Budget 2018: The 2018 budget is the last full budget by the NDA government. In the first couple of years, this government opened up the economy on the backs of some important policies and going after black money.
Budget 2018: The 2018 budget is the last full budget by the NDA government. In the first couple of years, this government opened up the economy on the backs of some important policies and going after black money. It has done very well in these areas as it has had an average GDP growth of 7.5% for the first three years, with this year’s growth expected to be around 6.75%. One expected legitimately for this to be a political budget 2018, with expectations running high. The expectations were not disproved, with the focus on the core constituencies of farmers, people below the poverty line, and the lower-middle-class income groups maintained steadfastly. The Budget has good proposals for agriculture and the rural areas, health, senior citizens, and education infrastructure.
Watch: Tax takeaways from Budget 2018 for the common man
Further, the rural sector will get all-weather roads to connect to markets, which is going to have a tremendous impact in the long term. Rural housing has been given a massive boost, and the free LPG programme has been rightly extended to 8 crore families, as against 5 crores. The government has committed to contribute 12% of the wages of the new employees in the EPF for all the sectors for next three years, while also reducing women employees’ compulsory contribution to 8%. These moves are positioned to be an integral boost to formal-sector job creation. On the taxation front, the Budget has been a disappointment. The government has not kept the promises of reducing the corporate tax rate from 30% to 25%.
The established turnover limit to avail this diminished rate has gone up from Rs 50 crore to Rs 250 crore, increasing the proportion of companies covered by this rate to 99% of all taxpaying corporates. Another disappointing measure comes in the form of taxation of LTCG at the rate of 10% for gains exceeding `1 lakh. This will have an adverse impact on the net returns earned, hurting investor sentiments.