Lack of jobs has begun to hurt India like never before, but most better-informed Indians don’t want it to be Finance minister Nirmala Sitharaman’s overriding priority. LTCG tax continues to rankle badly, but India wants Sitharaman to focus on another tax matter first. Farmers’ plight keeps on making one negative headline after another, but an overwhelming number of Indians * don’t take kindly to loan waivers. These, and a host of other eye-opening findings have just emerged in E ..
So, what does India exactly want from its new Finance minister this Budget day?
The economy is beset with a 20-quarter low, the debilitating investment lag shows no signs of easing, vital indicators of the economy are sputtering, jobs are hard to find, and consumption — the engine that powers the economy and accounts for over 60% of GDP — has long been seriously wobbly.
In short, even as the clock ticks away on Modi’s $5-trillion-in-5-years GDP dream, it’s problems galore with no quick solution in sight.
In such a backdrop, the government has its task cut out. Does it mean Sitharaman has no choice but to finally bring in the hard, painful reforms? Here’s is what ET readers think.
First stop: Jobs or GDP?
While the seriousness of India’s jobs problem is beyond all doubts now, survey respondents think this budget’s top priority should be on pushing broader economic growth first.
In answer to ‘What would you like the Budget’s top focus to be?’, 35.4% of the participants said Sitharaman’s main focus needs to be on measures that would bring the economy back on track. 31.5% of them picked job generation over growth.
A raise in tax slabs came in at a distant third with 19.7% of the vote.
Agriculture: MSP over loan waiver
As regards what Sitharaman should do to alleviate India’s farm crisis, over 42.8% of respondent think raising MSP is the best solution.
The second biggest group of respondents — at 29% — picked a fixed per-acre payout system for all of India. Even as a debate over farm loan waiver rages, a surprisingly low number of respondents (6.5%) said they wanted the Budget to waive off farm loans.
Taxes: More money in middle India’s hands
On the tax front, there were way more people (more than 38%) who want the basic slab to be raised to Rs 5 lakh, than those who wanted the deduction limit under 80(C) to be increased (less than 20%).
33% of the respondents backed the idea of rewarding honest taxpayers in some way of the other. The rest thought the current tax slabs were perfect and no changes were required.
The reform on top of India’s mind
Changes in direct tax topped the wish list of most respondents (34%) when asked which they thought was the reform that couldn’t wait any longer.
25.7% of them preferred to go with land reforms while an almost equal number (24.7%) wanted labour code to be put on the fast track.
Power sector reforms came in at the last position.
On bringing back the jobs
So, what do ET readers think is the best way to address India’s jobs crisis? Here, those who want an overhaul of the education system win hands down at 40%.
The second largest section (27.5%) wants the government to start a mechanism for providing incentives to the top job creators.
21.9% of the respondents backed labour reforms, and the rest said they wanted the government to take more initiatives on the lines of MUDRA loans.
How to jumpstart the economy
That the Indian economy is firmly stuck in a slow lane is no longer news. Many measures to help the economy get its mojo back have been tried with not much success.
The survey asked which of the four steps — remove infra bottlenecks, revive stalled projects, speed up privatisation and increase govt spending — ticked the most boxes.
A high 40.6% of participants thought infra bottlenecks needed to be tackled on a high priority basis. Speeding up privatisation resonated with 27.1% of them, while 17.8% batted for revival of stuck projects.
What investors want
Last year, Jaitley had handed investors a big dampener in his long-term capital gains (LTCG) tax on shares. While that move still rankles, a higher number of participants (48.8%) in the ET survey thought that putting more money in the investor’s hands via reduced taxation was the best thing Sitharaman could do in this Budget.
27.4% of the respondents thought the Finance minister should abolish, or at least cut, the LTCG tax on stocks, while 14.1% wanted a level playing field for equity mutual funds and ULIPs.
About angel tax
Angel tax refers to the income tax payable on capital raised by unlisted companies through shares issue where the share price is seen in excess of the fair market value of the shares sold. There are various arguments both for and against this tax — the startup sector mostly sees it as unfair.
30.3% of the survey participants said this tax should be abolished, prospectively, while 25.5% thought it should be done away with retrospectively. A high 29% of the respondents remained undecided.
Where to put most of the money in
Which sector should get top allocation in this Budget? 36.4% of the respondents went with infrastructure. Agriculture drew 29% backers.
The rest of the participants were divided between skilling (18.7%) and climate/environment (15.9%)
Source : Times of India