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A progressive budget
By Kumar Mangalam Birla, Aditya Birla Group
The 2018 Budget goes back to first organisations earning less than Rs.100
principles to shine light on some of crore. This move will particularly benefit
India’s core sectors – agriculture, MSME the MSME sector. Another significant
and infrastructure. change is the 10% long term capitals gain
tax, by which the government hopes to
Improving road and rail infrastructure
has been a recurring theme of this leverage India’s equity markets to
administration’s budgets, and 2018 saw a increase its revenues.
continuation of the same. The Finance The strongest focus of the Budget is on
Minister allocated Rs.50 lakh crore to India’s agricultural sector, with the
improve infrastructure, including roads, Minister stating that the intent is for farm
railways, airports, etc. This will be hailed incomes to double by 2022. Farm
as a welcome move. India needs better reforms have been a crying need for
connectivity to knit its vast hinterland decades and this Budget aims to tackle
and bring manufacturing and one of the biggest issues faced by farmers
consumption centres closer together. – the disconnect between cost and
income. The Budget has announced that
The Budget’s focus on building more
roads and transitioning the railways to minimum support pricing (MSP) of crops
broad gauge and electrification will go a will be linked to production costs and
long way in enabling higher efficiencies fixed at 1.5 times the costs. This will help
in freight and transportation. Also farmers earn a return on their
welcome is the long term plan to grow air investments, and be less vulnerable to
capacities 5-fold to enable 1 billion trips unpredictable weather conditions and
annually. The outlay on urban metros and volatile market cycles. A move that will
railways also includes measures for reverberate across India’s agricultural
passenger convenience – escalators and markets, and hopefully boost rural
WiFi in high traffic railway stations are consumption.
being planned. Apart from the above, the Budget has
This Budget stands out from earlier taken a social stance by introducing
editions in terms of changes to the direct health insurance coverage for all. The
and indirect structure. Personal tax announcement of Rs 5 lakh medical cover
remains more or less the same, and the for 10 crore households is a huge positive
Finance Minister offered reliefs for step that will bring over 50 million
women and senior citizens. With GST individuals under insurance coverage
already rolled out, the Minister made no and provide them with a much-needed
major changes to indirect taxes. The financial net. There were other big social
highlight of the Budget is the reduction of messages. Free gas connections for about
corporate tax from 30% to 25% for eight crore households, which will have
the dual benefit of reducing air pollution
