The Union Budget of the United Progressive Alliance Government, perhaps the last before the 2014 elections, holds promise for youth, women and the poor, say commentators.
But eating out in an air-conditioned restaurant, smoking cigarettes, and buying smart phones and luxury cars will be more expensive. Except for the super rich who earn more than Rs 1 crore annually and face a 10 per cent surcharge, there has been no change in general income tax rates.
“Now a Rs 100 meal in Saravana Bhavan’s ac restaurants will become costlier with at least a 5 per cent increase in prices due to the increase in service tax. This will have a negative effect on our customers,” said L. Sitaram, the chief account executive of Saravana Bhavan.
“Earlier we paid service taxes only at niche restaurants in Nungambakkam. But now we will have to pay more even to buy a single scoop of ice cream from Ibaco,” says N. Menon, a customer at Ibaco ice cream parlour in Besantnagar.
Women have been a target beneficiary of the budget too.
The Government has proposed to introduce the first public sector Women’s Bank and allocate Rs100 crore to the Nirbhaya Fund for the safety and security of women.
“We already have a number of women working as branch managers of banks all across the country. There are special banking rules for women entrepreneurs taking personal loans. The introduction of India’s first public sector women’s bank is welcome but I do not think it is going to bring drastic changes unless we have an innovative set of rules. Besides, we need to know the location of such a bank and the number of branches it will have,” said V. Saraswathi , secretary general of the Madras Chamber of Commerce and Industry (MCCI).
“Overall it was a balanced budget and the act of not increasing excise duty to manage the huge fiscal deficit was a wise decision,” Saraswathi added.
S. Raghavan, a student at Loyola College, said, “The increase in taxes on cigarettes will help in cutting down smoking among the youth but the hike in taxes on mobile phones priced above Rs 2000 will hardly be able to check the rise in sale of phones as smart phones with their various applications are gradually becoming a necessity.”
Manoj Agarwal, an economics student from the same college could not understand why a Rs 100 crore grant each was allotted only to four specific institutes of excellence which includes Banaras Hindu University, Aligarh Muslim University, Tata Institute of Social Sciences, and Guwahati and Indian Trust for Arts and Cultural Heritage. “This will certainly support the study of social sciences and art and aesthetics in the country where becoming a doctor, engineer is a middle-class mania. But the Government should have allocated more money to primary and secondary education,” Manoj said.
Analysing the other macroeconomic measures of the budget, honorary professor U. Shankar from the Madras School of Economics said, “The allocation of Rs 10,000 crore for food security is a populist measure and the Government will have to keep up with the inflation in food prices.”
“Industrial growth has been near negative in the last few quarters and no resource allocated to revive the manufacturing sector at all. Only the increase in funds allocated to Jawaharlal Nehru National Urban Renewal Mission (JNNURM) will help to build better infrastructure in towns and cities,” he added.
The Finance Minister has also specifically said that a major portion of the JNNURM funds “will be used to support the purchase of up to 10,000 buses especially by the hill states ” which is seen as positive by several economists.
(Shubhranka is a student of the Asian College of Journalism.)