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There is a clear focus on the rural and agriculture sectors, the lower income category and the MSMEs. In a year with multiple elections looming on the horizon, the government has eschewed outright populism and has made efforts to continue down the fiscal consolidation path, albeit with an allowance for the revenue distortions caused due to structural changes implemented during the year.
While the current year’s fiscal deficit has been revised to 3.5 per cent against the budget estimate of 3.2 per cent, the target for next year is set at 3.3 per cent of GDP.
The estimate for next year is based on prudent assumptions for tax revenue growth — both direct and indirect taxes — conservative assumptions for dis-investment revenues and receipts of dividend and profits from state-owned entities. The introduction of the healthcare cover of Rs 0.5 million to about 100 million vulnerable families was a laudable initiative to improve the finances and health of the poor.
Amitabh Chaudhry, MD and CEO, HDFC Life
A big measure on the taxation front was the introduction of the Long Term Capital Gains tax on equities.
The finance minister, though, took care to prevent any ‘retrospective’ effect on the taxes by indexing the future gains to the prices as on 31 January 2018.
This is a step in the right direction and puts equity on a par with other asset classes.