It has been a welcome change to see initiatives like Make in India, Digital India, Start-up India and 100 Smart Cities introduced by the Modi-led Government. However, it will be crucial to see how these initiatives take shape and benefit the country as a whole. This depends a lot on appropriate fund allocation to these projects.
New initiatives
Talking about Make in India and Start-up India, the Budget should facilitate the manufacturing sector and adequate measures should be taken to encourage domestic manufacturing.
Given that smartphones and similar devices have a very large consumer base and an ever-rowing market in India, it is time domestic players are encouraged to manufacture such devices by getting certain tax benefits. Domestic players find it hard to compete with well-established international brands. Therefore, such tax exemptions will provide an ecosystem that encourages local manufacturers.
Tax slabs, exemptions
From a common man’s perspective, it will be good to leave more disposable income in the hands of the middle-income group. Tax slabs can be raised for the highest income bracket, keeping the other categories constant. In the case of the salaried class, the present tax exemption limit of ₹1.5 lakh is very low. This can be raised to ₹2 lakh so that retail investors are motivated to save more which, in turn, gets channeled into industry.
Housing loans
The Government should also focus on increasing the tax deduction limit for housing loans. Owing to increasing property prices, the current limit of ₹2 lakh is very less. Considering how the property prices have skyrocketed in metros like Mumbai and Delhi, where a 2-BHK apartment is priced at ₹1 crore or more, the current tax deduction limit is almost meaningless.
Coming to the handing over of the property, buyers are burdened with additional cost because under Section 24B, the buyer can claim only ₹30,000 if the construction of the property is not over within three years. There should be clear-cut norms to relieve the buyers from such burdens.
Hospitality and tourism
Another sector where the Budget could divert its focus is hospitality, in particular branding India as a desirable tourist location. Considerable funds should be allotted to ensure safety of the tourists and women in the country and attract high revenues from tourism. A policy revision in the e-commerce industry will also fuel the economy.