Union Budget 2018: What To Expect From The Modi-led Government

Along with Assembly elections in multiple states, Union Budget 2018 will be the most documented event in Indian politics this year and BJP might be the most dominating party in the last couple of years but this year’s budget will definitely act as the key to hold on the position due to several controversial policies last year, which left a huge dent in the Government’s image.

If Gujarat Elections are taken into the picture, it was indeed a close call for the Modi-led Government as Rahul Gandhi-led Indian National Congress gave a tough fight for a majority in the state. With Congress grabbing 77 seats and the Bharatiya Janata Party winning the polls by 99 seats, it will act as a wake-up call for the saffron party which has opted for a reformist approach in previous Union Budgets.

With Arun Jaitley expected to table the Union Budget 2018 on 1st February, all we expect is a more populist approach from the party which can help them hold their stand as the unchallenged political group in India.

From more insights in the future of GST to tax exemptions, the common man is expecting a lot from the Union Budget 2018 which will lay down the path of BJP’s future at the center.

On that note, here we take a look at few areas or policies where the common man is expecting some relief from the Union Budget 2018 and the points that Arun Jaitley and his team should’ve kept in mind before tabling the bill.

Union Budget 2018: What To Expect From The Modi-led Government

1. Raising tax exemption limit

The Union Budget 2018 might bring joy to the middle class as finance ministry is expected to hike personal tax exemption limit as well as tweak the tax slabs to give a substantial relief to the middle-income group, especially salaried class, according to recent reports. The proposals before the ministry state that the exemption limit should be hiked from Rs 2.5 lakh to at least Rs 3 lakh per annum if not 5 lakh.

2. Reduction of Corporate Tax rate

Currently, a Domestic Company is taxed at a direct rate of 30% and if the total income exceeds Rs. 1 crore, the company has to pay a surcharge of 7% and 12% in case of it exceeds Rs. 10 crores (plus Education Cess of 3%) taking the effective tax rate at 33.063% and 34.608% respectively. Domestic companies will be looking for the effective tax rate to come down at 30%.

3. Cutting Down On Excise Duty For Petrol and Diesel

When the Modi-led Government came into power in 2014, it was indeed blessed with reducing crude oil prices, however, it now has to tackle an increase of $42 per barrel to $ 65 per barrel from July 2017 to January 2018. This instant rise in crude oil prices is one of the biggest contributors to inflation in India and a reduction in excise duty can be expected.

4. GST and its effect

Since the introduction of Goods and Services Tax (GST), this will the first Union Budget from the centre and while there is not much scope for new policies or relief regarding GST as it is the GST Council which is entrusted to look after these issues, we still expect a little more in the Union Budget 2018. Moreover, since The Central Statistics Office (CSO) had earlier projected India’s growth to slow down to a 4-year low of 6.5 percent of the current fiscal as the aftereffects of Goods and Services Tax (GST) regime, it will be interesting to see how Arun Jaitley will tackle every question from the opposition over the issue.

5. Job Creation

During his 2017 Lok Sabha campaign, PM Narendra Modi had promised a huge rise in job creation but nothing of that sorts have been seen in the nation with the Congress-led opposition raising a lot of questions over lack of job creation in India.

According to Chief Economic Advisor to FICCI Ajay Chhibber, Union Budget 2018 will be the perfect opportunity to silence the critics for the party. He said, The Modi government needs to look into job creation and if your economy is increasing at 8 to 9 percent with labor productivity growing by 2 to 3 percent, then there has to be a balance in job creation.

These are the five areas of policies that the Union Budget 2018 needs to be focused on if BJP wants to go with the populist approach as the middle-income group id asking for some realistic numbers which can positively affect their lives.

Everything said and done, the Union Budget 2018 is the final nail in BJP’s hope to retain power in 2019 Lok Sabha elections while PM Modi and Arun Jaitley would want to please the common man with this bill.

What are your expectations for the Union Budget 2018?

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