Thursday, 28 February 2013

Budget-playing safe

Using the success of the budget presented this year,government has to show progress/results immediately. Otherwise they would be voted out in next year's election(Election 2014) So it better be good. No big increase is good for the salaried class. The ruling class has to show immediate success. Long range effect of the programmes does not matter to them. Big portion of the treasury for social welfare programmes will give immediate relief to the poor and hence their votes can be won. But on the long range, such programmes can ruin the economic status of the government. We can spend more on developmental programmes which will have a better effect of eradicating poverty: but this will take time. Election 2014 is too close for all that. Expenditure on social welfare schemes would erode the treasury.
Those earning more than one crore a year will have to pay more tax. Otherwise tax slabs remain the same. New slabs could have been created. Tax on luxury cars and imported vehicles has been increased. But those who are rich, tax is a small expenditure. To them, it does not matter. Cost of mobiles will go up, that is not good(cost of those above Rs. 2000). As mobiles have become common man's access to the world, a price rise would curtail usage.
Banks for women will be made, now. This is positive move. Women entrepreneurs will benefit a great deal. This was done so that the budget to be called "inclusive"Women's votes have been thus roped in.One thousand crore will be spent on security for women. Rural and urban health care has been clubbed together.
Over all, more efforts could have been made to improve industries/job-creating organisations. But that would take time to demonstrate results and there is only one year to show down (Election 2014)
So people can satisfy themselves that no big change would affect them directly. But the possibility that we could have leaped forward and progressed further is gone. All cannot be pleased. Now investors will be happy.This is an investor-friendly budget.

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