It's not a populist budget, but a popular one: Arun Jaitley
Feb 05 2018 by Kristina Bennett
"The first right on government's treasury is that of the poor". Jaitley has extended the Pradhan Mantri Vaya Vandana Yojana (PMVVY) till March 2020 with an assured return of eight percent given by the LIC of India. Jaitley said the country was "firmly on course" to exceed 8 percent. Gains from stocks held for less than 12 months will continue to be taxed at 15 percent. However, a majority of the people's total earnings are below the tax threshold.
Apparently, the outlay this year was Rs 55,000 crore but was not mentioned by the finance minister in his Budget speech. While these announcements are positive, the real test lies in the implementation.
The headline announcement was a National Health Protection Scheme to provide the poor with insurance to access private sector health care without building up sizeable debts.
The BBC's Soutik Biswas says although it is laudable to give medical coverage to the poor in a country where quality healthcare costs are prohibitive, what is not clear is how this programme is going to be created to protect the poor from being exploited by private hospitals.
Advani also highlighted the budget's provisions for farmers, small and medium sector enterprises, education and infrastructure.
The BJP-led government may have hailed Finance Minister Arun Jaitley's last full budget before the general elections for the huge rural focus, the possibly game changing health insurance plan and keeping the fiscal glide path largely in check. "There will be no resource crunch for the scheme as Rs 2,000 crore earmarked as RBSY/NHPS as initial allocation and RSBY will be subsumed in NHPS", Paul said.
Indeed, a fiscal slippage of three percentage points in the current year over the target and a modest correction to reach a level of 3.3 per cent of GDP next year suggests that the damage that could have been caused by electoral imperatives has been minimised.
Various estimates have been made on the job losses in the informal sector because of demonetisation.
Government will take measures to stop cryptocurrency circulation, as it is not considered legal tender. It would however explore use of the crypto-currencies' blockchain technology to boost the digital economy.
The government intends to add more airports in the country, Currently, India has 124 airports. The increased customs duty would be viewed as protectionism, but the move is in sync with the government's idea of promoting domestic manufacturing.
"What was really required was focused investment on increasing farm productivity. Indian economy has performed very well since our government took over in May 2014".
On the expenditure side, the budgeted 9.87 per cent capital expenditure growth for FY19 - lower than overall expenditure growth - could be inadequate to kickstart a capex cycle.
The announcement of National Health Protection Scheme (NHPS) for marginalized and disadvantaged families is going to be transformative for the Indian economy as the Budget correctly notes that "India can not realize its demographic dividend without its citizens being healthy".