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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
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