India Budget 2018
Considering the government’s long-term vision as well as the trend set through the earlier budgets, the focus will remain largely on housing, infrastructure, and the rural economy. With the likelihood of the budget being pro-poor, there could be incentives going in the way of the rural economy, including a focus on job creation. Not to mention that the expectations for tax cuts and lower rates for individuals and corporate both are high as well.
All of these will have a trickledown effect on consumption and will give a fillip to areas such as farm mechanization, fertilizer usage, auto consumption and NBFCs.
These areas would get a further boost if the government allocates higher amounts towards crop insurance (given its importance) and a special focus on rolling out direct benefit transfer (given that it has helped curb the leakage in the system considerably) quicker. Farmers will benefit. Tax reduction will put more money in hands of tax payers, GST will be further reduced ( slabs ) thereby reducing inflation. Only show spoiler will be rising petroleum prices.
Dr. Sujaya Banerjee is the CEO of Capstone People Consulting