We Live in Interesting Times

Amar Pandit , CFA , CFP

I wasted exactly Zero minutes on the Budget this year and I plan to save myself and you from the mindless budget conversations (& musings) that most people seem to have before, during and after the budget. I would encourage you to read my broad take on the budget that I had written last year (link pasted below).


I assure you the above post can be read before the budget every year and is likely to remain relevant for decades to come (till we do not really have an overhaul of this budget process). Though I have mentioned zero minutes above, I did spend some time discussing the budget at a broad level with my team. Additionally, I wanted to invest sometime again sharing some uncommon sense (that you might not read in the media) to protect your energy, time, sanity, health, and wealth. This post is my attempt towards that objective.

I asked my team member a typical question that is frequently asked “How was the budget?” The first response was “There is nothing negative in the budget.” This was a common response across many of my research team members. I then asked, “What is so good about the budget?” There was nothing spectacular for the taxpayer or investor. Yes, there is a solid thrust on infrastructure spending and many industry wide budget allocations, privatizations, LIC IPO, FDI in the Insurance sector (going up to 74%) and promises. However, we all know by now that the devil lies in the detail and most importantly in EXECUTION. “We will do this and have allocated XXXXXX Crores for this”, does not mean it is exactly allocated the same way and that the execution is flawless and world class.

So why did the Equity Markets go up so sharply when people were hyper analysing (on Twitter according to my colleague) that the Markets have only gone up so much or down during the last 10 years of the budget? Sadly, the market does not listen to what we feel or our opinions. I am not getting into the technical details of the markets going up – short covering, FII buying, and so on.

The broad reason seemed to be “No negative news is WONDERFUL NEWS”. Therefore, I wrote the headline as “We Live in Interesting Times”. I think the real feeling here is that of Gratitude. There was no additional capital gain tax, dividend distribution tax, surcharge, cess, stamp duty, estate duty or some other thing. Thus, more than anything else, there was a sigh of relief. An Agri-Cess is smartly introduced despite our inflated petrol and diesel prices even though the oil prices globally have been low. I do not expect us to benefit from oil prices anytime other than election times.

So how does this affect you and me? On the so-called wonderful side, no additional significant change. On the personal income tax side, again no change except for some procedural and TDS related stuff for NRIs. There is nothing substantial for retirees dependent on interest income. Rs. 1 Crore in 2000 could give you an interest of Rs 8-9 Lakh pre-tax; In 2021 that same Rs.1 Crore gives you an interest of Rs. 3-5 Lakh pre-tax though Inflation has gone up like crazy in the last 20 years. People are living longer. The Lifestyle Inflation is even higher. Interest rates have gone to such lows that it is impossible to survive on Fixed Deposits and Bonds. Like Superman’s Kryptonite, Lifestyle Inflation is Every Family’s Biggest Kryptonite. Thus, we have to rely on the process of life centered planning and plan for the retirement of the 21st century wisely. If you are a small and medium size business owner, there is practically nothing in this budget (nor in the announcements made in the last 10 months).

Atma Nirbhar (I would have said “Self-Reliant or Independence” but using this phrase as it is in vogue) is the only phrase that we need to truly need to understand here and take charge of our overall health, and emotional as well as financial well-being.