The Union Budget for the year 2018 has been passed and it’s time to look whether it’s a good one or a bad one. The Finance Minister Arun Jaitley read out long portions of the Union Budget 2018 in his speech on February 1, 2018, Thursday. The interest was principal to areas that make up the numbers at the hustings – poor people, farmer, lower middle class, youthful job seekers, senior citizens.
Final Budget for BJP Government
This is the last budget announcement of the ruling term of NDA government. If seen properly, you will notice that there have not been much great changes or developments in the Indian economy in past few years. Many people think and to an extent, it is a true fact that the demonetization, cleansing of Rs.500 and Rs.1000 denomination currency notes and the Goods and Service Tax (GST) implementation has slowed down the growth rate of Indian economy. In this case, the full focus is on the after-effects of the Union Budget 2018.
Good news for whom?
There are many positive side effects of the Union Budget 2018. For many people, this budget is good news but for most of the people, it is a bad news. If talking about the good news, we can consider the senior citizens, because there are a bunch of benefits for them. Some of them are as follows –
- A sharp increase in tax exemption limit for income from interest from banks and post offices from Rs 10,000 to Rs 50,000.
- Increase in deduction limit for health care coverage insurance premium as well as a medical expenditure from Rs 30,000 to Rs 50,000 under section 80D.
- Hike in deduction limit for the medical expenses of certain basic diseases from Rs 60,000 (in the event of senior residents) and from Rs 80,000 (in the event of extremely senior residents) to Rs 100,000 for every single senior national, under section 80DDB. While this is a useful move, procedures to assert these deductions are amazingly cumbersome.
- Tax deducted at source isn’t required to be deducted under segment 194A. The benefit is likewise accessible for interest from all fixed as well as recurring deposit schemes.
- Pradhan Mantri Vaya Vandana Yojana has been stretched out to March 2020 and has raised the present speculation breaking point to Rs 1.5 million from Rs 750,000. This is an awesome plan from the Life Insurance Corporation, which ensures 8% income and ought to be considered by senior citizens anticipating a consistent income.
Bad news for whom?
For the middle-class people, the union budget 2018 can be disappointing to an extent. The minister said that there is significant potential for local esteem expansion in specific divisions, such as food processing, electronics and gadgets, auto components, footwear and furniture and hence, he chose to increase the customs duty on a few things. Increasing customs duty on any item means, making the product expensive as compared to before.
There is an increase in the customs duty on mobile phones, from 15% to 20%. Mobile phone accessories, TV parts, and accessories are now having an increased customs duty of 15%. The Education Cess and Secondary and Higher Education Cess on imported merchandise have been annulled and a Social Welfare Surcharge, at the rate of 10% of the aggregate duties of Customs, on imported products has been actualized.
The customs duty on the crude vegetable oil has been increased from 12.5% to 30%. On refined edible vegetable oil has an increased customs duty of 35% from 20 %. Imitation jewelry had a customs duty of 15%, which is now 20%. The duty of wearable devices, watches, and footwear has been hiked to 20%. Other products, on which the customs duty has been increased, are sunglasses, toys, bus and truck tires, cigarette lighter and selected furniture.
Few other items which have become costlier after the pass of the Union Budget 2018 are as follows –
- Silver, Gold, Diamond and Coloured Gemstone
- Vegetable and Fruit Juices
- Miscellaneous Food Preparations
- Sunglasses and Perfumes
- Toilet Sprays and Deodorants
- Sunscreen or Suntan
- Manicure and Pedicure Preparations
- Oral Dental Hygiene
- Dental Fixative Plates and Powders
- Dental Floss
- Shaving Products
- Silk Fabrics
- Video Game Consoles
- Outdoor Game Equipment
- Swimming Pool and Paddling Pools
- Cards and Bikes
Few items that have been made cheaper after the Union Budget 2018 –
- Raw Cashew Nuts
- Solar Tempered Glass used for manufacturing of Solar Panels and Modules
- Raw Materials, Parts or Accessories for Cochlear Implants
From the above list, we can predict that mostly the middle-class people and housewives must be disappointed by the budget of 2018. Not only these people but also the savers and investors are left all alone, facing a disappointment from the Union Budget 2018.
Union Budget effect on Investors and Equity Holders
For as long as a couple of weeks before, the theory have been overflowing that the government will never again permit long-term capital from listed shares to remain tax-exempt. This Budget expels the long-term gains from listed shared from tax-exempt status after 13 years. Arun Jaitley has proposed to re-present long-term capital additions duty of 10% on listed equity shares (and equity mutual funds) for profits made surpassing Rs 100,000, without permitting any indexation advantage. The tax will be effective after January 31, 2018.
Union Budget Effect on Farmers
Agriculture and the rural economy was the first subject in the Union Budget speech from Finance Minister Arun Jaitley. The focus of the budget is to provide maximum livelihood opportunities in rural areas of the country by increasing expenses on livelihood, agricultural and allied activities. New construction of rural infrastructure will be implemented soon. The National Health Protection Scheme was announced in the budget speech, which will cover 10 crore poor and vulnerable families in the nation, or around 50 crore beneficiaries, with a cover of 5 lakh for every family every year for optional and tertiary care hospitalization. Poor women will be benefitted by the budget as the finance minister has announced to provide 8 crore free gas connections to the poor women.
Good or Bad?
It cannot be said that the budget is good or the budget is bad. For some sectors, it is a boon, and for the others, it’s a bad fate. But, if you compare this year’s budget to the last year’s budget, then you will notice that the last year’s budget was much better than this year’s. Many things have been missed out in the budget, for example, the boost of irrigation, especially micro-irrigation. Many people think that the budget has not catered to their needs. Maybe, this was the best move before the Elections in 2019 from the BJP’s side to get positive results in the election next year.