Letter from New Delhi
Affecting the Indian Diaspora in a number of ways, the Indian budget charts the road to social welfare and fast growth despite lacking any ‘wow’ factor.
As an overseas Indian, when you make plans to travel to India, no need to get a visa in advance. Now you can get it on arrival because this year’s budget provides for visa on arrival from 150 countries out of 190-195 countries of the world. After introducing visa on arrival from 43 countries, the increase will be in a phased manner. If you want a visa before arrival, the new electronic visa has become popular; and to boost tourist arrival by four times for December 2014.
When you travel by railways by the end of this year, you will perhaps notice many changes: better food, cleaner toilets, better medical and emergency services with a doctor on every long distance train and an ambulance service in every railway station, and above all, more welcoming railway stations as the major ones will be privatized. All this is promised by the new railway minister in his maiden budget.
The Finance Minister Arun Jaitley wants you to pay more for your cigarettes and liquor while reducing the price of leather shoes above Rs 1000, locally made mobiles and tablets. If you need a pacemaker for your heart, it will cost less.
A new innovation will help overseas Indians to earn interest on their gold lying in India. Under this scheme, you can deposit your gold or ornaments with the government and get fixed interest rate on all of it instead of storing it in a bank locker. Finally, new Sovereign Gold Bond was announced as an alternative to purchasing metal gold. The bonds will carry a fixed rate of interest, and be redeemable in case for the face value of the gold, at the time of redemption by the bondholder. Moreover, the government will soon introduce gold coins you can invest in. These gold coins, with the Ashok Chakra, would help reduce the demand for similar coins minted outside Indian and also help to recycle the gold available in the country, Jaitley said. Overseas Indians can invest in these coins as well.
As an investor in stocks, the overseas Indians do not pay any taxes on dividends. The budget made mutual funds tax-free as well. Soon after the budget, the stock market rocketed to a new high by touching 30,000 points. After the thumping victory of Narendra Modi, the market has been on a bull run. After hovering between 20,000 and 22,000 since 2007, the market jumped to 25,000 when BJP won a clear majority. And the market went up rising until hitting the 30,000 mark on 4 March 2015 when the Reserve Bank announced a cut in the repo rate. Equity and mutual fund investments are thus very lucrative investments for overseas Indians as the experts predict the market to reach 35,000 by the end of this year.
The income tax rates have not been changed but the Wealth Tax has been abolished. Instead, the very rich pay an additional two per cent on their income over ten million rupees. Medical treatment deductions have been announced, especially for senior citizens. This is just one of the measures enabling India to become a social welfare state. A major new initiative is the creation of a pension fund for all employees who want to join with the government contributing an equal amount to the employee’s contribution. Insurance cover has been extended to the poor who have opened 136,800,000 new bank accounts by the end of February 2015. Each of these account holders is covered for Rs, 100,000.
The hot issue of black money stashed outside India has not been overlooked. The budget provides one last chance for all Indians to declare their overseas deposits and assets, pay tax with a hefty penalty and get away with it. If not declared, and the taxman finds out, and then be prepared for ten years’ hard labour in prison.
Ease of doing business and attracting more investment are major priorities touched in this budget. Basically, the budget has no ‘wow’ factor but puts India on the path for a double-digit growth. Already, predictions have been made that India will become the fifth largest economy by the end of this decade. IMF commented that India is the faster growing economy now. All this makes overseas proud of India.
Kul Bhushan worked as a newspaper Editor in Nairobi for over three decades and now lives in New Delhi
* Published in print edition on 13 March 2015