Budget Impact on Common Man

Pro-growth Budget with emphasis on capital expenditure and investments to power the country’s GDP.

Key Highlights:

  • No change in tax slabs. However, one can now file updated tax returns 2 years from the end of the A.Y. to correct the errors
  • Relief to differently-abled persons wherein the payment of annuity/lump sum will also be available for deduction during the lifetime of the parent/guardian (attaining the age of 60)
  • India set to provide 60 lakh jobs in 14 sectors via Productivity Linked Incentive Scheme
  • National Digital Health Ecosystem to be rolled out with National Tele Mental Health Programme
  • 80 lakh houses to be completed under PM AWAS Yojana
  • Taxation slab on ‘Digital Assets’

– 30% taxes on gains

– Setting off losses not allowed under any head of income

– 1% TDS on transactions beyond a certain threshold

  • TDS of 1% on the sale of non-agricultural land above Rs 50 lakh on basis of sale value or stamp duty.
  • An additional excise duty of Rs 2 on unblended fuel, petrol, and diesel could get more expensive
  • The Budget has proposed the introduction of digital currency by the RBI using blockchain during FY23.
Cut and polished diamondsHeadphones, earplugs
Camera and charger parts of cell phonesLoudspeakers, Electronic Toys
Asafoetida & cocoa beansUmbrellas

Budgetary Allocation and its Impact on Common Man

  • With a major focus on PM Gatishakti which lays a 25-year long view, will not only boost connectivity but also help the distress-ridden construction sector with will help in higher employment generation.
  • The government has cut down food subsidies from Rs 2.86 Lakh crore to Rs 2.06 lakh crore, which will curtail the food distribution programme. Rising inflation on commodities can further cause problems in poor households.
  • Fertiliser subsidy has been further reduced to 1.05 lakh crore, adding additional farm burden. As fertiliser prices are sensitive to crude oil prices this can hamper farm earnings.
  • The government has decreased its allocation to the MGNREGA programme employs blue-collar and unskilled labours. An Accountability Initiative shows that around 9.1 million who demanded work have not been given.
  • The government will provide Rs 50,000 crore to distress-ridden hospitality sectors for overcoming the liquidity crisis.

Consumer Sentiment & Inflation                                            

 The consumer sentiment which is finally growing slowly can be hampered with the risk of high inflation estimated @ 6% due to geopolitical tensions, crude oil prices, and overall food prices.

Even though the tax collections have beaten the records, no relaxation in tax deduction or slabs can hamper Consumer Sentiments.

To sum up, the boost of overall growth with Capex boost, there are chances of benefits percolating down to the middle class and poor.

By Rashi Chheda

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