budget 2023, Budget 2023: Finance Minister will understand the pain of middle class, salaried class will get good news in the budget! – budget expectation for middle class and salaried class

New Delhi: Finance Minister Nirmala Sitharaman will present the budget on 1 February. The budget speech will start from 11 am. People sitting with hopes are waiting for the announcement of this budget. Due to the election year, the expectations of the people have also increased. The country’s largest population, the middle class, which is most troubled by the burden of inflation, is hopeful that relief will be announced for them in the budget. On the other hand, the salaried class under the burden of tax hopes that the Finance Minister will reduce their pain a little by giving relief in income tax. It is believed that one can get relief in income tax. Renowned economist and chairman of research institute Center for Development Studies Sudipto Mandal has expressed this possibility.

The government may give some relief on the income tax front to the middle class and employed people in the budget to be presented before the 2024 Lok Sabha elections. Apart from this, the scope of areas covered under the Production Linked Incentive (PLI) scheme is also likely to be increased. Finance Minister Nirmala Sitharaman will present the budget for 2023-24 in Parliament on February 1. This is his last full budget before the Lok Sabha elections next year.

When asked about the government’s priorities in the budget in view of the current global challenges and the domestic situation, Mandal said, “Definitely many global problems have come together and this has increased the economic challenges on the economy front in the country.” These include slowing of economic growth, rising inflation and current account deficit along with insufficient employment generation. Inflation, especially core inflation (excluding fuel and food articles), continues to remain elevated. The pace of economic growth has slowed down in the first three quarters of FY 2022-23 and we estimate that the GDP (Gross Domestic Product) growth rate in FY 2023-24 will be only 5.2 percent.

“Besides, the current account deficit (CAD) is also above a satisfactory level,” he said. Looking at all these things, I believe that the Reserve Bank will continue its efforts to bring inflation under control, while special attention should be paid to economic growth, especially employment-enhancing growth and export-promoting measures in the budget. ‘

According to RBI data, the current account deficit widened to $36.4 billion, or 4.4 per cent of GDP, in the second quarter of the current fiscal from $18.2 billion, or 2.2 per cent of GDP, in the first quarter April-June. CAD is mainly the difference between the total export and import value of goods and services. However, it also includes net income and (interest and dividends etc.) and transfers from abroad (foreign aid etc.), but their share is much smaller.

Asked about the expectation of some relief in the budget for the middle class and salaried people on the income tax front, Mandal said, “Actually, a large section of salaried people do not pay income tax. Only the upper middle class and a small section of the wealthy pay income tax. Therefore, any change in the provisions of personal income tax will not affect a large section. Also, our personal income tax rates are not very high by global standards. Our tax structure needs stability rather than change. So I think no significant changes are expected in the income tax structure. From the point of view of taxpayers, simplification of income tax provisions through the Direct Taxes Code would be more important. It is better to simplify tax payment procedures and compliance requirements.

“However, it is quite possible that the Finance Minister will announce some relief by increasing exemption limits (tax slabs and investment limits) or standard deduction,” he said. Responding to another question, the economist said, “The realty sector has just started coming back on track after a long period. Also, it is an employment enhancing sector. In such a situation, if the limit of exemption on interest payment on housing loan is increased, then it will be a welcome step.

Asked about the Production Linked Incentive (PLI) scheme, he said, “The PLI scheme has boosted production in some areas. But its benefits went mainly to large enterprises in the organized sector. I hope this scheme can be extended to more employment generating sectors….It would be better to implement the scheme for those sectors which export major part of their production. This will help in boosting production in export-oriented areas.

It is noteworthy that the Finance Minister has announced a production-based incentive scheme for 14 major sectors with the intention of speeding up manufacturing and creating employment in the country. This scheme has been implemented in areas like vehicles, vehicle components, advanced chemical batteries, special steel.

On agriculture, Mandal said, “In the agriculture sector, crop diversification is essential. Our main challenge is to replace water-intensive crops like rice, wheat and sugarcane with other crops. The recent attention paid to millets is welcome. If the budget announces changes in the food policy regime… procurement and public distribution system… for crops like millets, pulses and oilseeds, then it would be a good step. Important provisions are expected to be made for this in the expenditure budget.