Opinion: 'Election budget' after elections! There is only politics in this economics!

The big political shift after the Lok Sabha election results is that the BJP will now have to listen to and meet the political demands of its key allies. Hence, the budget focused on infrastructure projects. Bihar and Andhra Pradesh received a lot of attention. This is in line with the NDA government's policy of investing in infrastructure. However, it is slightly tilted towards the two states that send the highest number of MPs to the Lok Sabha from BJP's allies.

Bihar has got an industrial node at Gaya, several road connectivity projects, airports, medical colleges and better tourism infrastructure as part of the Amritsar-Kolkata Industrial Corridor. Andhra Pradesh has been promised financial assistance of Rs 15,000 crore for its new capital at Amaravati, additional funds for the Polavaram irrigation project, a Kopparthi node on the Vizag-Chennai Industrial Corridor and grants for backward areas.

But the biggest theme of the budget was to address the problem of rising unemployment among the youth. While most NDA budgets have tried to boost job creation, this budget has gone all-in in this direction. A major initiative is the offer of one month's salary (up to Rs 15,000) for first-time workers registered with the EPFO ​​- which is expected to benefit 2.1 crore youth.

Apart from this, there is a plan to promote additional employment in the manufacturing sector which will encourage both employees and employers. The plan to promote apprenticeship in 500 big companies is expected to provide skill development opportunities to one crore youth in 5 years, and the government will also give Rs 5,000 per month as internship allowance. These schemes are again in line with the Modi government's philosophy of formalizing the job market.

Two other proposals of the budget are also important in terms of employment generation. One is related to MSMEs, the other to urban development. Both contribute significantly to employment generation. Special assistance is being given to the MSME sector, which was badly affected by the pressure of demonetization and then GST. In the manufacturing sector, there is a credit guarantee scheme for MSMEs and a scheme for better credit support in difficult times. Angel tax has been abolished to promote the start-up sector. The limit of Mudra loan has been increased to Rs 20 lakh. That is, the most important sectors of employment generation – small companies and start-ups are being promoted.

Also, urban investment has been re-emphasized. Thus, it has been recognized once again that there is a need to shift more people from agriculture to urban employment. Cities will be developed as growth centers. Redevelopment of cities will be encouraged through policy decisions from time to time. 14 big cities with a population of more than 30 lakh will be developed as transit hubs. Urban housing will be encouraged under the Pradhan Mantri Awas Yojana for 1 lakh urban poor and middle class families. Rs 10 lakh crore will be spent for this, out of which 22% will come from the Center in the next 5 years.

The disappointing part of the budget is related to the salaried middle class. The half-hearted benefits given to the salaried middle class are disappointing, which do not compensate for the increase in the price of almost everything. The market was also shocked by the increase in Long Term Capital Gain Tax (LTCG) from 10% to 12.5%. Apart from this, indexation benefit on sale of real estate has been partially abolished.

Overall, the Modi government has correctly understood the message of the election results and has given itself an opportunity to recover economically and politically.