THE BUDGET BONANZA

Abstract:

Giving the nation a sneak peek into the ‘Acchhe Din’ to come , 45-days-old Modi regime set a tone of development as they proposed a promising maiden Union Budget 2014 with something for everyone in it.

Main Article:

Yellow was the color of the day, on July 10th 2014 the entire Jaitley clan arrived at the Parliament donning the astrologically relevant yellow hue in a hope to bring providence to their patriarch and the Finance Minister of the country Mr.Arun Jaitley. Presenting the maiden union budget, Mr. Jaitley also the Minister of Defense of the Union Cabinet of the 16th Lok Sabha laid the cornerstone by paving way for the ‘Achhe Din’ as promised by Modi and his benefactor. Carefully crafting the blueprint of India’s economic stride over the next four years the Union Budget 2014 is said to an attempt by the Modi Government to revive the otherwise dwindling economic status of the country.

Labeling it as a progressive budget, experts have opined that this maiden initiative by the Modi government is a step in the right direction. In his 128 minutes long speech Jaitley packaged promises to nab price rise, boost fiscal situation of the country, strengthen investor confidence, restore country’s growth back to 7 to 8 per cent and hack the expenditure by a considerable amount. Being an 18-lakh crore rupees, that is, 300 billion dollars budget, this budget would help the tax payers to save more on their income. Covering a wide spectrum of the society Jaitley had something for everyone. His host of proposals included both welfare formats and reformist policy measures. These promising proposals covered everyone – from senior citizens to young students and women folks and from foreign investors to the rural entrepreneurs and defense forces. The master plan of this budget also included measures and remedies to gain economic prudence, create more jobs, push FDI and stabilize the tax regime of the country. Prepared with a long term goal in mind the finance minister has promised to revive the national from its sluggish economic state.

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Pro-youth promises

Being from the corporate sphere a b-school student happens to be the future mover and shaker of the business world. Being acquainted with the nitty-gritty of the Union budget should become an essential business habit. Keeping abreast with all the latest development, manipulations and tweaks announced during the budget will equip you to navigate through the business world in an efficient manner.

Mr. Jaitley sure had the youth of the nation on his mind while drafting his budget. Laden with long term academic promises and benefits for students, many experts call it a pro youth budget. From national level progammes to promote employment among the youth to newer educational infrastructure – the future for the youngsters in the country looks promising. There is something for everyone, as the promotion of vocation training and skilling is set to make the freshers job ready and equipped. For management students and aspirants there are multiple bonuses at various levels. So below are the pointers and promises relevant for a management/ business from the Union Budget 2014 in a gist:

  • ‘Skill India’ - In an impressive attempt to boast the possibility of youth employment and curb the menace of unemployment, Mr. Jaitley declared the launch of a national level multi- skill programme known as ‘Skill India’. This programme stemmed from his effort to promote entrepreneurial skill and employment opportunities.

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  • Vocational training and skill promotion, especially for those from the rural sector, will allow the youth to start their own ventures. With a whopping 14389 crore rupees allocated for this programme, the idea behind Skill India is to bring vocational training held at a rural level at par with the higher education system. Along with this, a separate 100 crore is being allocated to initiate village entrepreneurship training schemes
  • Digital India – a pan- India programme that furthers the promises made by Modi to bring about a digital revolution in the country. Starting with increased broadband connectivity across the country to enabling IT platforms – the programme will also introduce the concept of digital classrooms and online government services. With 100 crores set apart for virtual classrooms and 500 for National Rural Internet and Technology Mission, the country is gearing up for a massive wave of digital modernization. This initiative will allow citizens to access government services online. IT enabled plat forms with higher level of lucidity which will allow increased indigenous assembly of software and hardware for exporting purposes along with easy availability on a domestic level. E-Kranti scheme will enable government service delivery and governance scheme.
  • 5 IIMs, 5 IITs and 4 AIIMs and many more - among the many other pro-youth announcements was Mr. Jaitley’s proposal to establish outstanding educational infrastructure. With 500 crore being allotted for this cause states like Himachal Pradesh, Punjab , Bihar, Odisha and Maharashtra will have their own India Institute of Management(IIM). While Jammu, Goa, Chattisgarh, AP and Kerala will house Indian Institute of Technology (IIT).

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    Within this promising proposal was the agenda of Young Leaders’ programme which in particular will be beneficial for management students and aspiring entrepreneurs.In the area of sport education, FM announced training units for sportsmen for Asian games and an all purpose Sports University at Manipur at the cost of 100 crore. For the students from the film fraternity a special status of recognition is promised for Film and Television Institute of India (FTII) and Satyajit Ray Film and Television Institute. (SRFTI).

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  • Smart cities – taking forward the idea of digital development in the country, the Finance Minister announced the concept of Smart cities. A model smart city will include the usage of technology in all this workings – everything will be modern, digital and new-age. With the exodus of population from rural areas to urban set ups, the need for such cities are more now than ever. A solid sum of 7,060 crore rupees has been allotted for this project. With the Prime Minister aiming at setting up 100 smart cities, the idea is to modernize existing mid sized cities and develop satellite towns of larger cities along with it. With the rise of neo-middle class, these smart cities will be stocked and equipped to support a much better living standard.
  • In the wake of increasing number of gory crimes against female, the government has come up with various effective schemes and programmes in an attempt to curb this menace and enlighten the masses. Being a cause that needs immediate attention, these proposals couldn’t have come at a better time. Mr. Jaitley announced 100 crore for Beti Bachao Beti Padhao programme, which will be aimed at the overall development of girl child. Ensuring more safety for the woman in the country, FM proposed the idea of Crisis Management Centre for woman. This cause will draw funds from the Nirbhaya Fund, which was started after the Delhi gang-rape case in 2012. A pilot scheme in ensure safety in public transport a separate fund of 50 crore us allotted.

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  • Apart from these prominent new additions the Finance Minister also made some promising proposals such as funds for airports in smaller cities, a huge chunk for better roads in rural areas and means to include sanitation facility in every household by 2019. Electronic goods are going to be cheaper from this on and buying toiletries such as soaps and oil will be easier on the pocket.

Corporate winners and losers

With this budget many crucial sectors in the country are set to witness their ‘achhe din’ as promised by Modi. According to various experts the budget targeted apt issues such as taxation. The major winners to gain from this budget are the finance sector, the insurance sector and realty. Many corporate giant such as ICICI Bank and HDFC (Housing Development Finance Corporation) will gain from the increase in FDI (Foreign Direct Investment) from 26 per cent to 49 per cent in the insurance sector. With the increase in tax exemption level the insurance sector will make profit. The real estate agencies and developers are also set to incur benefits with the announcement of 100 smart cities. This scheme will be beneficial even for the common man as properties prices will take a dip due to this new proposal. Housing finance companies will also share the benefit as rural housing plans will increase allocations. With a huge chunk of money set to be spent on roads with the ‘Pradhan Mantri Gram Sadak Yojana’, the transportation sector and its players have also emerged as winners.

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After every budget the sector that gets affected is the tobacco and alcohol industry, and this year was no exception. With the excise duty to increase on cigarettes, companies like ITC Ltd will face the brunt of it. Diamond and gold businesses will also suffer as less to no change in the import duty for silver and gold was announced.

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The negatives

Though deemed as a positive and progressive Union Budget, there are few sections will that could have been considered, but weren’t. Environmentalists in particular feel that the budget was anti- environment as not enough funds is allocated for promoting renewable energy and recycling. Public transportation sector also took a hit and was almost completely ignored in Mr. Jaitley’s budget. It’s not just the environmental sector that feels ignored; the agriculture sector which is considered as of the key players of Indian economy was also ignored to a large extent. Educationist and students are complaining as well, as most of the funds from this sector are directed towards setting up for pioneer institutes such as the IIMs, IITs and AIIMs, hence ignoring students with average grades. They argue that while this scheme will cater to the outstanding students the average ones or the once with diverse career choices will be left out. Other concern that stemmed upon a thorough analysis of the Budget was the 200 crore allocation of funds for the Sardar Vallabhai Statue, experts opine that given the country’s sluggish economic condition this proposal could a waited a few more years. The introduction of Good and Service Tax also reeked in criticism for the Modi government. Being a fairly new concept in India, this proposal wasn’t received well by Indians who are still reeling from the shock caused by the inclusion of VAT (Value added Tax) the textile industry has taken a hit as well which would indirectly affect all the skilled labors and weavers. Inclusion of service tax for online advertising has also caused many fresher entrepreneurs to sulk.

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Fun tidbits

  • Apart from being a promising proposal, the Union Budget 2014 also happens to be a one-of-its-kind budgets’ due to its many firsts. The parliament experienced various interesting and fun nuances, here are few-
  • Union Budget 2014 is the longest Union Budget so far. Trumping the budget of his predecessor ex Finance Minister Pranab Mukherjee’s which was a 36 pages long proposal, Mr. Jaitley’s budget stretched upto 44 pages written using 16,299 words.
  • Yellow being an astrologically auspicious colour and also the colour of Thursday, the day on the which the Budget was read – the entire family and Mr. Jaitley himself turned up to the parliament wearing yellow ensembles.
  • For the first time in the history of Budget reading, a Finance Minister took a 5 minute break in between his 128 minutes speech. Owing his need for rest to physical exhaustion and his medical condition Mr. Jaitley proceeded to read the rest of his Budget while being seated.
  • The most used word this maiden budget by the Modi regime was ‘development’ which was used 55 times followed by ‘infrastructure’ which was used 33 times.
  • After Bollywood it was the turn of the center government to follow the ‘100 crore’ club trend. 29 schemes were allotted a whopping 100 crore in Mr. Jaitley’s budget.
  • The 2014 Union Budget by the NDA government is the 84th budget to be presented in Independent India.

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BUDDING MANAGERS
AUGUST 2014 ISSUE


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Author:  buddingmanagers
Posted On:  Saturday, 16 August, 2014 - 13:27

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