FINANCE TIP OF THE DAY
Can you afford your loan?!
Know the quantity of loan you can afford. The banks may sanction loan based on your income but you should look at your monthly expenditure and see if you can afford the maximum that banks offer. As a thumb rule, remember not to let your credit exceed 40% of your income!
Budget 2013 – Effects on Women!
Women were expected to be given importance in this year’s Budget, considering their increasing importance in different areas in the economy – both as homemakers and as working women. The Budget was a mixed bag for women, with some positives and some expectations not met.
Let’s first look at what expectations were not met by the Finance Minister:
No increase in tax exemption limits: The biggest hope by working women was a relaxation in direct tax slabs or rates for women. Presently, the initial exemption limit is Rs. 2 lakhs for both men and women. This year’s Budget has kept this unchanged, thus disappointing many women. Also, there are no changes indicated in the tax rates. The only relief given by the Finance Minister for all tax payers (including women) is to provide a tax credit of Rs. 2000 to persons in the first bracket of Rs. 2 lakhs to Rs. 5 lakhs. However, there is no woman-specific benefit here.
No incentives on investments for women: Another expectation has been to incentivise women towards market-related investments. There have been some measures related to savings in financial instruments, rather than purchase of gold – like increasing the scope of the Rajiv Gandhi Equity Savings Scheme, additional deduction of interest on home loans up to Rs. 25 lakhs and introduction of inflation-proof investments. However, these are general measures and there have been no woman-specific benefits in this regard.
Inflation concerns not addressed effectively: Although the Budget had a pro-growth tone and fiscal deficit target at 4.8% for 2013-14 sent out a positive sentiment in the market, the budget did not expressly address inflation concerns of the common man. Further, Government’s expenditure target is high, making the 4.8% number looking doubtful. Food inflation has been pointed out as the main worry, and the Finance Minister has specified that all steps will be taken to augment supply of food items. However, the homemaker expected more concrete measures on this front, which were not met.
The following are a few positive policies for women by the Finance Minister:
Additional funds to the Ministry of Women and Child Development: The Budget has allocated an additional sum of Rs. 200 crores to this ministry to begin work in designing schemes to address gender discrimination issues, across the different sections of the society.
Exclusive woman-only bank: The Finance Minister has proposed setting up an exclusive bank for women, which lends mostly to women and women-run businesses, supports women Self-Help Groups and women’s livelihood and employs women predominantly. This bank is planned to be set up as a public sector bank and an initial capital of Rs. 1000 crores has been allocated in the Budget. It is proposed to obtain the banking license by Oct 2013 and commence operations shortly thereafter. The first women’s bank will increase job opportunities for women and help in the emergence of more women entrepreneurs.
Safety and Security: Recent incidents across the country have forced the ruling party to bring about policies favouring women safety. The Budget also aims to address this issue, wherein the Finance Minister has made a promise to the women of the country to ensure their safety and security. A fund is proposed to be set up by the Government, called the Nirbhaya Fund with a contribution of Rs. 1000 crores. Women related ministries have been asked to work out details of the structure, scope and application of this fund.
Scholarships to the girl child: The Finance Minister has proposed grant of scholarships to girl children in 2013-14. Although the exact amount of allocation for girl children was not specified in the Budget, the total amount allocated for scholarships to students belonging to Scheduled Castes, Scheduled Tribes, Other Backward Classes and Minorities, and girl children was specified at Rs. 5284 crores. It is hoped that some concrete steps are taken towards girl child education, unlike how it has happened the past.
Gold: The Finance Minister has addressed the issue of high Current Account Deficit in the Budget, and has cited import of gold to be one of the main causes for this. However, he has spared gold and has not further raised the import duty on gold. Gold import duty was already hiked recently in January to 6%. Although exempting gold from an import duty hike is not a positive step from the current account deficit perspective, Indian women who love the yellow metal have something to cheer about. Further, the Finance Minister has increased the duty-free limit for women bringing jewellery into the country to Rs. 1 lakh.
On the whole, this year’s Budget has had both positives and negatives for the Indian woman. Translating policies on paper to action will be the key challenge.