A nation’s budget is one of the most followed annual events. India is a huge country. In the last three decades, Indians have become vastly aspirational. The present government has tried to formulate and implement policies which have something for all the sections of society. Though, it is not easy to keep everyone happy, all the time. Central and state governments have allocated huge sums to welfare schemes and such move is bound to take the fiscal deficit higher.
Whenever a government announces a stimulus package, there are two ways of looking at it. On one hand, when cash and coupons are distributed to citizens, it helps in reviving consumption and saving in the economy. On the flipside, large scale welfare schemes can be interpreted as a failure on the part of government to create self-sufficient economic system. Majority of Indians look at the budget through the prism of what became cheaper and what became dearer. Such an approach makes the task for policy makers easier. As fewer people read the budget fine print, the scope for asking essential questions gets narrowed.
Successive governments have tried to demystify the budget and make it more understandable to the common person. Very few people try to look at the complete picture, while most dissect the hits and misses from the vantage point of their political leanings. As soon as the budget document and finance bill are made public, well-rehearsed, and premeditated reactions start to appear on social media and news channels. In all this noise and clutter, it becomes even more important to read, understand and question the annual exercise that affects all of us in more ways than we can comprehend.
From Government to Facilitator
The government has no business to be in business. In the budget announcements for financial year 2022-23 (FY23), the central government has tried to become an enabler for development. Increased private sector participation will help the government to shift its focus on governance issues. Among all the sectors of economy, budget for FY23 has focused primarily on roads, railways, communication and defence.
Digital Currency and Assets
One of the most noteworthy announcement of budget for FY23 was regarding crypto assets. The union minister for Finance & Corporate Affairs, Ms. Nirmala Sitharaman made a clear distinction between digital currency and digital assets. The finance bill has proposed to levy a 30% tax on the profit made by selling digital assets. Assesses will not be able to set-off losses made while transacting in digital assets.
At the moment, government has chosen to categorize all forms of crypto assets as speculative products. Ms. Sitharaman has also announced that Reserve Bank of India (RBI) is working on a project to introduce digital Rupee based on blockchain technology.
For the past few years, assesses transacting in digital assets have been found to hide their crypto transactions or show them in different form. In the absence of a specific legislation, RBI has been empowered to monitor digital assets on ad-hoc basis. All efforts are being made to discourage the money laundering angle and keep an account of forex outflow.
Agriculture, Housing and Water
₹2.37 lakh crore have been allocated for direct payment to 1.63 crore farmers for procurement of wheat and paddy. Chemical free natural farming will be promoted throughout the country. Initial focus is on farmer’s lands in 5 km wide corridors along river Ganga. ₹60,000 crore has been allocated to cover 3.8 crore households in FY23 under Har Ghar, Nal se Jal (piped water supply in every house), while ₹48,000 crore has been allocated to provide housing for 80 lakh families under PM Awas Yojna.
Yeh Dil Mange More
When citizens expect better economic conditions, they wish for noticeable improvement in living standards. On the unemployment front, government has repeatedly copy-pasted the excuse of Covid-19 pandemic. Last two years have been difficult for everyone. Some have lost their loved ones, while others have lost livelihood. Due to cessation of normal education, future employability of millions is at stake. The citizens have every right to question the government if they feel left behind. Asking questions with objectivity is critical in a democracy. Governments come and go, while their action and inaction last for generations.