Come February 1, the Modi government is going to present the last budget of its tenure. In the past four years, the government has been non-daring in its approach but the Budget 2018-19 will give the government one last chance to woo its voters before the 2019 general elections. The importance of this budget lies in the fact that this will be the first one to be tabled after GST. As Finance Minister Arun Jaitley readies to present the budget here are a few expectations from it.
Reduce direct taxes
Following demoneitisation the government reduced income tax from 10% to 5% for the income group of Rs 2.5-5 lakhs. After GST, tax payers are expecting lowering of direct tax rates and increased limit of non-taxable income.
Increase healthcare spending
Arun Jaitley’s government is expected to increase spending in the healthcare sector by 11% to help fill up gaps in the infrastructure of the sector.
Tax free gratuity
Following five years of service in the formal sector, an employee is entitled to Rs 10 lakh of tax free gratuity but this limit is expected to be increased to Rs 20 lakh in the new budget.
Reduce GST rates
The government has revised several GST rates for common items but that does not seem to be enough as the common man continues to have hopes of more products like insurance products, education, transportation and such other essential products and services see reduced GST.
This section of the tax sector is going to be a dicey area for the government to deal with. While it is expected to lower the corporate tax rate from 30% to 25%, no government wants to be tagged as a government for the rich especially before an election.
In all, experts believe the upcoming Budget may bring some relief to India’s large middle-class. The government is expected to give a bigger push to Prime Ministerial scheme in a bid to increase investment in the primary education sector. The need of the hour however rests on increasing farmer income and the government might just take up the cause with elections round the corner.