The Union budget of India also referred to as the annual financial statement in the constitution of India which gives the estimated receipts and expenditure of the government for that particular year. It keeps the account of the government’s finances for the fiscal year that runs from 1st april to 31st March. Union budget can be categorized as a revenue budget and capital budget. Revenue budget incorporates government’s revenue receipts and expenditure for example expenditure incurred on day to day functioning of the government. Capital budget includes receipts and payments of the government, for example loans from foreign government and public.
Central government is constitutionally required to lay an “annual financial statement” before both the houses of the parliament. The budget this time is considered as the biggest economic event of the year with the elections at the doorstep. This budget is also portrayed as the game changer and as a catalyst in the objective of retaining power in the coming parliamentary elections.
This budget is considered as a booster dose for rural India and bitter-pill for investors as per the economists. The budget has favoured the rural populous but the financial market is little disappointed. It is a mix bag of both expectations and a few surprises. The government claims that the appeal was primarily to sections that make up for the poor, farmers, young job seekers, senior citizens and lower middle class people.
Some of the highlights are:
n Health sector has been hugely benefited. The announcement of Rs. 5 lakhs health care insurance each for 10 crores families has made this sector a buzzword of 2018-19 budget.
n This budget has given a substantial focus on agricultural sector. The government is committed to double the farmers’ income by 2022. It is also helping the farmers with the price support and implementation of MSP (Minimum Support Price) for all crops has been hiked 1.5 times of production cost. Coverage of “phasal bheema yojana” to go up from 40% to 50% of cropped area.
n LPG connection will be provided for around 8 crore woman under UJWALA scheme, which is appreciable.
n Emoluments have been revised for president to 5 lakhs, 4 lakhs for vice president and 3.5 lakhs a month for governors. Emoluments to MP’s will also be revised with automatic revision every 5 years indexed to inflation.
n Amrut program focuses on providing water supply to all households in 500 cities.
n The prominent tourist sites will be developed into iconic ones to boost the tourism.
n 2018 budget has bouquet of benefits for senior citizens. These include increase in tax exemption limit for interest income from banks and post offices from Rs. 10000/- to Rs 50000/-. Increase in tax break on health insurance and medical expenditure, would give a big relief to taxpayers as most senior citizens derive most of their income from bank FD’s and post office schemes.
n Budget 2018 has given suburban rail connectivity boosts for bangalore. Amount of Rs.17,000 crore would be spent on the development of 160 km of suburban railway network for Bengaluru, which was a very much required boost to country ‘s over crowded information Technology capital.
n The strain on the economy is mainly due to unemployment and the budget has promised to enhance the employment rate, but has not specified the sectors where surplus job opportunities can be created.
n The budget extends sops to micro, small and medium enterprises as part of the government’s efforts to bring businesses under the formal economic field. As they are labour intensive and the need of the hour is to create an enabling environment for them to invest and grow, creating jobs and pushing demand and growth. Though the reduction in tax rate to 25% for MSMEs who have reported turnover of upto 250 crores, will not create job prospectus but also expand their business by additional investments..
n Over two crore toilets will be constructed across the country under swatch bharat mission.
n No personal income tax changes proposed in the budget and long term capital gains exceeding Rs 1 lakh will be taxed at 10% without indexing.
n Customs duty on certain products such as mobile and television has been increased to provide a fillip to ’make in India’.
Besides ensuring easy access to bank loans, the government is working on measures to address the bad loans and stressed accounts of MSMEs.
Government in this budget has given importance to development of rural areas, infrastructure and poverty alleviation. On the whole, with the elections close by, the union budget has addressed the various priorities of Indian economy. It has well addressed social sector priorities while maintaining fiscal discipline.