Budget 2018- Is it worth the Hype?
Amar is a CFA Charterholder and CFP, having over 20 years of experience in IT and Financial Services. He is very passionate about spreading financial literacy and has authored four bestselling books on Personal Finance.
30 Jan, 2018
Yes, you read it right. But before jumping to any conclusions, hear me out.
The Budget is an ‘event’ of mammoth proportions in India. A fortnight before the Union Budget is presented to the nation, a frenzy grips every person in India. Prior to the declaration, people are obsessed with guessing the possible outcomes, and once the budget has been announced, they spend their time nitpicking its merits and demerits. Discussions and screaming matches disguised as debates between ‘experts’, the media, common man and politicians are televised. Every person has their own opinion and wants to voice it – the loudest. But does this entire budget business really need this much importance? Do we really need to give the budget as much time and thought as we actually do? An average person spends to the tune of around 70-80 hours discussing the budget. In our time-scarce and information-excess society, is this really the best use of one’s time?
In India (one of the only countries to do so), the budget presentation is given so much importance that the entire point of the budget is lost. A budget in layman’s language, is the estimate of income and expenditure for a set period of time. For the Union, the Budget, is exactly the same. It’s an estimate of the Government’s income and expenditure for the next financial year, the only difference being it involves money in a great quantum and the expenses are allocated to various departments, ministries, sections of society and different industries. Just like a personal budget, there are only a few things that a government can do with its earnings. They can either spend, save and invest or give subsidies or free stuff.
But the real question that arises from this announcement is, why does the common man make such a big fuss about the Government announcing its income and expenses?
Granted, the stock markets during this period are highly volatile and many make or lose a lot of money in the markets during this time. However, like any other external stimulus to the stock market, the budget too, has a temporary effect. The market swings up and down, eventually correcting itself over the course of a couple of days.
The second thing that everybody thinks the budget greatly impacts, is the income tax slabs. While the income tax slabs for individuals remained same in FY13 and FY14. There was a minimal change from Rs. 2,00,000 to Rs. 2,50,000 in FY15, and that has remained the same till date. While incomes have risen continuously, the income tax slabs have changed marginally, making the entire hullaballoo over the budget a complete waste. Many people, without understanding the impact of increased tax on products and services, make a huge hue and cry when the budget is declared, only to eventually forget all about it and continue using the products or services, irrespective of the prices.
The Government of India, made a very good move in 2017 when they stopped the presentation of the Railway Budget separately and avoided the entire media circus revolving it. Because let’s face it, no one has missed it.
Personally, I would rather spend the same time planning my investments and household budget, instead of being glued to the ‘experts’ screech, shout and give their takes on the budget.
So, with this budget, maybe you could do yourself a favour and make better use of your time by investing it the Right Way!