The reactions of the Cochin Chamber to the Union Budget 2018-19

The Indian economy seems on track for a period of high growth.  Clocking an average growth of 7.5% in first three years it is hoped that the economy will grow to 7.2-7.4 per cent in the short run and will achieve the targeted growth of 8% in the long run.

The proposal for a Rs 5.97 lakh crore additional budgetary allocation for infrastructure is a positive step. We especially appreciate the fact that 372 basic reform actions have been identified for improving ease of doing business. We hope that the Government will follow through quickly on this so as to actually foster the ease of doing business.

The Budget’s focus on Infrastructure, Agriculture, Education and Health is a good move and should, in the long run foster the growth of these sectors.

The tax proposals announced in the Budget are far below expectations. There have been no reductions in personal income tax rates which is disappointing. The reduction in Corporate tax announced is far from satisfactory as it will benefit only MSMEs with turnover of Rs 250 crore.

We however welcome the introduction of the standard deduction of Rs 40,000  in lieu of transport and medical allowance and the incentives announced for senior citizens.

Where Kerala is concerned we applaud the reduction of import duty on raw cashews to 2.5% from 5%. This is bound to be a boost for the Cashew Industry in Kerala. However, we are disappointed that the other sectors such as rubber, coir, spices do not find specific mention on these lines.

As expected the Government has in its Budget for 2018-19 reiterated its commitment to improving the lot of the rural economy by announcing schemes to promote the welfare of farmers, higher income for farmers and also focussing on farm and non-farm employment. 

The Cochin Chamber welcomes the renewed focus on the agricultural sector and its realisation of the potential that this sector holds in the growth of the economy. We hope that “Operation Green” with its Rs. 500 crore allocation will help realise the agriculture potential of the country. Initiatives such as the mechanism to ensure that farmers get better price on their products, focus on agri logistics and the proposal to set up 42 mega food parks for processed foods are welcome.

We in Kerala especially welcome the announcement that the exports of agri goods will be liberalised.

The announcements for the Education sector with a massive outlay of one lakh crore Rupees over the next four years to revitalise educational infrastructure is most welcome. The allocation of Rs 1 Lakh crore in the next four years to boost Research and Development is something that this country desperately needs. 

Credit support through capital and interest subsidy to Micro Small and Medium Enterprises and measure to ease their NPA burden is a good move.

Announcements such as the allocation to Digital India of Rs 373 crore and the Government’s desire to use of Block Chain Technology for payments are welcome.

The proposals for the transport sector, increased infrastructure allocation and the increased focus on safety are good as also the proposal to expand the country’s airport capacity by 5 times to handle 1 billion passengers annually.

 While we welcome the announcement that the Government will contribute 12 per cent of wages for new employees for all sectors for the next 3 years and that women’s contribution to retirement savings is to be reduced to 8% from 12% in first 3 years, we feel that this could reduce the savings component of these young women in the long run.

We are also quite surprised that there has been no mention in the Budget about the Governments much touted Skill Development Programmes.