Union Budget 2024: The Union Budget of India is a much-anticipated annual event that sets the economic agenda for the country. For the Indian middle class, it is a moment of high hopes and expectations. They look to the Budget for tax relief, increased subsidies, and measures that promise a better standard of living. However, many of these expectations are often unrealistic and unlikely to be fulfilled due to various economic constraints and policy priorities.
Here are some of the key unrealistic expectations that the Indian middle class often harbours.
1) Abolition of income tax
The proposal to abolish income tax in India is a bold and controversial idea that has attracted both support and skepticism. Income tax has long been a major source of government revenue, essential for funding public services and infrastructure. However, proponents argue that eliminating income tax could bring several economic and societal benefits, such as boosting economic growth, simplifying the tax system, and curbing tax evasion. This essay will examine the arguments in favour of abolishing income tax in India and assess its potential impact on the nation.
The proposal is daring and requires careful consideration. While it promises to enhance economic growth, streamline the tax system, and reduce tax evasion, it also presents significant challenges, including potential revenue loss and concerns about wealth inequality.
2) Universal Healthcare and Education
As per middle-class expectation, comprehensive and affordable healthcare and education are high on the wish list. The middle class hopes for government policies that will make quality healthcare and education accessible to all without significant out-of-pocket expenses.
However the reality is different. While there are steps towards improving healthcare and education infrastructure, achieving universal, high-quality services requires massive investment. The government faces challenges in mobilising the necessary resources without significantly increasing taxes or reallocating funds from other critical areas.
3) High Returns on Savings and Investments
It is expected that policies that will ensure high returns on savings schemes and investments, protecting the middle class from market volatility and inflation. In reality, the global economic environment and market dynamics largely influence returns on investments. The government can provide stable schemes, but guaranteeing high returns is impractical. Interest rates are often adjusted to balance economic growth and inflation control, which may not always align with middle-class expectations.
4) Lower GST Rates on Consumer Goods
The middle class anticipates lower Goods and Services Tax (GST) rates on essential and luxury goods, making them more affordable. However, GST rates are set to balance revenue generation and economic activity. Lowering rates across the board can lead to reduced government revenue, impacting public services and infrastructure projects. Revisions in GST rates are typically incremental and based on broader economic strategies.
5) Restoring OPS
Another pipe dream of the middle class is restoration of the Old Pension Scheme (OPS). However, there is no proposal under the Central government's consideration to restore OPS. Way back in December 2003, the BJP-led NDA government had discontinued the old pension scheme and had launched the NPS as a substitute for the old pension scheme. The NPS took effect on April 1, 2004.
As the countdown has already begun for the Budget 2024, Finance Minister Nirmala Sitharaman will table the Union Budget in Parliament on July 23. As the first full Union Budget of the Modi 3.0 administration, it carries high expectations from both the corporate sector and the general public. After presenting an interim Budget earlier, she will now deliver a comprehensive Budget focused on economic growth and job creation under the NDA government.
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