File photo: Arun Jaitley. Photograph:( Reuters )
Union Finance Minister Arun Jaitley presented the most awaited budget which started off with a positive note on how the Indian economy has reversed course with GDP at 6.3 percent signalling a turnaround of the economy.
Allocation to Digital India scheme has been doubled to Rs 3073 crore. Moreover, 5 lakh WiFi HotSpots will provide Broadband access to 5 crore rural citizens, at the cost of Rs 10,000 crore.
He also announced initiating a national program along with the NITI Aayog to direct efforts in artificial intelligence.
Arun Jaitley also allocated Rs 1 trillion to a new scheme called Revitalizing Infrastructure in School Education or RISE to integrate its school education sector-from pre-school to class 12-implying merger of several school schemes in the near future to revitalize the infrastructure of schools in the country.
Here's what the people of the nation had to say:
From food processing to fiber optics, roads to shipping, youth to senior citizen, rural India to Ayushmaan Bharat, Digital India to Start Up India, this budget strengthens hopes & aspirations of crores of Indians: PM @narendramodi #NewIndiaBudget#Budget2018— Priti Gandhi (@MrsGandhi) February 1, 2018
In the rapidly changing landscape, the distinction between telecom, IT and broadcasting technology has disappeared and a convergence of these sectors is required. A positive consideration of this demand in the #Budget2018 will certainly help in the rapid growth & employment.— Punit Goenka (@punitgoenka) February 1, 2018
From #GIFTcity to #AI to crypto currencies to #5G, there is a rising sensitivity to technology in #Budget2018.— Gautam Chikermane (@gchikermane) February 1, 2018
These may not need big budgetary outlays but are strong enablers of future growth and will have deep impact on the economy. Look at them as investments.
Meanwhile, In the Budget for 2018-19, finance minister Arun Jaitley increased custom duty on CKD (completely knocked down) imports of motor vehicles, motor cars, motor cycles from 10% to 15%.
The government also raised custom duty on specified parts/accessories of motor vehicles, motor cars, motor cycles from 7.5% to 15%. Besides, imported duty on truck and bus radial tyres has been increased from 10 to 15%.
Further, duty on CBU (completely built units) imports of motor vehicles (trucks and buses) has been hiked from 20% to 25%.
A large number of imported items including mobile handsets, cars and motorcycles, fruit juices, perfumes and footwear will become costlier.
This will impact luxury car and bike manufacturing companies such as Mercedes-Benz, BMW, Audi, Volvo, Jaguar Land Rover, Harley-Davidson, Triumph, who have set up assembly plants.
Roland Folger, Managing Director & CEO, Mercedes-Benz India said: “The increase in the basic customs duty of auto parts, accessories and CKD components varying from 5% to 10%, clubbed with the new Social Welfare Surcharge at 10%, at a time when the auto industry is reviving, is unfortunate, and comes as a surprise. We believe it is going to impact the auto industry, the consumers and is also against the spirit of ‘Make in India’. The auto industry was expecting the Government to formulate policies and take decisions that would create demand, create additional jobs and help the industry to grow. As the overall costs due to various duty increase is imminent, we are left with no option but to pass on the resulting increase in price to the customers."
Folger further added, “The increase in basic customs duty hike will highly restrict the growth of the luxury car industry and this will only result in the loss of additional revenue, which would have increased significantly with increase in volume. The auto industry which contributes 7.2% of the GDP is likely to be affected and further job creation might be impacted with this decision."
Sohinder Gill, Director- Corporate Affairs, Society of Manufacturers of Electric Vehicles said: “As the EV Policy is not a part of the budget, we were not expecting any major announcement related to electric vehicles in today’s budget. However, we are happy to note that there are general announcements made today, which will support the cause."
"The only thing we were expecting from the budget was rationalization of GST rate i.e. currently 12% for EVs and 28% for EV batteries. Also, we had requested that GST should be made at least either 0 or 5% for initial years. But we didn’t find any mention of the same. Perhaps it will be covered in the policy, later. Overall we are happy with the outcome of the budget” Gill added.
Society of Indian Automobile Manufactures (SIAM) deputy director general Sugato Sen said that the move to increase duty on components would impact the entire automobile industry.
“Since every company has to import some kind of components, the increase is going to impact everyone. Companies with greater exposure to imported articles would be impacted more,” Sen said.