Make no mistake. The NDA government’s fifth budget has elections written all over it. There are several appreciable, noteworthy proposals but they’re all aimed at constituencies that bring in the votes. Farmers, informal sector workers, small businesses, senior citizens and the poor in general, all stand to benefit from the Budget while the middle-class tax payer, markets and corporates have been hung out to dry.

The story of this budget may well be the proposed universal health cover of Rs 5 lakh per annum that will benefit 50 crore people. This is an excellent proposal to support the needy as most times the poor are forced to borrow for treatment in expensive private hospitals. Politically it ranks up there with the Right to Food and Right to Work (NREGA) legislations of the UPA government. Implementation is key, however, and it remains to be seen how much this government will be able to accomplish on this front in the remainder of its tenure.

The tax concessions extended to senior citizens is also commendable for three reasons-- the poor social security system in the country, the deleterious effect of inflation on savings and rising health care costs. With most senior citizens living off interest income, the increase in taxable limit for interest earnings to Rs.50,000 is welcome indeed.

The idea of setting MSP at 1.5x the cost of production sets off mixed feelings. While it is something that will benefit the farmer (assuming that government agencies are active in procurement, which has not been the case till now) the fact is that it might have an impact on food price inflation. Indeed, one of the prime reasons for the galloping food inflation just before this government took over was the generous increases on MSP offered by the previous one.

The proposal to extend the 25 per cent corporate tax rate to MSMEs with turnover upto Rs 250 crore (earlier Rs 50 crore) who are in dire need of support is a good one. They bring in the jobs, after all, not the big corporates. So is the plan to bring public sector banks on to the Trade Electronic Receivable Discounting System (TReDS) and link it with the GSTN. The promise to revamp online loan sanctioning facility for MSMEs is encouraging too.

The corporate sector, which was anticipating a reduction in tax has reason to be disappointed. Similarly, the middle-class tax payer’s grumble will continue-- the Rs 40,000 standard deduction proposed to be granted is not good enough especially considering that it will be in lieu of two other tax breaks that are already available.

The markets have the reason to whine the most with the imposition of long-term capital gains tax albeit in a stunted form. The proposal is a bit complicated and the tax bureaucracy must be rubbing its hands in glee at the prospect of locking horns with assessees over granular details. In his attempt to make the imposition of long-term capital gains palatable, the Finance Minister may well have made it unfriendly for the taxpayer. It should also be noted here that Securities Transaction Tax remains despite the imposition of LTCG, which is a bit unfair on the investor.

Finally, the slippage in fiscal deficit this year to 3.5 per cent (against the budgeted level of 3.2 per cent) and the projected 3.3 per cent for 2018-19 are unlikely to go down well with the markets and ratings agencies. The obvious question here is whether the increased spending is on productive avenues and the answer to this is: doubtful.

There is a quantum rise in spending on the rural sector. Institutional credit for the agricultural sector is up by 10 per cent to Rs.11 lakh crore. As much as Rs.14.34 lakh crore will be spent on creation of rural infrastructure and livelihoods by different ministries put together and they will be funded by extra-budgetary and non-budgetary resources.