Budget ignores the concerns of lower income groups

Low income groups will have to bear the disproportionate hike in prices of daily essentials, house rent and travel.

There is nothing wrong with having big ambitions, especially for a government with an unprecedented mandate. Yet in order to be credible in the public eye, such high ambitions have to be tempered by a healthy dose of realism. The government’s national goals must also be equitable. On Friday, Finance Minister Swarnim Wagle unveiled a budget of Rs2.12 trillion—the biggest in the country’s history. In doing so, he ignored the suggestion of the National Planning Commission that the annual outlay be under Rs1.89 trillion, given the country’s resource constraints and the state’s old inability to spend. The Balendra Shah government, nonetheless, brought a bloated budget that by and large catered to the middle class—in a move some opposition political leaders termed ‘vote-bank politics’. The income of civil servants has gone up by as much as 21 percent. Taxes on individual annual incomes of up to Rs1 million have been capped at 1 percent. While these measures will bring cheer to the middle class, they will only add to the financial burdens of those in the lower rungs of the income ladder. These groups will see little or no benefit from tax reductions while they will have to bear the disproportionate hike in prices of daily essentials, house rent and travel—all expected after the hike in salary of civil servants.