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FM walks the tightrope between pragmatism and idealism

In Union Budget 2018-19, the focus is on boosting growth and employment through intervention and support to agriculture, infrastructure and rural development. On the tax front, the government had a tough task at hand to meet demands of different stakeholders and to contain fiscal deficit.

Accordingly, a more pragmatic approach has been adopted by providing some tax relief to salaried tax payers, senior citizens, and small and medium enterprises (SME). Also, the government has taken a bold decision by introducing long-term capital gains on listed securities as a measure to boost revenues, as against the popular demand of maintaining a status quo.

Vikas Vasal
Partner
Grant Thornton India LLP

From the CEO’s desk

“Overall, Budget 2018 is very aligned to the macro global direction - reduction in Corporate Tax rate, protecting domestic industry by increasing Customs Duty, and supporting all major Government schemes including Digital India, Doubling Farmers’ Income by 2022, Make In India, Clean Ganga, etc. Health and Social security to take care of our weakest and tackling our toxic air pollution will truly transform India into a Vibrant Economy.”

Vishesh C Chandiok
Chief Executive Officer

Grant Thornton India LLP

 

Expert Take:

BDGT -1

As expected, the government continued its efforts to boost the agriculture sector this Budget. With emphasis on doubling farmers’ income by 2022 and providing various schemes and initiatives to boost rural economy, the disposable income in rural India will increase. This will result in more discretionary spending and increased consumption. Other initiatives like target credit of INR 11 lakh crore to the agri sector, cluster development model for farming and promotion of farmer producer organisations (FPO) along with 100 per cent tax deduction on profits for 5 years to Farmer Producer Companies having turnover up to INR 100 crore, will only strengthen the rural economy. The FMCG sector will be one of the biggest beneficiaries from the growth in rural economy.

Dhanraj Bhagat
Partner
Grant Thornton India LLP

BDGT -2

In this Budget, the government continues its focus on the Rural sector with enhanced spend on rural outreach. Announcement on affordable housing is a favourable one for the people of India. The impetus on Make in India continues with a policy on domestic defence production on the anvil. While the GST impact is yet to be assessed, tweaks in the customs rates on certain items, particularly in the auto sector will make domestic manufacturing competitive. Tax incentives on employment generation is extended to the footwear and leather industries besides textiles highlights the government’s focus on taking its Make in India agenda ahead.

Vikram Bapat
Partner
Grant Thornton India LLP

BDGT -3

In this budget, the government’s focus on Digital India initiative through measures planned to increase use of technology in Rural India, Education, Governance (e-governance), and Smart Cities continues. There is also a focus on artificial intelligence, robotics and block-chain technology which demonstrates the Modi government’s commitment to leverage new-age technologies. Further, the plan for re-capitalisation of banks through bond offering and merger of the state insurance companies, is aimed at strengthening the financial services sector in India.

Raja Lahiri
Partner
Grant Thornton India LLP

In conversation post Union Budget 2018: Riaz Thingna and Suresh Nandlal Rohira