Greetings, friends! A budget such that was never seen in the last hundred years is finally here! So what is there in this budget for a middle class common folk? What things will be cheaper for you and what will be dearer? Apart from this, what is there in this budget for businesses, start-ups, farmers and workers?
Come let’s get to know all of these things in today’s article. There was definitely one thing in this budget which had never been seen before! Older budgets used to come in some physical paper form in a briefcase or a khata but this time, for the first time, budget came in a digital tablet. The word “digital” remained the keyword for the entire budget presentation. It was repeated again and again.
But if we talk about what matters, then this time the government is going through a serious issue, the economic crash caused by Covid-19 crisis. Businesses were shut down and many jobs were lost. And many experts believe that the government needs to increase its expenditure to revive the economy. A part of the money that is being spent by the government needs to be transferred in the hands of the public or the economic burden on the public should be decreased so that people are able to save more money. If people are able to save more money, people would be able to spend more money. If people would spend more money, it would lead to greater circulation of money in the economy which would result in economic revival. Due to this reason, many people were expecting that the government would reduce the income tax this time. But what did the government do, let’s get to know that. From the perspective of a salaried common individual ;
The first thing is that the government has not brought any changes to the income tax rates. I told you one perspective that many people were expecting that the government would do this. A lot of people wanted the government to do this. But there is a different perspective to it as well. Many people believe that it is a good thing that the government has not brought any changes to it. These experts say that if these rates keep changing every year then it results in a lot of inconsistency. People need to hire a CA to understand it and it results in an increase in bureaucracy. If the income tax rates are kept stable and consistent then people would be able to learn it by themselves and it’ll be less of a headache.
Secondly, for senior citizens who are 75+ need not file any income tax returns. This does not mean that they will not pay any income tax! No, no! This means they will not have to file their income tax returns themselves. Their banks who transfer the pension to them will deduct the tax before making the pension payout. So, you can basically say that the hassle of filing income tax returns will potentially reduce for some people, especially for people who do not know how to file income tax returns by themselves.
Third, the government has introduced a new cess, Agriculture Infrastructure and Development Cess. Due to this, a lot of things would become dearer wherever this cess would be applied. There were lots of discussions on social media about petrol and diesel such that petrol and diesel would become expensive because the government will apply this cess for Rs. 2.5 per litre on petrol. But the government says this will not make petrol and diesel dearer. Because simultaneously, the government will reduce some other duties so the overall price will not be affected. But there are some other things on which this cess will be applied such as apples (35% cess), peas (30% cess), lentils (20% cess), chickpeas (50%). Specific fertilisers such as urea will be charged with 5% extra cess. Crude soybean and sunflower will be charged with 20% extra cess. Cotton (5% extra cess). In fact. cotton will also be levied with additional customs duty. Cell Phones might becomes dearer because custom duty on mobile parts and components have been increased by 2.5% Air conditioners, refrigerators will become dearer. Custom duty on automobile parts has also been increased up to 15% will result in them becoming dearer as well. Some leather products too will become dearer. The duty on solar inverters has also been increased from 5% to 20% while it has been increased from 5% to 15% for solar lanterns. On one side they argue that we are increasing the duty so that imports come down. ‘We will promote self sufficiency of India by increasing the custom duty. ‘ But the argument on the other hand friends is that if you make items like solar inverters expensive deliberately and if good inverters won’t be available in India then basically you are promoting to not use renewable energy. And overall, it will not be a good thing for climate change. Similar argument can be used for imported agriculture products on which this cess has been applied such as apple, chickpeas and lentils. But apart from this, what will become cheaper? Nylon products will become cheaper along with iron, copper, platinum, gold, silver and shoes. These will become cheaper because government has decreased the custom duty on these items. If we talk about the healthcare sector then the government claims to have doubled its spending on the healthcare sector to INR 2.2 lakh crores. Out of which INR 35000 crores has been allocated for Covid19 vaccines. Apart from this, a new scheme is being launched PM Atamnirbhar Swasth Bharat Yojana INR 64,000 cores would be spent on it in the next 6 years to improve the healthcare system of the country and to build new primary health care centres. Many government representatives have claimed an increase of 137% in the healthcare budget. Replying to which opposition politicians have said that this is a misleading figure. Now, you will ask why? Firstly, out of INR 2.2 crore, INR 64000 crore that has been brought for the new scheme will not be spent in one year alone rather over the next 6 years. Secondly, Mr. Chidambaram says that the INR 35000 crore vaccination cost is a one time, so this does not mean that the government has increased the healthcare budget for every year. In fact he has even claimed that the government has also counted the allocation of the Department of Water and Sanitation in this healthcare budget. So, according to Mr Chidambaram, in reality, the INR 72,934 crore budget of healthcare (2020-20201) has increased to INR 79,602 crore this year. So there is a slight increase which is a good thing but there isn’t a big increase. The government has given assurance for the farmers that MSP will remain continued at 1.5 times the cost of production. This is an important announcement especially at a time when farmer protests are ongoing. Although, I believe there isn’t much to the promise. This promise will not yield much result. Because like I have already told you in the old farm bills and farmer protest videos that how few farmers are able to avail the benefits of MSP. So, here the priority should be to make the benefits of MSP available to as many farmers as possible. If we talk about gig workers, building and construction workers, then there is good news for all of them.
For the first time, the government has decided to launch a portal that will collect relevant information related to gig workers and the like. This is quite an unorganized sector. If you do not know about gig workers, They are basically those people who work in companies like Ola Uber, Swiggy and Zomato They work in delivery and taxi services. They are not salaried employees. Their source of income is based on the amount of work they get. If they deliver something from one place to another, they will get money. If they drive a taxi from one place to another, they will get money. Not being salaried and not being employed in the organized sector has many pitfalls. They don’t get any social security benefits, insurance and pension benefits. The government has decided to launch a portal to make these jobs more organised. It is not only for gig workers but also building workers, construction workers, migrant workers. With help from this, they will get health insurance benefits. They will also get to participate in housing schemes, credit schemes and food schemes. So, in my opinion, this is very good news for a lot of people. Simultaneously, they will also get the benefit of one nation, one ration card. Now friends, let’s come to the most controversial topic which is privatization. The government has clearly showcased its intention in this budget that they want to privatize… if anyone had a doubt that the government is not much interested in privatization. This basically means that the government companies (PSUs) will be privatized i.e they will be sold off to private companies. A PSU is called a government company when the government stakes are more than 50%. But if it has more than 50% stakes belonging to a private company then you can consider it privatized and the government loses its control. The government has called it Disinvestment and Strategic Sale in which many government companies such as BPCL, Air India, Shipping Corporation of India, Container Corporation of India, IDBI Bank, BEML… That is as many government companies you can think of, leaving aside four strategic sectors, the government has decided to privatize them. Today or Tomorrow, all these companies will be privatized. Privatization is a controversial issue. On one hand, a lot of people believe that it is a good thing to do. If the government privatized these companies then it will increase their efficiency and these companies will be better able to gain profits. They will be more successful as compared to government controlled ones. But on the other hand, many people believe that capitalization means selling the companies to big crony capitalists and giving away government assets in the hands of the private companies which is not a good thing. Personally, I believe privatization is something which has its own advantages and disadvantages. This is such a topic on which a separate article can be made. So, I may discuss this in detail in a future article. I do not want to get in this topic right now whether privatization is a good thing or a bad thing. But how successful is the government in privatizing yet to be seen because if you take the example of Air India then the government has been trying to sell it since the last three years. These are such decisions friends for which political parties often keep switching, For instance, the government has recently taken a decision to increase the FDI in the insurance sector from 49% to 74%. But in 2013, BJP has strongly taken a stand that they would never let it happen. They would never let FDI in the insurance sector go beyond 49%. Today, they are doing it themselves. Next, if we talk about businesses and start-ups, there is much good news for them too. For instance, the government has decided that the companies which have a turnover of INR 5 crore or less need not get their tax audited from a Chartered Accountant. This was the existing rule. Now, the government has increased the limit from INR 5 crore to INR 10 crores. So, it is quite beneficial for companies that come under this range. It is less of a headache and they would have to go through less of a hassle. It is being said that the definition of small businesses will also be changed. Till now, the companies which have an annual turnover of up to INR 2 crores used to be called small businesses and small companies. But this limit is now being increased to INR 20 crores. Small businesses have many advantages in auditing and they have to do less bureaucracy and paperwork. So, once again this is advantageous for businesses. The hospitals and schools that are run by trusts did not have to file taxes up to INR 1 crore till now. But now the government has increased this limit to INR 5 crores. In order to give start-ups more incentive, the government has also increased the eligibility for claiming tax holiday by one year i.e. to 31st March, 2022. For the ones who don’t know, tax holiday is the time period for a start-up during which it does not have to pay taxes. Usually it is the initial time period when the business is growing. The government brings in schemes to promote start-ups such that they do not have to pay taxes for a certain time period or it is called tax holiday. Similarly, more such small decisions have been taken to help starts-ups and businesses. And you can say that it is one reason why the stock market and sensex broke records?Post budget release, it only climbed up. Apart from this, I would like to tell you about some things that I found unique and innovative in this budget. First, the government has launched the National Hydrogen Energy Mission to promote hydrogen power. In the coming times, this could be a very important source of renewable energy. Simultaneously, the government has also allocated INR 1500 crores to the renewable energy sector. Secondly, the government has decided to establish a multi-purpose seaweed park in Tamil Nadu. This will promote sea weed farming and cultivation. It is a superb thing in my opinion friends. Because seaweed is a resource that can help fight climate change. It is not used as a food item that humans eat, it is used as an outside cover in Sushi but it can also be used as livestock feed…to feed the animals. It can also be used as a fertilizer. It can also be used in beauty products. In fact it also helps in reversing ocean acidification. I already told you the benefits related to climate change. It helps in absorbing carbon dioxide. if there are several seaweed farms that are grown Seaweed can also be used to make recyclable plastic. Consider it as wonder material. There are so many benefits of seaweed By not doing seaweed farming already, in my opinion we are losing a lot of potential. It is important to promote such things that have so many advantages. Thirdly, for a deep sea mission i.e a mission that will research by going in the depths of the ocean, the government has allocated INR 4000 crores for it for the next 5 years. It is quite an interesting and unique thing but unfortunately, it is something that the government announced in 2018 and action has been taken on it now. Actually there are many schemes that the government has announced in the last many budgets. A lot of noise is made, you get to see headlines such that the government is promising this or so much money is being allocated here. But after some years when you assess the implementation of the scheme then nothing can be found. One of its biggest examples is 2015’s 100 smart cities scheme. This is the reason why in this video, I am not focusing more on promises and schemes Bout how the government has said that we will spend this much money and build these things. I am only talking about those things that I find unique and nice And the things that concern you, a common person, businesses, farmers and workers. The fourth innovative thing that I found in the new budget is the vehicle scrapping policies that have been announced in the new budget. A policy to phase out old vehicles. We all know that in the entire country there are so many vehicles that have no pollution check as to how much pollution they spread. They do not have any safety standards. They have turned in junks. On top of it all, people have no way out as to what to do with old vehicles. Although the government hasn’t revealed the details of this policy but it is being said that every vehicle will have to go through a fitness test at an automated fitness centre every 20 years for personal vehicles and every 15 years for commercial vehicles. People will be allegedly given an option to recycle old vehicles such that people go and deposit their old vehicles and take away the incentive in return. Such that you are getting this benefit of buying a new car which will have better safety standards. Hopefully, the new vehicle people will buy after this scheme is implemented will be electric cars. Due to this very reason friends, the share of auto companies have also gone up after this budget. If you remember, the government gave you an option in the last budget to either follow the new tax regime or the old one. Which is more beneficial to you? Which one will help you save more money? To know this too, Kuvera has made a great tax calculator. It is completely free to use. I will put the link to it in the description below.You can use and check it. In conclusion, I would say that there aren’t big steps in this new budget apart from privatization. Small decisions have been taken here. It doesn’t affect anything much. But no big decisions, also means no big bad news And if there is no bad news then you can consider it good news only. You know what they say that usually the best politicians are those politicians when you feel that they haven’t done any work in their term. Five years go by and you do not realize what these politicians did? What difference did they make in your life? They turn out to be the best politicians. This is something often said about Obama. Because when you see the effects of the decisions made by a politician in your daily life then it is more often than not, negative. Problems are created in your life. So, if you think from that aspect and that this budget hasn’t made a big influence then take it as good news.
Budget 2021 : Download Here
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Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Further, the views in this article are the personal views of the author.