It’s again that time of the year when not only the working class, but the entire youth of the country is eager to witness the financial reboot. All eyes on Finance Minister Arun Jaitley to draw the curtains from the financial blueprint of the FY’18 and present his last and the fifth budget before the 2019 general elections, in the form of the Union Budget 2018 on February 1. So what do the millennials of the country expect from the upcoming budget? To take the pulse of GenNext on the Budget 2018, a team from ET Now team visited SP Jain Global’s Mumbai Campus. Here are some of the insights from the discussion, which would give you a brief walkthrough to understand the essence of this key annual event.
1. Tweak in the Income Tax Slabs
Based on the GenNext consensus, a little tweak in income tax slabs and rates can reduce the burden on individuals. Current 2.5 lakhs taxable income is deemed too less to be considered within the tax bracket. Instead, an exemption on up to 5 lakhs is expected to be more relevant for the bracket. And so, widening of the tax slabs and standard deduction is highly anticipated. Furthermore, enhancement of disposable income in the hands of the people should bring consistency and stability in tax policies.
2. Encouragement to Startup Ecosystem
Appearing amongst the favorites of PM Narendra Modi, the ‘Startup India’ campaign took off with a lot of enthusiasm. However, there are still certain loopholes which need to be filled to better benefit from it. Regulatory framework is required to speed up the process and the tax bracket must be maintained. Moreover, the acceptance of the demand from the start up community to abolish Angel Tax is highly anticipated.
3. Tax Benefits for Senior Citizens
Presently, a senior citizen (person who attains 60 years of age) of the country is already eligible to receive tax exemption limit of upto ₹3 lakhs against ₹2.5 lakhs for ordinary taxpayers. They are also entitled to an exemption from the advance tax obligation and automatic scrutiny selection. Additional deductions can be claimed based on the payment of their medical insurance premium and other medical insurance. Moreover, if the amount for healthcare treatment is paid by the senior citizens themselves or a dependent, a deduction should be permitted upto ₹60,000 or actual expenses, whichever is lesser. This limit for very senior citizens (80 years and above) should be ₹80,000.
4. Benefits from FDs & TDS
Tax sops on fixed deposits (FDs) and TDS will eliminate common man’s struggles with routine tax return and related compliances considerably. Relaxation on the tenure of fixed deposits is also highly anticipated. Moreover, an increase in TDS limit for bank interest from the current ₹10,000 (which was last set in 1997) is likely to pull out more interest in hand for the bank customers.
5. Effects of Demonetisation & GST
In consideration of all the buzz surrounding demonetisation and the Goods and Services Tax (GST), the sole motive of the NDA government was to eliminate black money from the system, bring the entire nation under the umbrella of a unified tax, and attain transparency, respectively. As mentioned before, their implementation would make the country undergo a notable cash crunch. However, the future certainly points towards a bigger and positive picture. Although the points of view of the countrymen are significantly divided, it would be interesting to get a clear picture or rather, get an analytical review of its costs and benefits from the horse’s mouth itself, about this economic overhaul and their strategy for the way forward on February 1, 2018.
6. Budgetary Allocation in Infrastructure Sector
Revival in the investment cycle of infrastructure sector is anticipated by further increasing the budgetary allocations with special focus on railways, roadways and urban infrastructure. Further allocation to NHAI should also be raised accounting to the hike in capital outlay on the development of national highway. Creation of specific infrastructure sub-sectors are likely to be created to resume and retain the interest of private sectors in taking up new projects. This will help resolve the bottlenecks and further develop the regulatory scenario.
7. Thrust on ‘Digital India’ to Resume
The Union Budget 2018 is seen as a pivotal event in realizing the dream of ‘Digital India’. Call it PM Narendra Modi’s close-to-the-heart vision or one of the most revolutionary initiative, digitalisation is set to bring a distinct shift in the Indian market. Giving its way to FinTech companies, the upcoming budget is drawing unwavering attention towards the reinforcement of digital capabilities and innovation.
8. Immediate Attention to Agriculture Sector
Agriculture sector seeks the major focus of the Union Budget 2018. With Indian farmers eagerly waiting for the cost of production increase, the government should brace itself to revive and ensure adequate reforms in it. Considering that the sector plays a major role in the scheme of things, more than 50% of country’s population is looking forward to a major reform in this sector since the past 4 years.
9. 2018, The Year of Bitcoin or Blockchain
The last phase of the year 2017 and the beginning of the first phase of 2018 has seen Bitcoin multiply threefold. This has resulted in a sudden spike in the awareness about cryptocurrency across the world, and especially in India. The precise legal status of these digital currencies is yet to be clarified and notified by the government. With Bitcoin catching an uptrend in the Indian money market, the use of Blockchain technology has become the need of the hour. Blockchain maintains a ‘distributed ledger’, which is a non-centralised ledger with possibly millions or billions of copies.
10. Watch Out for Recapitalization of PSBs
In order to revive growth and boost lending, the government of India should implement the recapitalisation of Public Sector Banks, the groundwork for which has already been laid down. Recently, government of India unveiled the details regarding the decision to infuse about ₹88,139 cr in 20 PSBs before March 31.
Considering the fact that it’s the last budget for the BJP government, it is most likely to garner a larger vote bank. Therefore, this discussion gives a clear indication that GenNext is seeking nothing but a populous Union Budget 2018-19 for the nation.