The union budget gives Madhya Pradesh hopes of growth but leaves common man red-faced with service tax hike and no income tax exemption slaps, say economic experts.
Bhopal-based economist RS Tiwari says that the increase in the share of taxes will augment MP's financial freedom and help it to give priority to projects it wants to pursue first. “But how much MP will gain from this decision of devolving a 42% share of the divisible pool of taxes to states, remains to be seen. But, in other areas, I don't see any major significant gains. On the contrary, housing will get costlier as they have hiked the cost of cement. Also, the middle class has not been given any major relief," he says.
The devolution to the states would be of the order of Rs 5.24 lakh crore in 2015-16.
According to the preliminary estimates in union economic survey report, Madhya Pradesh features as one of biggest gainers in per capita terms under General Category States (GCS) along with Kerala, Chhattisgarh. The survey report points out that when the recommendation is implemented, MP will get an additional benefit of Rs 15,072 crore in 2015-16 over 2014-15 from the centre.
Industrialists are also giving mixed response to the budget. Gautum Kothari, president Pithampur Industrial Audyhogik Sangathan, said that the budget won't benefit the industry to the extent it was being hyped. "On the contrary, despite 5% decrease in the corporate tax, we might have to pay more in the end as incentives that were provided to us will be removed," he said. Kothari opined that the state hadn't got any new national institutions as compared to the other states which got new AIIMS and IITs.
Residents feel that when it comes to providing a tax relief, the government chooses corporate India and forgets about common man. "It is in black and white as the income tax slabs for the vast middle class remained unchanged while corporate tax has come down for the elite," said Vivek Dixit, who works as a private employee in Bhopal's New Market area. There are others who are not happy with the price hike. "Now we will have to pay more for eating out and even bottled water. Mobile bills and WiFi will also get costlier. These are not achhe din...", says Sudhir Singh from Arera Colony. He also points out that there is no mention of Madhya Pradesh in the allocations for the DMIC project, in which Gujarat and Maharashtra have been allocated funds.
However, MP is likely to gain from the coal auctions in the coming time. In his budget speech, finance minister Arun Jaitley emphasised that earlier, the states only got benefits of royalty in coal auctions. But, now by the transparent auction process, the coal bearing states will get several lakh crores of rupees, experts feel. The state has over 21063 million tonnes of coal reserves, which is 8.3 % of the country's total coal reserves.
The state stands to gain from the government's push on JAM Trinity — Jan Dhan, Aadhar and Mobile — for ensuring direct transfer of benefits to people.
The state has a large population that resides in rural areas. With significant budgetary allocations in the sectors, like education, health, rural development, housing and urban development and women and child development, the state stands to get a significant share of these funds for its social welfare projects in its over 55,000 villages.
Experts feel that the state is likely to have a significant part of the proposed 7.5 lakh National Optical Fibre Network. Jaitley had announced that under digital India, optical fibre would be used to network 2.5 lakh villages.