This is truly the Budget for
Digital India. Dramatic direction of the Budget could see the last year of the
current political regime declare electronic voting doing away with huge ques
and heavy deployment of security staff.
Economic Survey that marked a significant
departure from the past to move to a $5trillion economy did not find its
reflection in the Budget speech in any of the sectors, while targeting $3trn
during the current year.
One welcome feature of the Budget
is the recognition that rich can’t get away with the bounties. 2% tax on cash
transactions of over Rs.1cr B2B and the untouched slabs at the upper end of
Income bracket.
Women and Self-Help Groups have
been recognized as economic citizens for the growing economy. Their share in
the GDP contribution is set to move up with the trust imposed in them by the
FM, through the interest subvention scheme, loan up to Rs.1lakh for one person
in the SHG and Rs.5000 loan for every verified woman jan dhan account holder.
Jal Jivan Mission with a promise of
drinking water all rural households – a replica of Mission Bhagiratha of
Telangana, a World Bank acclaimed project – has been announced.
Social Stock Exchange is a novel
initiative that will be a game changer if the logistics are well built.
FM modified the Share Transaction
Tax to only to the difference between settlement and strike price in case of
exercise of options. Had she raised the STT rate to at least 1% she would have
got direct revenue without tax administration expenditure into the treasury
simultaneously reducing the Corporate Tax to 20% for corporates with turnover
of Rs.400cr. This is a lost opportunity.
This is all that the Union Budget
has for MSMEs:
Ø Pradhan
Mantri Karam Yogi Maandhan Scheme
Ø Pension
benefits to about three crore retail traders & small shopkeepers with
annual turnover less than Rs. 1.5 crore.
Ø Enrolment
to be kept simple, requiring only Aadhaar, bank account and a
self-declaration.
Ø Rs.
350crore allocated for FY 2019-20 for 2% interest subvention (on fresh or
incremental loans) to all GST-registered MSMEs, under the Interest Subvention
Scheme for MSMEs.
Ø Payment
platform for MSMEs to be created to enable filing of bills and payment thereof,
to eliminate delays in government payments.
Ø Agri
entrepreneurs and rural enterprises covering bamboo, khadi and honey clusters,
100 new clusters covering 50000 artisans and 100 business incubators covering
75000 entrepreneurs under ASPIRE would be a good start to boost rural
entrepreneurship.
Finance
Minister left many more for the Sinha Committee Report to take effect. There have
been no provisions either for Fund of Funds (Rs.15000cr) or for the Stressed
Asset Fund of Rs.5000cr mentioned in the MSME Report. It has also ignored the
call for restructuring the CGTMSE away from SIDBI. Recognized inefficient
functioning of SIDBI and the new role of mentoring, counselling, Advisory and
non-financial services to the MSMEs assigned by the Committee has also not been
even cursorily referred. SIDBI begs organizational restructuring sooner than
later in the interest of the growth of MSME sector.
NBFCs heave a
sigh of relief. But the Housing Finance Companies will hence forward be under
the regulation of RBI. Rs.70000cr promised capital infusion in PSBs even after
acknowledging the efficacy of IBC code in resolving NPAs should have been done
with some accountability by the Banks that showed up over Rs.71000cr in frauds
in 2018-19. This Budget has not touched reforms in the financial sector, the
crying need of the nation.
Start Ups have
all that they wished. This should promote innovation and entrepreneurship.
Manufacturing Start Ups must prove that themselves as such, to avail the tax benefits.
FM targeted
self sufficiency and exportability of the food grains, fruits and fish but the
resources earmarked are far too inadequate. E-Nam and E-Markets have made
limited inroads thus far and at the farm gate not much is programmed for
change. Unless produce-wise aggregators reach the farm gate not much benefit
will reach the farmer.
*The Views are
personal.
.
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