(GIST OF YOJANA) Taking The Economy Forward [MARCH-2018]


(GIST OF YOJANA) Taking The Economy Forward

[MARCH-2018]


Taking The Economy Forward

The Union Budget 2018-19 is unique in many respects. It comes at a time when the economy is now witnessing the positive effects of two major structural reforms carried out by the Government in the last two years-demonetization and implementation of GST. At a time when all the indicators of economic activity re showing an upswing, this budgets tends to build on that and create a conducive economic climate for India to grow at 8 per cent per annum in the coming years.

This budget is different from other budgets in several respects. The main focus of the budget is on spending more money on agriculture and rural economy so that apart from helping the farmers in increase their income, it results into creation of demand for goods and services which will promote private investment. In the budget, maximum money is going to be spent on creation of rural infrastructure and rural employment. There is an increase in the budgets allocation for rural livelihood programmes under which self-help groups, mainly of women, are being helped by corpus funds as well as bank credit. In order to take care of unevenness in the prices of three major vegetable crops of tomato, onion, potato (TOP), a new scheme called ‘Operation Greens’ has been announced which will work on the pattern of Operation Flood which worked very well for the milk sector. Under the scheme of Operation Greens' for which Rs. 500 crore has been set apart initially, the production and consumption centers will be linked properly and necessary logistics support will be created for movement of these products. Also wherever required, new warehousing and processing capacities for these crops will be created with the help of a network of Farmers Producer Organizations (FPO). Incidentally, in this budget, it is also announced that such farmer producer companies with a turn-over upto Rs.100 crores will get income tax exemption.

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The second most important part of Union Budget 2018-19 is the emphasis given on health, education and other social protection schemes. The focus of education will be on improvement of quality of education and quality of teachers apart from use of digital technology for supplementary learning. In higher education, there is an ambitious plan of creating premier educational institutions including All India Institute of Medical Sciences (AIIMS) by spending capital expenditure of one lakh crore in the next four years which will be mostly funded from outside the budget. The Union Budget 2018-19 also has announced many programmes for helping small and medium industries which are the main instruments for creation of jobs. The Government has announced that in case of newly created jobs, the employer’s contribution of 12 percent of wages will be given by the Government, in addition to 30 per cent cost of wages of new employment being allowed as deduction under Income Tax Law. The textile and leather sector has been given further boost in the budget. 0n the infrastructure development, the Government has announced an ambitious plan to fund the existing and new road, rail and urban infrastructure projects by supplementing the same with extra budgetary resources and borrowings. The total amount to be spent on infrastructure next year will be Rs. 5.97 lakh crore as against the estimated expenditure of Rs. 4.94 lakh crore in 2017-18. On the whole, this is a Budget for growth. This is a Budget for rejuvenating rural economy and this is a Budget for creation of new employment.

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