22 June, 2021

Happy Tithe Cometh

Pushing incomes to higher brackets, the budget pleases a wide swathe

Happy Tithe Cometh
Budget 2008 has a good mix of announcements, and strikes a desirable balance between enhancing consumption and ensuring inclusive growth. Moreover, P. Chidambaram's last budget before the general elections has tried to strike a balance between urban and rural populations, in the process covering varied strata of society.

The waiver of farm loans worth Rs 60,000 crore will not only offer a new lease of life to farmers, but also spur rural consumption. That, along with enhanced allocation to social schemes like education—through opening modern schools, universities and IITs—and tax holidays for hospitals, will bring inclusive growth. On the other hand, the increase in tax exemption limits and taxation slabs will leave amounts ranging from about Rs 44,000 with a taxpayer at the higher end to Rs 4,000 with someone at the lower end. This, along with the announced non-taxation of reverse mortgage income, will spur urban consumption.

The announcements on direct personal income taxation are positive from the perspective of the mutual fund...

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