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Expected focus areas of Budget 2018-19

Budget 2018 will mostly look to kick start the economic growth after the recent growth slump and concerns.

Anurag Khare 

budget 2018

The Finance minister in his Budget speech on 1st February 2017 stated that he proposes to present the Budget proposals under ten distinct themes which were Farmers, Rural Population, Youth, Poor and the Underprivileged, Infrastructure, Financial Sector, Digital Economy, Public Service, Prudent Fiscal Management and Tax Administration. Expect the to focus on these very areas along with some new areas of interest. will mostly look to kick start the economic growth after the recent growth slump and concerns. With a lull in private investment the government will most likely increase its own spending and allocation for schemes and projects significantly. Although after demonetisation and implementation of goods and services tax (GST) real big ticket reforms are hardly expected. But going by the recent trends the below mentioned sectors and areas would most likely feature in the speech of the finance minister in bold.

- After facing the hardships of demonetisation, to pacify the middle income group the FM is more than likely to consider raising the tax exemption limit to Rs. 3 lakh per annum. Other than that increase in tax breaks under section 80C can also be another ace up the sleeve of the FM. Also additional benefits and sops for investment in health insurance, mutual funds and fixed deposits also further relief for first time home buyers using housing loan can be expected. Tax breaks for senior citizens and pensioners is also expected.

- Government’s scheme of Housing for All by 2022 may see some progress. The government has already stated that it will push for foreign direct investments in the sector. Also expect a large chunk of capital expenditure to be spent for development. As port and highway development has been satisfactory, expect said the investment to go to railways and other segments.

- This has been one of the biggest areas of concern for the government. Slowdown in growth, increased automation and restrained investment sentiment has had its impact on creation of job opportunities. Add to that job losses in the informal sector due to impact of demonetization. Most probably the FM will try and provide extra impetus to job creating sectors such as banking, agriculture, real estate, manufacturing and more. Expect renewed focus on skill development too. To tackle jobless growth government may also announce country’s first National Employment Policy (NEP) in the

- In 2015 budget speech the FM had proposed cutting of the corporate tax rate from current 30% to 25% over a period of four years. Since then corporate India has been lobbying for the same, especially after US has passed a law cutting the corporate tax rates from 35% to just 21%. Cut in corporate tax is expected to be one of the bold initiatives of the government in the

- After reforms such as recapitalization of banks, Bankruptcy Code and others to tackle massive NPAs expect further steps in the to address issues faced by the sector. Expect some reforms and safeguards to be placed so that the current NPA situation is not repeated. Expect renewed focus on improved efficiency and risk management and some sops for the sector too in the We may also hear something about the rumoured proposed mergers of PSBs.

- Farmers and rural distress is another challenge for the government. Prime Minister Narendra Modi has stated in the past that rural welfare is his focus area and a personal agenda as well. Expect fresh capital infusion in the sector along with steps to improve farm productivity, reduce cost of farming and improving access to markets for farmers. Renewed focus on job creation in rural areas through agriculture and otherwise will also be a focus area for the government in the

First Published: Tue, January 23 2018. 16:33 IST