Economy needs a strong push, all eyes on Budget

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With the pandemic having taken a toll on many businesses and many salaried employees losing their jobs, all eyes are now on Finance Minister Nirmala Sitharaman as she is expected to present a Budget aimed at lifting the economy and accelerate employment.

The list of expectations is huge, considering that many sectors have fallen prey to the pandemic.

However, to my mind, some key ones are listed below:

1) With the Prime Ministers vision of ‘Make in India’, startups need to be supported at large with concrete enablers eg. support with working capital that help startups accelerate progress. Also reduction in compliances, simplified GST that encourage startups to enter and grow into diversified sectors.

2) The country needs to move towards credit and financial Literacy. Government must encourage consumers by giving some tax relief or rebates for customers who take a step in this direction.

3) Liquidity support to NBFCs

4) Last year’s reduction in Corporate tax at 22% was a welcome one, This year, there should be serious conscious relaxation in GST across consumer durables, land and housing sector, cost of raw materials, etc, along with a simple GST process. This will help in increasing demand and bring in economies of scale. Tourism, hospitality and MSME sectors have been severely affected by the pandemic and hence, some subvention scheme will be helpful.

5) Stamp duty reduction in Maharashtra gave a good boost to the real estate sector however the same must be extended along with GST reduction at a country level.

6) Salaried sector has always been the highest tax paying segment historically. The government must look at reducing IT rate slabs for salaried employees. Also, with work from home option being available for many employees, many internal costs have increased for households. Many companies are looking at providing allowances like internet allowance. Such allowances provided to employees should not be taxable.

7) Despite the presence of online tools for education, this sector has also been severely affected. The schools were unprepared and they suffered due to lack of digital infrastructure. All schools, including government-aided schools, must be supported with some government backed programmes to enhance digital infrastructure.

8) Income tax should be waived for senior citizens. With most of them having no health insurances and neither eligible for one now due to age, health maintenance, hospitalisation and hygiene costs have increased. They have paid taxes all their lives. Now, they need to be given waivers so that they can use their savings for better and healthy retirement. Also, under the Senior Citizens Savings Scheme, a senior citizen can deposit Rs 15 lakh. However, the interest on the scheme is fully taxable.

(The writer is founder and CEO, AskCred. Views expressed are personal)