The last full Budget of the current government will be presented in 2018, with experts saying that it’s going to be a populist one due to the upcoming elections in eight states and the 2019 General Election. Finance Minister Arun Jaitley is likely to present the 2018-19 Budget on February 1, the preparation for which has already begun. So far, pre-budget consultations have been held with various stakeholders, where they voiced their expectations from the Budget.
Here’s what India wants from the Budget 2018:
Stick to fiscal deficit target, but increase social security pension: Several economists asked the government to increase social security pension and implementation of maternity entitlements, while suggesting to stick to the fiscal deficit target. Noted economist Jean Dreze said that increase in social security pension will not have much impact on the fiscal deficit as it was peanuts. “The amount (for social security pension) has been Rs 200 per month. This is totally unacceptable. There is no reason to keep it so low. So, make it at least Rs 500, I would say even Rs 1,000, if possible and increase the coverage,” he said.
Income security to farmers: Agriculture experts asked for an Income Security Act for farmers, tenant farmers and farm labourers. “The median income of farmers in 2012 was about Rs 1,600 per month, which is meagre to sustain… Hence, the farming community of India demands Income Security Act for farmers as well as tenant and farm labours,” Consortium of Indian Farmers Association (CIFA) Secretary General B Dasaratha Rami Reddy said.
Corporate tax cut: Corporate India asked Arun Jaitley to reduce corporate taxes. They suggested lowering the corporate tax to 18%-25% from up to 30% at present. This may be on top priority for the government as in the 2015 Budget — the first full Budget of the current government — Arun Jaitley had proposed cutting basic rate of corporate tax to 25% from current 30% in four years. In fact, even top banker Uday Kotak backed this demand saying it will help the government to boost its income.
Raising minimum wage: Traders bodies asked the government to fix minimum wages for all the workers across India at Rs 21,000 per month and fixation of monthly pension to the EPFO subscribers at Rs 3,000 per month.
Tax incentives on bad loans: Bankers asked for tax incentives on the provisions made by them towards bad debt under insolvency resolution. The bankers also want the government to work on to enhance the effectiveness of the Insolvency and Bankruptcy proceedings at the National Company Law Tribunal by prioritising case hearings.
Finance Minister Arun Jaitley last week at an event of FICCI said that the strengthening of public sector banks (PSBs), infrastructure and housing will be top priorities for government next year. He said that the government will focus on the momentum of infrastructure creation. Infrastructure creation, even the rural infrastructure, is core to India’s future growth story.