The Hindu Business Line : Budgeting for Gen-Y

“Until last year I never really cared about the Union Budget. But now, since I run my own law firm, every penny counts. I am going to hang-on to Mr Pranab Mukherjee’s speech word by word on Monday,” asserts Arjun Manohar, a young lawyer who has taken over the reins at his father’s law practice. With just a day to go before the Budget is unveiled, many people, including the hip-n-happening younger generation of India, seem quite keen to know what the Finance Minister may have in store for the country and how his policies would benefit them.

Business Line interacted with a cross-section of today’s Y-Gen and learnt that their needs are indeed boundless and varied. Here’s a sample.

Reduce tax rates

Quite predictably, a vast majority of the population that we surveyed was upset about the present tax structure. “The government is showing mercy by exempting Rs 1.5 lakh from tax currently. But that’s hardly anything if you consider the kind of cut-backs that salaried people are forced to take today.

The basic exemption limit has to be increased, if there has to be an increase in spending. Otherwise where are we going to have the money to spend?” questioned Swathi Mathur, an executive in an advertisement agency. “Reduce the income tax rates and make it less of a burden for all. By doing this the government can ensure 100 per cent tax compliance”, opined Gaurav Sethi, CEO of Mint Hospitality which runs a chain of restaurants in Bombay, Pune, Delhi and Bangalore.

“Get back the standard deduction. People who earn salary need more tax relaxations”, insisted Vinodh Nagarajan, a senior executive in a multinational audit firm. Similarly, Devita Saraf, CEO, Vu Technologies, and a recipient of Zee TV’s young achiever of the year award for 2008, asked for more incentives for entrepreneurs. “Be done with excise duty. Or at least do not increase the tax rates. We need to give a boost to manufacturing and spending, and not punish our entrepreneurs,” she said.

Sunil Vishnu, who runs his theatre company Evam Entertainment, is looking forward to seeing support in setting up new ventures in the non-conventional fields such as performing arts.

“I would like to see some rationalisation in entertainment tax, incentives for investment into creating training academies and performance venues/auditoriums,” he added.

Need more to save…

Where is the incentive to save? “At one end, the government is trying hard to boost spending. But on the other, if I want to spend on buying useful assets such as a house or piece of land, jewellery, bonds and saving schemes, I have to do it at my expense, because if I strictly adhere to tax laws, I don’t get any incentive for saving more than a lakh of rupee.

In today’s cost of living scenario, one lakh rupee is peanuts. So increase the exemption limits for saving. demanded Imran Hussain who works in a multinational company.

…to indulge and enjoy

Needs don’t stop with food, clothing and shelter, do they? “Make mobile phones, mobile connections, DTH, LCD televisions, MP3 players and laptops less expensive,” asked Janani Natarajan, a young professional who’s just got into the corporate world. “ATF tax must be reduced to make air travel within the reach of aam-junta”, remarked Harish Anand, who owns an online media portal Influx Interactive.

“Eating out, movies, gaming and clubbing should be made pocket-friendly modes of entertainment. It’s ridiculous to charge service tax and entertainment tax. Scrap them,” insisted Chaitanya Sundar, a movie buff and regular clubber in Chennai. “I would love to see a reduction in import duty on cars. It is unfair to pay two times the price for a decent imported car,” added Gaurav Sethi.

Focused spending

From transportation to saving tigers, the younger generation appear only too willing to shell out a few bucks, all for a good cause.

“There are bad roads and traffic congestion everywhere. It is high time the government increases its focus on infrastructure development,” said Baidik Sarkar, who works in a micro financing company. Agreeing with Baidik, Reena Desai, a fashion designer, said she was ready to go to any length if only her commuting time within the city of Mumbai could be reduced. For animal lovers like Smita, the demand was for the government to boost its efforts to protect endangered species such as tigers and snakes. And for that, they are willing to pay some money towards wild life protection.

But where is the money?

With so many demands made for tax benefits and relaxations, India’s fiscal deficit is sure to head northwards. “Given the kind of fiscal deficit that the government is already faced with, it would be too selfish to expect a reduction in tax slabs or structured savings schemes,” said Saurabh Kumar Bachhawat, an executive in a consulting firm. But many feel proper implementation of policies and judicious tax laws may reduce the fiscal burden.

“Don’t burden the common man with more taxes. Instead, a meticulous execution of policies, improved infrastructure facilities, spreading out money in the hands of common man and focusing more on industrial growth may help the country reduce the deficit in the long run,” he emphasised. Wondering how many of these demands can be met by Mr Pranab Mukherjee? A day to go before you have your answer!

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