The economic scenario and crime graph in Odisha reveal disturbing features. Both industry and agriculture are sluggish. Reforms in both of them are not up to the mark. A recent NITI Aayog report puts Odisha at 21st position among the States in agro reforms and agro implementation. On the crime front, daylight bank robberies have become common. There are disturbing indicators of circulation of fake notes (new ones). Crimes against women and children are on the increase to the extent that girls in schools are now insecure. Corruptions at different levels are rampant. The law and order situation in general is precarious. The panchayat elections have thrown up aberrations. Criminal intimidation and murders have crept into the fabric of elections. The helpline for complaints regarding panchayat elections is nonfunctional. Conducts of particular candidates are far from ethical standards.
There are allegations of large-scale corruption in procurement of medicines for veterinary needs. River pollution advisories from the Pollution Control Board have fallen on deaf ears and pollution of rivers is on the increase.
All this reveals a picture of a society in drift. There are allegations that coastline villages are ceasing to exist. This feature is not limited to coastal areas but is also a phenomenon along rivers, mining area, regions where factories are coming up including areas in reserve forest. In the name of industrialisation, modernisation and urbanisation, rural heritage is gradually vanishing. Right from the days of Hirakud, villages have been under threat regarding their existence. Medicare is available only for the affluent. In a recent conclave by an electronic media house, it came to the forefront that the Government’s developmental programmes have become instruments in vote bank politics. In the panchayat polls, the role of money power has revealed an ugly picture. There are reports that seats have literally been auctioned in terms of the promises that are held out. Alongside, Maoist activities have resurrected and that too in very cruel forms. Broad daylight murders have become a common feature in every part of the State. We have reached an all-time nadir in removing or stealing statues of the Panchasakha from the Sakshigopal Bakulaban. The so-called developmental programmes do not reach the fringe zones like the marginal communities. This has had its adverse effect in increasing the gap between the rich and the poor. Disparities of different types have driven people to drugs. The State is today probably at the peak of drug trade. After 67 year of the Republic, we still cannot provide safe drinking water and basic housing and sanitation facilities to a very large section of the community.
In the national scenario, the fiscal deficit in the first nine months of 2016-17 has gone as high as about 94% of the Budget target against 87.9% and for the same period a year ago. Fiscal deficit, the gap between expenditure and revenue for the entire fiscal 2016-17 has been pegged at about Rs 5.33 lakh crore or 3.25% of the GDP.
This kind of an overall picture is not indicative of conducive growth-oriented and egalitarian principles being implemented in the interest of the society in an inclusive manner.
The Union Budget has tinkered with the Income Tax in a marginal manner. An additional rebate of Rs 2.5 thousand on tax liability on income up to Rs 3.5 lakh per annum is now going to be available. This will in the end make income up to Rs 3 lakhs tax-free. If one adds the benefits of Section 80C of the IT Act and, the exemption is fully availed of, there can be no tax effect up to an income of about Rs 4.5 lakh. Beyond the range of Rs 50 lakh, the surcharge rates are further hiked. There is, therefore, a redefinition of the rich making the dividing line of Rs 50 lakh to be taxed as the “rich”. Individual taxpayers will benefit in about 10 ways as detailed below:
i). With a decrease in tax rate from 10% to 5% for total income between Rs 2.5 lakh and Rs 5 lakh, there is a maximum tax saving of up to Rs 14,806 per year in the hands of individuals. ii). Tax rebate is reduced to Rs 2,500 from Rs 5,000 for taxpayers with income up to Rs 3.5 lakh (earlier Rs 5 lakh). Due to the combined effect of change in tax rate and rebate, an individual with taxable income of Rs 3.5 lakh will now pay tax of Rs 2,575 instead of Rs 5,150. iii). Holding period for immovable property to be considered long term reduced to two years from three years. iv). Surcharge at the rate of 10% of tax levied on rich taxpayers with income between Rs. 50 lakh and Rs 1 crore. v). Further, tax exemption will be available on reinvestment of capital gains in notified redeemable bonds (in addition to investment in NHAI and REC bonds. vi). long-term capital gains tax will result in a lower payout owing to various beneficial amendments. The base year for indexation of cost (adjustment of inflation) has been shifted to April 1, 2001 from April 1, 1981. This means lower profits on sale. vii). Deduction for first-time investors in listed equity shares or listed units of equity-oriented fund under the Rajiv Gandhi Equity Savings Scheme is withdrawn from 2017-18. If an individual has already claimed deduction under this scheme before April 1, 2017, he shall be allowed to avail a deduction for the next two years. viii). A simple one-page tax return form is to be introduced for individuals with taxable income up to Rs 5 lakh (including business income). Those filing returns for the first time in this category will generally not be subject to scrutiny. ix). Time period for revision of tax return cut to one year (from two years) from the end of the relevant FY or before completion of assessment, whichever is earlier. x). Delay in filing tax return for 2017-18 will attract fee/penalty of Rs 5,000 if filed by Dec 31, 2018 and Rs 10,000 if filed later. For small taxpayers with income up to Rs 5 lakh, the fee would be Rs 1,000.
Self-employed individuals such as professionals like doctors or advocates or even those engaged in vocations like fitness trainers or beauticians can now invest up to 20% of their gross total income in the National Pension Scheme (NPS). They would get a tax deduction from their taxable income. However, there is a catch. The overall limit of aggregate investments of Rs 1.5 lakh stands.
Apart from these, the new pension scheme, home loan interest benefits, educational loan interest benefits, medical insurance premiums covering self, spouse and dependent children and disability-related tax benefits will be further cash on benefits under Section 80C.
The Finance Minister has apparently balanced populism and fiscal prudence. Allocation of funds to the farming sector was a political compulsion. It is not clear how the credit benefit would translate itself into reality. There may be pitfalls and shortfalls in this direction. The economy had taken one beating with demonetisation. Before it recovers from the same, the GST, when implemented, would be another radical intervention. The Finance Minister says “across the board, every personal IT payers has more to relief and has more to spend”. In other words, the inherent budgetary policy appears to be in the direction of increasing the spending power in the hands of individuals. That in turn is expected to increase the demands and, thereby, provide a fillip to the manufacturing sector.
A real remarkable thing in the present context is the cash donation to political parties capped at Rs 2,000 per entity. Electoral bonds will ensure anonymity of donors. There are also no bar on cheques and digital methods. The enormous amount of money from an undisclosed source plagued the political parties in a significant manner. It is to be seen whether this step will curb the prevalent tendency of donations from undisclosed sources contributing in a massive manner. There may be proliferation of contributions below Rs 2,000 perpetuating the whole order.
The Budget should attract the attention of youths who should respond to it in a proactive manner. Whereas all are concerned with the Budget, the youths have a bigger stake in what has been proposed for the future. Continuous comment on the manner in which the Budget is being implemented is a desperate need of the hour. Though youths must play a dominant role, we cannot be uninterested and inactive if we belong to the non-youth category. The issues require the participation by all of us. And this concerns us all!
(The writer, a Senior Advocate, is a former All India Service officer, a former diplomat, a former editor, a former President of Orissa High Court Bar Association and a former Advocate General of Odisha.jayantdas@hotmail.com)