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Union Budget 2018-19 Preview

Union Budget 2018-19 Preview

Union Budget 2018-19 Preview
The Union Budget For2018-19 Presented By The Finance Minister In The Parliament On February 1,2018

Aims To Give Thrust In Four Areas:
Agriculture And Rural Sector,
Infrastructure
Healthcare ,Education And Social Security,
Job Creation Through Micro, Small And Medium Enterprises (MSME).
THE CONTEXT
Positive Developments
The Robust Economic Growth At 7.2 Percent Stable Inflation (Lowest In The Last 6 Years), And Fiscal Consolidation ,Macroeconomic Stability And The Strong Foreign Exchange Reserves Impressive Proceeds From Disinvestment. Of 1 Lakh Crores (Crossed The Target Of 72.500 Crore).
Savings Of 65000 Crores In Subsides By Making Aadhaar As Base For Direct Benefit Transfer (DBT).
Demonetization Has Led To An Addition Of About 1.8 Million In Individual Tax Filers Since November 2016: There Has Been 50 Percent Increase In Unique Indirect Taxpayers Under The GST Compared With The Pre-GST System; Introduction Of New Indian Bank Rupty Code; Implementation Of Aadhaar Card; Liberalization Of FDI Regime; Implementing A Major Recapitalization Package To Strength The Stressed Public Sector Banks.
Challenges
The Low Growth Rate Of Agriculture At 2.1 Percent Despite Respectable Food Grain Production Of 275.7 Million Tones And 300 Million Tones Of Fruits And Vegetable During 2016-17.
Doubling Farmers’ Income By 2022,Expansion Of Education And Health Facilities Generating Employment And Giving Boost To Investment And Export, Poverty Reduction And Women Empowerment ,Reviving Private Investment.

Another Major Challenge Is Gigantic Amount Of Npas And Problem In The State Run –Banks.
Infrastructure
Increase In Allocation To Infrastructure ,And Specifically To Smart Cities Mission And Atal Mission For Rejuventation And Urban Transformation (ARMUT) To 5.97 Lakh Crore From 4.94 Lakh Crore.
Allocation To Department Of Space Has Increased By 18% Which Is The Highest For Any Science Department Or Ministry.
Dedicated Affordable Housing Fund(AHF).
Under The National Housing Bank To Be Established AHF Will Be Funded From Priority Sector Lending Shortfall And Fully Serviced Bonds Authorized By The Centre.
Defence Allocation Increased By 7.81%Excluding Pensions.
The Single Largest Expenditure Has Been Sanctioned For The Indian Railways..The Thrust Has Been Capacity Creation Including 18000 Km Of Track Doubling, Third And Fourth Line Works; 5000 Km Of Gauge Conversion; Redevelopment Of 600 Railway Stations ;And Introducing Modern Train Sets.
Special Focus On Suburban Railways Including Mumbai And Bengaluru.
No Major New Trains Were Announced And The Focus Was More No Modernization And Passenger Safety.
These Will Be Increasing Use Of Technology Like For Safe’ And “Train” Protection And Warning System.
All Stations With More Than 25000 Footfalls To Have Escalators.Wi-Fi And Cctvs To Be Provided Progressively On All Trains And Stations.
TOTAL OUTLAY OF 1.21 LAKH CRORE FOR ROAD INFRASTRUCTURE THIS IS PART OF THE APPROVED FOCUSES ON DEVELOPMENT OF ECONOMIC CORRIDORS EFFICENCY IMPROVEMENTS OON KEY NATIONAL CORRIDORS COASTAL AND PORT CONNECTIVITY ROADS.
THE NATIONAL HIGHWAY Authority Of India(NHAI) Will Consider Organizing Its Road Assets Into Special Purpose Vehicles And Use Innovative Monetizing Structures Like TOLL,OPERATE And Transfer (TOT) And Infrastructure Investment Funds For Raising Funds.
Under TOT Model ,The Toll Roads Are Awarded To The Private Sector Entitles For Operations And Maintenance For A Fixed Period In Lieu Of An Upfront Fee.
To Enhance Connectivity In Border Areas, The Government Will Take Up The Construction Of A Tunnel Under Sela Pass (Arunachal Pradesh).
Proposal To Develop Ten Prominent Tourist Sites Into Iconic Tourism Destinations.
It Will Be A Holistic Approach Involving Infrastructure And Skill Development, Development Of Technology, Attracting Private Investment Branding And Marketing.

In Addition Tourist Amenities Will Be Upgraded At 100 Adarsh Monuments Of Archaeological Survey Of India(ASI).
99 Cities Have Been Selected With An Outlay Of 2.04 Crores .Under The Smart Cities Mission.
A New Initiative Nabh Nirman To Expand Airport Capacity By More Than Five Times.
The Balance Sheet AAI Is To Be Leveraged To Raise More Resources For Funding This Expansion. Challenges With Spending
One Of The Important Challenges With The Increased Allocations Is Inability To Spend It Effectively.
Inability To Spend Is A Function Of Insufficient Governmental Capacity In Putting Out Well Written Project Documents And Quickly Processing Permissions ;Lack Of Legal And Judicial Capacity And The Significant Non Performing Infrastructure Assets That Put Limits On Debt Financing.
Stalled Permissions And/Or Legal Issues Have Held Up Many Projects Mid Way.
There Is No Mechanism Of Reviewing The Budgetary Performance ,Not Just Financially,But In Actual Outcomes Achieved With An Analysis Of The Causes.E.G: The Railway Station Developments New Airports Developments Has Been Repeated In Many Successive Budgets Without Reviewing The Progress Of Previous Announcements.
The Other Challenge Is One Of Examining Inter Sectoral Implications.For Example ,It Is Not Clear Whether Building And Connecting More Airports Is The Way To Go, Given Improving Road Connectivity.

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