With the coming of the new Government in May
2014, India has witnessed a number of changes. One of these can be seen in the
proposal of the new Union Budget. The current finance minister, Arun Jaitley,
has brought about a refreshing and much needed change in the budget. It hopes
to help the common man in his daily struggles while also greatly reviving our
country’s economy. It has called for certain surprising and positive changes,
making us realize the faults in previous finance policies. This has become
especially evident in the reaction of the masses. Within just a few days of its
declaration, it has elicited a murmur of approval from them.
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| Budget 2014 - The aam admi wala budget
The new budget does not propose any changes in
the tax rate. However it does
propose an increase in the personal income tax exemption limit by Rs. 50,000.Therefore,
those below the age of 60, whose earnings come within the tax slab of Rs. 0 to Rs. 2,50,000 are exempted from taxes. For senior
citizens, the same has gone up to 3 lakhs.
He also attempts to encourage more savings. He
did so by increasing the limit for investments
under section 80C to 1.5 lakhs. The Public Provident Fund (PPF) limit too was
raised similarly. The reintroduction of the Kisan Vikas Patra profited the
small investors. Life Insurance was declared tax free, making it more
affordable. The New Pension Scheme also brought relief to several people. It
deducts from one’s monthly salary. But after the age of 60 it provides a lump
sum as well as a monthly pension. It therefore reduces the fear of working into
old age.
The budget has also promised the construction
of nearly 100 small cities, redevelopment of slums and an increase in
allocation for the National Housing Bank. This, coupled with the reduction in interest
rates on housing loans would directly impact the common man. It would greatly increase
the demand for housing. It would also positively impact the real estate and
construction sectors.
There is a welcome increase in the Foreign
Direct Investment (FDI) limit for banks from 26% to 49%. The increase in the
FDI limit would help insurance schemes to penetrate even the rural areas. It
would allow more people to be insured, preventing sudden accidents from becoming
financial handicaps. The budget also allows banks to raise long term funds.
These could be lent to the infrastructure sector with minimal regulatory
obligations.
A part of the budget focuses on the agricultural
sector and rural development. There is an attempt to reduce wastage of crops.
With the building of warehouses and soil testing facilities, it tries to
increase and preserve the crop yield. The ‘Price Stabilization Fund’ attempts
to give agricultural workers the right price for their efforts, preventing
their exploitation.
The budget also allocates funds for setting up
rural health care facilities and health research centres. This allows for the
studying of local health problems, leading to better solutions.
The budget seems to have an overwhelmingly
positive effect upon the masses, especially the investor. It has introduced
various schemes and tax exemptions in order to encourage investments and savings. Its increase in the percentage of FDI
brings relief to various sectors. The rapid economic growth it plans for is
intended to bring about a more hopeful future.
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