Dhingra Classes Raisinghnagar: English Vocab

Promise and delivery: on Union Budget 2018

If the Union Budget is construed (to understand or explain the sense or intention of usually in a particular way or with respect to a given set of circumstances) as an annual tug-of-war between populism and fiscal prudence, arguably it is the latter that prevailed in the past four budgets tabled by the NDA. However, populism seems to have gained an upper hand in Arun Jaitley’s latest effort. Despite exceptional buoyancy in direct tax revenues (18.7% growth in FY18) and record disinvestment proceeds (Rs.1 lakh crore), shortfalls in GST mop-ups and dividend receipts have forced the Finance Minister to ease off on

fiscal consolidation (the action or process of combining a number of things into a single more effective or coherent whole) as mandated by the FRBM Act. The Budget has reported a fiscal deficit of 3.5% (of GDP) for FY18 and pegged it at a high 3.3% for next year. The Economic Survey prepared the ground for a deviation, yet the actual numbers surprised the markets. Armed with a war chest of Rs.24.4 lakh crore in budgeted receipts for FY19, Mr. Jaitley has homed in unerringly (always right and accurate) on the root causes of distress — unremunerative farm incomes, unemployment, lack of social security nets and the squeeze on the middle-class taxpayer.

With this in mind, Mr. Jaitley has announced a laundry list of ameliorative (to make better or more tolerable) measures. While his intent is clearly welfarist, resource constraints have forced him to rely significantly on extra-budgetary resources and external agencies to give life to many proposals. If they fail to materialise, it can lead to a gap between promise and delivery. Consider agriculture. After asserting that minimum support prices (MSPs) should cover all crops and assure farmers 1.5 times their production cost, food subsidy allocations for FY19 have been upped by a relatively modest Rs.29,041 crore. A ‘fool-proof’ mechanism has been mooted (to present or introduce (any point, subject, project, etc.) for discussion) to avoid market prices falling below MSPs, but it is left to the Niti Aayog to work out the modalities. Setting up farmers’ markets is similarly a great idea to free small farmers from the tyranny of Agricultural Produce Market Committees (APMCs), but the project gets a mere Rs.2,000-crore allocation.

The ambitious rural package in this Budget brings in free gas connections to three crore new households, free electricity connections to four crore homes, two crore new toilets under the Swachh Bharat Mission, higher micro-irrigation coverage, and so on. But of the massive outlay of Rs.14.34 lakh crore required to bankroll these grandiose (seeming to be impressive or intended to be impressive but not really possible or practical) plans, as much as Rs.11.98 lakh crore is expected to be met from extra-budgetary resources. A similar template has been used in social sector schemes. The National Health Protection Scheme, to provide a Rs.5 lakh health cover to 10 crore households, is a much-needed social security intervention to benefit poor households that rely overwhelmingly on private health care. But there is little clarity on modalities. The entire clutch of proposals on improving learning outcomes, providing universal health coverage and alleviating the lot of minorities and girl children is expected to be funded through a mere Rs.16,000-crore increase in allocations to Rs.1.38 lakh crore. Infrastructure appears to be one of the few sectors where the funding problem has been addressed, with PSUs bankrolling a significant proportion of the Rs.5.97-lakh crore outlay for FY19.

While being liberal in its announcements for rural India, the Budget has been frugal in its giveaways to the middle class and the corporate sector. Expectations of an increase in the basic exemption limit on income tax have been belied; instead, a standard deduction of Rs.40,000 is back for salaried taxpayers. While it is only fair that the salaried pay income tax on their net income (after expenses) as the self-employed do, this deduction (which also replaces transport and medical reimbursements) is too small to establish real parity. The clamour for an across-the-board cut in the basic corporate tax rate from 30 to 25% has also been ignored, with the cut limited to mid-size companies (up to Rs.250-crore turnover). Though this will benefit the overwhelming majority of corporate tax filers, how this impacts the competitive edge of India’s largest companies in the global context will be debated. Especially so, since the U.S. recently slashed its corporate tax rate to 21% and European nations average 20%. For the salariat and the corporate sector, the increase in education cess will offset some of the gains from these tax cuts. Senior citizens have benefited, particularly from the tax relief on interest from bank deposits and post office schemes, which has been hiked from Rs.10,000 to Rs.50,000 a year. These interest payouts are also exempt from thevexatious (causing or tending to cause annoyance, frustration, or worry) TDS provisions. This relief renders senior citizens far less vulnerable to steadily dwindling (diminish gradually in size, amount, or strength) interest rates on bank deposits and small savings schemes; it also helps them to continue relying on fixed-income instruments to cover living expenses. This relief may reverse the unhealthy trend of risk-averse savers shifting wholesale from bank deposits to market-linked options such as equity mutual funds, in search of higher returns.

The imposition of 10% long-term capital gains tax on profits from shares and equity mutual funds could dampen market sentiment in the near term, but is unlikely to have any structural impact on domestic equity flows. Equities are favoured by the relativelyaffluent (abounding in anything or having an abundance of wealth, property, or other material goods) savers and alternative financial instruments such as bonds and fixed deposits invite far higher tax incidence. Moreover, the bulk of new allocations flowing into Indian equities in the last two years have come from retail investors, most of them saving for the long term. It is unlikely that they will beat a hasty (exhibiting a lack of careful thought or consideration or acting too quickly) retreat from shares or mutual funds just because of a modest levy. Overall, the Budget has a sense of direction that is difficult to find fault with. If some of the proposals seem half-hearted or are not taken to their logical end, it may be the result of revenue constraints. It is to be hoped that as the revenue base improves and GST collections stabilise, future budgets can put the finishing touches on the welfare proposals.

Courtesy-The Hindu (National)

1. Construed (verb) : (To understand or explain the sense or intention of usually in a particular way or with respect to a given set of circumstances) (अर्थ करना, एक विशेष तरीके से व्याख्या करना)

Synonyms: Clarify, Explain, Demonstrate, Demystify, Elucidate, Explicate, Expound,

Antonyms: Obscure, Obfuscate, Involucre, Vague, Indistinct,

Example: You should not construe my silence as an acceptance of your ridiculous plan to rob the bank.

Verb forms: Construe, Construed, Construed

Related words: Construable adjective, Construer, noun

2. Consolidation (noun) : (The action or process of combining a number of things into a single more effective or coherent whole.) (एकत्रीकरण, समेकन)

Synonyms: Amalgamation, Linking, Merging, Unification, Combination, Integration

Antonyms: Schism, Scission, Split, Dissolution, Separation, Severance

Example: The file cabinet allows us to consolidate our bills and important documents in one place.

Verb forms: Consolidate, Consolidated, Consolidated

Related words: Consolidative, adjective

3. Unerring (adjective) : (Always right and accurate) (उचित, यथोचित, अचूक)

Synonyms: Unfailing, Infallible, Unswerving, Perfect, Flawless, Faultless, Error-Free, Impeccable,
Antonyms: Fallible, Inexact, Faulty, Unreliable

Example: The photographer had an unerring eye that allowed her to capture the right moment.

Related words: Unerringness, noun, Unerringly, adverb

4. Ameliorative (adjective) : (To make better or more tolerable) (उन्नति करनेवाला, सुधारात्मक)

Synonyms: Improve, Amend, Better, Enhance, Enrich, Meliorate

Antonyms: Worsen, Calamitous, Cataclysmal, Devastating, Tarnish, Vitiate; Blemish,

Example: Ameliorate your handwriting, because I can barely decipher the text!

Verb forms: Ameliorate; Ameliorated; Ameliorated

Related words: Amelioration, Ameliorator noun, Amelioratory adjective

5. Mooted (verb) : (To present or introduce (any point, subject, project, etc.) for discussion.) (विचार करना, बहस करना)

Synonyms: Argued, Debated, Deliberated, Conceived

Antonyms: Taken, Quiet, Silence, Suppress, Censor, Hush

Example: Since the judge has decided the child will live with her mother, the custody argument between the parents is moot.

Verb forms: Moot, Mooted, Mooted

Related words: Mooter, Mootness, noun

6. Grandiose (adjective) : (Seeming to be impressive or intended to be impressive but not really possible or practical) (दिखावटी)

Synonyms: Imperial, Imposing, Splendid, Magnificent, Lavish, Opulent,

Antonyms: Unimposing, Unimpressive, Mediocre, Meretricious, Shabby, Sordid

Example: The idea of throwing a party on top of the swimming pool seemed quitegrandiose to everyone in the room.

Related words: Grandiosely adverb, Grandioseness, Grandiosity noun

7. Vexatious (adjective) : (Causing or tending to cause annoyance, frustration, or worry.) (अफ़सोसनाक, कष्टकर)

Synonyms: Disturbing, Provoking, Irritating, Infuriating, Maddening, Exasperating,

Antonyms: Comfortable, Delightful, Pleasing, Sedative, Calming

Example: The bothersome child’s vexatious requests annoyed her mother who just wanted to work without being interrupted.

Related words: Vexatiously adverb, Vexatiousness noun

8. Dwindling (verb) : (Diminish gradually in size, amount, or strength.) (कम हो चलना, क्षीण होना, महत्त्व खोना)

Synonyms: Abate, De-Escalate, Deplete, Diminish, Downscale, Downsize, Waning, Reduce

Antonyms: Increase, Flourish, Aggrandize, Amplify, Augment, Boost

Example: When the store manager realized that his supply of the popular new toy was beginning to dwindle, he placed an order for a thousand more units.

Verb forms: Dwindle; Dwindled; Dwindled

Related words: Undwindling, adjective