Budget 2018: The government’s stress on developing the nation’s infrastructure was a key point in the Budget 2018-19 presented by finance minister Arun Jaitley. With a major portion of the customary Budget constituting excise and service tax dropping from the current Budget, this was a shorter one. The Budget 2018 has, as expected, been majorly focused on agriculture and rural development and also on socio-economic needs like healthcare, education, low-cost housing and senior citizen protection. It has also emphasised more on digitisation. Terming infrastructure a “growth driver” of the economy, the government announced an allocation of Rs 5.97 lakh crore for 2018-19 for infrastructure spending, up by over Rs 1 lakh crore from the ongoing fiscal.
The Budget also continues to focus on infrastructure development in all sectors, especially in the railways and roads sector. Budgetary allocation in these sectors, at Rs 5.97 lakh crore against last year’s Rs 4.94 lakh crore, is a jump of 20%. This will definitely support the Bharatmala programme. The FM has reaffirmed the Phase I of doing 35,000 km of roads with Rs 5.35 lakh crore, and with construction of 9,000 km of roads by March 2018-end, will give road infrastructure companies a continued boost in opportunities. This will also create huge opportunity for job creation. The thrust on digitisation vis-a-vis toll collection by use of fast tags and other methods and increasing such toll plazas from 60,000 to 10,00,000 will help bring efficieny. Further, the increase in allocation of expenditure by targeting electricity for all and wider health coverage would boost the infra sector.
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Infrastructure acts as a growth driver for economy, India needs a massive investment in excess of Rs 50 lakh crore in this sector to increase GDP growth and integrate the nation with a network of roads. The increased expenditure on infrastructure will create a massive employment opportunity. As for the rural focus, allocations towards Pradhan Mantri Gramin Sadak Yojana, Pradhan Mantri Krishi Sinchai Yojana, and Deen Dayal Upadhyaya Gram Jyoti Yojna could see higher allocation. Other tax benefits like 25% tax for assesses having a turnover of less than Rs 250 crore will help our subcontractors.
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The introduction of standard deduction for employees of Rs 40,000 on medical reimbursement and transport allowance will reduce compliance procedures. Covering in the tax ambit of LTCG on listed securities with a 10% tax will have some impact on return expectation of investors but grandfathering of the section has reduced the impact.
–Satish Parakh (MD & CEO, Ashoka Buildcon)