Mixed bag of goodies for the average Indian taxpayer

Physics is about the study of matters (economic units) in motion, chemistry about matters (political units) in reaction, biology about living matters (common man) and finally what really matters during Budget is Mathematics which is a matter of numbers. The Budget is now reduced to an arithmetic that displays mathematics at its best to answer the question of the famous financial historian Peter Bernstein when he said “what we are asking ourselves is not ‘what is your forecast’ but rather ‘can we forecast?’.” The global uncertainty since 2008 has been a lucky escape route for Finance Ministers and the Governments of the day to provide a simple answer to Bernstein’s question. There are certain questions that require no Maths or Physics but only common sense. Questions on agriculture and social sector spending fall under this category. The present Budget seems to have convincingly answered this question to touch the lives of farmers and those socially vulnerable. 

The media noise and public discourse on the Budget drowns the voices on the Economic Survey which is a goldmine of information. Once the Budget is out in public domain the discussion shifts to the Budget as though the Budget of the Government of India is going to solve the problems of India. The recently tabled Economic Survey for 2015-16 has captured social infrastructure spending with a focus on education & health. The moment the Budget estimates are released, the argument immediately shifts to the Budget allocation and that its only 3 per cent of GDP on education and 2 per cent on health unmindful of the fact that both are not the exclusive subjects of the centre. However, the Budget can provide the much needed symbolic stimulus to these critical social sectors through centrally funded institutions, Centre-State projects and through tax schemes. On that count, the current union Budget seems to have addressed the first two adequately while the third disappointingly.

The announcement of enabling regulatory architecture to create 20 world class higher educational institutions (10 public and 10 private), a not-forprofit Higher Education Financing Agency with an initial capital base of Rs 1,000 crore for higher educational infrastructure improvement and Rs 1,700 crore for skill training institutes are welcome measures. The funding mechanism needs to be transparent and non-discriminatory to ensure effective implementation. At a time when the total R&D spend is at a deplorable low of 1 per cent of GDP, far below USA, UK, China and Brazil, the Finance Minister has announced a gradual reduction in weighted tax deduction on research donation from the existing 175 per cent to 150 per cent to a final 100 per cent. This discourages corporates to fund translational research in educational institutions at a time when in-house corporate research and Budgetary allocations for research is insignificant. 

As an impartial observer, the overall Budget is a cheerful double-handed clap. As a partial academic, it’s a silent one-handed desk clap!