Even the common man knows that the exercise of Budget in India is not restricted to Economics but Politics plays a huge huge role. Every year, whichever party is ruling, takes the opportunity to showcase the event with much fanfare. A cut and dry economic balancing of accounts with some exploration on future investments, is turned on its head, into a circus of sorts, with much hype and months of speculation. The jostling for eye balls amongst economists, arm chair planners, journalists, corporate honchos, politicians and babus, is to be seen, to be believed. All want to have a piece of the budget cake exposition. Alas, it’s the common man, possibility for whom the Budget holds bread and butter import, gets the short shift. India, in its 78th year of Independence is still a country, whose majority population is poor. Therefore, much discourse about upliftment of poor is resorted to. Of course, the peculiar animal called middle class, is common fodder for all. Its position is most lamentable in the entire spectacle. Amongst the middle class, there is a diminutive percentage who are tax payers and who get most vocal on the issue of Income Tax. Lo and behold, 2025 Budget brought in some apparent relief on this front though much was hidden in the small print. Media has already waxed eloquent about Union Budget – 2025.Citizens, however feel it’s another opportunity lost. Much has been wasted in the altar of political and economic expediency.
The Union Budget, in its first avatar in 1947-48 was of Rs 197.39 Crore, the 2025-26 Budget has a staggering expenditure of Rs 50,65,345 Crore. With its meandering journey over the years, much has changed in the Union Budget. We can only touch upon some of them for purposes of clarity. Every year, a particular space is chosen as a focus area in the Budget. In 1947 almost 46 percent was allocated to defense. But we lost part of Kashmir to Pakistan in 1947 and the War with China in 1962. Cut to the Budget of 2021-22, the budget after Covid-19, focused on enhancing healthcare and increased allocation for vaccination to Rs 35,000 crore. The budget also imposed Rs 2.5 per litre agrii infra cess on petrol and Rs 4 on diesel. Have the health services or agri infrastructure improved? The answer most certainly should be a resounding NO. If the nation is once again confronted with another epidemic, we are not sure that we will be able to face it resolutely. The health infrastructure is crumbling and the Government has almost surrendered the services space to private players. The Agriculture Sector is constantly up in arms against the Government policies leading to confrontations which find resonance even abroad. Union Budget 2022-23 allocated Rs 10 lakh crore to capital investment, up by 33 per cent, to enhance growth potential and job creation, infrastructure development, crowd-in private investments, and provide a
cushion against global headwinds. What happened? The Private Sector did not reciprocate with warmth. It was only the PSEs which came forward to meet its capital expenditure targets. While many in the Private Sector made windfall profits, it did not choose to invest in developing national assets. Union Budget 2023-24
focused on ‘Amrit Kaal’ growth (referring to the next 25 years, by 2047), with the goal of making India a developed country in the period. The budget named seven pillars or ‘Saptarishi’ to usher growth and development, viz., inclusive development, reaching last mile, infrastructure investment, unleashing potential, green growth, youth power, and financial sector. The budget also included a record budgetary allocation of Rs 2.4 trillion for the Indian Railways. Indeed, the Railways have seen a growth in number of New Trains, Vande Bharat, Metro in cities and new connectivity in J&K etc. but is the Railways a story of pronounced success? Many have a different opinion. The Safety and Track Improvements have gone for a toss. The number of accidents, despite the so called Suraksha Kawach, have gone up. The services in most trains are below par. Conditions in trains which feed the rural areas, especially during festival seasons, has not improved a bit. We can see that year on year, most of the sectors which were the focus areas did not not achieve targets. The 2025 – 26 Budget has put emphasis on Gareeb, Youth , Nari; we need to see how this materializes.
Much brouhaha is there on the Income Tax relief given in Union Budget 2025-26, especially to the middle class. No Income Tax is payable till Rs 12 Lakh annual income. Apart from the apparent relief, this is also aimed at increasing consumption and help in growth. The Rs 12 Lakh, however, does not include income from other sources which are already taxed differently, like Capital Gains. Personal Income Tax continues to be one of the most important source of revenue for Indian government. No doubt some relief has been proposed but is the Tax Regime just? Agricultural Income is still not within the ambit of Income Tax. This has led to some sort of money laundering and leakage from the government coffers. It’s a fact that businessmen keep complaining about the lack of ease of doing business in India. Most feel India is not investor friendly. One of factors which should have been looked into is the Tax payable by highest income earners. Realistic slabs for highest tax payers (which is almost 39% today) could be a source of attracting more investment in businesses. For Senior Citizens, there is some good news, the threshold for TDS on interest Income exceeding Rs 50,000 has been raised to Rs 1 Lakh wef 2025-26. The annual TDS limit on rent has been increased from Rs 2.40 lakh to Rs 6 lakh per year. The New Income Tax Bill which has been introduced in the Parliament is aimed at making the Income Tax much simpler and user friendly. Inter alia, it intends to reduce the number of sections by 25-30 per cent, provide for extension of time frame for filing updated returns from two to four years, introduction of the term “tax year” instead of the existing financial year and assessment year, digital assets such as cryptocurrency are covered under a proper tax framework, for nonprofit organizations it establishes a more detailed framework, it also introduces new provisions to support startups, digital businesses, and renewable energy investments. These seem to be more procedural than substantive in nature. One has to see how the entire thing unfolds and put into practice. There is no change in the Corporate Tax Rates and the exemptions have been extended. Interestingly the Corporate Sector has, over the years, not responded with much enthusiasm. Neither there have been the anticipated investments nor has there been any move to improve employment and working conditions. On the contrary, many industry captains are calling for 70 to 90 Hours Work Week.
Coming to the issue of Job Creation, India has been facing the issue of unemployment and underemployment for years now. There is a vague promise on 100 percent Jobs for skilled workers but it seems to be more of an expectation than reality. On Education, Budget estimate for 2025-26 is Rs 1,28,650 crore as against Rs 1,25,638 crore for 2024-25 in BE which was revised downward to Rs1,14,054 crore. Will it be sufficient? Only time will tell. Further, what is the skill set we are talking about? The Educationists and Trainers do not appear to be sure themselves. Meanwhile Corporates keep lamenting on the lack of skilled manpower. The moot question is when will the two (Educators & Corporates) sit together and trash things out? Its otherwise a sheer waste of time and money chasing up Training fads and fashion. The only employment guarantee scheme under MGNREGA for rural areas, has same amount of Rs 86,000 crore for 2025-26 same as 2024-25 RE and BE. It’s to be noted though that the expenditure in 2023-24 was Rs 89,154 crore. So the government lacks some serious solutions on the employment front. AI, we all know, is going to be massively disruptive and no matter what soothsayers say, jobs will get eliminated. Those who fry pakoras, sell pani puri or litti chokha and stray motor mechanics, plumbers and carpenters may outlive the upheaval but otherwise it will be a scorched earth scenario as far as jobs are concerned. To quote what has appeared in the media – There is obviously very wide gap between what is required for our workforce, job generation, social welfare, education, and health, and what is provided in the Union Budget 2025-26. Moreover, there is total mismatch between the actual provisions and the dream projected for the people of India under Vikasit Bharat- (IPA Service). Its time India made some serious moves to encash it’s manpower dividend. One is tempted to state that much more revolutionary ideas will be required if India is to tackle the problem of unemployment. The situation in Bangladesh and its Textile industry taking a beating can be utilized to shift some businesses to India and create jobs. For this, the Bangladesh Model of giving land, tax breaks, dedicated freight corridors etc. to attract businesses to the country, not as much for profits but for employment generation, is worth emulation. Such a shift in approach can creäte substantial employment for the youth in India.
On the energy front, the announcement of setting up small but multiple Nuclear Plants has evoked mixed reactions. Experts are aghast at what may happen if a Chernobyl or Fukushima like disaster was to happen in India. There is also the issue of no clear cut policy framework designed for waste management. Managing Solid Waste, IT Related Waste, Used Batteries, Plastics, Tyres, Solar Panels. what to talk of nuclear waste, is no small task. While there is need to explore alternate sources of energy there is also an equally important need for a comprehensive energy related waste management strategy.
Many have criticized the Budget to be Bihar centric. Indeed, many facilities have been extended to this poll bound state right up to setting of a Makhana Board! This is where the wisdom of keeping the Budget as a purely economic exercise come into focus. Politics has often marred the investment pattern in India. Imagine setting up Oil Refineries in the hinterland instead of coastal areas and incurring additional, recurring cost of transportation of Crude and Products, which the country can ill afford. Even now, there is talk to setting up small to mid-sized Green Refineries in various states when everyone knows that Mega Refineries is a wiser option. In any case, Oil is now on the verge of being eliminated as an energy source the world over, then what use will these Refineries be put to? Being Capital Intensive job opportunities are also minimal. Citizens of India have matured over the last 76 years of independence and moved on. They are hardly impressed by sops and freebies which recent elections have proven.
The Union Budget is a huge opportunity for catapulting the nation from an also ran to a o developed nation. Every such opportunity should be made full use of. Policy makers and politicians of every hue must recognize the business part of Budget. They need to develop courage to take the plunge for a more realistic and future proof approach. A revolution is not always bad. Disruptive gains are a reality today. Its high time, India comes out of Gunnar Myrdal’s phase of lack of will, else it will be condemned to poverty for next 76 years.
