Budget 2014: Narendra Modi’s middle kingdom

New Delhi: Keeping in mind his middle class vote bank, which had virtually rallied behind him during the last general elections, Prime Minister, Narendra Modi offers a bouquet of sops to retain them.

The maiden budget of his government, which was presented by finance minister Arun Jaitley, a slew of measures including low cost housing, focus on quality job creation, hike in monthly pension and tax relief to individual tax payers. Mr Modi hopes these would also benefit the party in the forthcoming state polls.

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Aiming to fulfill ruling party’s poll promise to provide housing for all by 2022, Mr Jaitley announced setting up a Mission on Low Cost Affordable Housing to be anchored by the National Housing Bank (NHB). He proposed allocation of Rs 4,000 crore during the current financial year for NHB with a view to increase the flow of cheaper credit for affordable housing to the urban poor/EWS/LIG segment.

Further, slum development has been incorporated in the list of Corporate Social Responsibility (CSR) activities so that the private sector is encouraged to contribute more towards this activity.

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Mr Jaitley said the Rural Housing Scheme has benefited a large percentage of population in these areas who have availed credit through Rural Housing Fund. Keeping this in mind, enhanced allocations to the tune of Rs 8,000 crore has been made for NHB for the year 2014-15 to expand and support rural housing.

He also added that the government has already outlined some other incentives such as easier flow of FDI in this sector and is willing to examine other positive suggestions.

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Meanwhile, on the employment front, the finance minister has announced a few measures to boost manufacturing, infrastructure and construction sectors, which in turn could help create 5-8 million jobs in next 3-4 years. “India today needs a boost for job creation. Our manufacturing sector in particular needs a push for job creation,” Mr Jaitley said.

The minister further said growth in infrastructure and construction sectors is necessary to revive the economy and generate jobs for millions of our young boys and girls.

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“Manufacturing sector is of paramount importance for the growth of our economy and this sector has multiplier effect on creation of jobs,” he added.

 According to E&Y tax partner Paresh Parekh, the increase in personal tax exemption limit coupled with increase in savings under Section 80C related deduction limit on gross income should put more disposable income in the hands of consumers.