Budget 2018 was certainly the most difficult Union Budget for PM Narendra Modi in his four-year regime. On one hand, the government had to set a roadmap for country's development, and on the other, it had to pacify different sections of society before General Elections 2019.
Budget 2018 was certainly the most difficult Union Budget for PM Narendra Modi in his four-year regime. On one hand, the government had to set a roadmap for country’s development, and on the other, it had to pacify different sections of society before General Elections 2019. While many had expected the budget to be populist, Modi had hinted in advance that Arun Jaitley’s bag will be wooing voters. Yet, from rural economy to women to small businessmen – there were certain areas which Modi clearly addressed in Budget 2018. Here are Narendra Modi’s 7 bids for 2019 in Budget 2018
Eye on the rural vote
BJP witnessed a clear erosion of rural vote bank in Gujarat Assembly Elections. Also, there were farmer protests recorded from many states across the country. Jaitley started off his Budget 2018 speech with big announcement for rural-farm sector. The finance minister announced farmers will be given an MSP of at least 1.5 time production cost for kharif crops. The announcement was followed by many such schemes like raising institutional credit for agriculture sector to Rs 11 Lakh crore from Rs 10 Lakh Crore, Rs. 500 Crore for ‘operation greens’, Rs 2000 Crore fund for development of rural marketing infrastructure, doubling of allocation for food processing sector to Rs 1400 Crore, announcement of Rs 10,000 Crore funds for infrastructure development in fisheries and animal husbandry farmers etc.
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Middle Class and poor
Budget 2018 has set up higher targets for Ujjwala Yojana, Saubhagya and Swachh Mission to cater to lower and middle class sections, providing free LPG connections, electricity and toilets. Though considered as basic amenities, the three have turned out to be big difference makers in the lives of poor and lower-middle class sections of the society. (mention the new target). Tax benefits for the middle class: Jaitley announced that government will pay the 12 per cent of wages to Employees Provident Fund (EPF) contribution on behalf of new employees in all sections for the next three years.
Small Businessmen were one of the most affected after GST roll out and demonetisation. In Budget 2018, Jaitley made a proposal to extend reduced rate of 25 per cent corporate tax, currently available for companies with turnover of less than 50 crore (in Financial Year 2015-16), to companies reporting turnover up to Rs 250 crore in Financial Year 2016-17.
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Arun Jaitley clearly targeted women in Budget 2018. Jaitley increased the grant to Women Self Help Groups to Rs75,000 crore in 2019 from 42,500 crore last year. The target for Ujjawala Yojana, which provides free LPGs to households, were also increased. The government further announced that EPF limit for new women employees would be reduced to 8 per cent from existing 12 per cent, with no change in contribution from employer’s end.
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Youth: Make in India push, bid to create jobs
– In Budget 2018, Jaitley proposed changes in customs duty to promote creation of more jobs in the country and also to incentivise domestic value addition and Make in India in sectors such as food processing, electronics, auto components, footwear and furniture.
Dolling out a number of tax related benefits in Budget 2018, Modi government increased the exemption of interest income on deposits with banks and post offices from Rs. 10,000 to Rs. 50,000. Also, TDS will bot be required to be deducted under section 194A. The benefit will also be available for interest from all fixed deposit schemes and recurring deposit schemes.
Modi government increased allocation for SC-ST earmarked programmes in Budget 2018. The government announced that a fund of Rs 56,000 crore will be spent for SCs, while a fund of Rs 39,000 crore will be spent for STs. As per Jaitley’s speech, every block with more than 50% ST population and at least 20,000 tribal people will have ‘Ekalavya’ school, at par with Navodaya Vidyalayas, By 2022.