Exempt all women from paying Income Tax for 10 years: Economist Ajit Ranade

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Pune, July 12, 2019: “We should exempt all working women from paying Income Tax for 10 years, which will help increase the Women Labour Force Participation, which in turn would contribute to national income and increase Gross Domestic Product (GDP).” , said Ajit Ranade, Economist at the panel discussion on Union Budget 2019-20 organized by Pune International Centre (PIC) today.

The panel discussion was held at Gokhale Institute of Politics and Economics, Pune in presence of  Ajit Ranade, Economist and Member of PIC, Prof. Anjan Roy, Associate Professor, National Institute of Bank Management (NIBM), Pune, Dr. Rathin Roy, Director, National Institute of Public Finance and Policy (NIPFP), Delhi, Prof. Sangeeta Shroff, Professor, Gokhale Institute of Politics and Economics (GIPE), Pune and Dr. Shubhashis Gangopadhyay, Research Director, India Development Foundation (IDF), Delhi. Dignitaries including Dr. Raghunath Mashelkar, President, PIC, Dr. Vijay Kelkar, Vice President, PIC, Prashant Girbane, Director of PIC and Gautam Bambawale,  Former Indian Ambassador to China and Indian High Commissioner to Pakistan among others were also present at the event.

“As the savings rate have been declining in India, encouraging people to save through Sovereign Gold Bonds (SGBs), which are tax-free with 2.5 percent interest and mirror the market prices of gold will help save the money that is spent on importing gold as well as would help increase the savings rate,” added Ranade.

Dr. Rathin Roy, Director, NIPFP, Delhi said “We are going toward a silent fiscal crisis. He pointed out the difference between the tax revenue number presented in Budget document and as that by the Provisional Accounts in the Economic Survey. He also said that the Fiscal Deficit is being maintained on account of reducing expenditure but both set of documents are silent on where the cuts are going to be made. He concluded by saying that the government is borrowing from foreigners to finance its expenditure.

Shubhashis Gangopadhyay, Research Director, IDF, Delhi stated, We get the budget we deserve. He said the solution to the problem of Agriculture is to be found outside the Agriculture sector and we need to generate more jobs in manufacturing. He also spoke that we are losing our best human capital as most of the students from top institutes want to go abroad.

According to Prof. Anjan Roy, Associate Professor, NIBM, the premium banking institute of the country, the banking sector with the deposit of Rs. 126 lakh crores is looking at 10 percent growth. “But there are various challenges as there has been 2 years of negative growth with Rs. 10 trillion spent last year. The banking index is going downwards and there is pressure for growth. The banks are becoming more cautious as the budget provides strong amount of credit flow with 100 lakh crore investment in infrastructure projects, retail and manufacturing sector,” he said.

Prof. Sangeeta Shroff, Professor, GIPE, Pune said that with the total budget of Rs. 1,94,513 crores, about Rs. 1,84,220 crores were spent on food subsidy with the rise in minimum support price. “We are procuring excessively with wheat at 10 million tonnes and rice at 5 million tonnes, which is resulting in wastage of resources,” she said. Stressing on agricultural sector she said that Rs. 1,38,564 crores were spent with 84.3 percent spent on Direct Income Support scheme. “The government decided to distribute Rs. 75,000 crores to 125 million farmers. The agriculture share increased by 82.9 percent this year and the farmers with the pay bracket between Rs 2,799 and 1,500,00 were given equal subsidy, which is impractical.,” she added.

In his concluding remarks, Dr. Vijay Kelkar, Vice President, PIC recommended a single GST rate as a panacea to several economic problems that the country faces. He also said that the practice of sovereign borrowing could open the floodgates as central government may find it difficult if other states approach to borrow from abroad.