Budget 2018: Sector-Wise highlights of Arun Jaitley’s Budget Speech – Finance minister Arun Jaitley is presenting in Parliament the Union Budget 2018, the Narendra Modi government’s last full budget before the 2019 Lok Sabha elections. He has the unenvious task of balancing fiscal prudence with populism to repair the rural economy and bolster growth in the Indian economy.
Jaitley’s budget speech is expected to focus on agriculture, rural economy and unveil measures to drive private investment in the Indian economy, all the while maintaining the fiscal deficit target.
Here are the latest updates on Arun Jaitley’s budget speech in Parliament:
TAX PROPOSALS:
■ Huge increase in number of tax returns filed
■ Budget reduces tax rate to 25% for companies who have a reported turnover of up to Rs250 crore. This will benefit the entire MSME sector, which accounts for 99% of the companies filing their tax returns. Revenue foregone is Rs7,000 crore.
■ Long-term capital gains on listed equity shares exceeding Rs one lakh to be taxed at 10%; gains grandfathered till 31 January 2018
■ E-assesment: To almost eliminate any person-to-person contact:
■ 100% tax deduction for farmer produce societies for five years; will also encourage Operation Green
■ Income from capital gains in real estate: no adjustment when circle rate does not exceed 5% of considerations
■ MSMEs: Benefit of reduced 25% corporate tax rate extended to firms with turnover of Rs1.25 crore
■ Salaried taxpayers: no changes to I-T structure for individuals
■ Higher medical reimbursement and travel allowance limit at Rs40,000 for salaried taxpayers
■ Tax sops for senior citizens: interest on fixed deposits above up to Rs 50,000 exempted
■ Health and education cess: To be increased by 1%
■ Indirect taxes: First tax after GST rollout
■ Customs duty: To be increased to 20% for mobile phones
■ To abolish education cess on imported goods and instead place social welfare surcharge of 10%
FISCAL SITUATION:
■ Govt to get GST revenue for 11 months; there will be shortfall of non-tax revenue
■ Government breaches fiscal deficit target for 2017-18. Budget estimate 3.2% of GDP, revised estimate 3.5% of GDP.
■ Government revises fiscal consolidation glide path. Fiscal deficit target for 2018-19 now at 3.3% of GDP against earlier target of 3% of GDP.
■ To accept key recommendations of FRBM panel on debt
INFRASTRUCTURE AND FINANCIAL SECTOR:
■ Three public sector insurance companies—The Oriental Insurance Company Ltd, National Insurance Company Ltd, United India Insurance Company Ltd— will be merged into a single insurance company and listed
■ Emoluments for MPs: to refix allowances from 1 April 2018; automatic revision every 5 years indexed to inflation
■ Emoluments of President, VP to be revised to Rs5 lakh and Rs4 lakh per month respectively; Rs3.5 lakh for governors
■ Regulated gold exchanges; gold monetization scheme to be revamped
■ Introduction of e-governance initiatives in central ministries
■ To allow strong RRBs to raise capital from market
■ Disinvestment: have exceeded target; revised target at Rs1 trillion; target of Rs80,000 for FY19
■ ETF Bharat 22: Dipam will continue with more ETF offers including debt ETF
■ Commerce dept to develop national logistic portal
■ Mahatma Gandhi’s 150th birth anniversary to be celebrated next year; national panel chaired by PM has been constituted; Rs150 crore corpus
■ Aadhaar: To assign every individual enterprise and unique ID
■ Bond market: To move from AA to A-grade ratings
■ Government moves to remove stamp duty from financial transactions, a long-standing demand
■ A unified regulator announced for IFSC, Giftcity
■ Sebi will mandate that corporate India uses bond market to meet 1/4 of their funding needs
■ Government to use selected InvITs for infrastructure funding
■ NHAI would transfer the road projects into SPVs to use innovative structures such as infrastructure trusts for fund mobilisation
■ Sebi norms amended to give more freedom to levy penalties for infractions
■ Global economy transforming into digital economy
■ Govt does not consider cryptocurrency as legal tender
■ Government will take all measures to prevent use of crypto-assets to finance illegitimate activities
■ To explore use of blockchain in governance
■ To move to pay-and-use toll system
■ NITI Aayog to set up programme to direct efforts in AI and research
■ Jaitley says India Infra Corporation to raise funds for infra development, health and education
■ Defence: To bring out and industry-friendly defence production policy
■ Digital India: allocation doubled to Rs373 crore
■ Railways: Rs1.48 trillion capital expenditure for railways, up marginally from Rs1.31 trillion in 2017-18
■ Committed to further enhance public investment
■ Developing connectivity infra in border areas
■ To encourage investment in seaplane activities
■ Urbanization: Propose to develop 10 tourist sites into iconic sites
■ Railways: moving towards optimal electrification; doubling of 18,000 km of rail tracks; safety-first policy is a cornerstone; increasing use of technology; to eliminate more than 4,000 unmanned railway crossings
■ Railways: 600 railways stations to be redeveloped and equipped with wifi, CCTV cameras, 25,000 escalators
■ Railways: All railway stations to be given Wi-Fi and TVs; Mumbai transport system to be expanded and augmented at Rs11,000 crore
■ Railways: First new generation trainset to be rolled out by Integrated Coach Factory in 2018-19
■ Aviation: proposes to expand airport capacity five times to handle 1 billion trips
■ Telecom: Government proposes to set up 5 lakh wifi-hotspots that will provide internet to five crore rural citizens in 2018-19
■ Government provided Rs10,000 crore for creation and augmentation of telecom infrastructure in 2018-19
■ Department of Telecom will support the setting up of indigenous 5G center at IIT Chennai
MSME AND EMPLOYMENT:
■ MSME sector has seen formalization after GST and demonetization. This has led to creation of a big database. This will be used to enable easier credit to these units
■ Online loan sanctioning to be revamped
■ To on board PSU banks on MSME bill discounting platform and link it with Goods & Service Tax Network
■ To announce proposal to effectively address NPAs of MSMEs
■ NBFCs stepped up financing MSME financing post demonetisation
■ Mudra Yojana: Rs4.6 trillion has been sanctioned; to set up a target of Rs3 trillion under Mudra
■ VC funds and angel investors: To take additional measures to strengthen environment
■ Govt to contibute 12% of new employees’ EPF for three years
■ To reduce women’s contribution to EPF to 8% for first three years of employment
■ Textile sector: Outlay of Rs7,148 crore
HEALTH, EDUCATION AND SOCIAL PROTECTION:
■ Finance minister launches national health protection scheme to give Rs5 lakh a year health cover to 10 crore poor families under the largest such state funded scheme in the world
■ Steadily progressing towards universal health coverage
■ As per the national health policy 2017, health and wellness centres will be launched. Around 1.5 lakh centres will provide free essential drugs, maternal and child services. The finance ministry allocated Rs1,200 crore for this flagship programme.
■ Tuberculosis: to allocate Rs600 crore to give nutritional support to all TB patients
■ To set up 24 new govt medical colleges and hospitals by upgrading existing district hospitals
■ Govt will expand coverage under Jan Dhan Yojana
■ SCs and STs: To increase allocation in programmes to Rs56,600 crore and Rs39,100 crore respectively
■ 1.5 lakh health centres to provide comprehensive healthcare; committing Rs1,200 crore
■ Govt to launch PM’s research fellows to identify 1,000 best BTech students
■ Quality of education a cause of concern; defined learning outcomes through national survey of more than 20 lakh children
■ Scheme for revitalizing school infrastructure, with an allocation of Rs.1 trillion over four years . RISE – Revitalizing Infrastructure in School Education – scheme will be financed via a restructured higher education financing agency
■ Propose to treat education holistically
■ To start integrated B.Ed programme for teachers
■ To increase digital intensity in education; to move from black board to digital board
■ By 2022, every block with more than 50% ST population to have Ekalavya model residential school
■ To launch ‘the revitalizing of infra and systems in education’ with Rs1 trillion corpus
POOR AND MIDDLE CLASS:
■ The poor and middle-class are a case study in themselves
■ 8 crore poor women to be given free gas connections
■ More than 6 crore toilets have been built; around 2 crore toilets more to be constructed in FY19
■ Every poor person to have own house by 2022
■ Dedicated affordable housing fund to be set up
■ To increase allocation to National Livelihood Mission by Rs5,750 crore
■ Rs2,600 crore to groundwater irrigation
■ In 2018-19, Rs14.34 trillion to be spent by ministries for livelihood promotion in rural areas
AGRICULTURE AND RURAL ECONOMY:
■ Credit to agriculture targeted at Rs 11 trillion– a 10% rise over 2017-18 target
■ In upcoming Kharif season minimum support prices of crops to be decided at 50% over costs. This was a major demand of farmers
■ NITI Aayog to prepare an institutional mechanism to ensure farmers get benefit of support prices, either through procurement or paying them the difference between market prices and MSPs
■ Finance minister Arun Jaitley announces a scheme to support governments of Delhi-NCR in tackling high levels of air pollution.
■ Favourable taxation treatment to farmer produce organizations
■ Fisheries and aquaculture, animal husbandry devt fund to be set up: corpus of Rs10,000 crore
■ A plan targeted at farmers to generate solar power and purchasing surplus electricity.
■ Finance minister Arun Jaitley’s budget speech extols the benefits of Pradhan Mantri Sahaj Bijli Har Ghar Yojana (Saubhagya) scheme.
■ To launch restructured national bamboo mission with Rs1,290 crore
■ Propose to extend facility of kisan credit cards to fisheries and animal husbandry
■ Agri exports to be liberalized
■ Operation Green to be launched with corpus of Rs500 crore; to address production and price fluctuations in onion, potatoes and tomatoes
■ Food-processing sector: allocation to ministry doubled to Rs1,400 crore
■ Our govt has promoted organic farming; women self-help groups to be encouraged to take up organic farming in clusters
■ Cluster based model of horticulture to be developed to assist group of farmers from production to marketing
■ Finance minister announces creation of Rs 2000 crore agriculture market infrastructure fund to connect 22,000 rural markets to the electronic national agriculture market (e-NAM) platform
■ More than 86% farmers are small and marginal; we will upgrade existing rural haats into grameen agricultural markets
■ Govt to make institutional mechanism for demand forecast, prices
■ PM gave a clarion call to double farmers’ incomes by 2022; we want to help farmers to help produce more: FM
INTRODUCTION:
■ Our govt has ensured benefits reach eligible beneficiaries: FM
■ From ‘ease of doing business’ to ‘ease of living’ for the people: FM
■ Budget to focus on agriculture and rural economy, taking care of senior citizens, infra creation, improving quality of education: FM
■ Manufacturing sector back on growth path, we are firmly on track to achieve high growth of 8%-plus: FM
■ Indian economy is now a $2.5 trillion economy: FM
■ As a result of govt reforms, FDI has gone up, there is a premium on honesty: FM
■ When we took over, India was considered part of the ‘Fragile Five’. We have reversed this: FM
■ Jaitley: Four year ago, we pledged to the people of India to give a honest, clean govt
■ Finance minister Arun Jaitley has started speaking in Parliament.
