[v1p3r]

Originally Posted by kadanaJ

Sran wrote a nice detailed paragraph to reply to you. Everyone may not agree with it, but at least he put time and effort into his post....

First off, he didn't reply to me. So that's factually incorrect, but ok.

Multiple members have pointed out the fallacy of believing that DBTs actually work. Maybe they work marginally better than they do before, maybe they don't. I cannot comment, since I am not a beneficiary. Still a great example of just parroting figures.

However, I can tell you that the esteemed member has taken the liberty of quoting verbatim from the govt's figures, without any question or verification. This is a dangerous form of propaganda, and it is in fact how it propagates.

Let me examine just a few claims:

Erstwhile governments laughed at the thought of digital economy. Now even tea sellers are accepting digital payments.

smacks of the sort of propaganda that any sensible person abhors. It is also patently untrue. The Indian IT and banking technology infrastructure industries have always been fast movers. While UPI has eased lives and made things better - because now technology to build it exists - no one negated a digital economy. In fact, some govt departments still don't accept digital payments - from personal experience.

Inflation was successfully tamed in the last 2019 till Wuhan Virus made a dent.

Ignoring the obviously bigoted term the esteemed member has used to describe Covid-19, she/he has quoted inflation figures in isolation. While it is true that the inflation rate was between 10 and 12 % in 2009-10, the economy also grew at a scarcely believable rate - from USD 1.3 trillion to USD 1.7 trillion in the same time. It was in those years that we still believed in the India vs. China race, because we were growing that fast. That's now a distant dream. Why don't we also laud the previous government for hypergrowth, or blame ourselves now for not continuing it?

RERA again benefiting the consumers.Increased Formalisation and Taxation base of the economy.Due to GST and Demo, Tax-to-GDP ratio has improved remarkably.

Much like GST, which people use as proof of progress, RERA was actually introduced and tabled by the previous government. We all know that demonetisation helped no one - all the 'black' money is back in circulation, as every newspaper reports. Tax collections went up by 17% after demonetisation, but they went up by 18% in FY 11 in the normal course of events. So really, the net effect was near-zero. Still, the laws were introduced by previous dispensations.

Ease of Doing Business: Ranking jumped from 142 to 63 in 7 years

Please google Ease of Doing Business controversy India. The system was gamed so badly (also by China) that the World Bank just stopped publishing the index because it bore little semblance to reality.

IBC: The Insolvency and Bankruptcy Code has begun to transform the Indian NPA resolution process and its credit culture. Creation of Bad Banks.

The IBC is widely acknowledged to have failed at its purpose. I'm not sure 'begun to transform' means, but in the real world there are no marks for good intentions. 'Creation of Bad Banks' is literally 1 week old, though talk has been going on for 4 years now.

I hold no political affiliation or mandate. The reality is that I run multiple investments and businesses, and have a reasonable grasp of what is happening on the ground. I have also had the luxury of living across the world and being a part of multiple systems of governance, so I can lay claim to some objectivity. There is a reason our growth has slowed and unemployment is at a peak, as OP had alluded to. Spewing random statistics, that are either questionable or in isolation, do nothing except propagate falsehoods or half-truths.

I hope you now see that just copy-pasting figures and sentences (complete with strange formatting), because you believe in a certain political ideology, is a disservice to the country I love.

Sorry, this is all very tangential to the budget itself. I hope I don't get banned.

[AirbusCapt]

Originally Posted by Pancham

Sorry Captain but just to clarify (apologies if my understanding is incorrect): 30% tax is on the earning (profit). So if someone earns an 8% profit, the tax is 30% of 8%. So net profit comes to 5.6%.

In hindsight, Crypto is great. Because we see crypto millionaires and billionaires flaunting their fancy cars on Instagram. But it is also super risky. So I don't think someone should entirely depend on crypto - just my view. Naturally, government might not think of it as an alterative to jobs.

Thanks. That's the confusion. If it is only taxing the profit and the 1% tcs, that makes sense. I personally don't believe in crypto, and have not speculated in these. However as I said, I know people who have lost their jobs in the pandemic are day trading, trading in crypto, currency rates, commodities and in the stock market. Most are barely making about 10/15% of their lost income in these trades, but it certainly slows the slide into eating up savings. It's been over 2 years since this cursed Chinese virus hit us and I know a lot of people who have been badly affected. So putting a crypto tax directly affects such souls in this uncertain time

[AROO7]

Originally Posted by niv26

If a businessperson can enjoy by taking input tax credit, why not a taxpayer. This is very bad system in India.

I guess you don't get the crux here. All the commodities which a business claims under input tax credit are in a way for their business. Say you need a phone for your business its an input for you and the output would be you will be able to accept online payments (on your mobile phone), customers can reach you (on your mobile phone), etc. Several things come under this but as I said earlier quite a few people have been exploiting this. But this nowhere means that a salaried person can start claiming that because the things you buy are for your consumption you are not making anything else out of it like a manufacturer for instance. That said, if you still have some doubts I request you to visit this site and read a bit about input taxes for further clarity.

[Theyota]

Originally Posted by Sran

One thing about propaganda is that it takes more energy to refute than to spread, it's called Brandolini's law.

You are right sir, it does, especially when your post is like one of those WhatsApp forwards that we are all bombarded with by our loving overenthusiastic uncles.

So let us see what this "regime" and not a democratically elected government has done for financial inclusion that is having and will have massive long term benefit in future for the poorest of Indians.

As per Webster, definitions of "regime" are as follows,
a : mode of rule or management
b : a form of government a socialist regime
c : a government in power
d : a period of rule

Jan Dhan Yojana: 99% of households have at least 1 bank account.

When I was in grade 5 in rural Karnataka (over 3 decades back), Syndicate bank had come to my school to open bank accounts for interested kids under some government program.

Direct Benefit Transfer: Together with Jan Dhan and Aadhar, DBT cuts the middle man from government benefit transfers and puts benefits directly into the bank accounts of those in need.

You may want to checkout about PAHAL program. You may also want to remind yourself the background of Aadhar .

MUDRA: Micro-financing for 120 million people to encourage entrepreneurship and small businesses. 90 million of the beneficiaries were women

There have been many schemes coupled with subsidies similar to this one at the central and state government levels also in the past.

Digital Banking: Erstwhile governments laughed at the thought of digital economy. Now even tea sellers are accepting digital payments. Poor households now have access to financial savings, monetary security, and business opportunity – something that has alluded them for decades since India’s inception. The compounding effect of wealth creation has been buttressed by a direct deliverance of welfare, which has been hampered in the past by corruption.

The most popular fintech firms took birth during previous regime. How did the life of the tea seller improve by accepting digital payments? You are saying a lot of colorful words in this statement with no content.

Inflation was successfully tamed in the last 2019 till Wuhan Virus made a dent. Both CPI and WPI never went above 5%, which is within the range prescribed by MPC. This is a far cry compared to @004-14 era when inflation was in near double digits for 6 consecutive years.The Average inflation in India during 2014-2018 was 4.7%,whereas it was around 10.1% in 2009-2014. Inflation now is 5.80%.

Sir, inflation is significantly linked to economic growth. There is nothing to celebrate with an inflation of 5.80% when the economic growth is barely 6.5 to 7% in such a high populated young demographic.

Foreign reserve: Comfy at around 700 Billion Dollars (3rd in world).

I wish you would have talked about trade deficit which is growing every month even with all the "Make in India" shenanigans. Foreign reserves are up because of FII investments in Indian Stocks and inflows of cash from Indian labor toiling all around the world.

LED distribution: again significant contribution from energy savings to cost cut.

I fully support the initiative towards energy independence. I hope you also know that UJALA scheme you are referring to is not some kind of social welfare scheme. It is a scheme where the government acts as a wholesale agency and an product counselor.

IBC: The Insolvency and Bankruptcy Code has begun to transform the Indian NPA resolution process and its credit culture. Creation of Bad Banks.

It is certainly a step in the right direction to update outdated laws.

RERA again benefiting the consumers.

Sir, RERA bill was introduced in "2013". This industry is filled with filth to this day. RERA has made little difference. There is a long way to go. This is an industry that has massive potential to be an economic driver if driven in the correct direction.

Increased Formalisation and Taxation base of the economy.Due to GST and Demo, Tax-to-GDP ratio has improved remarkably.

As far as I know, tax-to-gdp has been on upward trend since 2001, but it is still playing a roller coaster ride. I do not see the data for remarkable improvement. Demonetization in my opinion was a Tughalaq darbar decision. The GST in its current form was proposed by AB Vajpayee government, taken forward by MMS government and was finally executed by current govt with the readily available majority in both the houses.

Mission Indradhanush: Immunisation of around 2.55 crore children from 12 deadly diseases. It has been lauded by even International organisations. Mission Indradhanush upped vaccine coverage growth rate from 1% a year to 6.7%, a rare success.

India had universal immunization programs since the late 1970s. It was again upgraded in mid 80s and also at the beginning of this century.

Under the Jan Aushadhi scheme, 8000+ Jan Aushadhi Kendras are selling medicines at affordable and cheap prices and around 1700 medical items have been added to existing list of medicines available. The Jan Aushadi Scheme saw only 80 stores till March 31, 2014, and only 100 medical items were added between 2008-14.Plus, prices of stents have been capped to prevent extortion from patients.

Jan Aushadhi scheme was started in 2008.

E-NAM: Reforming agricultural markets, which introduces transparency and competition to agricultural market, removing the middlemen from the process.

My father is a full time farmer since his retirement 17 years back. I do not see what is that revolution you are talking about.

Now there are roads and infra, housing, electricity, solar, and how we tackled Wuhan virus which is still decimating the global economic powerhouses. I could go on and on but please read the ground to understand the reality.

Could you name those global economic powerhouses that are being decimated with some data? There is nothing special in how we tackled COVID. At the end, people tackled it on their own. Images from mid of 2021 are fresh in mind. We all lost family members that we should not have lost.


At the end, none of the points you raised are creating jobs or GDP growth at the rate needed to feed our people which was what my post was about.

The previous regimes and the current regime have all come up with good programs, schemes, etc. But they were never executed properly. Most of them turned out to be money minting schemes for the men in power and the middle men.

I still think the current government is more ambitious than the previous ones. My hope is that they stay away from religion and stick to development and growth.

[vasanthn21]

Originally Posted by AROO7

Unless the digital rupee is traded on a trading platform it won't appreciate. Plus the digital rupee will be like a legal tender but in this case, the RBI will reduce its expenditure on printing new notes, raw material, security, and transportation. Although things aren't very clear as of now how this digital rupee will pan out in the future. That said, in case you want to read more on something similar you can read this piece from Finshots titled 'What is China's Digital Yuan?' here.

Thanks, this helps.

[warrioraks]

I think the budget was fine, practically bordering on the verge of being a non-event. I prefer people in power work like that. Crypto investors got burnt with step-child treatment but status quo for someone like me - salaried middle class.

Imagine my horror when I opened up a couple of business websites yesterday during budget speech and saw headlines like - ‘Capex Mohotsav’, ‘Digital Utsav’ and what not. Seems it was just the media going crazy with click-bait titles. Luckily the newspaper reports today were much more mellowed down.


All eyes on RBI now for inflation management.

[thanixravindran]

Budget is getting de-glamorized with each year. Earlier we used to wait for Railway budget eagerly to know the ticket cost increase. It was knocked down. Budget has lost its major sheen after GST implementation which means the rates of most items are decided by GST council barring few. This is the way the system has to be. The day Budget just becomes a plain summary of accounts and plan, most TV debates and newspaper columns will vanish.

Coming to the tax rates (Corporate tax, Income tax rates, etc) in the budget - We are proceeding to a period of stability. Corporate tax is already reduced and is in line with the minimum tax rates that is being implemented to reduce tax havens. i don't believe there will be any change in that front.

For Income tax also, I believe there won't be any further rate/slab changes/relaxations/exemptions since Government is in observation mode for the new tax regime. So it will be stable. Please note that Income tax has seen a huge uptick this year. Few years down the line, I believe most exemptions will be eliminated except retirals/pension and new tax regime may become the norm. I believe this is the reason the Direct Tax Code bill is shelved.

Finally, policy stability is better than frequent changes which only breed speculation by which few will profit and most others lose. Leaving unchecked, it will also create a new class of 'Fixers/Influencers' which leads to corruption and weakens the foundation. Good businesses love Stability which will allow them to plan their expenditure properly and finally may help create the jobs that will fuel further growth.

[tiagoatrix]

Better accept that this is the best budget ever, else they are going to spend our 2000 Cr rupees on advertisement explaining why the budget is good. - read in twitter.

[m8002?]

Originally Posted by thanixravindran

For Income tax also, I believe there won't be any further rate/slab changes/relaxations/exemptions since Government is in observation mode for the new tax regime. So it will be stable. Please note that Income tax has seen a huge uptick this year. Few years down the line, I believe most exemptions will be eliminated except retirals/pension and new tax regime may become the norm. I believe this is the reason the Direct Tax Code bill is shelved.

Totally agree on all the points except the one quoted. For a country like India with high inflation, we need to tweak the slabs/deductions to keep up with inflation.
You will get new tax payers but they are not people whose "real" income has increased. Their buying power is still same as 5 years ago but now they will have to pay tax on that - resulting in net decrease in income.

Most of the exemption limits/caps ( like 80C, Home loan interest, medical expenses) were reasonable 15 years back. But those have just remained the same inspite of the cost of the underlying service going up 3-4 times.

[thanixravindran]

Originally Posted by m8002?

Totally agree on all the points except the one quoted. For a country like India with high inflation, we need to tweak the slabs/deductions to keep up with inflation.
You will get new tax payers but they are not people whose "real" income has increased. Their buying power is still same as 5 years ago but now they will have to pay tax on that - resulting in net decrease in income.

Most of the exemption limits/caps ( like 80C, Home loan interest, medical expenses) were reasonable 15 years back. But those have just remained the same inspite of the cost of the underlying service going up 3-4 times.

You are right about Inflation. Inflation is the real enemy of wealth erosion than taxes. However, addressing it via the above stated exemptions may not be the great way. If you see the progressive tax slabs, it is clear that a minimum income is exempted. I believe standard deduction is there to address the inflation and may be tweaked from time to time.

Apart from PF (EPF, VPF, PPF) which is a social security net, 80C has various provisions like life insurance, fixed deposits, ELSS mutual funds which were all to provide incentives to spur the growth of those industries in a different era (And it gets vote too). Same with housing and medical insurance, leave travel exemptions when the penetration was low.

If you see the flagship policies of the government - Housing for all or Universal health insurance which is Work In Progress all point to achieve the minimum possible living standard. Once the Government declares victory (which no politician worth his salt will miss), they will eliminate these exemptions.

My belief is it will take at least a decade to achieve this and Government will prepare the people by not granting more exemptions and phase out slowly select tax concessions (Just the way Conveyance allowance and Medical allowance is removed) to avoid any political fall out.

[stewie]

There is a big difference between a 'digital' currency and a bank account showing your balance of money stored with the bank.

Here are a few points/differences:

- Normally, your savings bank account (assuming it is savings account for sake of simplicity) balance is based on the money that you have stored with the bank
- Your balance is based on the money kept with the bank. You might not have deposited physical money, rather could have been credited from a digital transaction.
- Your bank allows you to do transaction and every transaction is dependent on the bank allowing it, based on balance maintained
- Bank may disallow some transactions even if you have balance available in your account
- This is unlike physical currency or digital currency where the control of transaction stays with you.
- Digital Currencies (like other crypto coins ex. Bitcoin, Ethereum etc) are based on blockchain technology.
- Blockchain verification is peer-based, which means you do not have a central authority (like a bank) which confirms authenticity of digital currency. Rather, the authenticity can be verified from the digital token containing the digital currency itself.
- The transaction between sender and receiver can happen without any bank or other institute being in the picture. The ledger which records transactions is peer based (somewhat like torrent networks) where each node in the network maintains/authenticates each transaction. So it is not controlled by one central entity.

Normally, a physical currency derives value because it is guaranteed by the central bank of a country. In terms of crypto-currencies, it's not entirely clear how their worth is determined. Crypto-currencies have a value assigned based on the effort on 'mining' them as also because the total number of tokens have been capped as part of their implementation. Right now, their worth seems determined only by the fact that buyers are ready to pay a certain amount for them.

It will be interesting to see how this new Indian digital currency is implemented.

[DonHyd]

Originally Posted by stewie

There is a big difference between a 'digital' currency and a bank account showing your balance of money stored with the bank.

Here are a few points/differences:

- Normally, your savings bank account (assuming it is savings account for sake of simplicity) balance is based on the money that you have stored with the bank
- Your balance is based on the money kept with the bank. You might not have deposited physical money, rather could have been credited from a digital transaction.
- Your bank allows you to do transaction and every transaction is dependent on the bank allowing it, based on balance maintained
- Bank may disallow some transactions even if you have balance available in your account
- This is unlike physical currency or digital currency where the control of transaction stays with you.
- Digital Currencies (like other crypto coins ex. Bitcoin, Ethereum etc) are based on blockchain technology.
- Blockchain verification is peer-based, which means you do not have a central authority (like a bank) which confirms authenticity of digital currency. Rather, the authenticity can be verified from the digital token containing the digital currency itself.
- The transaction between sender and receiver can happen without any bank or other institute being in the picture. The ledger which records transactions is peer based (somewhat like torrent networks) where each node in the network maintains/authenticates each transaction. So it is not controlled by one central entity.

Normally, a physical currency derives value because it is guaranteed by the central bank of a country. In terms of crypto-currencies, it's not entirely clear how their worth is determined. Crypto-currencies have a value assigned based on the effort on 'mining' them as also because the total number of tokens have been capped as part of their implementation. Right now, their worth seems determined only by the fact that buyers are ready to pay a certain amount for them.

It will be interesting to see how this new Indian digital currency is implemented.

It is a bit difficult to grasp until they become mainstream and are accepted everywhere. What will happen once the demand surpasses the ability to mine? And who exactly mines them?

[Siddarth_Ramani]

Originally Posted by AROO7

No, it isn't. Businesspersons claim them under business expenses and also claim the reduction benefit on deperication. Some do it the right way but some have been exploiting a lot around these provisions in the law. (eg- lot of Apple products are brought this way )

Well it is actually illegal to claim depreciation on GST part, if the credit is already taken. There is a provision in Income Tax Act actually preventing this. But the actual definition of illegal is twisted in India, it's illegal if you get caught

[AjinkyaP]

It is impossible for me to react on this topic while being politically neutral or without breaking handful of TeamBHP rules
So to keep it short, I had zero expectations from this government and it turned out to be same as expected.

[V.Narayan]

Originally Posted by AjinkyaP

It is impossible for me to react on this topic while being politically neutral or without breaking handful of TeamBHP rules
So to keep it short, I had zero expectations from this government and it turned out to be same as expected.

You must be grateful as hell that they fulfilled your wishes