An Engineer’s Take On the Budget
-Indraneel Sahu, 2nd year, Chemical Engineering
The 2018 Union budget will go down as the one of the most wide ranging budget of all times. But will it again be one of those budgets which have huge promises but a poor implementation. Only time will answer most of the questions but here, I will try to put forward the important announcements in the budget.
India now has an economy of $2.5 trillion, which makes it the 5th largest economy in the world in terms of size. The government has predicted that our economy would grow by 8% in the next year while the average growth has been 7.5% in last three years. The main highlight of the budget has been the promise made by the government to provide a health insurance of Rs. 5 Lakh to 10 crore families. However, there is some bad news for the IITs. There has been a decline of 20% in the funding given to IITs whereas it has almost remained the same for the IIMs.
An outlay of Rs.85,010 crores has been made for the education sector. This includes Rs.35,010 crores for higher education and Rs.50,000 crore for school education. Also, 1 Lakh Crore will be invested in
education sector in the next four years and the focus would be on training the teachers of our country. BitCoin (Any cryptocurrency) cannot be used as legal tender. I want to clarify that this does not mean one can’t invest in cryptocurrency but it means we can’t use it as freely as Paytm or FreeCharge. For
example, payments by shopkeepers can’t be taken via bitcoins. This may be good for the government. For the very first time a Long Term Capital Gain Tax has also been introduced. This means that now, one needs to pay taxes on returns of mutual funds, stock markets etc. A tax of 10% will be charged if the return exceeds 1 Lakh. This is also a bad news for many as most of the salaried class people invest in these places. The import duty has also been increased from 15%-20%. This means that all foreign commodities will become expensive. This includes a big chunk of our daily use items, most prominent being the various electronic items. The government has taken this decision to promote manufacturing in India. But, I believe that this will hinder free and fair competition. Why can’t Indian manufacturers produce products that can match global standards? There were speculations that government may increase the bracket of tax free class from 2 Lakhs to 5 Lakhs, but no such steps were taken.
There is some good news for farmers. Housing for all has also been promised till 2022. The incomes of farmers will be doubled and the MSP will be increased by 1.5 times by 2022. A special scheme has also been launched to curb air pollution in the Delhi-NCR region. Under this scheme state governments will be funded so that farmers in their state don’t burn their crops.
But I really suspect on the implementation of these promises. The promise to double the income of farmers seems far-fetched. This means that there needs to be a growth of 12% every year in the agriculture which has never been achieved by any country before.
While it is uncertain whether this budget is good or bad for common people. It is sure that this budget is beneficial for the politicians and people in power. There has been a salary hike for the President, the Vice President, MPs and Governors. The salary of the MPs has been hiked by 200% and has been linked with inflation which means that their salaries will kept on increasing time to time with inflation while that of the president by 400% making it 5 Lakh per month along with many other benefits and also the salary being non-taxable. Similarly the salaries of Vice president and governors have been increased by 300–400% .Though this step might seem to be unjustified but I believe that it has a positive side too. I feel that this might reduce bribery and corruption to some extent. May be our politicians stop the menace of corruption! I leave it as an open ended argument.
Overall we have to admit that the budget is one with very good intentions. I feel very happy that the government has shifted its attention to real issues like healthcare and education. The only problem I find is on its implementation as there hasn’t been any action plan as to how the targets will be achieved. There have been big promises in education and healthcare. The fact is there has been an increase in investment by 3.84% in education and 2.76% in healthcare. To fulfill so many promises with such small increase in investment seems difficult. I hope the promises made in the budget do not turn out to be like the Ganga cleaning promise or the village electrification promise.
At the end I would like to emphasize on the importance of going through each and every aspect of budget. Dr Manmohan Singh, one of the greatest economist of our country, once said in an interview that the reason Anna Hazare has been successful movements is because he goes through the budget very carefully and follows the lesser known schemes so as to extract benefits from them.
