A Budget for Bharat leaves middle India in a sulk

There were few happy faces in India after the Budget speech got over, except for the senior citizens. Since we don’t have representatives of Bharat in the TV studios or as talking heads, their reaction does not get captured. Budget 2018 has given a big push to Bharat and tightened India a bit more. Bharat has got targeted spends on a whole range of items, from electrification to a massive health insurance programme—probably the biggest in the world.

Senior citizens should be happy. The morning laughing club should be laughing harder. They have reason to because they are possibly the only middle India cohort that gets to take home more money. Interest income for them will be exempt from tax up to Rs50,000, up from Rs10,000. This means that if a 60-plus person had an income of, say, Rs10 lakh as interest, she will now be taxed on Rs9.5 lakh, other exemptions and deductions remaining the same. The deduction on premiums on health insurance is up from Rs30,000 to Rs50,000. This is good because privately bought health covers for senior citizens are very expensive. The Pradhan Mantri Vaya Vandana Yojana has been extended till March 2020, and the Rs7.5 lakh-limit is doubled. A 60-plus person can now get an assured 8.3% annual return on Rs15 lakh of investment. A couple that has invested Rs30 lakh, can earn an interest of Rs2.49 lakh a year from it. These are important changes for a generation that is sitting on pension corpuses that were earned on pre-liberalization salaries, and which is finding today’s costs prohibitive.

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