will have a spiral effect in our economy. It will encourage savings, consumption, insurance and borrowings. The rupees saved from income tax will either go for the saving schemes of the government or banks which will strengthen our economy.
The first full-fledged budget of Modi government 3.0 has been presented in the parliament. The budget has created euphoria across all the sections of the country except the opposition. The budget has given focus to the rural India especially the women and poor. This year budget is considered as an epoch-making budget because of its special attention to the middle-class people. The unexpected quantum jump in the income tax slab as well as reduction of income tax rates has created an atmosphere of jubilation not only in the mind of the salaried people but also people of self-employment. Though the bracket of salaried person in this category is only seventy lakhs but the non-salaried person in this category are huge. Previously they were planning to avoid tax by hiding their real income but now they will feel free to declare their income as a result number of tax filing person will increase.
The increase in income tax slab to the middle class will have a spiral effect in our economy. It will encourage savings, consumption, insurance and borrowings. The rupees saved from income tax will either go for the saving schemes of the government or banks which will strengthen our economy. The insurance sector will also be benefitted much from this. As the tax liability will be less, the net salary or net income of the people will be more in this bracket, so they may plan for more borrowings for consumption or infrastructure. The consumption market like vehicles, TV, Freeze, Cell phone and other electronics and electrical goods will witness a boom for this exemption. Though in a rough estimate, it is expected the tax collection in this sector will be reduced by one lakh crore, but the spiral impact of the exemption will be five times more than loss of tax. The borrowing from the banks for consumption and infrastructure will also increase substantially. As the repayment capacity of the people will be increased, the quantum of loan intake will also be increased. Healthy bank with quality loan portfolios will boost our economy a lot.
After the defence allocation, rural development has been placed in number two position in this budget. A multi approach development model like Rural Development and Resilience will give special focus to rural development. The saying of the father of the nation Mahatma Gandhi was India resides in it’s villages, unless the villages are developed India cannot be considered as a developed nation. When the nation has a plan to make Vikashita Bharat by the year 2047, which is the centenary year of independence, focus to rural development is a must. Accordingly, rural development has been given due share and importance in this budget.
Imagining rural development without the development of agriculture is not a possible proposition. So, thrust have been given for agriculture by extending the ceiling of interest subvention to farmers up to five lakhs which was three lakhs earlier. A new scheme named Dhana Dhanya Krushi Yojana has been launched. For this, hundred districts will be selected where the production is low and stress will be given to diversify their products and increase productivity. Storage and cold storage facilities will be extended up to Panchayat level for post-harvest storage and preservation to avoid distress sale. Irrigation facility will be extended for continuous farming instead of seasonal farming. Farmers will be provided with both short term and long-term loan for agriculture and agricultural allied activities. This is going to benefit one crore seventy lakh farmers. This year the agriculture budget has been enhanced by four percentage.
MSME which is considered as the second engine of development of economy is being given due importance. The investment and turnover ratio have been increased for MSME by 2.5 and 2 times respectively. The loan guarantee for micro and small enterprises has been increased from five crores to ten crores as a result within the next five years this sector will be able for an additional borrowing of 1.5 lakh crores. For start-ups in MSME, the loan guarantee has been enhanced from 10 crores to 20 crores. The export based MSMEs will be able to avail term loan up to 20 crores. The MSMEs registered in the MSME portals will get credit card up to five lakhs. A corpus fund of ten thousand crores have been constituted as fund of funds for stat ups. Five lakh ladies who have become first time entrepreneurs in SC/ST category will be given two crores term loan within the next five years. Leather and leather products have been earmarked as a special and focus sector and it is estimated this sector only will create employment opportunity to twenty-two lakhs employees with four lakh crores business along with more than one lakh crore export opportunity.
Health and health education have been given due importance. This year only ten thousand seats will be increased in medical education and in the next five years this will go up to additional seventy-five thousand. Each district of the country will be covered with medical college. Rural health infrastructure will be given priority. Alike medical education, the general education under the new education policy is also a thrust area in the budget.
The budget which envisages a Vikashita Bharat by the year 2047 by turning the country to a thirty trillion-dollar economy rests with the implementation part. Past experiences show that we the Indians are very good planners but very poor implementers. Now it is not only the duty of the government but also the duty of each and every citizen of India to rise to the call given by the government and contribute their might to make our country a developed nation by the year 2047.