Finance Minister Nirmala Sitharaman will present the union budget for 2022-23 on Tuesday at a time when India’s economy is showing strong signs of recovery from the problems created by COVID-19 and the country has again emerged as among the fastest-growing economies in the world.
The budget, which will be presented at 11 am on Tuesday, will be paperless like the last year. The government is expected to announce measures to boost GDP growth and strengthen infrastructure.
The man on the street will keep a close eye on the proposals regarding income tax and the impact of announcements on prices of essential commodities. There has been no change in income tax slabs since 2014.
Some analysts believe that the Finance Minister may announce some relief to the taxpayers.
They said the basic exemption limit may be raised from the existing Rs 2.5 lakh to Rs 3 lakh and for senior citizens, it may be increased to Rs 3.5 lakh. There could be changes in other slabs also.
According to a pre-budget survey conducted among different stakeholders by KPMG recently, the majority (64 per cent) of respondents expect an enhancement in the basic income tax exemption limit of Rs 2.5 lakh.
“Our pre-budget survey indicates that relief for individual taxpayers by way of an enhancement in the basic income tax exemption limit of Rs 2.5 lakh is highly awaited. Respondents also support an upward revision in the top income slab of Rs10 lakh,” said Rajeev Dimri, Partner and National Head of Tax, KPMG in India.
“Although the government has taken several measures to resolve tax disputes and overhaul the tax dispute resolution framework over the past few years, further measures in this regard may help in reducing litigation. Rationalization of TDS and TCS provisions to ease compliance burdens will also be welcome,” he added.
The government is expected to continue its focus on the healthcare sector that is in the forefront of the fight against the COVID pandemic.
Health professionals said that there is a need to further strengthen medical services in rural areas and equip tier 2-3 towns with facilities like diagnosis centres, ventilators, ICU, critical care facilities and oxygen plants.
Indian Medical Association President Sahajanand Prasad Singh said that the government should increase the allocation of GDP from 1.2 per cent to 3.3 per cent.
Speaking to ANI, Dr Suneeta Reddy, MD, Apollo Hospitals said, “The country should spend more on the healthcare system. Currently, we spend 1.15 per cent of our GDP on health care, but it needs to be 2.5 per cent soon. The Centre can also work with the private sector to be a part of this journey.”
Emphasizing research and development, Dr Reddy said the pandemic has shown the potential of India to become a global centre for drugs and vaccines. “Tax incentives should also be extended to R&D as this would encourage further innovation in healthcare.”
The realty sector is also pinning high hopes on the budget. Experts believe that the growth-oriented steps taken by the government have helped the reality sector regain momentum and more announcements in this direction can boost the market sentiment further.
For MSMEs (Micro, Small and Medium Enterprises), industry experts believe that steps should be taken to ensure hassle-free credit availability reduce the costs of doing business.
Pradeep Multani, President, PHD Chamber of Commerce and Industry
suggested extension in the timeline of the Emergency Credit Line Guarantee Scheme (ECLGS) for another year till March 31, 2023.
He suggested a reduction in tax on MSME firms working as proprietorship/partnerships as it will benefit the entire MSME sector.
The chamber has suggested that export income should be made tax-free for MSMEs for three years and the income of large enterprises from incremental exports (Y-o-Y) be made tax-free.
The tourism sector is also hoping for relaxation in taxes from the Union Budget. The tourism industry is one of the most affected sectors due to COVID-19.
The government’s steps to boost exports and promote manufacturing in the country are expected to get continued attention in the budget.
The customary ‘halwa ceremony’ to mark the final stage of the budget-making exercise was not held this year due to COVID protocols. Instead, the union government distributed packed sweets among the core staff members involved in the budget-making.
The budget session of parliament is being held in two parts. The first part will continue till February 11 and the second part from March 14 to April 8. (ANI)