Why Are People Angry? Budget 2024 Explained

Introduction

2024 ka budget kaafi logon mein naraazgi ka karan bana hua hai, khaaskar shehri taxpayers ke beech. Is report mein hum is naraazgi ke khaas karanon ko samjhenge, economic context, tax changes, aur inka prabhav individual taxpayers aur broader economic activities par.

Economic Context and Consumption

Indian Economy Mein Consumption Challenges Indian economy ek badi samasya se joojh rahi hai: low domestic consumption. Consumption, jo GDP ka ek major part hai investment, government spending, aur net exports ke saath, expected tarike se nahi badh raha hai. Iski mool samasya yeh hai ki logon ki kamai kafi nahi hai.

Corporate Earnings aur Investment Trends Indian companies ne achi earnings growth dekhi hai, jahan 5000 listed companies ki net sales 52% aur net profits 187% badhe hain 2018 aur 2022 ke beech. Lekin yeh growth zyada tar ameer consumers ke chhote segment se aa rahi hai. Jaise, premium brands jaise Metro ne 70% sales growth dekha, jabki more affordable brands jaise Bata sirf 20% growth dekha. Companies apne profits wapas economy mein invest karne se katra rahi hain kyunki unhe dar hai ki broader population mein spending power ki kami hai.

Tax Changes aur Public Reaction

Income Tax Adjustments Bohot se taxpayers ne ummeed ki thi ki income tax rates kam honge taaki private consumption badhe, lekin budget in umeedon par khara nahi utar paya. Jabki new income tax regime mein standard deduction Rs. 50,000 se badhakar Rs. 75,000 kar diya gaya, salaried employees ko overall benefit bahut kam mila, maximum tax saving sirf Rs. 17,500. Yeh limited change ne consumer sentiment ko negative impact kiya hai.

Capital Gains aur Stock Market Taxes Stock market se jude taxes mein significant increases bhi public ki naraazgi ka karan bane:

• Short-term capital gains tax assets par jo ek saal se kam period ke liye hold kiye jaate hain, 15% se badhakar 20% ho gaya.

• Long-term capital gains tax assets par jo ek saal se zyada period ke liye hold kiye jaate hain, 10% se badhakar 12.5% ho gaya.

• Futures aur options par securities transaction tax bhi badh gaya.

Yeh changes stock market mein investing ko mehenga bana dete hain, retail participation ko kam karte hain aur investors ko naraaz karte hain jo maante hain ki government ka approach uske stated goal "maximum governance, minimum government" ke vipreet hai.

Indexation Benefit Removal Indexation benefit ka hataya jaana, jo pehle taxpayers ko inflation ko account karte hue capital gains calculate karne mein madad karta tha, ek aur contentious point hai. Jabki aise gains par tax rate 20% se kam karke 12.5% kar diya gaya, indexation benefit hatane ka matlab hai ki taxpayers ko zyada tax dena padega, khaaskar agar unhone property ko bohot saalon tak hold kiya hai.

Impact on Urban Taxpayers

Quality of Life aur Urban Governance Shehri taxpayers khaaskar isliye frustrated hain kyunki unhe apne high tax payments ke bawajood apni quality of life mein koi sudhar nahi dikhai de raha. Poor road infrastructure, inadequate public transport, severe air pollution, aur inefficient waste management systems jaise issues Indian cities ko pareshan kar rahe hain. Yeh problems zyada accountability aur effective governance ki kami se hoti hain, fund ki kami se nahi.

Comparative Urban Spending US aur China jaise deshon ke vipreet, jahan local governments zyada tar public spending handle karti hain, India mein central aur state governments significant control rakhti hain. Yeh centralization urban management ki effectiveness ko hamper karta hai, kyunki local authorities ke paas resources aur autonomy ki kami hoti hai jo city-specific issues ko address kar sakein.

Job Creation aur Economic Growth

Government Initiatives Budget mein job creation aur economic growth ke liye kai initiatives outline kiye gaye hain:

• New workforce entrants ko ek mahine ki salary ke barabar direct benefit transfers teen instalments mein, jo 2 crore logon ko benefit denge.

• Agle paanch saalon mein top 500 companies mein 1 crore logon ko internships dene ki yojna.

Feasibility aur Effectiveness In measures ki feasibility ko lekar concerns hain. Companies proposed scale par internships tabhi provide karengi jab yeh unke business growth aur revenue increases ke sath align hoga. In initiatives ki safalta kaafi had tak improved economic conditions aur infrastructure par depend karti hai.

Focus on Infrastructure Government ne infrastructure development par Rs. 11 lakh crore (3.4% of GDP) kharch karne ka commitment kiya hai. Lekin critics argue karte hain ki yeh focus on infrastructure existing policies ka continuation hai na ki ek transformative approach desh ki economic challenges ko address karne ke liye.

Broader Implications

Fiscal Conservatism aur Deficit Reduction Budget ek conservative approach reflect karta hai, jahan government fiscal deficit reduction ko aggressive spending par prioritize kar rahi hai. Fiscal deficit target ko 5.1% se 4.9% of GDP tak kam kiya gaya hai, jo indicate karta hai ki government immediate stimulus ke bajaye saving aur future spending ko prefer kar rahi hai.

Political Considerations Kuch critics maante hain ki budget regions jaise Bihar aur Andhra Pradesh ko favor karta hai, jo ruling coalition ke liye significant hain. In states ke liye large infrastructure projects announce kiye gaye hain, jaise new expressways aur bridges, jo politically motivated decisions lagte hain economic decisions ke bajaye.

Here are some solutions based on the issues highlighted in this post

Solutions for Increasing Domestic Consumption

1. Income Tax Reforms:

   • Broaden Tax Relief: Increase the standard deduction and adjust income tax slabs to provide more relief to middle-income earners. This will increase disposable income and encourage spending.

   • Introduce Deductions for Consumption: Offer tax deductions for expenditures on essential goods and services, such as healthcare, education, and housing, to motivate spending in these sectors.

2. Incentivize Corporate Investment:

   • Tax Credits for Reinvestment: Provide tax credits to companies that reinvest their profits into domestic projects and infrastructure, particularly those that create jobs.

   • Public-Private Partnerships: Encourage public-private partnerships to invest in large-scale infrastructure projects that can spur economic activity and employment.

Solutions for Stock Market and Capital Gains Taxes

3. Balanced Capital Gains Tax Policy:

   • Gradual Implementation: Implement any increases in capital gains taxes gradually to minimize market disruption and allow investors to adjust their strategies.

   • Reintroduce Indexation Benefits: Restore indexation benefits to protect long-term investors from the eroding effects of inflation on their investments.

4. Regulate Speculative Trading:

   • Stricter Regulations on Futures and Options: Introduce stricter regulations on speculative trading practices in the stock market to ensure stability without overly penalizing regular investors.

Solutions for Urban Infrastructure and Quality of Life

5. Enhance Urban Governance:

   • Decentralize Power: Devolve more power and resources to local governments to address city-specific issues effectively. This includes better funding and autonomy for municipal bodies.

   • Accountability Measures: Implement strict accountability measures for local officials responsible for urban management, ensuring that funds are used efficiently and projects are completed on time.

6. Invest in Infrastructure:

   • Targeted Urban Projects: Focus on upgrading urban infrastructure such as roads, public transport, waste management, and pollution control systems. Prioritize projects that can improve the daily lives of urban residents.

   • Public-Private Initiatives: Encourage private investment in urban projects through incentives and streamlined approval processes.

Solutions for Job Creation and Economic Growth

7. Support Small and Medium Enterprises (SMEs):

   • Access to Credit: Facilitate easier access to credit for SMEs through government-backed loans and reduced interest rates.

   • Skill Development Programs: Expand skill development programs to train workers in high-demand sectors and improve their employability.

8. Promote Low-Value Manufacturing:

   • Manufacturing Hubs: Establish manufacturing hubs with favorable policies and infrastructure to attract investments in low-value manufacturing sectors such as textiles, footwear, and consumer goods.

   • Reduce Regulatory Burdens: Simplify regulations and reduce bureaucratic hurdles to make it easier for businesses to set up and operate manufacturing units.

Political and Fiscal Strategy

9. Fiscal Discipline with Strategic Spending:

   • Balanced Fiscal Policy: Maintain fiscal discipline while strategically increasing spending in areas that can have a multiplier effect on the economy, such as infrastructure and job creation.

   • Transparent Allocation: Ensure transparent and equitable allocation of funds to different regions based on economic needs rather than political considerations.

10. Address Income Disparities:

    • Agricultural Income Tax: Introduce a tax on high-income agricultural earners to ensure a fair tax system where income, regardless of the source, is taxed progressively.

    • Welfare Programs: Strengthen welfare programs targeted at low-income and rural populations to reduce income disparities and stimulate consumption from the bottom up.

Implementing these solutions could help address the grievances of urban taxpayers, boost domestic consumption, and promote sustainable economic growth in India