‘De Dana Dhan’: All Eyes on Union Budget 2018-19

‘De Dana Dhan’ because the centre needs to pull up its socks if it wants to keep its promises before the 2019 polls.

Sanjay Pugalia, Editorial Director of The Quint, on the Union Budget 2018.

(Photo: The Quint)

Expectations are riding high on the Union Budget 2018-2019, but before it can be presented, we need to discuss some important issues. This is where The Quint’s ‘De Dana Dhan’ comes in. We picked this name because the Narendra Modi government needs revenue to fulfill its promises – the promises of growth and development that it has made to its farmers and rural voters ahead of the 2019 Lok Sabha polls.

But how will the government arrange for the money? Let’s try to find out.

When the Modi government came to power, they promised that income tax rates would be reduced. However, this appears to be but a distant dream, considering the current state of the national exchequer. The government may raise the tax exemption limit so as to woo the urban middle-class – their core voter base.

What about taxing the share market? Since the share market is on an upward trend, the Modi government may consider increasing the span for short-term capital gains tax from one year to three years. Capital can also be generated by selling off shares in PSUs. But the issue with disinvestment is that one PSU tends to buy stakes from another. This only results in accounting transfer when in reality, there is no sale or revenue generation.

Then there is the matter of public sector banks that are under heavy debts. The banks were recapitalised by the funds provided by the government. But the bigger question is, did the banks recover all the money they had lost?

In the coming days, you will hear news about assets being sold at rates much cheaper than their actual worth. The government will be expected to take some drastic steps to improve the banking system and increase private investment. Since this is the last budget before the 2019 Lok Sabha elections, the Modi government can now opt for:

1. A safe Budget
2. A revolutionary Budge
3. A populist Budget

Which one will it be? We'll find out on 1 February 2018.

Video Editor: Mohd Ibrahim

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