Budget gives middle class a little relief

Budget 2022-23 was a blueprint for India @100 that sought to lay the foundation for the next 25 years, leaning heavily on growth.

The Budget 2023-24 was an endorsement of that, as it listed out seven priority areas. But, as pointed out by the opposition, it showed little initiative to bring down inflation or unemployment.

On the other hand, last year’s budget had given little relief to the middle class as the income tax slabs had remained unchanged.

On the eve of Budget 2023-24, a cartoon that popped up on social media had the question “Are you excited to find out who’s getting what in the budget?” The answer was “No” because the man was from the middle class.

The income tax slabs were amended in this budget, and the middle class did get something after all, even if in the past, year after year, the middle class got little out of the Finance Bill.

This is despite the fact that it is the taxes paid by this large section and their purchasing power that sustains the economy.

For those looking for some personal advantages, senior citizens have got the investment cap for monthly income scheme and senior citizens’ saving scheme raised.

While industry and economists may go through the budget with a fine-toothed comb, checking to see what benefits it brings, for the common man the only things that matter are the tax slabs, employment and what is going to cost more or less.

Strangely, clothes are going to cost more along with, and not to be surprised at, articles made of gold, platinum and silver, as will cigarettes too. One can’t find fault with that.

What becomes cheaper are camera lenses for phones, laptops and DSLRs, which could bring down the cost of a phone and increase sales. The same applies to parts of TV panels and lithium-ion batteries. Electronics could see a better future in sales in the next fiscal year.

There was a thumbs up to this from the markets that rose as the budget was being presented, though it came down later to rise a little again before showing a downward trend.

It closed higher, but just above the previous day’s close. Market sentiments, therefore, remained almost flat at the end of the day. The reason for the early surge in the markets has been ascribed to the revised tax slabs and the development programmes.

This is the last complete budget of the current term as the government has a full year to implement it. Next year’s budget will be presented with elections just months away.

Not surprisingly, seven priority areas have been announced, which include “inclusive development, reaching the last mile, infrastructure and investment, unleashing the potential, green growth, youth power and financial sector”.

In order to meet some of these development plans, the capital investment outlay will be raised by 33 per cent to Rs 10 lakh crore, which works out to 3.3 per cent of the GDP.

It remains to be seen whether this capital investment outlay will create employment, even if the union finance minister did not specifically focus on the job situation during the speech.

Last year, the infrastructure projects that were announced had projected the creation of 60 lakh jobs in five years.

The budget was presented a day after the economic survey was tabled that predicted India’s GDP to grow in the range of 6 to 6.8 per cent in 2023-24, which is marginally lower than the estimated 7 per cent of the current fiscal and a lot lower of the 8.7 per cent in 2021-22.

The economic survey stressed that India's economic recovery from the Covid pandemic is complete and the economy is expected to grow.

From the economic survey, it does appear that India has emerged out of the downward trend that the pandemic had taken it to, but there is still a lot of ground to cover.

The plan has been unveiled in the budget, but it can show results only if there is a proper implementation of the budget proposals.

The delivery is more important now as that will determine whether what was proposed has met the aims.

In Goa, industry, especially the tourism stakeholders, had something to cheer about as tourism has been given a push. For an industry that went through some trying times during the pandemic, this is good news.