Union Finance Minister Shri Arun Jaitley on February 1, 2018, presented the UNION BUDGET 2018-19. Here are the detailed factual features of Union Budget 2018-19:
- Indian economy is now 2.5 trillion dollar economy – seventh largest in the world. India is expected to become the fifth largest economy very soon.
- On Purchasing Power Parity (PPP) basis, we are already the third largest economy.
- ‘Minimum Government and Maximum Governance’ vision has inspired Government agencies in carrying out hundreds of reforms in policies, rules and procedures. This transformation is reflected in improvement of India’s ranking by 42 places in last three years in the World Bank’s ‘Ease of Doing Business’ with India breaking into top 100 for the first time.
- Government is providing free LPG connections to the poor of this country through Ujjwala Yojana. Under Saubhagya Yojna 4 crore household are being provided with electricity connections. More than 800 medicines are being sold at lower price through more than 3 thousand Jan Aushadhi Centres.
- Certificate attestation is not mandatory, interviews for appointment in Group C and Group D posts have been done away with. These measures have saved time and money of lakhs of our youth.
Agriculture
- In th eyear 2016-17 India has achieved a record food grain production of around 275 million tonnes and around 300 million tonnes of fruits and vegetables.
- Government has decided to keep MSP for the all unannounced crops of kharif and rabi at least at one and half times of their production cost.
- Niti Ayog, in consultation with Central and State Governments, will put in place a fool-proof mechanism so that farmers will get adequate price for their produce.
- Government will develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs). In these GrAMs, physical infrastructure will be strengthened using MGNREGA and other Government Schemes. These GrAMs, electronically linked to e-NAM and exempted from regulations of APMCs, will provide farmers facility to make direct sale to consumers and bulk purchasers.
- An Agri-Market Infrastructure Fund with a corpus of Rs. 2000 crore will be set up for developing and upgrading agricultural marketing infrastructure in the 22000 Grameen Agricultural Markets (GrAMs) and 585 APMCs.
- Prime Minister Gram Sadak Yojana Phase III will include Major link routes which connect habitations to agricultural and rural markets (GrAMs), higher secondary schools and hospitals.
- Women Self Help Groups (SHGs) will also be encouraged to take up organic agriculture in clusters under National Rural Livelihood Programme.
- Government shall support organized cultivation and associated industry. It will allocated a sum of Rs. 200 crore for this purpose.
- Allocation of Ministry of Food Processing is being doubled from Rs. 715 crore in RE 2017-18 to Rs. 1400 crore in BE 2018-19. Prime Minister Krishi Sampada Yojana is a flagship programme.
- Government proposes to launch an ‘Operation Greens’ on the lines of ‘‘Operation Flood’’. ‘‘Operation Greens’’ shall promote Farmer Producers Organizations (FPOs), agri-logistics, processing facilities and professional management. A sum of Rs. 500 crore allocated for this purpose.
- India’s agri-exports potential is as high as US $ 100 billion against current exports of US $ 30 billion. To realize this potential, export of agri-commodities will be liberalized.
- The facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital needs. Small and marginal farmers will get more benefits.
- Bamboo is ‘Green Gold’. Recently government removed bamboo grown outside forest areas from the definition of trees. Now it will launch a Re-structured National Bamboo Mission with an outlay of Rs. 1290 crore to promote bamboo sector in a holistic manner.
- A Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for fisheries sector and an Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirement of animal husbandry sector will be set up with the total Corpus of Rs. 10,000 crore.
- The volume of institutional credit for agriculture sector has been increased to Rs. 11 lakh crore for the year 2018-19 from Rs. 10 lakh crore in 2017-18.
- A special Scheme will be implemented to support the efforts of the governments of Haryana, Punjab, Uttar Pradesh and the NCT of Delhi to address air pollution and to subsidize machinery required for insitu management of crop residue.
- Ujjwala scheme target increased from 5 crore to 8 crore, providing free connection poor women.
- Government is planning to construct around 2 crore toilets.
- Under Prime Minister Awas Scheme Rural, 51 lakhs houses in year 2017-18 and 51 lakh houses during 2018-19 which is more than one crore houses will be constructed exclusively in rural areas. In urban areas the assistance has been sanctioned to construct 37 lakh houses.
- Government will also establish a dedicated Affordable Housing Fund (AHF) in National Housing Bank, funded from priority sector lending shortfall and fully serviced bonds authorized by the Government of India.
- Increase in allocation of National Rural Livelihood Mission to Rs. 5750 crore in 2018-19.
- Ground water irrigation scheme under Prime Minister Krishi Sinchai Yojna- Har Khet ko Pani will be taken up in 96 deprived irrigation districts where less than 30% of the land holdings gets assured irrigation presently. I have allocated `2600 crore for this purpose.
- In the year 2018-19, for creation of livelihood and infrastructure in rural areas, total amount to be spent by the Ministries will be Rs. 14.34 lakh crore, including extra-budgetary and non-budgetary resources of `11.98 lakh crore. Apart from employment due to farming activities and self employment, this expenditure will create employment of 321 crore person days, 3.17 lakh kilometers of rural roads, 51 lakh new rural houses, 1.88 crore toilets, and provide 1.75 crore new household electric connections besides boosting agricultural growth.
Education
- An integrated B.Ed. programme for teachers will be initiated.
- To increase the digital intensity in education government will move gradually from ‘‘black board’’ to ‘‘digital board’’. Technology will also be used to upgrade the skills of teachers through the recently launched digital portal ‘‘DIKSHA’’.
- By the year 2022, every block with more than 50% ST population and at least 20,000 tribal persons, will have an Ekalavya Model Residential School. Ekalavya schools will be on par with Navodaya Vidyalayas and will have special facilities for preserving local art and culture besides providing training in sports and skill development.
- ‘Revitalising Infrastructure and Systems in Education (RISE)‘ will be launched by 2022’’ with a total investment of Rs. 1,00,000 crore in next four years.
- Two new full-fledged Schools of Planning and Architecture will be set up, to be selected on challenge mode.
- Additionally, 18 new SPAs would be established in the IITs and NITs as autonomous Schools, also on challenge mode.
- The Government would launch the ‘‘Prime Minister’s Research Fellows (PMRF)’’ Scheme this year. Under this, government would identify 1,000 best B.Tech students each year from premier institutions and provide them facilities to do Ph.D in IITs and IISc, with a handsome fellowship.
Health and Social
- -Two major initiatives as part of ‘Ayushman Bharat’ programme aimed at making path breaking interventions to address health holistically, in primary, secondary and tertiary care system covering both prevention and health promotion.
- Government 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.
- Additional Rs 600 crore allocation to provide nutritional support to all TB patients at the rate of Rs. 500 per month for the duration of their treatment.
- Government will be set up 24 new Government Medical Colleges and Hospitals by upgrading existing district hospitals in the country. This would ensure that there is at least 1 Medical College for every 3 Parliamentary Constituencies and at least 1 Government Medical College in each State of the country.
- Government will launch a Scheme called ‘Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN)’ for management and conversion of cattle dung and solid waste in farms to compost, fertilizer, bio-gas and bio-CNG.
- The Government will expand the coverage under Prime Minister Jan Dhan Yojana by bringing all sixty crore basic accounts within its fold and undertake measures to provide services of micro insurance and unorganized sector pension schemes through these accounts.
- Under Sukanya Samriddhi Account Scheme launched in January 2015, until November, 2017 more than 1.26 crore accounts have been opened across the country in the name of girlchild securing an amount of Rs. 19,183 crore.
- All 4465 Ganga Grams – villages on the bank of river – have been declared open defecation free.
- To give focused attention and to achieve vision of an inclusive society, the Government has identified 115 aspirational districts taking various indices of development in consideration.
- Government’s estimated schematic budgetary expenditure on health, education and social protection for 2018-19 is Rs. 1.38 lakh crore against estimated expenditure of Rs. 1.22 lakh crore in BE 2017-18.
Medium, Small and Micro Enterprises (MSMEs) and Employment
- It has been proposed to onboard public sector banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link this with GSTN.
- MUDRA Yojana launched in April, 2015 has led to sanction of Rs. 4.6 lakh crore in credit from 10.38 crore MUDRA loans. 76% of loan accounts are of women and more than 50% belong to SCs, STs and OBCs. It is proposed to set a target of Rs. 3 lakh crore for lending under MUDRA for 2018-19 after having successfully exceeded the targets in all previous years.
- The Government will contribute 12% of the wages of the new employees in the EPF for all the sectors for next three years. Also, the facility of fixed term employment will be extended to all sectors.
- The Employees Provident Fund and Miscellaneous Provisions Act, 1952 will be amended to reduce women employees’ contribution to 8% for first three years of their employment against existing rate of 12% or 10% with no change in employers’ contribution.
- 306 Pradhan Mantri Kaushal Kendra have been established for imparting skill training.
Infrastructure and Financial Sector Development
- Under Smart Cities Mission 99 Cities have been selected with an outlay of Rs. 2.04 lakh crore.
- Railway: A ‘Safety First’ policy, with allocation of adequate funds under Rashtriya Rail Sanraksha Kosh is cornerstone of Railways’ focus on safety. Maintenance of track infrastructure is being given special attention. Over 3600 kms of track renewal is targeted during the current fiscal. Other major steps include increasing use of technology like ‘‘Fog Safe’’ and ‘‘Train Protection and Warning System’’. A decision has been taken to eliminate 4267 unmanned level crossings in the broad gauge network in the next two years.
- The Government will establish a unified authority for regulating all financial services in IFSCs in India.
- Department of Science & Technology will launch a Mission on Cyber Physical Systems to support establishment of centres of excellence. Allocation on Digital India programme has been doubled to Rs. 3073 crore in 2018-19.
- To harness the benefit of emerging new technologies, particularly the ‘Fifth Generation’ (5G) technologies and its adoption, the Department of Telecom will support establishment of an indigenous 5G Test Bed at IIT, Chennai.
- In order to create employment and aid growth, Government’s estimated budgetary and extra budgetary expenditure on infrastructure for 2018-19 is being increased to Rs. 5.97 lakh crore against estimated expenditure of Rs. 4.94 lakh crore in 2017-18.
Building Institutions and Improving Public Service Delivery
- The Government will evolve a Scheme to assign every individual enterprise in India a unique ID.
- To carry the business reforms for ease of doing business deeper and in every State of India, the Government of India has identified 372 specific business reform actions.
- Three public sector general insurance companies National Insurance Company Ltd., United India Assurance Company Limited and Oriental India Insurance Company Limited will be merged into a single insurance entity and will be subsequently listed.
- Disinvestment target: 2017-18 Budget Estimates for disinvestment were pegged at the highest ever level of Rs. 72,500 crore. It has already exceeded the budget estimates. Government is assuming receipts of Rs. 1,00,000 crore in 2017-18. The disinvestment target for 2018-19 is Rs. 80,000 crore .
- Bank recapitalization program has been launched with bonds of Rs. 80,000 crore being issued this year. The programme has been integrated with an ambitious reform agenda, under the rubric of an Enhanced Access and Service Excellence (EASE) programme. This recapitalization will pave the way for the public sector banks to lend additional credit of Rs. 5 lakh crore.
- -The Government will formulate a comprehensive Gold Policy to develop gold as an asset class.
- -Outward Direct Investment (ODI) from India has grown to US$15 billion per annum.
- –The emoluments of the President, the Vice President and the Governors were last revised with effect from 1st January, 2006. These emoluments are proposed to be revised to Rs. 5 lakh for the President, Rs. 4 lakhs for the Vice President and to Rs. 3.5 lakh per month for the Governors.
Fiscal Estimates
- Total Revised Estimates for expenditure in 2017-18 are Rs. 21.57 lakh crore (net of GST compensation transfers to the States) as against the Budget Estimates of Rs. 21.47 lakh crore.
- Fiscal Deficit was brought down to 4.1% in 2014-15 to 3.9% in 2015-16, and to 3.5% in 2016-17. Revised Fiscal Deficit estimates for 2017-18 are Rs. 5.95 lakh crore at 3.5% of GDP. Fiscal Deficit for the year 2018-19 has been projected 3.3% of GDP.
- Key recommendations of the Fiscal Reform and Budget Management Committee relating to adoption of the Debt Rule and to bring down Central Government’s Debt to GDP ratio to 40% accepted.
Tax Proposals
- The growth in direct taxes up to 15th January, 2018 is 18.7%.
- The average buoyancy in personal income tax of seven years preceding these two years comes to 1.1. In simple terms tax buoyancy of 1.1 means that if nominal GDP growth rate of the country is 10%, the growth rate of personal income tax is 11%.
- In financial year 2016-17, 85.51 lakhs new taxpayers filed their returns of income as against 66.26 lakhs in the immediately preceding year.
- This number of effective tax payer base increased from 6.47 crores at the beginning of F.Y.14-15 to 8.27 crores at the end of F.Y.16-17.
- Hundred per cent deduction to Farmer Producer Companies companies registered as Farmer Producer Companies and having annual turnover up to Rs. 100 crores in respect of their profit derived from such activities for a period of five years from financial year 2018-19.
- Benefit of reduced corporate rate of 25% to be extended to companies who have reported turnover up to Rs. 250 crore in the financial year 2016-17.
- Income Tax: Income tax data analysis suggests that major portion of personal income-tax collection comes from the salaried class. For assessment year 2016-17, 1.89 crore salaried individuals have filed their returns and have paid total tax of Rs. 1.44 lakh crores which works out to average tax payment of Rs. 76,306/- per individual salaried taxpayer. As against this, 1.88 crores individual business taxpayers including professionals, who filed their returns for the same assessment year paid total tax of Rs. 48,000 crores which works out to an average tax payment of Rs. 25,753- per individual business taxpayer.
- A standard deduction of Rs. 40,000/- in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses in income tax.
Senior Citizen Exemptions
- Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000/- to Rs. 50,000/- and TDS shall not be required to be deducted on such income, under section 194A.
- Raised the limit of deduction for health insurance premium and/ or medical expenditure from Rs.30,000/- to Rs.50,000/-, under section 80D. All senior citizens will now be able to claim benefit of deduction up to Rs.50,000/- per annum in respect of any health insurance premium and/or any general medical expenditure incurred.
- Raised the limit of deduction for medical expenditure in respect of certain critical illness from, Rs. 60,000/- in case of senior citizens and from Rs. 80,000/- in case of very senior citizens, to Rs. 1 lakh in respect of all senior citizens, under section 80DDB.
To control Cash Economy
- In order to have audit trail of the expenses incurred by trusts entities, it is proposed that payments exceeding Rs. 10,000/- in cash made by such entities shall be disallowed and the same shall be subject to tax.
Capital Gain Tax
- To tax long term capital gains exceeding Rs. 1 lakh at the rate of 10% without allowing the benefit of any indexation. However, all gains up to 31st January, 2018 will be grandfathered.
- A new tax on distributed income by equity oriented mutual fund at the rate of 10%.
Health and Education Cess
- The existing three per cent education cess will be replaced by a four per cent “Health and Education Cess” to be levied on the tax payable. This will enable us to collect an estimated additional amount of Rs. 11,000 crores.
Indirect Taxes
- Customs duty on mobile phones increased from 15% to 20%, on some of their parts and accessories to 15% and on certain parts of TVs to 15%.
- Customs duty on raw cashew reduced from 5% to 2.5%.
- Education Cess and Secondary and Higher Education Cess on imported goods abolished.
- A Social Welfare Surcharge, at the rate of 10% of the aggregate duties of Customs, on imported goods imposed.
