Friday, May 14, 2021
Home News Reports Why the Union Budget 2017 did not have any big bang announcements

Why the Union Budget 2017 did not have any big bang announcements

We saw the first Union Budget which was preponed by a month to February 1. It was also the first budget after the demonetisation exercise, which caused hardship to the common man, killed a large portion of the black currency economy. Further, it was the budget just before 5 states went to elections, most notably being Uttar Pradesh, which had virtually single-handedly ensured that BJP would get an absolute majority in 2014, by giving BJP more than 70 MPs. Understandably expectations were high.

By now PM Narendra Modi and his Government have earned the reputation of being capable of doing the unthinkable. The surgical strikes on Pakistan and the massive demonetisation exercise have lead people to believe that this Government can take daring decisions. Such feelings made people believe in ridiculous rumours during demonetisation, including that the Rs 2000 note had a chip in it, and that bank lockers would be targeted next. Such a reputation also gives rise to massive expectations, especially from the Union Budget.

In the exercise of building expectations, the media too plays its part. The Economic Times had published what they thought would be the tax rates. The Indian Express confidently reported that Service Tax would be hiked to 16-18%. Bloomberg Quint claimed that “The Tax Changes In Budget 2017 Are An Open Secret”. The Economic Times also mooted the idea that the Universal Basic Income Scheme has gained currency.

Eventually Budget 2017 did not bring in any of the above changes, some of which were quite radical.

In fact, as our columnist Aashish Chandorkar rightly pointed out, the budget belied expectations:

The Union Budget 2017-18 was primed to be explosive – income tax cuts, banking transaction tax, securities transactions tax, long term capital gains tax, universal basic income, demonetization windfall – there was a whole bunch of things discussed, proposed, and speculated. And now, eventually all junked.

The nation – supporters of the government and the detractors alike – waited with a bated breath assuming Finance Minister Arun Jaitley will deliver a Dabangg budget – a Salman Khan at his caring, scheming, and edgy best. Instead, Mr. Jaitley has delivered a safe, defensive, conservative, and a wait and watch budget which gives a Hum Saath Saath Hain feel – a mild, please most, annoy least Salman Khan of the Rajashree Productions version.

One of the reasons, why the Finance Minister may have opted for an almost muted, incremental budget could be the fact that this budget is uniquely placed in between 2 storms which the Indian economy has faced/will face.

The first storm is over. Demonetisation impacted practically all businesses and even the common man. While the impact has not been as negative as expected in some sectors, certain other sectors may have still seen some pain, and may even still be recovering from the shock. It is not good logic to give more shocks to a person recovering from a major one. The Union Budget 2017 ensured that.

The second storm is yet to come. Goods and Services Tax, which will replace a host of indirect taxes and bring a totally new regime of taxation in India, is primed to be introduced in the coming months. It may get delayed by a few months but it is certain to come within the next 6 months or so. If you thought demonetisation was bad for the informal or cash economy, then GST will be worse.

Even the regulated sector will have to redraw their entire business plan due to GST. Entire supply chains will have to be reworked. Past business decisions will no longer seem to be right. It will be a major disruptor, the impact of which could be felt for 6 months to even a year.

It is possible that the Finance Minister has sensed this and has decided to step of the pedal for Budget 2017, which saw some high level tinkering, some incremental reforms, so small adjustments in the direction which the budget has already been given, and no major big bang moves.

If the stock markets are to be considered to be an indicator, in spite of this “low-key” budget, the markets reacted positively to this budget, with the Sensex shooting up by 486 point on the budget day. One major reason for this spurt is certainly the fact that the budget did have much shocks i.e. many of the fears floating around did not materialise e.g. levies on capital gains did not occur, no tax exemption withdrawals for indirect capital gains of foreign portfolio investors, service tax was not increased to 18%. Sure there were many positives too, but the lack of any radical game-altering negatives also played a part.

Political analysts would see the budget as a missed opportunity to shower poll bound states with goodies, but it appears the people in the Government have decided to not take the populist route, instead focus on fiscal discipline and step-by-step reform. To quote Aashish Chandorkar once again, “Mr. Jaitley batted through the 30thto 35th over milking the opposition”.

This only makes us wonder, will the next budget be one of the slog overs?

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

Gaurav
co-founder, OpIndia.com

Related Articles

Trending now

Kejriwal govt sets aside Rs 50 crores for free vaccination of Delhi residents, while spending far more on PR: Details

While AAP government in Delhi spent Rs 150 crores on PR from Jan to March, it has only allocated Rs 50 crores for the free vaccination of Delhi's 2 crore population.

Israel Defence Forces debunk propaganda peddled by Palestinian supporters, explain how Hamas is causing death of Gazan civilians

Israel Defence Forces informed that about 1,750 rockets have been fired at the Jewish State by terror outfits such as Hamas and Palestinian Islamic Jihad.

His mental, physical condition can’t be ignored: Former military officers question legitimacy of Joe Biden’s victory, ability to lead

124 retired US military leaders have written letter questioning legitimacy of the 2020 United States Presidential election and victory of Joe Biden

Congress MP Abhishek Manu Singhvi defends Navneet Kalra in HC, ASG says concentrators black-marketed by him had only 32% output

Navneet Kalra filed an appeal in the Delhi High Court with Congress MP Abhishek Manu Singhvi appearing on his behalf.

While Delhi govt was alleging inadequate oxygen supply, data show it was returning oxygen to suppliers, asked them to store the excess

Due to lack of storage plants and not enough demand, Delhi govt had returned oxygen and asked the suppliers to store them

Kamala Harris’ niece wants people to fight for Palestine to protect the LGBT community: Here is how they are treated in Gaza

Kamala Harris' niece Meena Harris has once again found herself in a controversial position amidst the Israel-Palestine conflict

Recently Popular

Narcissism at its worse: After doubts were raised on the help being provided by Sonu Sood, actor gets called out for sharing cringe self-laudatory...

After making questionable claims on helping Covid-19 victims, Sonu Sood now shares cartoons that shows him as a God

Israeli actress Gal Gadot, who once hailed ‘Shaheen Bagh dadi’, wishes for safety for Israel, gets hate from Islamists and ‘liberals’ in return

Gal Gadot's prayer for peace in her home country Israel irks up 'liberals' who even accused her of being a genocide enabler.

Rihanna gets cancelled by Islamists for saying that Israeli and Palestinian lives are equal

Several social media users slammed Rihanna for her Instagram post mourning the loss of lives on both sides during Israel-Palestine conflict

Israel spy agency Mossad’s parody account pokes fun at Bollywood entertainer Swara Bhasker over her ‘#FreePalestine’ campaign

Swara Bhasker had posted a tweet calling Israel apartheid and terrorist state following the clashes at the Al Aqsa Mosque in Jerusalem

Watch: Israel Defence Forces destroy 14-floor terrorist hideout inside Gaza in a precision airstrike

"Terror organisations have been hit hard and will continue to be hit because of their decision to hit Israel. We'll return peace and quiet for the long term," Israeli Defence Minister Benny Gantz said.
- Advertisement -

 

Connect with us

254,950FansLike
543,311FollowersFollow
24,300SubscribersSubscribe