oppn parties Union Budget 2020: Lost Opportunity

News Snippets

  • Government data placed in Parliament shows a sharp decline in job creation under its flagship employment generation schemes
  • The government is working to amend the Aadhar Act to make it possible for the Aadhar to be linked with the Voter's ID. Election Commission will simultaneously be empowered to link the two
  • Tapas Pal, former TMC MP, dies of cardiac arrest in Mumbai. He was questioned for his alleged involvement in the Rose Valley scam and gained notoriety for his rape remark in 2014.
  • Bypoll to panchayats in J&K, scheduled for March in eight phases, postponed due to security concerns.
  • Supreme Court says that overhead power transmission lines going through the Desert National Park in Jaisalmer in Rajasthan must go underground to save the Great Indian Bustard and the Lesser Florican
  • Pakistan not placed in FAFT blacklist but kept on the grey list with warning
  • The government is expected to announce duty cuts and other measures to combat business disruption due to coronavirus outbreak in China
  • South-East Asia loses its charm as a tourist destination after the coronavirus outbreak in China, airfares dip to new lows
  • DMK leader RS Bharathi says media is running like the red light area in Mumbai
  • A Delhi court issues fresh warrants for the hanging of the Nirbhaya convicts. Fixes the date for March 3
  • Supreme Court appoints a mediation team to ask Shaheen Bagh protestors to avoid blocking the road and shift to another venue
  • Supreme Court says peaceful protests cannot be denied in a democracy but also says that a balance must be struck as protestors cannot be allowed to block roads
  • Telcos pay part of their dues for AGR after the bashing from the Supreme Court
  • Debbie Abrahams, a Labour MP from UK, who was critical of India's action in Kashmir, not allowed to enter India. She was deported to Dubai from the Delhi airport
  • Sidharth Shukla wins Big Boss 13
Former principal secretary to PM Modi, Nripendra Mishra, appointed to head the temple committee of the Ram Janambhoomi Teertha Kshetra Trust
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Union Budget 2020: Lost Opportunity

By Sunil Garodia
First publised on 2020-02-01 21:51:57

About the Author

Sunil Garodia Editor-in-Chief of indiacommentary.com. Current Affairs analyst and political commentator. Writes for a number of publications.

Although the Union Budget presented by the Finance Minister Nirmala Sitharaman has certain good points, one feels that overall, she missed the opportunity to introduce game-changing reforms. The need of the hour was to shake the economy out of its slumber. But the finance minister has tried to make small noises which will not be enough to do so. It needed a huge shout out but perhaps she did not find her voice.

In fact, even when the finance minister was reading her speech, one got the impression that the government felt that it had already done enough for the economy by announcing several measures in the last couple of months including announcing the intention to invest in infrastructure projects to the tune of Rs 1.5 lakh crore and reduction in the corporate tax rate. The budget has no major new policy to add. It has managed to alienate both the farmers and the corporate world by not addressing the concerns of either sector. This is evident as at least one farmers' body, the All India Kisan Shangharsh Coordination Committee, has announced that it will start an agitation against the budget, calling it "pro-corporate" while no corporate honcho has said only kind words about it. Even the stock market has thumbed it down with the Sensex going down by 900 points.

The removal of the dividend distribution tax is excellent and does away with double-taxation while leaving money in the hands of companies. So is increasing the limit of FPI investment in corporate bonds from 9 to 15%. This will mean a higher inflow of funds to companies through this route and will ease the pressure on banks. But the juggling of personal income tax by providing an alternate regime where people will pay lower taxes if they forgo exemptions is confusing. Instead of simplifying matters, taxpayers will now have to calculate their taxes both ways and adopt the one that is beneficial to them. Although to be fair to the government, the finance minister also announced that all exemptions will be phased out in the long run. Hence, this double regime can be seen as a preview of how taxpayers will file returns of income in the future.

One feels that given the slump in demand, the finance minister could have done much better by targeting specific areas and boosting demand by putting money there instead of giving small concessions to taxpayers and companies and hoping that the extra money in their hands will boost investment and demand. There was a need for structural reforms in many areas but they have been left for a later date. Just like the Economic Survey presented a day earlier, the budget too fails to provide the solutions to the many ills plaguing the economy. Of course, the economy will bounce back in due course. The budget could have hastened that by providing a direction. Sadly, it does not and now only the inherent strength of the economy and the huge Indian market will have to do the trick.