Greetings of Mahashivratri !!
The most anticipated event of the Indian financial calendar is over. What political and economic message has the Budget sent out? The budget by the current government looks like a budget guided by a mission to strengthen agriculture, rural development, health, education, employment, MSME, and infrastructure sectors. As Finance Minister, Arun Jaitley speaks on refining the economic growth of our country; he certainly has won hearts of senior citizens and the farmers. Aam aadmi can now breathe a sigh of relief as the FM manages to bring a balanced budget without significantly modifying provisions applicable to the salaried class. However, the government has surprised investors by opening doors for taxation on long term capital gain on equity.
Its going to be a tough balancing act amid calls for supporting growth, addressing the issue of farm distress, which can have political consequences in an election year, and the need for maintaining fiscal discipline. Most analysts expect the government to breach the fiscal deficit target of 3.2% of gross domestic product (GDP) in the current year. However, they would keenly watch how the government intends to manage its finances in the next financial year. The budget will also be expected to clear the air regarding the actual revenue position after the implementation of the goods and services tax, as there is still a fair bit of confusion in the market place. In terms of overall fiscal management, the government has done well so far in its tenure and is expected to not lose sight of the importance of continued fiscal discipline. It will be a big achievement for the Narendra Modi government if it is able to attain the medium-term target of restricting the fiscal deficit to 3% of GDP in the next financial year. The Union Budget is construed as an annual tug-of-war between populism and fiscal prudence; arguably it is the latter that prevailed in the past four budgets tabled by the NDA. However, populism seems to have gained an upper hand in Arun Jaitleys latest effort. Despite exceptional buoyancy in direct tax revenues (18.7% growth in FY18) and record disinvestment proceeds (1 lakh crore), shortfalls in GST mop-ups and dividend receipts have forced the Finance Minister to ease off on fiscal consolidation as mandated by the FRBM Act. The Budget has reported a fiscal deficit of 3.5% (of GDP) for FY18 and pegged it at a high 3.3% for next year. The Economic Survey prepared the ground for a deviation, yet the actual numbers surprised the markets. Armed with a war chest of 24.4 lakh crore in budgeted receipts for FY19, Mr. Jaitley has homed in unerringly on the root causes of distress unremunerative farm incomes, unemployment, lack of social security nets and the squeeze on the middle-class taxpayer.
The budget is the process where the vision of the government gets reflected. We therefore need to examine the vision of the Government for building a responsible society, as we know only a responsible society can be sustainable. Therefore sustainability should be the ultimate priority of any government. The Union Finance Minister has put his best efforts to present a balanced and growth oriented budget ahead of the polls.
This issue covers a story on Northern Coalfields Limited a subsidiary of Coal India, situated at Singrauli District of Madhya Pradesh. The issue also covers the interview of Nisha Narayanan, COO, Red FM as the Interview of the Month. Interview of Farzana Cama Balpande, Head, BookASmile is covered as the CSR professional of the Month.
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