Major Stress on Farm, Social Sectors In Modi Govt’s 2018-19 Budget Ahead of Elections
New Delhi : Under attack over farm distress and amid overall unease in the poor and lower middle classes because of job losses following the note ban, Finance Minister Arun Jaitley today announced some major steps in the General Budget for 2018-19 to push agricultural growth and extend relief to these classes, ahead of elections in several states and also Lok Sabha polls later.
The Budget also gave a substantial relief to the urban salaried class when it announced tax exemption on the interest up to Rs 50,000 on bank deposits by pensioners.
Besides, the Finance Minister also announced a standard deduction of Rs 40,000 for salaried employees in lieu of transport and medical expenses.
This year’s budget did not propose any changes in tax slabs for the salaried class.
One of the major announcements was about the launch of a flagship National Health Protection scheme which will cover 10 crore poor families or around 50 crore people for secondary and tertiary healthcare up to an expenditure of Rs 5 lakh.
In a much needed support to the farm sector, the Finance Minister announced that MSP for all kharif crops will be one and half times of their production cost. This is already existing in the case of all rabi criops.
Besides, Institutional farm credit has been raised to Rs 11 lakh crore in 2018-19 from 8.5 lakh crore in 2014-15.
In addition to these measures, the Government is launching a “Operation Greens” to address price fluctuations in potato, tomato and onion, for benefit of both farmers and consumers.
As many as 22,000 rural haats will be upgraded into Gramin Agricultural Markets to protect the interests of 86% small and marginal farmers. Two New Funds of Rs10,000 crore have been announced for Fisheries and Animal Husbandry sectors.
The budget also proposes 100 percent deduction to companies registered as Farmer Producer Companies with an annual turnover upto Rs. 100 crore on profit derived from such activities, for five years from 2018-19.
An expenditure of Rs 14.34 trillion has been proposed for enhancing rural infrastructure. The Finance Minister also tried to balance the long standing demand of the industry for reducing corporate tax and the Opposition criticism of being a ”suit boot ki sarkar” by slashing corporate tax from 30 to 25 percent, but only for the companies with turnover of up to Rs. 250 crore in Financial Year 2016-17, to benefit micro, small and medium enterprises.
Besides, he has proposed to tax long-term gains exceeding Rs 1 lakh in listed stocks at 10 per cent. There is this time no change in the personal income tax . In the indirect taxes, only custom duties have been changed as excise and other indirect taxes have been subsumed in the GST.
Because of the increase in customs duty, imported electronic, including phones and TV sets will now become costlier. The custom duty on mobiles has been proposed to increase from 15 to 20 per cent, and on some other mobile parts , and some parts of TV to 15 per cent. There is also a proposal to increase the health and education cess to four per cent.
Health, as already pointed out was a major area of thrust in this budget. As announced in the national Health Policy 2017, around 1.5 lakh health and wellness centres will be set up to provide free essential drugs, maternal and child services, for which Rs 1200 crore had been provided.
Besides TB patients will get Rs 500 per month for nutritional support. The Budget also provides for upgradation of 24 district hospitals as government medical colleges and hospitals.
In a good news for women from poor households, the government proposes to increase the target of providing free LPG connections to eight crore women. Railways Capital Expenditure for the year 2018-19 has been pegged at Rs.1,48,528 crore. Over 3600 kms of track renewal is targeted during the current fiscal. Redevelopment of 600 major railway stations is being taken up.
Mumbai?s local train network will have 90 kilo-meters of double line tracks at a cost of over Rs.11,000 crore. The Budget proposes to expand the airport capacity more than five times to handle a billion trips a year under a new initiative – NABH Nirman. Under the Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) initiated by the Government last year, 56 unserved airports and 31 unserved helipads would be connected.
The Budget proposes an expenditure Rs.21.57 lakh crore (net of GST compensation transfers to the States) in 2017-18 as against the Budget Estimates of Rs.21.47 lakh crore.
The Finance Minister projected a fiscal deficit of 3.3% of GDP for the year 2018-19. The revised fiscal deficit estimates for 2017-18 were put at Rs. 5.95 lakh crore at 3.5% of GDP.
Mr Jaitley said the tax payer base had gone up from 6.47 crore in 2014-15 to 8.27 crore in 2016-17, and more payers were joining the tax net but the turnover was not encouraging.
Earlier, in the beginning of his speech, Mr Jaitley said the government was firmly on course to achieve high growth of 8 per cent plus as manufacturing, services and exports were back on good growth path.
While GDP growth at 6.3 per cent in the second quarter of 2017-18 signalled turnaround of the economy, growth in the second half is likely to remain between 7.2 pc to 7.5 pc.
He said that Indian society, polity and economy had shown remarkable resilience in adjusting with the structural reforms. IMF, in its latest Update, has forecast that India will grow at 7.4% next year . The Finance Minister said the government was working to build a strong, confident New India. ”We will soon become the world’s 5th largest economy from the 7th at present,” he said.