Published On : Sat, Feb 1st, 2020

“Budget unlikely to address current economic woes” CA Umang V Agrawal,

The Hon’ble Finance Minister of the Country has presented the Budget 2020 today. This budget comes at a time when the country is facing challenges with in all sectors. The expectations for the budget 2020 have been high from the Modi Government and it was expected that major reforms shall be introduced to increase the positivity amongst the stakeholders. The Budget was expected to reignite demand in the economy.

Looking on the pointers on Bugdet 2020, this Budget is unlikely to address the current economic problems being faced by the country. The estimation of 10% growth in GDP needs to be scrutinised with concrete reasoning. The budget is void of any big, bold things.

Looking on the few positive facts, extension of time limit till March 2021 in affordable housing space will benefit both the purchasers and developers. Further the government has proposed to remove DDT paid by Indian companies on dividend and replace it with traditional withholding mechanism is a welcome move and is likely to make India an attractive destination of investment by foreign companies. Further the move to increase the Deposit Insurance from 1 Lakh to 5 lakh is highly encouraging in a time when people’s confidence in banking sector is at the lowest level.

However concerns should be raised with respect to the modes of job creation in economy. Further FM’s silence on outstanding refunds on GST, Exporters duty refunds and unpaid bills of PSU’s amounting to Ten lac crores is conspicuous. The Finance Ministry’s decision to introduce new optional Income Tax Regime needs to studied deeply and hence this may result in increased confusion amongst the taxpayers.

Overall the Budget 2020 with no major stimulus to growth would be looked upon with suspicious eyes and no major economic turnaround is expected in near future.