Union Budget 2018-19, mixed opinion among economists over proposed budget

New Delhi, Feb 5 (KNN) Finance Minister Arun Jaitley earlier last week presented the Union Budget for  2018-19 in the parliament, following which various stakeholders including economists have expressed their take on the proposed budget.

Talking to KNN, Dr. Yerram Raju, Economist said this budget has an increment over the previous outlay. But the direction has changed more to the health and education sectors.

The effect of these interventions will be experienced more in future than immediate present. In so far as Agriculture is concerned the farmers get some announcements and hopefully, appropriate rules will be made to ensure that the farmers get 1.5 times the cost price for their produce.

So far they have not been able to get the dividend out of the MSP. E-Nam spread though welcome has not so far stabilised in delivering the intended benefits to the farmers, Raju added.

A non-budget allocation of Rs.11 lakh crores to farm credit is again a please all announcement.

If NITi Aayog comes up with a modicum of lending to the tenant farmers with the owners' interests duly protected, things may change in the short term credit. Any short term credit not matched with the term lending or investment credit for farm sector as has happened so far, would end up in only irresponsible target chase.

Agriculture should have been provided a separate budget because of the low growth experienced (just around 2.1%) and the already admitted climate change risks in the Economic Survey 2018.

In so far as MSMEs are concerned, emphasis on the food processing, leather and apparels would provide great fillip. National Bamboo Mission would provide the bamboo based artisans and small enterprises in rural areas and tribal areas a great opportunity for developing branding and move to export zone.

In the name of MSME sector, the corporate tax exemption threshold rise to Rs.250 crores would help the medium enterprises and mid-corporates that constitute less than 2% of the total number of MSMEs. This is more an apology of support to the sector.

MUDRA Loans target increase by 3 lakhs should have been more specific to manufacturing MSEs. So far less than 3% of the total loans have been given to manufacturing.

SHG credit allocation of Rs.75000 crrore - a non-budget allocation would be rebalancing the gender portfolio of banks in the MSME sector.

MSMEs' major problem is availability of land for setting up the enterprise as the land prices everywhere are just soaring to unbearable heights.

“If the government had announced tax exemption for five years for infrastructure and land cost in Rural Industrial Parks - either private or state - it would have been of great help”, Raju added.

Also commenting on the proposals made for the Micro, Small and Medium Enterprises (MSMEs) in the Union Budget, Akash Jindal, Economist opined that the document is to bring new wave among the MSMEs of the country.

Talking to KNN, Jindal said the sector suffered in the aftermath of demonetization drive of the government and also due to the early teething effects of the new taxation in the country. (KNN/DA)