The focus of the last full Budget 2018-19 of the Bharatiya Janata Party-led National Democratic Alliance government, just before the General Election 2019 presented by Finance Minister Arun Jaitley was on rural India and agriculture, perhaps with an eye on electoral gains for the ruling party at the centre next year, announcing a number of schemes and incentives. For the Kharif agricultural output, his speech also focused on education and healthcare.
The problem of the suicide of farmers of course was inherited by the ruling government, which remain unsolved. One needs to understand that the agricultural sector is the backbone of the nation, but the farmers were never taken seriously.
Although the attempt was made to extend digital technology to this sector, in this last full budget, Jaitley hiked the customs duty on mobile phones to 20 per cent from 15 per cent, a move that will force foreign players to pass on the burden to consumers. But this will also go against the attempt of the flagship programme of Digital India, when the economically weaker section of the society will not be able to afford mobile handset.
Jaitley had announced a Mission on Cyber Physical Systems to be launched by department of science and technology, doubling the allocation on Digital India to Rs 3,073 crore. NITI Aayog was asked to initiate a national programme on artificial intelligence. Five lakh WiFi hotspots are planned to be set up.
In the last few months, the education and health sectors have been hitting the headlines- mismanagement of the education institutions across the nation where cases of sexual abuse and murder are hitting the headlines. In the case of health care, children lost their lives to mismanagement, even due to lack of oxygen supply and wrong treatment leading to closure of a hospital.
There were no remedies for both education and health, but Jaitley announced a health coverage called National Health Protection Service of upto Rs 5 lakh per family in secondary and tertiary treatments, which is expected to cover 10 crore poor families. The government is likely to make an expenditure of Rs 4,000 crore on this. The Finance Minister called it the world’s largest health scheme.
To pay for the social welfare schemes, the government has imposed Social Welfare Surcharge at the rate of 10 per cent on aggregate customs duties. The Surcharge replaces the earlier Education Cess and Secondary and Higher Education Cess.
Individual tax payers were allowed a standard deduction of Rs 40,000 in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses. Also, interest on deposits with banks has been increased from Rs 10,000 to Rs 50,000 and money spend on health insurance premium exempted from tax raised to Rs 50,000 from Rs 30,000. Cess on personal income tax, though, was increased from three to four per cent, thus raising Rs 11,000 crore for the government from individual tax payers. It will now be called Health and Education Cess.
It is understood that as three of the eight states of the North-eastern region are poll bound, there is no special package for the region as this could violate the Model Code of Conduct being imposed in Meghalaya, Tripura and Nagaland.
The ambitious programme of the Ruling Government - Make in India which aims at production, manufacturing and invention will need more time to see the result, as the skills for the same were not ready. At the same time, skill development is progressing slowly which was not anticipated when the Modi government announced them. There is no mentioned at all of employment avenues in the budget and it seems like the NDA government understands that it needs to answer to the masses about the slow take off of the schemes.
In this situation, the nation will witness more unemployment issues across the country. Increasing the customs duty on mobile phones does not mean that India will not produce its own handsets.
Over all the budget has too many assurance, or had failed to analyze the economic status of the world’s largest democratic nation due to the new dispensation of one tax policy- Goods and Services Tax (GST), which many had expected to provide some relieve after the budget. The government still requires more time to streamline the system even as it has just about a year’s time to do so.