Business Standard Expected focus areas of Budget 2018-19
Budget 2018 will mostly look to kick start the economic growth after the recent growth slump and concerns. The Finance minister in his Budget speech on 1st February 2017 stated that he proposes to present the Budget proposals under ten distinct themes which were Farmers, Rural Population, Youth, Poor and the Underprivileged, Infrastructure, Financial Sector, Digital Economy, Public Service, Prudent Fiscal Management and Tax Administration. Expect the Budget 2018-19 to focus on these very areas along with some new areas of interest. Budget 2018 will mostly look to kick start the economic growth after the recent
growth slump and concerns. With a lull in private investment the government will most likely increase its own spending and allocation for schemes and projects significantly. Although after demonetisation and implementation of goods and services tax (GST) real big ticket reforms are hardly expected. But going by the recent trends the below mentioned sectors and areas would most likely feature in the Budget 2018 speech of the finance minister in bold. Middle Class - After facing the hardships of demonetisation, to pacify the middle income group the FM is more than likely to consider raising the tax exemption limit to Rs. 3 lakh per annum. Other than that increase in tax breaks under section 80C can also be another ace up the sleeve of the FM. Also additional benefits and sops for investment in health insurance, mutual funds and fixed deposits also further relief for first time home buyers using housing loan can be expected. Tax breaks for senior citizens and pensioners is also expected. Infrastructure - Government’s scheme of Housing for All by 2022 may see some progress. The government has already stated that it will push for foreign direct investments in the sector. Also expect a large chunk of capital expenditure to be spent for infrastructure development. As port and highway development has been satisfactory, expect said the investment to go to railways and other segments. Job growth - This has been one of the biggest areas of concern for the government. Slowdown in growth, increased automation and restrained investment sentiment has had its impact on creation of job opportunities. Add to that job losses in the informal sector due to impact of demonetization. Most probably the FM will try and provide extra impetus to job creating sectors such as banking, agriculture, real estate, manufacturing and more. Expect renewed focus on skill development too. To tackle jobless growth government may also announce country’s first National Employment Policy (NEP) in the Budget 2018. Corporate tax cut - In 2015 budget speech the FM had proposed cutting of the corporate tax rate from current 30% to 25% over a period of four years. Since then corporate India has been lobbying for the same, especially after US has passed a law cutting the corporate tax rates from 35% to just 21%. Cut in corporate tax is expected to be one of the bold initiatives of the government in the Budget 2018..........read more