EAC-PM hails the Union Budget for its focus on Agriculture, Rural Economy, Healthcare and Employment generation

The Chairman of the Economic Advisory Council to the Prime Minister Shri Bibek Debroy has welcomed the announcements made in the Union Budget 2018-19 and its focus on agriculture, rural economy, health care and employment generation. He emphasised that the Government is committed to following the path of significant structural reforms and the Budget 2018-19 is a step in that direction. The Budget focussed on the structural issues of the Indian economy especially the agriculture sector and rural economy instead of following economic populism.

The Union Budget has focused extensively on social sector and rural economy. it has emphasise upon the need to give a boost to overall growth by giving impetus to the rural, agriculture sector, health and education. The Government has allocated the sum of ₹ 1.38 lakh crore towards Health, Education and Social Protection. The Chairman, EAC-PMis of the view that the growth needs to be inclusive and the Budget is an important milestone in that direction. He lauded the proposal of launching of the National Health Protection Scheme which is intended to cover 10 crore households with an insurance cover of ₹ 5 lakh per family. Further, the proposed scheme is a milestone step towards achieving the Universal Health Coverage.

According to advance estimates released by the Government, the GDP growth at constant prices for the financial year 2018-19is estimated to grow at 7.2–7.5 percent. The average GDP growth for the first three years of the government was at 7.5 percent. The Indian economy has become the seventh largest economy in the world and will soon become the fifth largest. The government remains committed to following the gradual fiscal consolidation glide path, however, has revised the Fiscal Deficit target for the year 2018-19 to 3.3 percent of GDP and has kept the Fiscal Deficit for the year 2017-18 at 3.5 percent of GDP. The Chairman, EAC to PM feels that the revision of Fiscal Deficit will not be affecting India’s macroeconomic stability and revising it was a necessity for the government because the Implementation of GST has resulted in tax collection for 11 months only. Moreover, there is a shortfall in the non-tax revenue due to lower accrual from spectrum auction. He is also of the view that at the time when the growth rate is suffering due to private sector unwillingness to invest, it had become a necessity for the government to start the investment cycle through public investment. The government investment in key productive sectors like infrastructure, health and education will crowd in private investment in the years to come.

The government had also met its disinvestment target for the year 2017-18 and expects to collect ₹ 72,500 crore. For the year 2018-19, it has set the disinvestment target at ₹ 80,000 crore. Further, it accepted the recommendations of the N K Singh Committee on Fiscal Discipline to reduce Debt-to-GDP Ratio. The above measures will help the government to maintain macroeconomic stability.