By SANJAY THAPA JEET
Against widespread speculation of a populist budget with an eye on the 2019 polls, FM Jaitley today presented a plain vanilla with no frills!. Falling flat on Oppositions malafide pretensions, there was no relaxation in personal income tax as was being widely expected to woo the votebank –by way of some let up in the threshold limit. Investors hopes crashed as the Sensex tumbled 300 points due massive selling during the budget speech of the FM to finally close at 35,906.
My apprehensions as expressed in my LOK SABHA TV discussion came true as slipped to the fiscal deficit target of 3.2 per cent to 3.5 per cent this time. “I have a 11 month revenue for a 12 month budget this time…”, said Jaitley after the budget presentation in the Parliament when questioned. This is quite against the optimism exuded by CEA Arvind Subramaniam, who has expressed optimism in the Economic Survey clears any misigivings in terms of meeting the fiscal front for FY18, and said the target is likely to be met. Capex has been compressed and has been below desirable limits.
Except for a leeway, albeit a small one, the budget gives little respite to the salaried middle class. For the salaried class Jaitley gas given a small respite by way of reintroduction of standard deduction upto the limit of Rs 40,000 p a in lieu of the transport and medical allowances. Standard deduction was discontinued since 2006-2007. He has also given a TDS relaxation for senior citizens and very senior citizens for their retirement investments and increasing the paid maternity leave for women and a reduction in their EPF contribution of employees to 8 per cent from 12 percent.
Last budget laid less emphasis on the social and health sector this time. A higher allocation for MNREGA and allocation of 14.74 lakh crore for rural job creation by all ministries through budgetary and extra-budgetary support has been announced. Health sector which received a stepmotherly treatment last year has been given an increased focus this time. Creation of atleast one medical college in every government state and one medical college in every three parliamentary constituency, a health insurance cover of Rs 5 lakh per year for 10 crore families, large emphasis on health in terms of been provided for this time compared to that of the previous year when the spending on these sector suffered.
The loss of revenue to the tune of Rs 50000 crore has comeabout due to the GST implementation. CEA Subramaniam has pointed out in the Economic Survey for FY18 a positive trend under the GST regime since July 1, 2017. He said that with an increase in indirect taxpayers numbers by almost 50 per cent for first eight months and says it is likely to spill over to the next year. Corporate sector has expressed dismay with no concession in terms of corporate tax which was expected to be lowered to 25 per cent. However, the MSMEs have been favoured with turnover Rs 250 crore getting a respite. The longterm capital gains has been introduced at 10 per cent for equity till 3 years of holding.
GST has been the major areas of worry since its implementation on July 1, the subsequent teething troubles in terms of claasifacation, frequent altering of tax slabs, the return filing pains and complications as well as technical glitches that hounded the tax payers.
The budget puts a special emphasis on the rural sector. having seen the sector lip to 2.1 per cent growth level. The FM has said that the farmer income needs to be enhanced and the MSP would be enhanced by as much as 1.5 times through the development of çluster’ models as done for manufacturing. What will happen to inflation is a moot point! An agri-marketing support of Rs 5000 crore, warehousing development, opening up of the futures and options in farm commodities as well as eNAM model of APMCs will be undertaken. a higher allocation for PM SIchai yojana at Rs 2600 crore has been announced. In a startling revelation, the Survey points out to the increasing ‘feminisation’ of the Indian agriculture. It says a new trend has emerged in the agriculture with a substantial migration of male population out of the rural households, females are shifting towards farming.
Infra-spending has been limited except for a little higher spending on electrification. But quite against expectations there has been no higher spending on defence sector given the increasing incidents of threats from China and in the POK. But here the FM has said that the new mechanism to allow increased Make in India in participation with private sector is being worked out.