THE HIDDEN DRAWBACKS IN THE BUDGET 2019

This year, the interim budget of country turned out to be surprising for everyone. The government has focused on issues like tax exemptions, fiscal deficit targets and increased investment on several schemes but there are some points which people are missing out. The current NDA government funded the medical insurance scheme that may cover over 40% of Indian families. Also, with the direct income transfer of Rs 6,000 per agricultural household. With the growing talk of minimum income the government has listed various new entitlements that India is not in the position to fulfill. With the growing entitlements and lack of proper accounting the people of lower households will eventually suffer. The direct income transfer to agriculture households will cost Rs 75,000 crore.  The problem is that it is easy for government to announce entitlements without their long-term funding plan but the burden will be dislodged to the people of country. The two schemes announced by the current government will cost around 0.6 percent of GDP which is a big value to look at.  This burden is relieved by two ways – The government will either increase the taxes by up to some basis points which effect rich households. The price of certain products can increase as it target common people in the form of indirect taxes. The other alternative is to remove other unproductive schemes such as fertilizer subsidy or MSP which have failed to achieve their purpose. This is the most suitable way of implementing these entitlements. The government can Direct Benefit Transfer (DBT) this amount to ensure it reaches the premeditated beneficiary and remove the former interventions. Thought the second option is not practically possible so there are high chances of increased encumbrance on low income families.

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