Budget 2022 Analysis | What did Middle Class Get? | Pros and Cons
Hello, friends!
Budget 2022.
This is a very important year for the Budget.
Because if you'd recall,
New India 2022,
was a major campaign by the government for this year.
They claimed that this year, 2022, would be the deadline for several promises.
Every Indian would get a house by 2022.
Each house would get a water connection by 2022.
Every village would have 24*7 electricity by 2022.
Farmers' income would be doubled by 2022.
It was even said that bullet trains would be a reality in India by 2022.
Because a New India was supposed to emerge by 2022.
The year is here.
And the Budget has been proposed for the year.
So what does this Budget have for the middle-class?
How many dreams would become realities?
What are the boons and banes of this Budget?
Come, let's find out in today's article.
According to the Finance Ministry,
this year's Budget focuses on
creating a blueprint for India's next 25 years.
We were talking about India @ 75 till now,
from now, we will start talking about India @ 100.
This would be the Amrit Kaal for India.
[Amrit: Elixir; Kaal: Era]
They listed four areas of focus.
[Gatishakti: Dynamism]
According to the PM Gatishakti plan,
there would be 7 engines of growth.
Several people have criticized this.
Because they are basically using new words for marketing
and the old words are being forgotten.
There were promises of Smart Cities at one point.
There were promises of investing ₹100,000 trillion in infrastructure.
Where are the Smart Cities now?
Why aren't they talked about?
The words that they use here,
shouldn't be given much importance,
because in a few years, the government will forget these words.
But if we look at the numbers,
Capital Expenditure got a big boost
by 35% for the next year.
And the government has said that National Highways Network would be expanded,
by 25,000 km,
in the Financial Year 2023.
These are both good things.
If we get infrastructure development,
it will boost employment as well.
But the thing that doesn't benefit employment is that
reduction in MGNREGA.
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| Budget 2022 Analysis BY Dhruv Rathee |
Mnrega
MGNREGA or the Mahatma Gandhi National Rural Employment Guarantee Scheme.
It is the biggest scheme for rural jobs by the government.
And the government has cut its budget by 25% as compared to last year.
From last year's ₹980 trillion,
it is at ₹730 trillion this year.
Reasons haven't been cited for doing so.
So it does raise questions,
whether the government is even interested in issues like unemployment?
According to the data,
there were 30 million unemployed people in India in 2019,
And after the onset of the Covid-19 pandemic,
this number has increased by more than 10 million.
According to some other estimates,
more than 50 million people are unemployed in the country currently.
So unemployment should have been the #1 priority of the government.
Additionally, the government has cut the budget for food subsidies by 27%.
From ₹2,990 trillion
it has been reduced to ₹2,070 trillion.
It is the same with fertilizer subsidies and petroleum subsidies.
If the budget has been cut at so many places,
where has it been increased?
A good thing is that the spending on Education has been increased.
Education
This year, ₹1,040 trillion would be spent
as compared to last year's ₹930 trillion.
In my opinion,
this is a small increase
it is welcome but it isn't very significant,
because if you recall,
the government had introduced the New Education Policy in 2020,
I had praised it too,
in it, the government had said that
they aim to take the education budget to 6% of the GDP.
And though the actual number has increased a bit,
it is still a long way from 6%.
It is still around 3%.
Talking a bit more about the education field,
the government has proposed to establish a digital university
and has said that it would expand the One Class, One TV Channel scheme.
It would be expanded from 12 to 200 TV Channels.
So that supplementary education can be imparted
in every regional language of the country.
So that the loss to the formal education due to Covid,
can be minimized.
Health and Family welfare
In the Health Sector,
the government has proposed a minor increase in the budget of the Health Ministry.
From ₹860 trillion
it is increased to ₹862 trillion.
But the money that was being spent on medical and public health,
saw a huge budget cut of 45%.
From ₹740 trillion,
it has been cut to approximately ₹410 trillion.
The reasoning for this by the government is that
they would not need to spend a huge amount on Covid vaccination.
But an outstanding thing in this budget is that
the government has a new focus on mental health.
National Tele-Mental Health Programme has been proposed,
under which, more than 23 Tele-Mental Health Centers of Excellence would be set up,
to help people.
And as you know, this is such an issue
that is rarely focused upon in our Indian society.
During the pandemic, the mental health of the people has taken a hit
by staying locked in their homes.
According to the WHO,
in every 1 out of 4 families,
at least one of the family members
suffers from some mental health disorders.
And in such cases,
there is little to no support from friends and family.
This initiative by the government is a very positive step.
Defense and Sports
Moving on, the defense budget has been increased by 10%.
From ₹4,780 trillion
to ₹5,250 trillion.
The sports budget saw a significant increase too.
An increase of ₹3 trillion,
this year, the budget allocated to it is ₹30 trillion.
It is good news,
the reason behind it is said to be
the outstanding performance by our sportspersons in the Tokyo Olympics.
Perhaps that has influenced the government
to spend more on sports.
Now, let's come to the most important part of the Budget.
Middle Class
The middle-class.
What did the average person get from this Budget?
The common man got the same thing, friends
that he was getting in the past several Budgets.
A big Nothing.
You heard it right.
Many people were expecting that
there would be a change in the tax slabs
that the government would raise the income limits a bit,
so that the tax burden on the middle-class man could be reduced.
But nothing of the sort happened.
People's disappointment was evident on Twitter.
#MiddleClass was trending on Twitter
when the Budget was being presented.
The financial condition of a common man had deteriorated to quite an extent in this pandemic.
Many economists believed
that if we want to revive economic growth,
we need to focus on the middle class.
If the middle-class people have more money with them,
they will spend more.
The more they consume,
there would be more manufacturing because of the increase in consumption.
Because of the increased demand, there would be more supply.
And then the economic growth would be revived.
But the government did not focus on it at all.
The supporters of the government will argue saying that
though they did not lower the taxes,
at least the government didn't increase the tax.
That this should be enough to make everyone happy.
Initially, you may think that they are right,
but think about it a little,
because of inflation,
each year the value of your money is decreasing.
But the tax slabs are the same.
What is the inflation here, on average?
We get to see an inflation of about 6%-7% every year.
The cost of things keeps on increasing.
But your salary stays the same.
And your salary is taxed the same.
If the tax slabs aren't modified with inflation,
it would mean that each year,
the government is taking more and more tax from you.
But think about it for a bit,
is the government using your tax money properly?
Do you see development in the country?
Do you see economic growth in the country?
Because of inflation,
a normal, salaried person is taxed more.
And there are tax cuts for the corporates.
For large companies.
You heard it right.
this time, the Corporate Surcharge Tax has been reduced from 12% to 7%.
Additionally, there has been a lot of focus on Crypto in this Budget.
CryptoCurrency
It was decided that
the RBI would issue a digital Rupee.
With its help, it is being said,
the digital economy would get a boost.
It has become a controversial decision.
India would not be the first country
to introduce a cryptocurrency for its legal currency.
But the fans of cryptocurrency,
believe that the basic concept of cryptocurrency
is decentralization.
It is a currency
that is not controlled by any bank or government.
So when the various governments and banks around the world
introduce their own cryptocurrency,
they go against the fundamentals of cryptocurrency.
It is something that can be discussed in detail in some other video.
But apart from this,
the government has decided to tax crypto.
The crypto transactions would be charged 30% as tax.
In fact, not only on crypto,
on any virtual, digital asset.
NFTs are also being included in it.
This 30% tax is only on profits.
If you invest money in any cryptocurrencies
and get a profit from there,
a 30% tax would be levied on your profits.
But if you incur a loss there,
you cannot off-set that loss
from any other income.
Some people criticized the government for this as well.
Saying that they are the only ones to bear the loss,
but if they earn any profit,
the government would take away 30% of it.
One thing is certain,
if you are incurring a loss, you can off-set it
against the profits on any digital assets.
Against other cryptos.
If you incurred a loss from investing in any coin,
and you get a profit from another,
you can combine that loss and profit
to get the net profit,
and you'd have to pay 30% tax on it.
Imposing a tax on crypto by the government is seen as
acceptance or acknowledgment of the cryptocurrencies by the government.
Although they aren't legal yet,
but this is seen as the first step
towards legalizing it.
But even if the government hasn't said so literally
that cryptocurrencies are now legal,
but the government is still charging tax on it,
it becomes a weird circumstance.
That though the government doesn't acknowledge something as legal,
the government would still collect tax from it.
Interesting things
Apart from these, there were some other things that I found to be interesting,
e-Passports.
It means passports that would have a chip embedded in them.
It is a technology
that is already being used in the passports of some of the developed countries,
and it would now be introduced in India too,
from 2022-2023, as per the government.
The 5G spectrum auction would be held in 2022-2023,
after 4G, 5G would also be introduced.
Another interesting and bold promise by the government here is that,
we would see optical internet fiber in all Indian villages by 2025.
The promises sound great in the Budget every year.
But the thing that matters the most is
to what extent will they be actually implemented?
As I said at the start of the article,
there were so many promises for 2022,
that it was unbelievable.
How many of them have been actually being implemented by the government?
How many schemes, has the government absolutely stopped talking about?
We must ponder on these.
What is your opinion on this Budget?
Comment below to let me know.
I hope you found this article informative.
Thank you very much!