Amid global slowdown, high inflation has been one of the critical issues for India too. According to media reports, it will be addressed in the budget the next year leading to a boost in demand, job creation and put the economy on a sustained 8 per cent plus growth path. There may be an announcement on the slab rates and tax-cut, however it may not be a significant one, said Ashok Prabhu
The government needs to ensure better implementation of the schemes to deliver the benefit to the targeted group of people, says Ashok Prabhu, vice-president, HCL Infosystems on his expectations from the upcoming budget.
Finance minister (FM) Nirmala Sitharaman led customary pre-budget meetings began virtually on 21 November, covering various issues concerning climate change, infrastructure among others.
However, there have not been much discussion over giving tax related benefits to the mid and lower-level employee group which caters to a major population group.
Amid global slowdown, high inflation has been one of the critical issues for India too. Various media reports stated that it will be addressed in the budget the next year leading to a boost in demand, job creation and put the economy on a sustained 8 per cent plus growth path.
While speaking to BW Businessworld, Prabhu, said, “Although, there may not be any announcements which will directly impact the common man however, the infrastructural developments in rural areas by the government will boost employments and confidence among the people.”
“Manufacturing units needs to be established which will boost the job creation, as by 2024 everyone would have faced the prevailing global economic slowdown,” he added.
Providing a tax relief in this inflationary environment, could lower the burden on employees. However, considering last year’s budget announcement and media reports on upcoming budget, there has not been any big announcement giving relaxation or perk under tax regime.
Prabhu said, “Not much deduction can be made in tax as it will increase the purchasing power of the consumer which will impact the economy at large. There may be an announcement on the slab rates and tax-cut, however it may not be a significant one.”
In February, this year, when the budget for FY22-23 was announced, many had different opinions and analysis based on their needs and knowledge, however the budget did not meet a common man’s expectation, according to experts.
According to Prabhu, the reforms push by the government and the accountability will develop confidence among the people. A lot of schemes were announced for the common man during pandemic, government, however, needs to ensure better implementation of the scheme in order to deliver the benefit to the targeted group of people.
Commenting on single rate GST on all items he said, that we have learnt a lot about the GST in last five years, and hence in his opinion the common slab rates on all items under GST Regime would be beneficial in the long run. This, however, will have to be dealt with due care as there exist few items relating to basic necessity a such as fuel, electricity, liquor and etc.
Government will continue to have push for economic growth. They will try to bring more investments from global companies to India, he added.
The FM held meeting with the agriculture and agro-processing industry, representatives from financial sector and capital markets on 22 November. She also met the representatives of services sector and trade bodies, along with the experts from social sector, including health, education, water and sanitation, on 24 November. She is due to hold meetings with trade union representatives and economists on 28 November.
The suggestions from the participants will form part of 2023-24 Budget which will be presented in Parliament by the finance minister on 1 February.
On prospective tax related announcements, Prabhu said, “Considering the last five-year trend and looking at government’s current plan it is very difficult to speculate on what amendments or perks has the government decided to surprise the masses with. It however, will address the issues relating to the middle as well as lower-level employee group as the entire world is witnessing a slowdown and India is no exception to that.”
The Modi led government and Sitharaman will be discussing the fifth budget and the last full budget prior to the general elections scheduled in April-May 2024.