With the Union Budget just days away from being read in Parliament by Finance Minister Arun Jaitley on 28 February, speculation on what it could contain is growing, given that it will mark the first full-time Budget by the Narendra Modi led BJP government.
From widening fiscal deficit to personal finance, questions on how the budget will shape up the next fiscal year have been multiplying with the countdown for the Budget gathering steam. Network18 Digital & Publishing, editor-in-chief, R Jagannathan sought to answer a few of the queries through a live chat.
The curiosity in the mind of the citizens is palpable with one of the participants, Ashok Goekar, expressing doubts whether the Union Budget would turn out to be nothing more than media hype and whether it would actually send out a concrete message to the future trajectory of India's economy.
Responding to Goekar, Jagannathan said, "I agree budgets are driven by media hype. But once in a while budgets are important. The coming one is important to find out if Modi government will announce big changes or merely incremental changes. It will impact the markets."
Quelling concerns that more spending on social sectors might affect the economy, Jagannathan while answering to Brajesh Kumar said, "More spending on social sectors is not the issue. Wastage and leakage of money already allocated is the issue. The direct benefits transfer scheme is intended to plug the leakages."
There is little doubt that lack of sufficient spending in infrastructure has brought growth almost to a standstill. This is one area that people are watching, especially given the fact that the government is putting its weight behind the 'Make in India' campaign. "A big investment in infrastructure is widely expected in this budget. ICT is already doing well, but 'Make in India' will be led by investments in defence, textiles, pharma, etc.," the Firstpost editor-in-chief said in response to Goekar.
Sectoral worries particularly in real estate were also seen with people unsure how the scene would evolve post-Budget. Answering Rohan Shah on the possible impact on real estate, the Firspost editor-in-chief said, "Real estate is actually something the Centre can do little about, since land is largely in the state's domain. Here, corruption and builders' cartels are keeping house prices too high and unaffordable."
Suhit Sanjiv Bhoir wondered how the Budget would help those aspiring for new homes in their name in the coming fiscal. "I don't expect any benefit for home buyers in the middle class this time. Announcement will be on the mass housing scheme, since Modi has promised houses for all by 2022," Jagannathan said.
The talk about the possibility of a hike in medical reimbursement from the 1997 benchmark of Rs 15,000 is fast gaining attention. There is a hope that a continuously rising medical expenditure should coax the government to raise the limit. Brajesh Kumar had a different take on the matter. He said that the medical component for tax payers should be made open-ended as people claim Rs 15,000 when they don't even spend it in reality. Kumar in fact went ahead to call it a "kind of government sponsored corruption".
"People are supposed to have mediclaim premia receipts. But this proof is not really checked diligently. The amount is small, so the government does not bother," the editor-in-chief said.
But there was also a view from Kumar that the government should seriously consider spending more in healthcare.
"Healthcare is one area where expenditure must increase. Our spending is too low. However, many expenses not grouped under healthcare — like toilets and Swachh Bharat Abhiyan and clean drinking water — are essentially health-related. Basic hygiene, sanitation and clean water are vital for improving the nation's health," Jagannathan said.
One of the participants Swaroop Nittur Prabhakar even wanted to know if the Finance Commission report, which was tabled today in Parliament, could impress the editor-in-chief.
"As for Finance Commission report, it is a good one, shifting more resources to states. Fiscal federalism is becoming a reality," Jagannathan said.
Significantly the live chat was not bound by numbers alone. It became even more lively when elements of politics were also came in the form of queries. Vishv wondered if Jammu and Kashmir would get a fair share of the money because the People's Democratic Party climbed down on many of their key demands to form a government there in alliance with the BJP.
"I doubt J&K will get anything special in the budget. Their problem is J&K does not levy service tax, and hence gets less money because it is not taxing citizens like rest of the country," the Firstpost editor-in-chief said.
Even Anna Hazare's latest agitation against the Land Acquisition Bill was not left out. Satya Sidhartha Parija asked if the Union Budget would have any impression of the Delhi Assembly election results and the Anna protest.
"The Delhi results will have no impact, for the NDA government realises that time is short, and it can't wait for elections to decide reforms. If anything, Delhi may have accelerated thinking on speedy reforms," Jagannathan told Parija.
He also made it clear another participant Sundaravaradan Srinivasan that the finance minister "will give the usual relaxations in tax exemption limit for middle class, and 80C benefits".
"Corporates may get incentives for investing in infrastructure. In last budget, they got incentives for higher investment," Jagannathan said.
Unless the real document is out, the talk can only generate positivity from the Budget that fits into everyone's bill. The Firstpost editor-in-chief rightly summed up the spirit of the optimism just ahead of the Budget before signing off.
"Folks, to sum up, this is what I expect in the budget. A higher tax exemption limit, and higher limit for 80C savings and mediclaim bills. For companies, there will be incentives for investment, especially infrastructure. Many social sector allocations may go up, especially housing for the poor. But the big announcement will be on infrastructure, where outlays in the public sector will rise in order to push up growth. I am sure there will be lots of questions, but save them up for tomorrow," Jagannathan said.
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Updated Date: Feb 24, 2015 19:18:05 IST