On 1st February 2020, Union Finance Minister Mrs Nirmala Sitharaman presented the Union Budget for FY 2020-21.
There were many speculations associated with the budget, especially when India is facing the worst economic slowdown in the past ten years. In his Economic Survey, Chief Economic Advisor Dr Krishnamurthy Subramanian said on Friday that the slowdown was cyclical and the key to revival of economic growth is increasing government spending to boost overall demand. He pegged the growth rate in 2020-21 at 6-6.5%. The past six quarters have witnessed the economy slumped from 8.1% in January-March 2018 to 4.5% in July-September 2019.
Not just steps like disinvestment of LIC have been introduced, the budget overall has not addressed any of the major factors that would significantly matter to the youths and the environment.
A completely new tax regime has been introduced under which the percentage of income tax deduction has been feebly reduced. However, a major change has been made in the exemption categories namely, 80G, 80C and 80E for which there will be no further tax benefit. This may have a strong impact on all those who take education loans for higher studies. So far under section 80E, the EMI for education loan entitles to tax exemption, but henceforth, any loan taken will not be exempted.
The rate of interest for education loan at present varies between 7–11%, which amounts to a good sum, and hence, will pose a significant burden. One of the most important tax benefit instrument is 80C, which offers relief for any investment amounting to 1,50,000. With the removal of this section, there would be a cut in the overall saving, especially for those who are right at the initial stage of their careers.
Next is the allocation for education. There has been absolutely no mention on how the 99, 300 crores are going to be invested in the various sections across school, colleges and universities, and how the government would boost and reform the education system. It has not been long since the issues going on in the JNU regarding an abrupt fee hike.
If the government shows a reason that the fee hike is necessary for salaries and other factors, then now, will there be a respite from any kind of fee hike in any government colleges and universities across the country? Well, there is no mention of this. Moreover, attracting FDI in the education sector is also not appreciable because this may lead to too much commercialisation, which may dilute the quality of education.
No concrete plan or statement has been given on how the whooping rate of unemployment can be countered. The proposition of internship opportunities for fresh engineering graduates in state government organizations is completely vague for the following reasons:
Next is the idea of pumping more capital in the manufacturing sector, which is accountable for a large category of job opportunities. But, will this solve the issue of unemployment? Well, the answer is NO.
One of the primary parameters that decide the overall performance of the manufacturing sector is the capital:labour ratio. The survey chart below shows that the ratio has increased significantly, which means instead of a number of workers, there is an increase in the capital only. What is worse is that this trend holds true across the board, including sectors such as textiles and leather products that are considered “labour-intensive” and most capable of creating jobs and soaking up surplus labour.
Finally, the most important and neglected department that will significantly affect everyone irrespective of age and demographics is the climate crisis. An amount of 3100 crores have been allocated to the Ministry of Environment of which 460 crores are for pollution control, which is the same as last year. This is merely a statement and nothing more than that—because there is no explanation on utilisation. In September 2019, India promised to bring their renewable energy capacity to 175 gigawatts by 2022, and in the present budget, there is no explanation for the same.
If we think of the total GHG emissions where India has been among the top four emitters, there must have been a detailed plan on pollution control. In contrast, a lot has been spoken about infrastructure and development. The mere increase of 21% as compared to last year will actually serve no purpose.
So overall, if we analyze the budget, it has very less to offer to the citizens, especially the youths for whom things would be adverse. There is an absolute lack of vision and execution, and everything appears to be rhetoric than realistic. There were a great deal of expectation that a few logical steps would be taken, and we are disappointed this time as well.