Union Finance Minister Arun Jaitley has presented the Annual Financial Statement for the financial year 2018-2019 in Parliament, the last full year annual financial statement before the next Lok Sabha elections. There was a huge expectation that this budget 2018 proposals, will bring in lot of benefits and development to the people and our country. It turned out to be one of the greatest disappointment.

As the Goods and Service taxes are already implemented, the expectation was that this year’s budget would bring in some positive changes in direct tax rates and also an increase in income tax’s exemption limit up to Rs.5 lakhs. But it was not even increased to Rs. 3 lakh, rather the proposal was that the exemption limit will remain the same as that of the previous financial year’s limit of Rs 2.5 lakhs. Budget 2018 proposes to provide a standard deduction of Rs 40,000 from salary income to employees but also to take away existing annual transport allowance of Rs 19,200 and Rs 15,000 medical reimbursement

Similarly, with regard to senior citizens, the Budget 2018 proposal to Exempt the interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000 is a welcome measure and the hike in deduction limit for health insurance premium and/or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D are welcome measures, but these measures might not yield larger benefits. At the same time, Budget 2018 proposes to hike the cess on income tax from current 3% to 4% thereby increasing the tax burden to all categories of tax payers. As direct tax contribute a major junk of the tax revenue to the government, especially from the salaried class, no change in their personal income tax rates, will negatively affect the economic growth of the country.

Finance Minister Arun Jaitley has probably delivered the first ever ‘Hinglish budget’ by any Finance Minister, interspersed his speech with Hindi in all the proposals dealing with agriculture and rural areas. The promise to implement the recommendation of the M S Swaminathan formula of setting minimum support prices for crops to give farmers 50% return over production cost brings happiness and relief, however it is very sad, that it is not clear how this will be done. The proposals to establish 22,000 gram mandis will benefit the farmers.

Some beneficial proposals are made in the health sector.  A proposal to launch a world’s largest flagship national health protection scheme to cover 10 crore poor and vulnerable families were also made. This is approximately 50 crore beneficiaries, by providing them up to Rs 5 lakh per family per year for secondary and tertiary care hospitalisation. The proposal that the government will set up 24 new government medical colleges and hospitals by upgrading existing district hospitals in the country were also made, but the total allocation of only Rs, 1.38 lakhs were made for the above  expenditures . As there was no considerable increase in the allocation, compared to previous financial year, corresponding to the new proposals made in the health sector, it is not clear how the government will execute and implement the new schemes.

The 2017-18 budget saw the highest ever allocation to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) — the world’s largest make-work programme — at Rs 48,000 crore, but 56 percent wages were delayed and 15 percent wage seekers did not find work in 2016-17. Demands and Expectations were there to increase the revenue allocation to 1,00,000 crores for 2018-2019 fiscal year. But that demand was not met in this budget, which will negatively affect the rural employment and economic growth of the country.

The FM claimed that the proposal to reduce the tax burden on Micro, Small and Medium Enterprises (MSMEs) and that the government will fund 12% of wages for new employee of EPF and the proposed new schemes on health insurance will create more employment opportunities. If that happens it will be of great relief.

In total, only the proposals made in agriculture sector, if properly implemented will bring in some relief and benefit to farmers. Otherwise, the Mr Narendra Modi Government’s fifth annual financial statement is a great disappointment to the people of India.