Considering the tough period not only India but the entire world is passing through, the biggest challenge of this year budget after second World War will be finance minister vision on job creation and enhancing income and savings. The outbreak of pandemic has almost wiped out the income and savings of the middle and lower class in India. Moreover, With low interest rate, the people surviving on savings are finding it difficult to meet both the ends. Most families have either lost jobs or if in jobs, salaries have been drastically cut. With educational institutions still remaining closed for long time, there is not only loss of studies, but teachers and other employees in private sectors are on the verge of starvation.
The current inflation rate in India is nearly 5%.It was 4.76% in 2019, 3.43% in 2018 and 3.6% in 2017.Data shows 43% Indian consumers saw decline in household income. A decline of 5.4 per cent in the per capita income is seen in this financial year.
The outbreak of coronavirus has left common man weeping and bleeding. So there is an urgent need to provide scour to the people.
Most of the people would want this year budget to mainly focus on job creation and enhancing income. And the best way to lift economically weaker sections is to raise their purchasing power and income. More is the purchasing power, more will be spending and as such this will further lift demand leading to more production and manufacturing activities. An economy is in recession if there is lack of demand and supply is abundant. This is what has happened in this financial year. After extended lockdown in
the end of March and beginning of new financial year, economic activities came to almost standstill in first two quarter. It somewhat picked up in third and fourth quarter.
The outbreak of corona has put extra burden on common man. More money was needed for Wearing masks, washing and sanitizing hands repeatedly and strengthening your immunity system by taking Vitamins. For a common man, its extra burden. Budget should take care of this and more provision for health spending is needed. Corona will stay put and we need to continue taking with preventive measures. Economically weaker sections need relief for this. Govt should provide masks and sanitizers to weaker
sections free of cost.
Any tax by any name- cess or surchrge- would, definitely, pinch very hard at this time. So all cess and surcharges need to be done away for the time being. There is also no space for a Corona cess in Monday budget. if it has to be levied,
then only on Neo-rich and rich class.
The disruption in educational system has been the second-biggest long-term adverse impact by corona.It also deepened the inequalities due to digital divide. We expect the Budget to redouble the government’s efforts to
bridge this digital divide.
The pandemic outbreak has left most people in huge debt. Though the six month moratorium provided some relief but this wasn't enough . There is a need to extend it further as most people are still to recover from unemployment and cut in salary.
Farm sector has contributed in a big way in economic recovery during current slowdown. In Modi era the farm sector has suffered firstly due to back to back droughts in 2014 and 2015 and then demonetization in 2016. However, farmers enjoyed the political heft in massive loan waivers and the first-of-its-kind direct cash transfers scheme — the PM-Kisan (Kisan Samman Nidhi) Yojna. But since the passage of three farm laws , the farmers feel hurt and cheated and are on war path. Raising the outgo under PM-Kisan can assuage the farmers.
The worst-affected by corona are migrant laborers. Last year saw lakhs of The migrant laborers were stranded away from their homes and then, in the absence of timely and adequate support from the government, literally walked thousands of miles hungry and angry. Salt were sprinkled on their wounds when several states decided to summarily disband almost all labour laws hoping that setting aside even minimum wage and the most basic safety requirements would somehow lead to a surge in corporate investments. It didn't happen.
This also explains why the new farm laws may harm farmers more than benefiting them.
In short, this year budget will have to be employment and income centric with incentives and lessening tax burden. And if interest on saving is raised, it will be big relief to elderly people surviving on savings.
(Chander Sharma)
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