Finance Minister Nirmala Sitharaman will present the full budget on July 23. All preparations for this have been completed. Now the wait for the budget speech of the Finance Minister is on. Along with this, the common taxpayers are also waiting for one more thing and that is that the government should make some major announcement regarding tax exemption or tax cap in the budget. But experts give different opinions on this. Some believe that the government cannot make any major announcement regarding taxes in the current budget.
Asked about tax relief in the Budget amid the BJP failing to secure an absolute majority in the Lok Sabha elections, Professor NR Bhanumurthy of the National Institute of Public Finance and Policy (NIPFP) said, “I don’t think the election results will have any impact on the direct tax policy, but it will be affected. Since private consumption is a cause of concern, the GST Council should consider reducing its rates, especially when tax collections have reached record levels.”
Very few people pay income tax
Chakraborty, who is also a board member of the Munich-based International Institute of Public Finance, said cutting tax rates will increase disposable income in the hands of people and may boost consumption, but one thing to keep in mind is that only a small section of the country’s population (about four per cent) pays income tax.
Speaking about the priorities in the Budget, Chaturvedi, who is also a member of the RBI Board, said the seven priorities already identified in the Budget – inclusive growth, last mile access, infrastructure and investment, capacity utilisation, green growth, youth and focus on power and financial sector expansion should continue.
I have a long time
Responding to a question related to the free foodgrain scheme for 80 crore population, Chaturvedi said that after many efforts, India has lifted over 35 crore people out of multidimensional poverty. Every effort must be made to prevent them from falling back into the same situation. Food programmes are only a part of the solution at that level. Equally important will be development of micro and small enterprises and continued efforts to improve health coverage and access to sanitation. All measures, such as the food scheme, initiated during Covid, need to be reconsidered. Instead, there are other areas, such as rural development, that need the government’s attention.
