What students from IIM, JNU, and ISB thought of Arun Jaitley’s budget

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Heads up.
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The Narendra Modi government’s last full budget before the 2019 general elections announced a slew of measures to double farm incomes and boost the flailing rural economy.

In his speech to parliament, finance minister Arun Jaitley also said the government will fund one of the largest health care schemes the country has ever seen, and further reduce corporate taxes to boost jobs.

As per tradition, Quartz invited graduate students from the Indian Institutes of Management Ahmedabad (IIM-A) and Bangalore (IIM-B), the two campuses of the Indian School of Business (ISB)—Hyderabad and Mohali—and New Delhi’s Jawaharlal Nehru University (JNU) to annotate the full text of Jaitley’s speech.

Their responses have been lightly edited for grammar and clarity.



“My government is committed for the welfare of farmers. For decades, (the) country’s agriculture policy and programme had remained production centric. We have sought to effect a paradigm shift. Honourable prime minister gave a clarion call to double farmers’ income by 2022 when India celebrates its 75th year of independence. Our emphasis is on generating higher incomes for farmers. We consider agriculture as an enterprise and want to help farmers produce more from the same land parcel at lesser cost and simultaneously realize higher prices for their produce. Our emphasis is also on generating productive and gainful on-farm and non-farm employment for the farmers and landless families”

“While the government still claims it will double farm incomes (let’s not even go into whether that is in real or nominal terms), no reference is made to the impact of climate change on farm incomes (a fall of 25% in the medium term), as mentioned by the Economic Survey. Too short sighted, the vision.” —Abhishek Naulakha (IIM-A) 


“I am pleased to announce that as per pre-determined principle, government has decided to keep MSP (minimum support price) for the all unannounced crops of kharif at least at one-and-half times of their production cost. I am confident that this historic decision will prove an important step towards doubling the income of our farmers”

“The Modi government seemed to have learned the lesson from the Gujarat elections. This pro-farmer, pro-poor announcement is in the right direction…The key of this measure will be implementation.”—Sourabh Kishanpuria (IIM-B)


“Our government works with the holistic approach of solving any issue rather than in fragments. Increasing MSP is not adequate and it is more important that farmers should get full benefit of the announced MSP. For this, it is essential that if price of the agriculture produce market is less than MSP, then in that case government should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism. Niti Aayog, in consultation with central and state governments, will put in place a foolproof mechanism so that farmers will get adequate price for their produce.”

“The government seems to have realised that measures like the MSP and farm-loan waivers are short-sighted, and efforts should be focused on building infrastructure for food-processing, export, etc. For instance, for more than three years the prices of pulses have been below the MSP. The purchase capacity of the government is limited. Efforts to boost the export could’ve been taken earlier. Also, the import-export strategy should be dynamic and proactive unlike current delayed responsive methods.”—Sumit Singare (IIM-A) 


“For better price realisation, farmers need to make decisions based on prices likely to be available after its harvest. Government will create an institutional mechanism, with participation of all concerned ministries, to develop appropriate policies and practices for price and demand forecast, use of futures and options market, expansion of warehouse depository system and to take decisions about specific exports and imports related measures.”

“This is the need of the hour! An agricultural labourer’s income has increased only 0.67% per year starting May 2014. This dismal state is despite having good monsoons, increased farm production, and increased yield rates. The biggest contributing factor is the falling prices of farm produce, not just across the country but also globally.
However, the announcement of better remunerative prices for crops is not enough. The government needs to manage the glut in agricultural markets through adequate export-import policies.”—Akshita Agarwal (IIM-A) 


“Many farmers are installing solar water pumps to irrigate their fields. Generation of solar electricity is harvesting of sun by the farmers using their lands. Government of India will take necessary measures and encourage state governments to put in place a mechanism that their surplus solar power is purchased by the distribution companies or licencees at reasonably remunerative rates.”

“Installation of solar water pumps to irrigate the fields has been a great move by farmers. But can this movement pick up its momentum in the near future as the ministry of finance has imposed a 70% safeguard duty on imported solar cells and modules. The imposition of this safeguard duty will raise the tariffs which will be ultimately borne by the end consumers, affecting them adversely.”—Shifali Goyal (JNU) 



“We will launch a flagship National Health Protection Scheme to cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries) providing coverage upto 5 lakh rupees per family per year for secondary and tertiary care hospitalization.  This will be the world’s largest government funded health care programme. Adequate funds will be provided for smooth implementation of this programme.”

“The National Health Protection Scheme was an initiative announced in 2016-17 and is merely restructuring of the Rashtriya Swasthya Bima Yojana. It is again a push towards insurance-financed health care, rather than a public health care system. It would bring in escalated costs, due to unnecessary treatments. Even if an inspection system is put in place, there is always a possibility of collusion between health care providers and the inspection agencies. It provides a great opportunity for transfer of public funds to the corporate-driven healthcare industry. Also, the Rs5 lakh amount to each household is too ambitious.”—Varsha Gupta (JNU) 

“Modicare seems to be a populist move to wow the poor for the upcoming elections. Although it is a good move, the budget lacks allocation to primary health care, which is a key node for health care dissemination in India.”—Sourabh Kishanpuria (IIM-B)

“The NHPS is an excellent opportunity, but also an immense threat—and it really depends on what the government envisions for it in depth. One possible model for this is that the sovereign essentially becomes the insurer and healthcare coverage is made available even in private hospitals. This would be a huge boon for the consumer, but almost unworkable from the government’s perspective.”—Gaurang Sinha (ISB)



“Technology will be the biggest driver in improving the quality of education.  We propose to increase the digital intensity in education and move gradually from ‘’black board’ to ‘digital board.'”

“Great direction but such reforms work best when they start from empowerment. Most of the teachers in the low-income government schools are uncomfortable using technology, with no incentive to upskill since most of their work involves record maintenance on paper, which again increases paper usage and wastage. The government needs to incentivise the teachers by mandating official work be recorded on Excel or digitally, and in the process get familiarised with the technology. Without such an intervention, initiatives such as ‘digital-board’ will lie unused in the corner of forlorn school campuses.”—Devraj HomRoy (ISB)


“The government is committed to provide the best quality education to the tribal children in their own environment.”

“Every year a huge number of children are sent to boarding schools by parents who could afford the expenses. This causes the leakage of a huge amount of state revenue to the other states. This scheme will have a twin effect in the economy: first, the children who have to stay away from home can be in their hometown or at least in the state and acquire a good education. Second, the state revenue to some extent will improve that. Consequently, it will ease the strain over the union.”—S Merina (JNU)



“Strengthening the railway network and enhancing railways’ carrying capacity has been a major focus of the government. Railways’ capex for the year 2018-19 has been pegged at Rs1,48,528 crore.” 

“Absolutely no new ideas for the Indian Railways, which is extremely disappointing for a budget speech…The government would do well to take a long, hard look at the role that Indian Railways play today and project what the railways will look like in the next 30-40 years. The rail network needs to get less bureaucratic, faster, and most importantly needs immense investment and enhancement in freight-carrying capacity and speed.”—Gaurang Sinha (ISB)



“The government does not recognise cryptocurrency as legal tender or coin and will take all measures to eliminate the use of these crypto assets in financing illegitimate activities or as part of the payments system.”

“This is, in my opinion, one of the most significant and far-reaching aspects of the union budget, which could have immense consequences on the economy in the next decade. First principles indicate that markets gravitate towards assets that fulfill a need, and crypto-tokens are fulfilling the need for global, decentralised assets. Bans and crackdowns simply lead to evasion, and the fact that crypto-tokens have well over half-a-trillion dollars in market capitalisation demonstrates there is a need.

The chief area of concern within the regulatory purview of the government and the Reserve Bank of India should be the point of conversion of these tokens into fiat currency, as well as identifying the source of investments made through cryptographic exchange systems.”—Gaurang Sinha (ISB)

“The government’s move to not consider crypto-currencies as legal tender and associating it with illegitimate activities and transactions has raised concerns over the emphasis of a digitised global economy. The blockchain technology has taken the image of a transparent system carrying out transactions all over the world. Does this mean that government’s strenuous digitisation and transparency project has an inbuilt motive of developing the state into a Leviathan at whose mercy lie the individuals?”—S Merina (JNU)

Fiscal deficit


“Revised fiscal deficit estimates for 2017-18 are Rs5.95 lakh crore at 3.5% of GDP.  I am projecting a fiscal deficit of 3.3% of GDP for the year 2018-19.”  

“A significant portion of this fiscal deficit reduction came from falling oil prices. The lower oil prices allowed the government to hike the excise duties and taxes, leading to higher revenues for the government. This solved the twin deficit problem of current account deficit and fiscal deficit. Thus, the better fiscal deficit should be attributed to exogenous factors rather than prudent fiscal management. Further, with oil prices hovering around $70 a barrel and the GST collections lower than the monthly target of Rs90,000 crore, it seems unlikely that the target would be met. Of course, the government is seeking to fill the gap with divestment.”—Gaerik Chhabra (IIM-B)

“The right step taken by relaxing fiscal norms, with money going to the right areas, will help boost growth in the medium term. The initial reactions from both the markets and Moody’s agency has been positive surprisingly, especially given the tight spot Moody’s was in after the recent upgradation of India’s sovereign rating.”—Abhishek Naulakha (IIM-A) 

“The revised fiscal deficit and non-adherence to erstwhile stated fiscal targets was expected and it is commendable that the finance minister did not loosen his purse strings significantly and maintained fiscal prudence. Through this measure, I believe he will maintain credibility vis-a-vis the credit ratings agencies, and this is critical in inviting foreign investment over the medium term.”—Nibu Shibu (ISB)

Corporate tax


“Towards fulfilment of my promise to reduce corporate tax rate in a phased manner, I now propose to extend the benefit of this reduced rate of 25% also to companies who have reported turnover up to Rs250 crore in the financial year 2016-17.”

“A very good and welcome move, this will reduce the tax burden on the majority of the companies. But, as with the amendment in the previous budget, this will also increase the opportunities for business houses to shift their income from high-turnover companies to the lower-turnover companies, resulting in loss of revenue.”—Mihir Vora (ISB)

“The importance of the measure stems from the signal that the measure sends across to corporate India. Considering that this is the last budget prior to the general elections next year, the finance minister could not grant extensive cuts to corporate taxes due to the signal it sends across to the common voter that the present dispensation is pro-corporate. Considering these circumstances, this is definitely a strong signal and if the present dispensation were to come back to power, one can expect tax cuts across the board.”—Nibu Shibu (ISB)

Long-term capital gains (LTCG)


“I propose to tax such long-term capital gains exceeding Rs1 lakh at the rate of 10% without allowing the benefit of any indexation.”

“Taxing on LTCG will work against the market momentum. When there is securities transaction tax (STT) already present, taxing another 10% is unfair in the kindest of words. Also, as honourable finance minister pointed out that a majority of the gains have accrued to the corporates and LLPs, keeping the exemption limit to a low Rs1 lakh will also make the small-time investors bear the brunt of the new regulation. If the target was to tax the big corporates cashing in on market gains, then the limit should have been kept at least Rs5 lakh to Rs10 lakh.”—Mihir Vora (ISB)

“This is an extremely bold move made by the government in the last full budget before the general elections. Considering the buoyancy in the markets at present, the time was ripe to introduce this tax. This is likely to yield huge dividends in the form of higher tax revenues considering the increased participation of domestic institutional investors and retail investors in Indian markets. However, the future of STT, which is levied on sale of shares at present, remains to be seen since the simultaneous application of LTCG and STT will result in double taxation and is likely dampen investor sentiment.”—Ayush Vimal (IIM-A) 

“I have a different opinion here and the rationale given behind the move seems justified. There are many developed and developing countries which have more than 10% of the LTCG, but are still doing good because of high return on investment. While I understand that the market conditions vary across different countries, so the comparison may not be apt, but I believe the market has really become buoyant, hence the action was inevitable. I agree that the limit could’ve been more.”—Sumit Singare (IIM-A)