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LATEST NEWS UPDATES | Who will pay for sops? -Arun Kumar

Who will pay for sops? -Arun Kumar

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published Published on Feb 13, 2019   modified Modified on Feb 13, 2019
-The Indian Express

Government’s claim that structural changes to the economy are paying off, and that is being used to give back to the people, is problematic.

The Interim Union Budget 2019 is no less than a full budget with changes in taxation and announcement of lucrative schemes for various sections of the population. The recent losses in three major assembly elections rang alarm bells for the ruling dispensation. With the general election around the corner, it had to act to regain the support of various segments of the population. The government’s policies in the last five years have caused distress to farmers, youth, small businesses, the cottage industries sector and minorities.

Small and marginal farmers will get Rs 6,000 per year. Concessions on credit and crop insurance to farmers have been announced. There is a pension scheme for unorganised sector workers. The lower middle classes have got concessions in income tax. The upper middle class has got concession in taxation on a second house. There are schemes for the SCs, STs, women, nomadic tribes and senior citizens.

There is no proposal for additional taxation. Given that in the current year, tax collection was lagging behind and the fiscal deficit was running way ahead of the target — 114 per cent in the seventh month itself — next year could be worse with additional expenditures but no proposals for raising additional revenue. More taxes are not sought to be raised lest some section feels hurt and that is undesirable in an election year. The rich could have been taxed more through a wealth tax or a cess on corporation tax. Actually, the corporates were expecting a reduction in the tax rate from 30 per cent to 2 per cent, announced two years back, but they would be happy that the tax rate has not gone up.

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The Indian Express, 13 February, 2019, https://indianexpress.com/article/opinion/columns/interim-union-budget-2019-piyush-goyal-farmers-gst-lok-sabha-elections-narendra-modi-govt-5580881/


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