Prof Mithilesh Kumar Sinha Finance Officer Nagaland University, Lumami Middle-class hopes from a "poll-bound" Budget 2018 were dashed with no change in the personal income tax structure. Finance Minister Arun Jaitley announced standard deduction Of Rs 40,000 for salaried employees in lieu of transport and medical expenses. Signalling that fiscal prudence has gone off track, Jaitley proposed a fiscal deficit target of 3.3 per cent of GDP for 2018-19. The target he had set for 2018-19 last year was 3 per cent. MSMEs being major growth element of economy, Government has given more emphasis on boosting this sector especially in this budget. A special corpus of Rs 3 lakh crore for lending under PM Mudra Yojana is fixed to boost morale of this sector. Also, it has been announced that tax rates will be lowered for companies having turnover upto Rs.250 Crore and this benefit of reduced corporate taxes was firstly introduced in last year’s budget and this year the benefit of corporate tax rate of 25% is provided for Small and medium sized companies. Also, Government is planning to link GSTN portal with system of loan sanction process of banks. This will reduce the time of sanction and approving loans by much extend and will boost economy. In contrary to the expectations, the proposals made by FinMin in personal taxation are on passive side. Nothing extraordinary has been proposed for individual taxpayers. There is no change in the rate of tax for all individuals whether male /female resident, senior citizen or super senior citizen. It was quiet expected that maximum exemption limit will be raised and benefit will be granted for salaried class. Moreover, the rate of education cess has been increased from 3% to 4% which will increase the tax burden. The budget holds immense importance since it’s the first after the GST was implemented in the country and the last just ahead of the next union elections take place in 2019. It the vision of the Modi government to provide ‘Housing for All by 2022’. Finance Minister Arun Jaitley came out with various new schemes in budget 2018. Since housing has been the Modi government’s one of the highest priorities, budget 2018 talked about ensuring every poor has a house by the year 2022. Finance Minister in his budget speed said that there will be 51 lakh houses built in rural areas by end of FY18-19. A dedicated Affordable Housing Fund will be set up under NHB that will ensure there are 37 lakh houses built in urban areas by end of FY18-19. PMJBY will be extended to all poor houses In order to encourage employment and to give social security to the employee, the government took a far-reaching positive decision. This step will give an opportunity to change informal to formal – new employment opportunities will be created. The government will contribute 12 percent of the new workers in the EPF account for three years. To realize the dream of modern India, Next Generation Infrastructure is very important to increase the ease of living and sustainability of the people in general India's poor population has been concerned with treating diseases. The new scheme 'Ayushmaan Bharat', presented in the budget, will free the poor from this big concern. This scheme will be available to nearly 10 crore poor and lower-middle-class families. That is, about 45 to 50 crore people. This is the biggest health insurance plan in the whole world, launched on government spending. In all major panchayats of the country, the decision to set up nearly 1.5 lakh health wellness centres is commendable. It will be accessible to the people living in the village," In this budget, India's farmers and villagers, as well as companies with exposure to agriculture, emerge as the biggest winners. Bond investors might just be loser Winners Farmers Distressed farmers have been protesting across the country. This budget promises to raise the minimum price offered to farmers for crops, while investing heavily in agricultural markets across India. It also delivers more money for rural areas, including irrigation projects and aquaculture projects, and directs state governments to purchase extra solar power generated by farmers using solar-powered Health Care Providers The government's new flagship National Health Protection Scheme, which aims to insure as much as 500 million people for up to 500,000 rupees a year of care, could benefit companies such as Apollo Hospitals Enterprise Ltd., India's largest hospital company, as well as Fortis Healthcare Ltd. Transport Companies With Jaitley promising record infrastructure spending on roads and railways, construction and engineering firms, as well as train wagon-producers, could benefit. That includes Larsen & Toubro Ltd., Hindustan Construction Co Ltd., NCC Ltd., IRB Infrastructure Developers Ltd., Dilip Buildcon Ltd., Titagarh Wagons Ltd., and Cimmco Ltd. Consumer Companies With boosted spending on India's vast hinterland, fast-moving consumer goods companies such as Hindustan Unilever Ltd., Britannia Industries Ltd. and Marico Ltd. could benefit as day laborers get jobs and disposable income. Other companies with rural exposure include: Hero MotoCorp Ltd., Mahindra& Mahindra Ltd., Larsen & Toubro Ltd. Jewelers With 60 percent of gold demand coming from rural India, the budget's focus on boosting rural and farm incomes could benefit companies such as Titan Co Ltd., Tribhovandas Bhimji Zaveri Ltd., PC Jeweller Ltd. Airports With the government pledging to expand regional airport construction, firms such as GMR Infrastructure Ltd. And GVK Power & Infrastructure Ltd. Could benefit. Bond Investors Bond investors drew some relief from a lower than expected borrowing program. Nevertheless, the relief could prove short-lived. India missed its fiscal deficit target of 3.2 percent, saying its targeting a 3.5 percent target for fiscal 2019. Big bond investors such as India's state-owned banks could be hit as yields go even higher than the the 96 basis points they climbed in the past six months, the most in Asia. Shares of HDFC Bank Ltd., ICICI Bank Ltd. Financial Sector The government's decision to impose long-term capital gains tax on equity investments may dent investor sentiment for financial services companies, life insurers and providers of mutual fund products including IDFC Ltd., Reliance Capital Ltd.BSE 0.21 %, Aditya Birla Capital Ltd., ICICI Prudential Life Insurance Co Ltd., HDFC Standard Life Insurance Co Ltd., General Insurance Corp of India Defence Sector Jaitley praised the armed forces and promised an industry-friendly policy to promote defence production as he addressed parliament. But there was no indication of a huge boost to defence spending. Companies such as Bharat Forge Ltd. may not see a boost.
