In less than two weeks from now, this government will present its final Budget before the Lok Sabha elections. Post-Budget, there will be dozens of columns and analyses. However, a better time to talk about the Budget we need is now, when there’s still time to change a few things.
Here are nine suggestions for the government to consider that will help India grow and prosper. And since this is an election year, care has been taken to ensure almost all of these suggestions are positive politically too, making it a win-win for the people as well as government.
Two, consider having a no-tax for under-25 youth, up to a cap of say Rs 10 lakh. Very few youth under 25 earn taxable income anyway, so the revenue loss would be limited. The announcement, however, can be a huge political advantage. Of course, we still need caps because India’s ingenious mega-rich will find a way to route income through their kids otherwise.
Three, and much delayed, the government has to find more creative ways to raise revenue. One of the big ideas here is land sales. Taxes can only be raised so much. Divestment of PSUs to raise revenue is already underway, but the rate of divestment is too low. It is also cumbersome to sell some of these entities. However, the government has literal gold in the form of one asset – land.
Across the country, the government or its entities (such as railways) own super prime land. A fraction of this being sold could generate tens of thousands of crores. It will also give a city better located homes and offices, as most of these land holdings are in central areas of a city.
Four, and this may sound like a broken record, but there needs to be one GST. Though, to the government’s credit, it has tried to narrow the GST bands and cluster more items in each band, there are still too many slabs. However, here’s a suggestion: get rid of the 5% and 28% bands, and collapse the 12% and 18% to one 15% band; while keeping a separate list of GST-exempt and sin tax items.
What this will do is make it one GST of 15%, with some exceptions at a 0% rate and certain items at a sin/ luxury tax rate. Doing this will take the arbitrariness out of indirect tax rates, which was the problem we had earlier and intended to solve with GST anyway.
Five, there has to be a mechanism for A-list or top colleges to spawn newer branches. Note that this does not mean renaming ten other colleges as IITs. It means that, say an IIT Delhi or a Hindu College, can itself ‘spawn’ or ‘create’ another college on its own, with the same management, faculty and staff involved in planning the new college. This is the only way we can create more quality institutions.
Colleges of a certain quality would be eligible to be on the ‘can spawn’ list. They will be granted land and allowed to raise funds for the new college. Individual states can bid, offering incentives to existing colleges to come set up a branch there. This way we can truly fix higher education, something a mere 10% increase in higher education funding or renaming colleges won’t do.
Six, primary education needs – and tech today allows us to have – a redesign. We can’t have top teachers in every village. We can and already do have 4G networks. Hence a top teacher in Delhi can teach kids in a village, with a local facilitator present. This may be a new model for government schools, rather than the traditional brick and mortar fully staffed schools.
Seven, something already announced in the last Budget, can be spread further by expanding the Ayushman Bharat health insurance scheme. More doctors and hospitals on the panel, and various bands of the scheme – the basic (which is free) to premium options (on a paid basis) – can even allow the government to raise some revenues from this scheme.
Eight, we need to have different, lower tax rates for big corporates shifting headquarters to smaller towns. It creates jobs there, eases pressure on choked metros. Win-win for all.
Nine, and probably the only suggestion that is tricky politically, is to revive the Land Acquisition Bill (remember that bill that didn’t get passed?) in a new form. The name should surely be changed (maybe call it Rural Employment Generation Bill) and concerns addressed to have a better version. However, unless private capital reaches our interiors, rural distress will never really be solved. One way to help farmers is give them job options if it is no longer viable for them to be farmers.
A Budget can simply be an inconsequential bells and whistles exercise, with no real impact for the country. Or it can have policy announcements that can change the shape of our economy. The upcoming Budget is a chance for this government to make a big impact in its final year. Before it ends its current term and gets ready to fight for the next, why not create a splash and make a big impact?