Print Friendly, PDF & Email

Budget 2018 Expectations are very high that the government will declare few income tax sops for the middle class in Budget 2018. This is also the last full-year Budget before the oncoming general elections due in 2019. With 8 state elections are in queue this year, the government is also anticipated to concentrate on the farm sector & small businesses. The debut budget to get announced after the introduction of GST. Analysts would be closely monitoring the fiscal deficit target for the succeeding fiscal year. The Economic Survey, that was published on Monday, took a pause in fiscal consolidation, steering to concerns where the government could larger its fiscal deficit targets for 2018-19. Here are top ten things one can anticipate from Budget 2018:

  • Income tax : In Budget 2018, the indian govt. may tweak income-tax slabs and rates so as to get down the individuals burden.
  • Review of IT priciples : Last November, the government formed a task-force to derive a latest direct tax law to substitute the prevailing Income Tax Act, of 1961. The step is focused to do direct taxes – income and corporate – very simpe.
  • Farm field sops : Before Budget, Finance Minister Arun Jaitley has earlier done his stand crystal that the agriculture field will be the main priority for the govt. Its priority is to make sure the profits go to the farmers and the rise is seeable even in the farm sector. Mr Jaitley is foresen to head up funding of rural programmes like MGNREGA, rural housing & paddy insurance.
  • The Central Statistics Office aka CSO has predicted the farm and associated sector development to fall to 2.1% in the present fiscal year from 4.9% in the earlier year. Chief Economic Advisor Arvind Subramanian, who made the Economic Survey, has also invited for extra support to the farm sector.
  • Markets will be centered on how much the govt. broadens the fiscal deficit beyond the three per cent of GDP foreseen for 2018-19. A poll of Reuters gave many economists want a 3.2% fiscal deficit target for this financial year 2018-19 as the government sees to grow investments in key sections like agriculture & infrastructure. But a deficit over 3.2 percent could strike shares and give bond yields very greater, say analysts.
  • The government is too anticipated to remain with its aim on constructing highways and advancing the railways. Mr Jaitley had apportioned a record high of Rupees 3.96 lakh crore to infrastructure sector in previous year’s Budget.
  • But the gap for fiscal expansion stays less at a time when the budget deficit is forecasted to breach the target of 3.2% of GDP in the present fiscal year. A budget that highly expands the deficit in the succeeding fiscal year could light a further sell-off in bond markets, giving way to a constant increase in bond yields that could height borrowing costs at a moment when the government is striving to hike growth.
  • Also, the government’s plan to maximize revenues is little due to the power to levy indirect taxes, that make up about part of total tax gathered, has been moved to the Goods and Services Tax Council. The GST Council is maintaining the new tax regime, that has effect from July 1 2017.
  • To challenge hard fiscal deficit targets, economists want the finance minister to fix an ambitious divestment target of as high as Rs. One lakh crore from state assets sale.
  • Corporate tax : Professionals don’t find the potentiality of a large cut in corporate tax rate for India Incorporation after the fiscal constraints. In his Budget speech of 2015-2016, Mr Jaitley had told proposed reduction of the rate of corporate tax from 30 percent to 25 per cent over the suceeding 4 years.

Leave a Reply

Your email address will not be published. Required fields are marked *