During the Budget debate, Member of Parliament Raghav Chadha said he would attempt an objective analysis of the Budget and offer constructive criticism to the Finance Minister. He titled his speech “The Good, The Bad and The Way Forward” and outlined four good aspects, four concerns and four suggestions.
The Good
1. Increase In STT On DerivativesThe MP supported the increase in Securities Transaction Tax (STT) on derivative trading to protect retail investors, a large majority of whom incur losses in F&O. He noted that STT was originally introduced by former FM P. Chidambaram to replace Long Term Capital Gains (LTCG) tax. Now that both are levied, he suggested making LTCG nil for individual investors.
2. Increase In Capital ExpenditureHe acknowledged the rise in CapEx from Rs. 3 lakh crore in FY 2018–19 to Rs. 12 lakh crore (approx. 4.4% of GDP) in the current financial year. He emphasized its multiplier effect but requested a five-year roadmap for these investments.
3. Restraint In Election-Bound AnnouncementsHe credited the Finance Minister for exercising restraint in making populist budgetary announcements specifically for states heading into elections.
4. Enhancement Of NRI Investment LimitHe welcomed the increase in the equity investment limit for NRIs beyond the previous 5% threshold, though he urged the government to investigate why Foreign Portfolio Investors (FPIs) have been withdrawing funds.
The Bad
1. Hidden Debt & Fiscal TransparencyThe MP expressed concern over the "hidden" debt. While the official Debt-to-GDP ratio is cited at 55.6%, he argued that including off-balance sheet items like FCI, NHAI, and OMC bonds brings the real figure closer to 60% (an additional liability of roughly Rs. 17.3 lakh crore).
2. The Burden on the Middle ClassHe highlighted that for the first time, Personal Income Tax collections (Rs. 11.02 lakh crore) have exceeded Corporate Tax collections (Rs. 9.8 lakh crore). He criticized the lack of revision in tax slabs or the Rs. 75,000 standard deduction (requesting it be raised to Rs. 1.5 lakh) despite 6.8% inflation.
3. Low Health AllocationHe noted that at Rs. 1.05 lakh crore, the health budget remains at roughly 2% of total expenditure (well below the 2.5% of GDP target set in 2017). He compared India's limited spending to the double-digit GDP percentages spent by the US, UK, and Germany.
The Way Forward
1. Blockchain-Based Land RecordsTo solve the crisis where 66% of civil disputes are land-related, he proposed a national blockchain registry. With 6.2 crore documents pending digitization, this would ensure tamper-proof, time-stamped titles.
2. Inflation Linked Salary Revision ActCiting a 16% decline in real wages between 2018 and 2026, he proposed a law to index private and formal sector wages to inflation, similar to systems in Belgium or Japan.
3. Matching Grants for State CapExInstead of loans, he suggested the Centre provide Rs. 1.5 lakh crore in matching grants over five years to help states build essential infrastructure like irrigation and sanitation.
4. Legal Recognition of Virtual Digital Assets (VDA)He argued that "regulation is protection." Since Rs. 4.8 lakh crore in trading volume and 180 startups have moved to Dubai and Singapore, he proposed a clear regulatory framework to bring this economy back to India.
