I would encourage all of you to not take any knee-jerk reaction. The grandfathering treatment mentioned in the budget ensures all past returns are protected. The 10% taxation announced today will continue make Equity Mutual Funds a lot more favourable vis-à-vis other instruments like banks and corporate Fixed Deposits.
The announcement on taxing dividends from equity oriented mutual funds will mean that Asset Management Companies will have to come up with a plan on how to handle dividends going forward. Let’s remember this tax is for both dividend payout and dividend reinvestment options.
The budget also placed a lot of focus on the agriculture sector. The government has found multiple ways to put money in the hands of rural. This will give a massive boost to the rural consumption story. There’s also a provision for connecting 22,000 GAMs with the national agriculture market, for better market access and increased aggregation and rationalization.
One of the big announcements made by Finance Minister Arun Jaitley was a new initiative under the Ayushman Bharat Program in the Union Budget 2018. Under the programme, a new Flagship National Health Protection Scheme, providing health insurance cover of 5 lakh per family per year. This is India’s very own Modicare. The Scheme will cover 10 crore vulnerable families, with approximately 50 crore beneficiaries.
This is a big step that India is taking towards universal health coverage making it the world’s largest healthcare programme. The government also announced that 150,000 centres for health and wellness will be created under Ayushman Bharat program are again a step in the right direction. These centres will provide primary and secondary healthcare focusing on non-communicable diseases, maternity benefits, diagnostics, and deliver cheap medicines.
In summary, I believe budget2018 is a balanced budget and I will give it a 7.5/10.