Skip to content

Union Budget ’09 – An effort to bring Bharat and India together!

July 8, 2009

The message is loud and clear. This budget is essentially a rural development-oriented budget. To make it very clear, it is NOT ONLY rural development oriented. It is an attempt to marginalize the rural-urban divide in India. Atleast I feel so. Do you wonder why?

There is a special focus this time to make sure that Bharat as a whole progresses towards a developed country and not only the urbanized-glitzy India.

Government plans to provide Rs 2000 crore for rural housing.

Banking facilities to be provided in remote areas in coming 3 years time frame.

Also adding handloom clusters in West Bengal and Tamil Nadu.

PM’s Adarsh Gram Yojana gets the impetus with Rs. 100 cr funding.

Indira Awaas Yojana outlay increasted by 63%. Bharat Nirman outlab also raised by 59%.

Food security to provide rice, wheeat at Rs. 3 a Kg to poor.

Special fund of Rs. 4000 cr from Rural Infra Dev fund to provide cheap loans to MSME.

Rajiv Gandhi, former prime minister of India, had once estimated that less than 15 paise out of every rupee meant for the poor actually reached them because of leakages in the delivery system. Twenty years later, finance minister Pranab Mukherjee announced initiatives that would remove the intermediaries in the supply chain and deliver subsidies directly to the intended beneficiaries.

Mukherjee’s Budget further underlined the government’s move towards disintermediation with huge thrusts in key social sector programmes such as National Rural Employment Guarantee Scheme (NREGS), Food Security Act, National Rural Livelihood Mission, women’s self help groups (SHGs) and the education loan subsidy scheme, focusing largely on rural India.

A mention of Decontrol of oil prices is another mega-reform.

More importantly, a 45-day limit on coming out with a “new” tax code,which should put a bridle to the finance ministers who are always ready to fiddle with tax rates, not to mention the plethora of cess, surcharges and other taxes bordering on the fringe.

Foreign investors often complain that our indirect tax structure is multilayered and complex with over half a dozen levies. Therefore GST is on schedule for April 2010, a national-level Goods and Services Tax (GST) that should be shared between the Centre and the States. Another step to mega-reform.

I know we all are mean and selfish. But we are not left out. Fringe Benefit Tax is abolished. Income tax exemption limit is increased. 10% surcharge in Direct Taxes scrapped.

And I must admire the re-consideration of service tax imposed on lawyers which was self-indulgently exempted by previous FM is now again introduced which implies individual law consultation will not to attract service tax.

And since I cannot include each and every detail of this budget, you can view this link which gives a extremely good picture of the budget.

Now after reading this, I am sure many questions will be raised on fiscal deficit which is up by 0.1% from 6.7% to 6.8%. BUT do you really expect it to be brought down in the recession years? How? By raising taxes which will give even less revenues? Or by lowering expenditures so that you get even lesser growth? Its upto you to decide!

I know this is not the dream budget but I really dont expect a dream budget which is never fullfilled but just shows a dreamy picture!! I feel this is realistic and well thought of budget which should be able to deliver what it has proposed!

3 Comments leave one →
  1. Chiranjib permalink
    September 28, 2009 9:22 pm

    Very insightful! I think I should buy your arguments! Well written! 🙂

  2. Arijit permalink
    September 28, 2009 9:27 pm

    Even i have the same query, that where will the funding come from for so many Yojana’s for rural development…the way of disinvestment of the PSU’s seems to be good with the govt keeping 51% share, but difficult to assure that would be enough for these yojana’s.i feel subsidizing food, giving out loans at minimal rate were already present in the system, may be not implementated in proper way.Most importantly creating work, job in the rural sector is more important…funding should be strongly to make rural people competitive enough with urban population.Only then will the margin decrease….Also one more comment on the Highlighted part, we are equally part of the system,so nothing like being selfish..there was a huge salary hike given to the govt officials..earlier this year..i don’t complain about it..but eve then the way govt offices work has not i think being in Private sector..getting alarmed with job security, whenever stock prices roll down and still continuing to work hard..we deserve atleast some tax exemption..when prices of food,petrol and others are soaring high.

  3. Giri permalink
    September 28, 2009 9:37 pm

    I agree with the idea of Bharat getting more importance. I also agree with the motive of taking growth to the rural hinterland. All these ‘Yojanas’ need loads of money! So the question is, if govt is spending all the money where does it get it from?? The budget hasnt done any good in terms of reforms, there is no increase in FDI cap in insurance and banking sectors, securities tax not abolished.. the list can go on.. at this rate with the fiscal deficits raising, I hope we dont go to IMF begging for cash!

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: