Bhubaneswar: The Union Budget 2020 presented by Finance Minister Nirmala Sitharaman on Saturday has invited mixed reactions from financial experts. Chartered Accountant-turned-Edupreneur Dr Bijay Kumar Sahoo termed it as a promising but tough one, whereas Chartered Accountant Tapas Ranjan Pani termed it satisfactory in view of the present economic scenario.
Sitharaman while presenting the budget pegged India’s nominal Gross Domestic Product growth rate to be around 10 per cent in 2020-’21, with an estimated fiscal deficit of 3.8 per cent. Providing major relief for taxpayers she also introduced new income tax slabs and rates. She also announced abolition of dividend distribution tax (DDT).
Taking it into consideration, Dr Sahoo said, “On the Personal Taxation front it will get more complicated with benefit. With DDT removed, personal tax will be higher and I feel Government will have a tough time assimilating the resources. I’m worried where will Government get the resources from. Rs 40,000 crore per annum revenue foregone from new income tax rates for individuals is alarming.”
While focusing on the Direct taxes there is some relief to the middle income group in the budget. Taxpayers charter to be institutionalised to induce trust and lessen tax harassment. Companies Act to be amended to decriminalize.
Individual tax rates have been revised for not availing any deduction. Tax slab of Rs 7.5 to Rs 10 lakh get a relief of 10 per cent bringing it down to 20 per cent from 30 per cent. For income between Rs 7.5-10 lakh, the tax rate has been reduced to 15 per cent from 20 percent earlier.
As Advisor cum Working President of Odisha Adarsha Vidyalaya Sangathan (OAVS), Dr Sahoo said, “The best part of Union Budget 2020 is the focus of Education but mostly on higher education. India needs huge reforms in K 12 education.”
In the Education Sector Finance Minister proposes to provide quality education and start a degree level full-fledged online programme by top 100 institutions. Steps will be taken to source external commercial borrowing and FDI to deliver higher quality education.
Urban local bodies will provide 1 year internships to engineering students. According to experts, the FDI would encourage top foreign universities and educational institutions to set up high quality educational institutions in India.
Sitharaman announced the introduction of ‘Ind-SAT’, an exam for Asian and African countries to help make India a higher education destination. Besides, an outlay of Rs 3,000 crore for education sector and Rs 99,300 crore for skill development in 2020-21. Urban local bodies will provide internship opportunities to fresh engineers for a year. 150 higher educational institutions to start apprenticeship embedded degree by 2021.
Dr Sahoo also said that the big push on digital India is a welcome step, private sector in data centers, digital highway to gram panchayats, new technology and innovation policy, start-up push will improve the Service Sector.
Through the Digital India Programme, Government has proposed a number of policies such as Rs 8,000 crore outlays over 5 years for National Mission of Quantum Technology and Application. Data policy to roll out to enable private sector to build data centre parks throughout the country. Computer-based online common eligibility test will be held for recruitment to non-gazetted posts.
It has identified suitable technology to eliminate manual cleaning of sewer systems and septic tanks. One lakh gram panchayats will be connected to the optical fibre programme. A scheme focused on encouraging the manufacturing of mobile phones and electrical equipment. Over 6 lakh Anganwadi workers have been equipped with smartphones to upload the nutrition status of 10 crore households.
“The structural improvements in agriculture, agricultural produce, and logistics will yield good dividend to farmers as well as the economy. A little more was expected to boost the manufacturing and the tourism sector,” said Dr Saho adding overall it is a promising budget to look forward to.
As per CA Pani, the abolition of DDT is a welcome move for investors. Similar is the divestment in Life Insurance Corporation (LIC) through an Initial Public Offering (IPO). While its result will be known after some time, people can hope everything goes well, he said.
Pani hailed the enhancement of Deposit insurance coverage from Rs 1 lakh to 5 lakh per depositor; if any bank goes bankrupt the depositor can recover their money within the said amount. He also termed the allotment of PAN online on the basis of Aadhaar as a good move.
“Sitharaman can’t present a budget which pleases all, but she did whatever she could. The budget has been not prepared properly but it is satisfactory in view of the present economic scenario and market conditions. One bad thing is that GST has not yet been stabilised,” said Pani.
He further stated that the government should see all the stratas of the society including the lower and middle class before preparing the budget. Main problem is that the benefits given to beneficiaries are not being properly monitored. India has not yet fully adapted to the cashless economy. Still, whatever benefits given through the cashless system is not foolproof.