Dinesh Kamath's Editorial 'Budget 2018 provides relief to Senior Citizens' that was published in Newsband

Budget 2018 provides relief to Senior Citizens

Arun Jaitley has come up with Union Budget 2018 Did Jaitley have populism or fiscal prudence in mind while making the budget? It appears to be the former.

Jaitley has homed in unerringly on the root causes of distress — unremunerative farm incomes, unemployment, lack of social security nets and the squeeze on the middle-class taxpayer. His intent is clearly welfarist. If they fail to materialise, it can lead to a gap between promise and delivery.

Setting up farmers’ markets is similarly a great idea to free small farmers from the tyranny of Agricultural Produce Market Committees (APMCs), but the project gets a mere ₹2,000-crore allocation.

The ambitious rural package in this Budget brings in free gas connections to three crore new households, free electricity connections to four crore homes, two crore new toilets under the Swachh Bharat Mission, higher micro-irrigation coverage, and so on.

The National Health Protection Scheme, to provide a ₹5 lakh health cover to 10 crore households, is a much-needed social security intervention to benefit poor households that rely overwhelmingly on private health care.

On improving learning outcomes, providing universal health coverage and alleviating the lot of minorities and girl children is expected to be funded through a mere ₹16,000-crore increase.

While being liberal in its announcements for rural India, the Budget has been frugal in its giveaways to the middle class and the corporate sector.

While it is only fair that the salaried pay income tax on their net income (after expenses) as the self-employed do, this deduction (which also replaces transport and medical reimbursements) is too small to establish real parity.

For the salaried and the corporate sector, there is increase in education cess. Senior citizens have benefited, particularly from the tax relief on interest from bank deposits and post office schemes, which has been hiked from ₹10,000 to ₹50,000 a year. These interest payouts are also exempt from the vexatious TDS provisions. This relief renders senior citizens far less vulnerable to steadily dwindling interest rates on bank deposits and small savings schemes; it also helps them to continue relying on fixed-income instruments to cover living expenses.

Overall, the Budget has a sense of direction that is difficult to find fault with. If some of the proposals seem half-hearted or are not taken to their logical end, it may be the result of revenue constraints.