28 November, 2020

Strong Mandate, Weak Budget

There isn’t clarity on the direct taxes code, and no contingency plan for the 42 per cent deficient monsoon we face.

Strong Mandate, Weak Budget
outlookindia.com
-0001-11-30T00:00:00+05:53

Arun Jaitley’s first budget sends mixed signals to financial markets, and one strong message: this is not a dream budget. The dream budget, if you heard the political campaign, was one in which taxes would be lower. They aren’t, by much. There’s a token increase in the tax slabs and exemption limits that was long overdue after years of heavy inflation.

The dream budget would not tax us retrospectively—instead, Jaitley has decided there will be a committee that decides if a retrospective tax should apply or not. The budget should have reduced our fiscal deficit—instead, it finds solace in targeting the exact number that the previous government had left behind. The dream budget should have reduced subsidies. They remain, and become bigger.

The budget speech itself saw the markets oscillate from the deep disappointment that there was nothing major to expect to an opt­imism that there would be, and finally a resi­g­nation that this government was ano­­ther one that would spend Rs 200 crore on a statue while allocating...

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