At the end of the day on which the Union Budget was presented, the Bombay Stock Exchange and the National Stock Exchange closed stronger, always seen as an indication that the Budget has met with the approval of those who deal in the share markets. But the gains have been marginal and came after a day when the Sensex and the Nifty swung wildly, with the Sensex dropping and only closed in the green when buyers came in during the last hour. The gains at the time of closing were just over half a per cent for the two indices. If the markets closed on a rather positive note, outside the share bazaar, individuals and industry heads have also given the interim Budget their approval.
There is no doubt that this is an election Budget, and Union Minister Piyush Goyal who presented it in the Lok Sabha was clear in stating at a post-Budget press conference that the implementation of the proposals would be left to the next government. The nation is weeks away from a general election, and the poll date announcements are expected next month, when the Code of Conduct will come into place. All the proposals of the Budget, including the changes in the tax structure, will be taken up for debate in the Lok Sabha after a new government has been formed and has taken charge. Goyal was clear that the proposals in his Budget were made to let the middle class know ‘what we are planning’.
And the plans are many. Calling it a Budget for a new India and all Indians, and with a vision for the future that has been outlined, what the government is saying is return us to the Lok Sabha for the next ten years. It was an election speech attempting to keep various sections happy before they go out to vote. But all these remain mere proposals that the new Lok Sabha will debate and vote upon. The government has only sought a vote on account for three months to ensure that the wheels of administration move in the new financial year. It is the new government and the Lok Sabha to be elected that will decide whether the Budget proposals will turn into law or not.
As the opposition pointed out, this was not an interim Budget – as it was meant to be – but a ‘full-fledged Budget accompanied by an election speech’. The Budget has some sop for almost everybody, with doles to farmers and concessions to the tax payers being the major announcements. Being election year, the possibility of changes in the Income Tax slabs was expected. The proposed amendment was met with thumping of desks in the Lok Sabha, but as the middle class cheers the income tax exemption that has been proposed, the reality is that the slabs have not been touched, they have as Goyal says, ‘made the change that those with an annual income less than Rs 5 lakh will have to pay zero tax’. This is expected to benefit around 3.5 crore people.
In the end, what matters to most people is the knowledge that if these Budget proposals become law, they will save some of their income. They are not interested in the GDP or the Fiscal deficit. To them the sops have brought on the smiles, as can be gauged by the reactions of the industry persons that Herald spoke to in the State. The most to benefit will be the middle class and the farmers, but who’s to say that the new government that comes to power will not introduce major amendments to the interim Budget, changing it to suit the new policies?
