Expectations from Union Budget 2020

Budget 2020 is around the corner and so is the common man’s expectation. In the midst of slowdown, the common man expects a great deal from the upcoming Union Budget which is likely to be presented 1st Feb’20. I, as a student of PGDM, put forward the view that major changes should be brought about in the Taxation arena and the Automobile industry.

Tax benefits: As for Tax benefits there are a lot of changes that can be introduced by the Union Budget.

  • Lower GST on items of daily use: The GST rates on consumer durables and FMGC must be brought down. This might bring a boost to economy by increasing demand and in turn aiding competition.
  • Tax benefits on affordable housing should be relaxed. As per the last Union Budget, a tax exemption of Rs 1.5 lacs was provided on a purchase of house up to Rs. 45 lacs in tier II, tier III and fringes of metropolitan cities. But it is difficult to get a house within that amount. The relief should be made for a higher amount.
  • Tax should be imposed above 5 lacs rupees of income in place of the current provision which provides for 5% tax rate for income between Rs. 2,50,0001 to Rs. 5,00,000. Increase in exemption limit would help the multifarious population generate more disposable income in hand and this might act as a bonus. 
  • Start- ups tax relief: Start-ups all around India should have the facility exemption of tax payment. The tax filing procedure must also be digitised. The start-up ecosystem is in itself struggling with myriad problems. Amidst the current economic slowdown, start-ups in India are going through a tough time. Investments have to be made in the field of research and development for the growth of the start-up. Payment of hefty taxes increases their liability and also their workload which can be simplified by way of digitising the tax filing procedure.

So far as the automobile industry is concerned the following modifications can be made. The current financial year has witnessed a slowdown in the automobile industry. So according to me the automobile industry must benefit from the Union Budget 2020 which is currently the worst hit sector. Sales of the automobile industry has greatly declined. Commercial vehicle sales are considered to be the mirror of economic growth or slowdown. This was clearly reflected last year. The industry has to make a smooth transition to BSVI before 31st march deadline. So, policies must be brought for the existing BSIV vehicles. Incentive based scrappage policy can profit the automobile industry. Scrappage policy is a government budget programme to promote the replacement of old vehicles with modern vehicles. The Union Budget must incorporate provisions regarding the scrappage of BSIV vehicles. This policy can stimulate the automobile industry and also aid in removing inefficient vehicles which create too much of pollution from the road.

Kanchan Sharma

PGDM Batch 2019-21