The Union Budget for FY20-21 has put emphasis on Aspirational India and a Caring Society for a more inclusive budget that would benefit all sections of the society. There are two sides to the budget that was announced today. The positive side is that the corporate tax has been reduced to 15% which will now be among the lowest in the world which will boost the industry. No compulsory audit for small businesses of up to INR 5 crore which was earlier INR 1 crore will further ensure ease of doing business. This will also uplift the industry and take forward the restructuring and reshaping. Reduction of income tax will increase individual income. This will mean that people will eventually have more money to spend.
Introduction of Foreign Direct Investment and External Commercial Borrowings will be beneficial to the education sector. It will help improve the quality of education in the country further. Offering online degrees by institutions who are ranked within top 100 in the National Institutional Ranking framework will promote online education and provide quality education to students of deprived section of the society.
There are also a few concerns with the budget. A large number of MSMEs in India are unorganized and operate as individual proprietors. Since they are not registered as a company, their tax liability will still be very high. If they earn 15 lakhs, they will have to pay 30% tax as individuals. This would mean small companies will pay more tax than large companies. This should have been taken care of. I would have expected more tax cut for higher income earnings. Moreover, GST is still a challenge for the MSME sector. They should have been given a tax holiday in order to boost the sector. Skill is a very big area. It creates employment and entrepreneurship. Investment in skill development could have been higher. Overall, the budget is more investment friendly and corporate friendly. Emphasis has also been given to welfare including education, health and agriculture.