Union Budget 2018-19 is guided by PM’s mission to strengthen agriculture, rural development, health, education, employment, MSME and infrastructure sectors feels Prof. J.D. Agarwal, Chairman & Professor of Finance, Indian Institute of Finance and a noted economist. According to Dr. Agarwal, allocations of Rs. 14.34 lakh crores for social welfare schemes is highly progressive, forward looking and a step in right direction to achieve “Garibi Hatao”.
Targeting a growth rate of 7.5%, maintaining fiscal deficit of 3.3% and programmes to direct the benefits of structural changes and good growth to reach farmers, poor and other vulnerable sections of our society and to uplift the under-developed regions. He further stated that, this year’s Budget will consolidate these gains and particularly is remarkable. FM’s focus on strengthening agriculture and rural economy, provision of good health care to economically less privileged, taking care of senior citizens, infrastructure creation and working with the States to provide more resources for improving the quality of education in the country is appreciable. The budget presented by the Finance Minister is in tune with the Budget forecasts made by Prof. J.D. Agarwal released a day before the budget and covered widely by press and news agencies. Prof. Agarwal had forecasted that the Union Budget 2018-19 would be pro-people, progressive, balanced and different from the general trend and expected to take care of the aspirations of people. He had said that the budget is likely to be growth oriented, non-inflationary, with focus on agriculture, rural development, education, employment and investment. In his forecasts (expectations from Budget) he stated that attempts may be made by the Finance Minister to promote affordable housing, give boost to real estate sectors, stimulating growth, promoting digital economy and promoting ease of doing business by removing obstacles through tax proposals.
According to Dr. Agarwal, the government’s heavy spending would reverse the sluggish growth particularly in industry as well as agriculture. The largees in terms of 11 lakh crores agriculture credit, announcement to develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) to take care of the interests of more than 86% small and marginal farmers and setting 42 mega food parks with an investment of 1290 crores will greatly help in increasing the productivity of agriculture. Post Harvest tax incentive and 100% rebate for farming producing companies will help increase production for agriculture produce raising of MSP by 1.5 times and chasing a target of possible potential of 100 billions export of agriculture produce will help increase incomes of the farmers in due course. Prof. Agarwal also appreciated the budget provision for facilitating farmers for installing solar water pumps to irrigate their fields and proposal to extend the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital needs.
The Finance Minister has taken care of welfare of poor & Lower middle class families by providing for 8 crores free LPG connections under Ujjwala Scheme to poor women and 4 crore poor households are being provided with free electricity connection under Saubahagya Yojana. This will greatly facilitate reduction in burning of fuel and causing deforestation and the sufferings of women. To fulfil target of housing for All by 2022 ,more than one crore houses will be built by 2019 in rural areas, besides constructing about 2 crores toilets in addition to already 6 crore toilets under Swachh Bharat Mission are also welcome steps feels Prof. Agarwal. This will help in adding to the dignity of Indian women.
He has been equally concerned for education, health and employment. His provision for one lakh crore for infrastructure system in education, setting up new school for planning and architecture, 24 medical colleges and large amount of allocations made for TB nutitional support etc are also welcome features in the budget. He has rightly targeted to provide scholarships to 50 lakh youth by year 2020. This will greatly help youth from middle and lower middle class families to pursue higher education including education.
Finance Minister announcement for the world’s largest government funded health care programme titled National Health Protection Scheme to cover over 10 crore poor and vulnerable families covering approximately 50 crore beneficiaries from 10 crore families and providing coverage upto 5 lakh rupees per family per year for secondary and tertiary care hospitalization is a laudable step said Dr. Agarwal. This would help generate more employment in insurance sector. This will also help people from different regions to seek quality medical treatment in their neighborhood rather than going to metro cities and face problems.
According to Prof. Agarwal, the Finance Minister has been very concerned about MSMEs which constitute 99% of the companies, by providing them 3794 crores for giving credit support, capital and interest subsidy and for innovations and an outlay of Rs.7148 crore for the textile sector in 2018-19. He has fulfilled his promise of reducing the corporate tax rate to 25% for MSMEs with a turnover of 250 crores covering 99% of the corporate entities.
This year budget has rightly focused on generating employment by making a provision of 70 lakhs formal jobs and through an investment in infrastructure, road, railways, airports and helipads, rural infrastructure, interconnecting rural with urban areas with a view to boost employment and quality of life of people feels Prof. Agarwal. While appreciating the steps taken in the Budget for generation of employment, Prof. Agarwal reiterated his suggestions to the Government for setting up of National Labour Exchange as suggested in one of the studies completed at Indian Institute of Finance and published in Finance India to deal with the problem of unemployment in the country.
The provision for 56619 crores for SC welfare and 39135 crores for ST welfare are very welcome allocations.
According to Prof. Agarwal, Finance Minister has been equally concerned for investing in infrastructure by emphasising that infrastructure is the growth driver of economy, the Finance Minister announced an increase of budgetary allocation on infrastructure for 2018-19 to Rs.5.97 lakh crore and connect the nation with a network of roads, airports, railways, ports and inland waterways opined Prof. Agarwal. To further boost tourism, the Budget proposal to develop ten prominent tourist sites into Iconic Tourism destinations by following a holistic approach involving infrastructure and skill development, development of technology, attracting private investment, branding and marketing are welcome announcements which will generate employment and result into growth feels Prof. Agarwal.
According to Prof. Agarwal, the disinvestment target of 80,000 crores is very moderate keeping in view of that a target of about one lakh crores may be attained in 17-18.
To further Broadband access in villages, the Government proposal to set up five lakh wi-fi hotspots to provide net connectivity to five crore rural citizens and allocations of Rs. 10000 crore in 2018-19 for creation and augmentation of Telecom infrastructure would help in Digital India programme of the Government said Dr. Agarwal.
It is appreciable that despite large allocations to social welfare schemes in agriculture, education, health and infrastructure he has been able to keep the fiscal deficit at 3.3 % and a growth rate of 7.5% of GDP without any additional tax burden as the Tax rates both personal and corporate remained unchanged.
On the direct taxation, a standard deduction of Rs. 40,000/- would make salaried class more happy. To tax some items like mobile phones, TV parts w0uld make such imported items costlier for common man.
He has been very caring for senior citizens by giving relief to Senior Citizens interest income on deposits with banks and post offices proposed to be increased from Rs. 10,000 to Rs. 50,000 u/s 194 A and hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D is another benefit to the middle class..
The Finance Minister has done a tremendously good job in presenting this Budget said Dr. Agarwal. He welcomed the budget and considered it to be one of the best budgets in last few years. According to him, Budget 2018-19 is welfare oriented, pro-poor, pro-agriculture and rural people, promoting education, taking care of health of the people particularly of middle class and the poor. On the whole the budget is a welcome shift from market driven economic system to the social welfare orientation, where the government takes care of the needs, requirements and aspirations of more than 80% population of the country said Dr. Agarwal.