Highlights Budget 2018-19

Union Finance minister Arun Jaitley presented Union Budget 2018 in Parliament. It is last full budget of Narendra Modi Government before 2019 Lok Sabha elections.

Economic Health

• Economy firmly on course to achieve high growth of 8%.
• GDP growth at 6.3% in second quarter of 2017-18.
• Growth in second half likely to remain between 7.2% to 7.5% .
• Manufacturing, services, and exports sectors are back on good growth path.

Fiscal Management

• Budget Revised Estimates for Expenditure at Rs.21.57 lakh crore
• R Fiscal Deficit estimates revised at 3.5% of GDP
• Central Government’s Debt to GDP ratio to be brought down at 40%

Taxation – Corporate/Personal/Customs Duty

• Growth of direct taxes in 2016-17 at 12.6% & for the financial year 2017-18 (up to 1 January 2018) at 18.7%.
• Additional revenue collected from personal income tax is Rs. 90,000 crore.
• No change in personal Income-Tax slabs. Number of Effective Tax Payers increased to 8.27 crore
• Standard Deduction of Rs. 40,000 in place of the present exemption allowed for transport allowance and reimbursement of miscellaneous medical expenses
• Increase in education and health cess on personal income tax and corporation tax to 4 %
• Corporate Tax: Reduced to 25 % and will be extended to companies with turnover up to Rs. 250 crore
• 100% deduction to companies registered as Farmer Producer Companies with annual turnover up to Rs. 100 crore
• Real estate sector: No adjustment to be made for transactions in immovable property where Circle Rate value does not exceed 5% of the consideration
• More concessions for International Financial Services Centre (IFSC) to promote trade
• Alternate Minimum Tax (AMT) at concessional rate of 9 percent at par with Minimum Alternate Tax (MAT) applicable for corporates
• Payments exceeding Rs. 10,000 in cash made by trusts and institutions to be disallowed
• Long-Term Capital Gains (LTCG) rationalised at the rate of 10% for Rs. 1 lakh. It will be without allowing any indexation benefit. However, all gains up to 31 January 2018 to be grandfathered.
• To introduce a tax on distributed income by equity-oriented mutual funds at the rate of 10%
• Customs Duty on mobile phones increased to 20% and also on televisions increased to 15 %
• Exemption of interest income on deposits with banks and post offices are proposed increased to Rs. 50,000 from Rs. 10,000.
• TDS shall not be required to be deducted under section 194A. Benefit will also be available for interest from all fixed deposit schemes and recurring deposit schemes.
• Hike in deduction limit for health insurance premium and medical expenditure to Rs. 50,000 from Rs. 30,000 under section 80D. Deduction limit for medical expenditure increased to Rs. 1 lakh under section 80DDB

Agriculture and Rural Economy

• MSP for all unannounced Kharif crops increased to 150%
• New scheme Operation Greens with an outlay of Rs 500 Crore announced
• Institutional credit for agri-sector increased to Rs.10 lakh crore in 2017-18
• Government to develop and upgrade existing 22,000 rural haats
• Agri-Market Infrastructure Fund allocated corpus of Rs.2000 crore
• Fisheries, aquaculture and animal husbandry allocated corpus at Rs.10,000 crore
• Allocation for Ministry of Food Processing doubled to Rs.1400 crore
• Loans to Self Help Groups (SHG) of women to increase to Rs.75,000 crore by March 2019.
• Increased allocation of National Rural Livelihood Mission (NRLM) to Rs 5750 crore
• Ujjwala Scheme’s target base for distribution of free LPG connections increased to 8 crore poor women
• Housing for All by 2022 – more than 1 crore houses to be built by 2019 in rural areas.
• Plan for employment of 321 crore person days, 51 lakh new rural houses will be construced along with 1.88 crore toilets, 1.75 crore new household will be provided electric connections and 3.17 lakh kilometers of rural roads will be built.

Education, Health, and Social Protection

• Estimated budgetary expenditure on health, education and social protection at Rs.1.38 lakh crore
• Investments for research & infrastructure in premier educational institutions at Rs.1 lakh crore in next 4 years.
• Ekalavya Model Residential School to be set up for tribal children
• Allocation on National Social Assistance Programme at Rs. 9975 crore
• World’s largest government-funded health care programme titled National Health Protection Scheme (NHPS) announced
• NHPS will cover 10 crore poor and vulnerable families (approximately 50 crore beneficiaries) and will provide insurance coverage up to 5 lakh rupees per family per year for hospitalisation
• Rs 1200 crore for the National Health Policy, 2017 and additional Rs.600 crore allocated for TB patients
• 24 new Government Medical Colleges and Hospitals to be opened
• Clean Ganga: Of 187 projects have been sanctioned, 47 complete. Banks of Ganga declared open defecation free.

Medium, Small and Micro Enterprises (MSMEs) and Employment

• Major thrust of the budget was for MSMEs with total allocation at Rs. 3794 crore
• MUDRA Yojana: Target of Rs.3 lakh crore for lending to MSMEs
• 70 lakh formal jobs to be created this year in MSME Sector
• Government will make 12% contribution of new employees in EPFO for all the sectors for 3 years
• Textile sector allocated Rs.7148 crore.
• Budgetary allocation on infrastructure increase at Rs.5.97 lakh crore.
• 10 prominent tourist sites will be developed into Iconic Tourism destinations
• 35000 kms road construction in Phase-I at an estimated cost of Rs.5,35,000 crore

Railways

• Railways Capital Expenditure pegged at Rs.1,48,528 crore
• 4000 kilometers of electrified railway network to be commissioned
• Work on Eastern and Western, dedicated freight corridors
• Over 3600 km of track targeted to be renewed in current fiscal
• 600 major railway stations will be redeveloped.
• Mumbai’s local train network to have 90 kilometers of double line tracks at Rs.11,000 crore cost
• 150 km of additional suburban network planned for Mumbai

Airport

• Airport capacity to be increased to handle more than five times to handle a billion trips a year
• Regional connectivity Scheme (RCS)- 56 unserved airports and 31 unserved helipads to be connected
• Unified authority will be established for regulating all financial services

Digital Economy

• Allocation doubled on Digital India programme to Rs 3073 crore.
• NITI Aayog to initiate national program to direct efforts in artificial intelligence
• Department of Science & Technology (DST) to launch Mission on Cyber-Physical Systems
• 5 lakh wifi hotspots will be set up to provide net-connectivity to five crore rural citizens
• 10000 crore for creation and augmentation of telecom infrastructure

Defence

• Defence gets lowest allocation since 1962 i.e. 1.58% of GDP.
• Government has increased defence budget by 5.91% for FY 2018-19 to Rs 2,95,511.41 crore. An additional amount of Rs 1,08,853.30 crore has been provided for defence pension
• Government to develop two defence industrial production corridors.

Disinvestment and Gold Disinvestment & Gold

• Disinvestment target of Rs.72,500 crore exceeded and expected receipts is of Rs.1,00,000 crore.
• New disinvestment target for 2018-19 is of Rs. 80,000 crore.
• National Insurance Co. Ltd., Oriental India Insurance Co. Ltd. and United India Assurance Co. Ltd to be merged into a single entity
• Comprehensive Gold Policy to be formulated to develop gold as an asset class. Gold Monetization Scheme to be revamped to enable people to open a hassle-free Gold Deposit Account
• System of consumer-friendly and trade efficient system of regulated gold exchanges in the country will be established.

Month: Current Affairs - February, 2018