I look at the common investor as the one who has his finger in every pie. He would like to spend if he has enough and save if he has little. With this psyche, he looks at the Budget with not only eyes wide open, but with a mouth to enjoy the benefits.
So what does the FM show us and give us?
Tax reliefs are fine prima facie. But the real effects do not last long...not even till Pranab Babu finishes his speech. The din created in Parliament by the opposition-of-convenience sends fears. There is something astonishingly wrong.
The Common investor was happy that he’s got relief and can save and spend. And, as the FM himself said: “to use for savings and consumption”. It’s like the rosy picture painted on the front page of the Times of India! The real picture is in inside pages. The Rs 50,000 dream carrot quickly disappears into the oblivion as one visualises the “broader picture” as analysts put.
This was exactly why Mr G V Nageswara Rao, MD & CEO, IDBI Fortis Life Insurance reminds us within ten minutes of FM’s speech that Pranab Babu has given with one hand and taken back with the other! Typical case of a Kabhi Khushi Kabhi Gham!
If FM has left an average of Rs 50,000 (though I do not understand as to how the analysts arrived at this super savings amount!), the cascading impact of taxes, fuel price hikes will continue to increase the unbearable burden on him.
Whether it is a developer, businessman, vegetable vendor, transport operator – all will pass on the tax impact to the common investor. The oil companies have already done so! In fact, I have already heard someone saying at the top of his voice: 50,000 bachaa kar kya karogey (What will you do with the savings of Rs 50,000?)?
There are many women like my wife who are worried about the expenses on te education and marriage of their children. You see, gold also costs more than yesterday!
One is very happy to note that the tax allowance on long-term infra bonds is extended to investment of additional Rs 20,000, allocations for infrastructure, rural housing, power, education and health are all up. This will surely help in spreading the small investor movement to tier-2 and 3 towns. The financial services industry has quite a bit coming its way in this new and ever growing market.
But the goodwill that FM wanted to earn will prove to be very short living.