This is the second budget of the National Democratic Alliance (NDA) and the first of Finance Minister Nirmala Sitharaman. She is the first woman Finance Minister who has presented the budget. Indira Gandhi had presented the budget in 1970, but at that time, she was in charge of the Prime Minister.
Becoming a $5 trillion economy
In the budget speech, the Finance Minister said that India could achieve the goal of making a $5 trillion economy. For this, the infrastructure needs to be strengthened. According to the speed at which the Indian economy is moving forward, the Indian economy may be $3 trillion economies in the current financial year. According to the Finance Minister, five years ago, the size of the Indian economy was $1,850 billion, which has now increased to $2,700 billion. In the budget speech, Sitharaman stressed on controlling the fiscal deficit, accelerating economic growth, and employment generation.
Efforts to strengthen the economy
It is worth mentioning that in the Economic Survey released on July 4, Finance Minister Nirmala Sitharaman had said that India’s Gross Domestic Product (GDP) will increase in 2019. According to Sitharaman, India can become the fifth largest economy in the world by leaving behind the UK in the current financial year. In spite of the decline in FDI in the world during the last three years, FDI in India has increased by 6 per cent in the fiscal year 2018-19. Recently, there has been an increase in direct tax. It has increased from Rs 6.8 lakh crore to Rs 11.37 lakh crore. It is believed that the ongoing reform process in the country is expected to further accelerate the investment. At present, the insurance sector is facing a shortage of heavy capital. Therefore, the matter of allowing 100 per cent FDI in insurance intermediary area has been stated in the budget.
To reinforce the infrastructure
In order to reinforce the infrastructure, the Modi government has set a target of constructing 210 km Metro line in the year 2019. To make the environment clean, the government will encourage the construction of electric vehicles. In the second phase of Bharatmala, the state government will be helped to lay the road network in states. The aim of the government is to bridge the gap between the rural and urban areas by implementing a scheme like Sagarmala. In the budget speech, the Finance Minister also said that cargo service will be started from Varanasi to Haldia by 2020 on River Ganges.
To overcome the problem of water and LPG, the Finance Minister has announced the formation of a national grid. The goal of the government is to implement “every house tap, every house water” scheme by 2024. Through this scheme, every household is aimed for water, because still a large population in the country is deprived of drinking clean water.
In order to strengthen the lower class of the society financially, the government will further strengthen the process of lending to the businessmen in 59 minutes, so that small businessmen can become economically self-sufficient. Currently, retail businessmen are undergoing mental vulnerabilities. Often their business gets derailed. Therefore, the government wants them to provide pension facilities. Therefore, Prime Minister Karmayogi Mandhan Pension Benefit Scheme will be launched for the three crore retailers who have done business worth less than Rs 1.5 crore. The process of providing accommodation to all will also be expedited and it will be provided to all eligible beneficiaries by the year 2022.
Proposal to provide electricity to all
Proposal for providing affordable power to all the states through a country level grid is placed in the budget. Under this, every state can get 24 hours power at a reasonable cost. The proposal to rationalize the electricity tariff has also been kept in the budget. Finance Minister Nirmala Sitharaman said in the budget speech that by 2022, electricity, cooking gas, and the house will be provided to all.
To support the rural economy
Under the Pradhan Mantri Gram Sadak Yojana, 1.25 lakh kms of the road will be upgraded to the cost of Rs 80,250 crores. Under the Pradhan Mantri Gramin Yojana scheme, there is a target to build 1.95 crore houses. In addition, LPG, toilets, and electricity will be provided to all. This budget has also been arranged for women’s upliftment. For making women self-reliant, they will be given a loan of Rs 1 lakh under Pradhan Mantri MUDRA Yojana. The Government will encourage mass awareness campaign to promote startup, under which special TV programs will be started.
Improvement in education
With the efforts of the government, three high educational institutes in the country have come under 200 major institutions of the world. In order to increase the quality of education in India, the specific amount has been allotted for research in the budget, which is three times more than the previous year’s budget. Rs 400 crores will be given to the higher education institutions to provide quality education to all. The government will come out with a new education policy to make education better and meaningful. Under the Prime Minister Rural Digital Literacy Campaign, every Panchayat has been targeted to provide Internet facility to local bodies. This work will be expedited under the Universal Service Obligation Fund.
Now, those who earn Rs 2-3 crores will have to pay 3 per cent additional tax, while those earning more than Rs 5 crore are at 4 per cent. There is no change in tax structure for those earning up to Rs 2 crore. The bank will have to give 2 per cent TDS for withdrawal of cash beyond Rs 1 crore in a year.
Relief to the common people
For up to Rs 45 lakhs loans which will run 15 years will be entitled to exemption in tax up to Rs 3.5 lakhs in context of housing loan interest. In order to encourage the defaulters to return the loan, will be given a rebate of tax of up to Rs 1.5 lakh to honest borrowers.
Arrangement of Capital
The government will focus on the disinvestment of government companies to raise capital. The target is of raising more than Rs 1 lakh crore through disinvestment in the current financial year. By the help of strict measures, the pace of recovery has accelerated. Non-performing assets (NPAs) decreased by Rs 1 lakh crore. The banks have recovered Rs 4 lakh crore in the last four years. Banks will be merged to strengthen the banking sector. In the future, only eight big government banks will be in the country.
Initiatives to strengthen railways
In order to strengthen the infrastructure in the Railways, an investment of Rs 50 lakh crore will be needed from 2018 to 2030. Railways will work on the PPP model to facilitate speedy improvement in the railway.
It can be said that the first budget of Finance Minister Nirmala Sitharaman was made keeping in mind the common people. In this budget, more tax was imposed on rich people, while the old tax structure has been kept in place to provide relief to the middle class. Taxes have also been increased on the items of use of rich people, such as cigarettes, gold, gutkha, bidi, etc.
By Satish Singh
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