The Finance Minister, Mr Arun Jaitley, presented the last full term budget of the BJP before the 2019 elections take place. Also, BJP lost the Rajasthan Lok Sabha bypolls to Congress. The economic credentials of India, as advocated by our Finance Minister, remain strong on the macro-economic front, yet there is a larger picture that has been avoided by the minister. That picture is the micro-economic position of the nation.
Coming over to the budget now, the last budget was expected to be one that gives freebies to all the classes of the Indian economy, though this did not happen. The budget has rather than being populist, is remarked as one to be status-quoist.
This budget, has only tried to address the farm sector issues which remain a crucial issue for the current regime. Compared to the last budget presented by the UPA, this budget has many things that do not conform to the common notions of the masses. The government has carefully put the moves, while keeping in mind the losses incurred due to implementation of the GST.
The GST, is one of the most important tax reforms that were actually needed by the country that is the largest indirect tax based economy in the world.
The Budget-2018 has not only kept in mind the after-effects of the Demonetisation exercise of November-2016 but has also kept the idea to push make in India when the for import duties on electronic peripherals which will be witnessing a surge in demand, have been raised including LEDs . The budget has taken care of the corporate demands of keeping the tax regime in the medium range, so that the flight mode Prime Minister, may host the foreign corporations in India, and tap the benefits of improvement in the ease of doing business index for India.
The effects, further, have been that due to mid-size businesses falling behind in accounting and tax compliance the Indians, today are facing trouble. The budget has tried to go soft on all quarters of the economy when the tax slabs have been kept unchanged, and that too at a time when the government is in the need of funds.
The FM fixed a disinvestment target of Rs 80,000 crore, which needs to be looked at from the perspective that what does an entrepreneur do when his one business registers losses. The government in the current financial year had met the target for disinvestment and earned a revenue of Rs 90,000 crores. The present budget aims to compensate for the losses that are being incurred due to various reasons, while the unproductive government companies don’t have be a burden on the government, while they may be more productive in a different corporate setting.
Coming over to the imposition of cess on fuel, and the prices being kept the same, the principle here is in line with many nations, whereby India, being the world’s second largest democracy, is catering to various social relief initiatives which need a collective approach, where the people need to contribute to the State. Thus, while the prices of crude may see an upward trend, in the light of corruption clean up in Saudi Arabia, the nation will still be in a stable price regime, thus the prices of oil remain unchanged.
The interest rates of loans will remain unchanged as we are vying for conservationism in the economy to push growth, thus the taxpayers may hope to have a better prospect of growth in the following quarters.
The budget is a conservationist one, and has pushed for keeping the Indian economic-ecosystem protected while the economy adapts to the new normal.