Budget and the Common Man
The Union Budget affects each one of us. But, it's often too deep an ocean to drown in. Worry not, we simplify what the Budget might look like for you this year. ReadOn!
Planning a solo trip that is on your bucket list for a long time? Or buying a gift for your parents’ 25th anniversary? Oh, wait. Before that, you must pay for rent, groceries, electricity, repay loans, and whatnot. The list is endless.
And then you check your bank balance: it’s a sum that makes you laugh and cry at the same time. Sad. But, this is a classic example of what we call the ‘basic economic problem:’
an individual’s needs and wants are unlimited (necessity + luxury)
the resources to achieve those wants are limited (being broke by the first week of a month)
the resources have alternative uses (you can buy junk food or buy a Netflix subscription with the same Rs. 200)
So, how do you plan to ‘allocate’ your money to each of your needs? That’s when you naturally prepare a ‘budget’. Whether you are a meticulous planner or a carefree spendthrift, you’ll realize you need a budget for your income and expenses. Just like our parents prepare a monthly budget for running our families, we need someone to do the same for our nation. That someone is the Finance Ministry, and the budget prepared is called the Union Budget.
But, why should you care about the Union Budget?
Simple. A lot of your personal financial planning depends on the market mood and demand and supply of resources. The Union Budget sets the base for everything. It gives you an idea of:
How much tax you must pay on what you earn (Income tax)
How much tax you must pay when you spend (GST)
What will be the price of your dream house, etc.
Everything that happens (or rather, that can happen) in the economy and the country is laid out by the budget. Yes, big promises (like farmers’ income will be doubled, etc) are made, but some crucial information of the government’s intent also becomes available.
Now, what should you look out for in the Budget?
A nation is a big family consisting of members from various social and economic backgrounds. A Budget has to consider the ‘basic economic problem’ of all of the family members. So, it broadly covers the following aspects:
For the kids of the family – Education and Skill Development
For the breadwinner – Taxes, Industry, Commerce & Investment
For women – Safety & Social Welfare
For grandparents – Wellness, Environment & Climate Change
For teens – Culture & tourism
For the entire family – Agriculture, Irrigation & Sustainable Development
(It’s a broad categorisation - please don’t take offence. We are not putting people in boxes and defining their role in society).
Now, let’s dive deeper into each of these areas.
Education and Skill Development:
This session will cover the Finance Minister’s (FM) plan to upskill our millennials and provide quality education to all. India, being a young and growing population, will focus on building better infrastructure facilities for schools, colleges and universities. The New Education Policy 2020 was touched upon in Budget 2020. With the pandemic wreaking havoc in education, NEP is setting high expectations in the country. Watch out for the government’s plan on its implementation!
Taxes
This would undoubtedly be the most popular tea-time conversations in (virtual) workspaces after the Budget is out. This session of the speech impacts almost every man in India. Under Income taxes, FM could talk about the government’s plan regarding tax rates, deductions, rebates, tax holidays, hassle-free compliance matters, etc. You got it right. To know your taxes, you got to know the Budget. Afterall, dena toh aapko bhi hai. Indirect taxes, mainly GST session, will broadly cover goods and services that are GST exempt, revision of tax rates for products, use of AI and IT for compliance-related matters, etc.
GST has a greater impact on the common man than Income tax because it is a tax on your spending. You might get away with income taxes if your income falls below the taxable limit. But if you want that super cool OnePlus Nord, you cannot escape GST. In fact, it’s gonna get costlier as the government recently increased the GST rate from 12% to 18%.
FYI: This year, look out for a COVID-19 relief cess being added to your direct/indirect taxes!
Industry, Commerce & Investment
Only those who plan for the future, control the future. In the Planning session, the FM shares her plans on the sector-wise allocation of funds, policies concerning foreign trade, encouraging start-ups & entrepreneurship, and many more. The Ministry of Defense had received the maximum allocation of funds (Rs.4.31 lakh crore) last Budget and we, without a doubt, are proud of our Defense Ministry. If you plan to be your own master, look out for all the new schemes introduced to promote entrepreneurship. For instance, Atmanirbhar Bharat, our Prime Minister's dream project (aiming to make India self-reliant), is touted to be a strong and powerful scheme which could have a significant impact in each industry.
Safety and Social Welfare
Let the data speak here:
Sadly, India takes the 139th position in the World’s Safest Countries as per the Global Peace Index 2020.
It is also ranked 133rd in the Women, Peace and Security Peace Ranking 2019 by the National Geographic.
Yes. We know that this is not one that an Indian can be proud of. So, the government rolls out various schemes & laws towards women’s safety, health, nutrition and social welfare.
Environment & Climate Change
Did you know? The ‘International Solar Alliance’ (ISA), an initiative started by our Prime Minister along with his French counterpart in 2015, aims to increase the use of solar energy in meeting the energy needs of ISA member countries.
Right from capturing the headlines in The New York Times way back in 1988 to Elon Musk’s vision of the future, sustainable development, global warming and climate change are affecting our lifestyles way more than we imagine. So better allocate funds to save the environment, before it’s too late. No?
Culture and Tourism
India is rich in culture and heritage. The government focuses on this not so untapped sector, which has the potential to generate high returns for the country. Don’t miss out on this part of the speech to get a glimpse of new tourism places which are planned to be developed! And, maybe explore our motherland this year?
Fun fact: Statue of Unity (the sculpture of Sri Sardar Vallabhbhai Patel) overtook Statue of Liberty in terms of number of visitors. On an average, Statue of Unity got 15,000 visitors pre-Covid whereas the Statue of Liberty had about only 10,000 visitors per day.
Agriculture & Irrigation
What is a Budget speech without the mention of Agriculture and Irrigation? Here, it majorly covers the reforms introduced, funds allocated to support farmers, schemes to adopt a technologically driven agro-based industry, innovation, R&D, etc. This is among the topmost sectors to which funds are allocated in a budget. Let’s wait and watch the FM’s game plan for the upcoming year on the proposed Farm Bills and building trust among farmers. In case you haven’t read about the farm laws, ReadOn for our version of the same.
We hope you've got a basic idea of what the budget might look like for you, and you're not left thinking:
Until then, ReadOn.
By Ashita and Aishwarya
Thousands of readers get our daily updates directly on WhatsApp! 👇 Join now!