A good first innings score does not always win the cricket match but does give the Captain enough leverage to be able to ‘attack’ and go for the win.
This is precisely what the finance minister could do because of the existing buoyant economy and robust revenue collection results.
As expected, the budget has been used as a scorecard for the government to showcase its achievements over the last four years while budget proposals have lived up to the expectations of a populist budget before the run up to the general elections early next year.
In presenting the “election” Budget, the finance minister has truly served the cause of his party men by ensuring that the biggest vote banks — the farmers — along with the common man get instant gratification.
In waiving of debts for the small and marginal farmers and across the board rationalization of tax slabs, the finance minister has won the popular mandate and created a pitch for his team to play to win the elections.
However what appeals to a thinking mind is that the finance minister’s generosity is not at the cost of any fiscal indiscretion and it may be safely said that the budget proposals are well within the bounds of core economic principles and fiscal discipline.
The budget proposals have several positives. Proposals relating to rationalisation of income tax slabs and rates for individual tax payers with higher deduction for medical insurance premium, will make the “aam admi” happy.
The maximum amount of income not chargeable to tax has increased from Rs 1,10,000 to Rs 1,50,000 which in case of women it goes up Rs 180000 from the existing Rs 1,45,000.
Senior Citizens will now pay tax only for taxable income above Rs 2,25,000.
(Rajiv memani is the CEO & Country Managing Partner, Ernst & Young, India)