Budget
Who is happy, who turned sad after Union budget
Summary
The Union Budget presented last week got a rating of 5.8 out of 10 in a Mint-CVoter poll held soon after the speech. Indians are worried about managing daily expenses after the Budget, and are upset about income tax slabs remaining unchanged. The elderly and those earning lower incomes were the most unhappy, the survey foundThe annual Union Budget is not just a document of government accounts, but is often a symbol of hope and aspirations it presents to the common Indian for the coming year. This year’s Budget, presented by Finance Minister Nirmala Sitharaman last week, got an overall rating of 5.8 out of 10 in a Mint-CVoter poll held soon after the speech was telecast. Over 1,200 respondents randomly selected across demographics were interviewed for the survey. Here’s what the survey found on the country’s reactions to the Budget, from what it means for daily expenses to populist welfare schemes and crypto tax:
1. Feeling the pinch
Every year, Indians get glued to the Union Budget speech in the anticipation of some relief on daily expenses. However, increasingly, they are getting disappointed. As many as 60% respondents said their monthly expenses would rise due to last week’s Budget, the highest share since 2018.
In 2019, around 29% of the respondents felt expenses would rise to an extent that they would be difficult to manage in the coming year. This share, too, has consistently increased—and after the Budget last week, stood at 56.6%.
Fewer people now expect prices to go up while staying within the manageable range. Just 8% said daily expenses would decrease—this share was around a quarter in 2014.
Only around one-fourth said they would be able to save more after the Budget—a three-year high. If the recent trend of steady retail inflation continues, consumers could further feel the heat of price rise.
2. Tax burden
Discontent with the Budget could stem from one aspect the salaried class watches out for: income tax slabs and exemptions. Nearly 55% respondents said it was a poor decision to keep the tax regime unchanged. Around 20% accepted the decision but felt the government could have done better, while a similar share had no complaints.
The income tax regime has stayed unchanged since 2020, when revised optional slabs were introduced for those not availing exemptions. For those who did, the minimum taxable income remains ₹2.5 lakh a year. A similar pre-Budget poll this year found that over 83% of respondents wanted this limit raised to ₹6.25 lakh—but that was not to be.
The big announcement for the blockchain world—tax on earnings from “virtual digital assets", also read as cryptocurrency—had mixed reactions. One in five respondents seemed miffed, while 34% felt that although the decision was not unwarranted, the Centre could have done more. One-third approved of the decision.
3. Welfare welcomed
While the Centre’s tax provisions did not find favour, some of the welfare measures announced in the Budget were welcomed. Over half of the respondents were in agreement on the proposal for direct transfer of minimum support price to farmers’ accounts and that of construction of eight million houses for the poor under the Pradhan Mantri Awas Yojana next fiscal year. Fewer than 15% felt that either was a “poor decision".
The response to the two schemes notwithstanding, the Centre’s expenditure on several key welfare sectors is set to fall or see only a marginal increase in 2022-23, Budget documents show (see Plain Facts, 2 February). For instance, the overall outlay for health is likely to fall to 2.2% of the total expenditure from 2.3% in 2021-22. Similarly, the outlay for food subsidy and rural development will also decline.
In the pre-Budget survey, many had favoured welfare measures such as universal basic income for all citizens and unemployment benefits.
4. Capitalist tilt
Soon after a Budget speech ends, analysts and TV pundits are quick to give it pro- and anti- labels. In the Mint-CVoter survey, over half of the respondents said last week’s Budget was “not at all" pro-poor, while 20% said parts of it were. When asked whether it was “pro-capitalist", 45.6% answered in the affirmative, with only 7% in complete disagreement. Such an opinion was likely due to measures such as a 15% cap on surcharge for the super-rich on unlisted shares even as no such measures were announced for the middle class. Around 28% said the Budget was pro-farmer, and just 17% found it pro-middle class. More than 50% felt the Budget would not be able to boost employment, but its ability to strengthen the economy got decent support. One reason why the middle class might not have found the Budget favourable was the unchanged income tax regime, said Nikhil Kamath, co-founder of Zerodha.
5. Ratings game
The survey recorded an overall rating of 5.8 on 10 for Budget 2022, but with significant variations among demographics. While those upto the age of 45 rated the Budget on similar lines, elderly ones seemed particularly upset, rating it 4.56. Those in the 46-55 group gave the Budget a rating of 6.6, the highest.
"The elderly have seen many younger people die due to covid and the current state of the economy has also left them worried about their future," said Yashwant Deskhmukh, founder-editor of CVoter Research, which conducted the survey.
There was a clear pattern on ratings based on income levels. Those earning less than ₹6,000 a month rated the Budget just below 5 on average, while those making over ₹1,00,000 a month were the happiest, rating it 6.59. One reason could be the pessimism of the poorest on the prevailing pandemic situation, coupled with concerns over rising prices, which the Budget did little to assuage, said Deshmukh.
"The data shows the bottom of the pyramid is really appreciative of the relief in terms of free ration and cash they have received in their accounts during the pandemic," he added. "It's ironical that while they feel safe in current short-term crisis of pandemic, but they do get worried in long-term perspective."
