Millennium Post

Budget priorities

Union Finance Minister Arun Jaitley presented the Budget for 2018-19 in Parliament on Thursday. As pre-budget discussions dwelt on whether the government will bring in a populist budget or go for a reformist one, the Finance Ministry must have carefully worked on the two themes to come up with the present budget which strikes a balance between the two. The budget predicts a growth rate of 7.5 per cent in the coming fiscal and the size of the Indian economy growing to double from $ 2.5 trillion to $ 5 trillion soon. Currently, the seventh largest economy worldwide, India is poised to become the fifth biggest economy soon. Agriculture and Small and Medium Enterprises (MSMEs) figured prominently in the two-hour long budget speech by Finance Minister Arun Jaitley. The budget proposed a hike in the customs duty on mobile phones and other electronic gadgets making television and mobile phones costlier. However, the budget has ensured that it does not lead to escalation of price of any other commodity. It said that the government had exceeded the disinvestment target by collecting Rs 1 lakh crore. Making sure that the budget does not look populist and unduly liberal, the Finance Minister has not provided any relief to individuals on income tax slabs but ensuring that the budget looks more business-oriented, it has slashed the corporate tax to 25 per cent for MSMEs with annual turnover up to 250 crore. MSMEs, which account for 99 per cent of the companies filing tax returns and provide maximum number of employment, will have an easier access to loan. By reducing the corporate tax for MSMEs to 25 per cent, the government will have to forego Rs 7,000 crore. The budget also accords higher priority on the farm sector by promising to raise the Minimum Support Price (MSP) for the farm produce and a five years tax holiday to agricultural firms with a minimum turnover of Rs 100 crore. The MSP of all crops will be increased to at least 1.5 times that of the production cost. The budget also doubles the outlay on food processing industry to Rs 1400 crore and allocates Rs 10,000 crore for promoting and creating infrastructure for fisheries and animal husbandry and related sectors. It also proposes to liberalise agricultural export. The Finance Minister also said that the NITI Aayog will work with states to ensure that the farmers receive the Minimum Support Price even if the market price falls. A whopping Rs 2.04 lakh crore has been earmarked for 99 cities under the Smart City project. NITI Aayog has also been entrusted with the task to spearhead a national programme on artificial intelligence. The budget also plans to install 5 lakh Wi-Fi hotspots in rural areas to ensure that Internet access is easily available to the rural people. The government has earmarked Rs 1,48,528 crore of capital expenditure for the Indian Railways. It also plans to progressively provided with Wi-Fi, CCTV, and other state-of-the-art amenities in all trains. Railways stations with more than 25,000 footfalls will be equipped with escalators. The government plans to give more focus to safety and maintenance of railway tracks. Further augmenting connectivity, the government's UDAN scheme will connect 56 unserved airports in India. Pushing social security, the government has proposed to bring down women employees' contribution to the provident fund to 8.33 per cent to for the first three years of new accounts while the government will contribute 12 per cent of EPF contribution for three years for all new employees in all sectors. More importantly, the government proposes to hike the health and education cess to 4 per cent. Rs 5.97 lakh crore has been allocated for infrastructure spending in India.
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