The much awaited Union budget has been announced and now it is time to understand and analyse the nitty gritties of what FM Arun Jaitely said yesterday.
Finance Minister, Arun Jaitley said in his speech,
Venture capital funds and angel investors need an innovative, special development and regulatory regime for their growth. We have taken a number of policy decisions, including the launching of the Startup India program building a robust investment.
This year’s budget was not up to the mark as per investors expectations because there was not much about the relaxation of angel tax and will continue to charge at 30 per cent as before. The budget 2018 was mainly focused on reviving agriculture, education and healthcare industry. The startup industry was not given that much attention this time.
Jaitley further added in his speech,
“Mass formalisation of the business of MSMEs is happening after demonetisation and introduction of GST. This is generating an enormous amount of financial information database of MSMEs which will be used for improving the finances of MSMEs and other requirements including working capital.”
Having said that, the government is still focused on its mission of creating an ease of doing business as well as ease of living. We have enlisted a few points that highlight what is in store for investors, startups and MSMEs this year.
- Budget levies 10 per cent long-term capital gain tax on equity gains of over Rs.1 lakh.
- Short-term capital gains tax remains the same which is 15 per cent.
- Capital gains made on shares until Jan 31, 2018 grandfathered.
- The allocation to Digital India scheme has been doubled to Rs 3,073 crore.
- 25 per cent of corporate tax rate extended to companies with turnover up to Rs 250 crore.
- Arun Jaitley proposes to allow 100 per cent tax deduction to companies registered as farmer-producer companies with a turnover of Rs 100 crore.
- Rural agri markets fund is set for Rs 2,000 crores.
- Food processing sector growing at 8 pc allocation for food processing ministry being doubled to Rs 1400 crore.
- India’s agri export potential is $100 billion as against current $30 billion exports, says FM.
- Mass formalisation of MSME sector is happening after demonetisation and GST.
- The target for loan disbursement under Mudra scheme set at Rs 3 lakh crore for next fiscal.
- Govt to soon announce scheme to address the issue of Non-Performing Assets.
- Rs 4.6 lakh crore sanctioned under MUDRA Scheme.
- Govt’s budget for health, education and social security increased to Rs 1.38 lakh crore for 2018-19 from Rs 1.22 lakh crore in current fiscal.
- The government will launch a flagship National Health Protection Scheme.
- Govt to focus on health, education social protection. To use technology to improve education from ‘blackboard to digital board
- Economy to grow by 7.2-7.5 per cent in second half of current fiscal, says FM.
- Introduction of GST has made the indirect tax system simpler.
- Govt is focusing on ease of doing as well as on ease of living now.
- Experts said that this is a balanced budget and will help in economic growth.
The budget is more focused on ease of living this time. It did not divulge anything about angel tax that means it will stay the same as it was. The positives of the budget remain the fact that it focuses on inclusive development, with allocations for enhancing both rural and urban infrastructure. Provisions announced in the Budget for the MSME sector in terms of lower corporate tax rate at 25 per cent would support their growth and create job opportunities. Better regulations have been proposed for the angel investors and hence, this might mean ease in generating funds in the long run.
To conclude, we can very well say that after analyzing all the factors that have gone into the creation of the Union Budget 2018, it is overall a balanced budget that will help in boosting up in the economic growth. Although, the main focus of the fund allocation remains the farmers, poor and the senior citizens, all other aspects have also been duly considered.