Union Budget India 2018-19: Boost to Infrastructure, Agriculture and More

Union Budget India 2018-19 Loanbaba

The Union Budget for India 2018-19 was recently laid out by the honourable Finance Minister, Mr. Arun Jaitley on 1 February 2018. His opening speech welcomed India’s growth at an average of 7.2% to 7.5% in the second half of 2017-2018. This year’s budget mainly focused on strengthening of the agricultural and rural economy, infrastructure, senior citizens, healthcare, education, transport, and other reforms. The intention of the budget this time was to uphold the value of “ease of living” than “ease of doing business”.

The fiscal deficit estimated for 2017-18 is 3.5 per cent of the GDP (gross domestic product) or Rs. 5.95 lakh crore. The fiscal deficit for 2018-19, is expected to be 3.3 per cent. The expenditure bill for 2017-18 is Rs 21.57 lakh crore.

Below given are the key highlights of the Union Budget 2018-19, India:

  1. Agricultural, Animal Husbandry and Fishery Sector
  • As a commitment toward the welfare of farmers, there would be measures to double the income of farmers by 2022.
  • In the upcoming Kharif season, the MSP (Minimum Support Price) of all crops may increase to 1.5 times that of the production cost. A fund of Rs. 2,000 crore shall be set up by the government to develop agricultural markets.
  • Rs 2,600 crore will be provided for groundwater irrigation. Agri exports will be liberalized.
  • Rs 500 crore will be dedicated to Operation Green to address price fluctuation and the production of tomatoes, onions, and potatoes.
  • Allocation for the food processing ministry went up to Rs. 1400 crore from Rs. 715 crore. GRAM (Grameen Agricultural Market) is going to offer farmers the means to sell directly to the buyers.
  • Fisheries fund of Rs 140,000 crore for the seafood industry.
  • A total corpus of Rs. 10,000 crore will be set for agriculture, animal husbandry, and fishery. Restructured National Bamboo Mission will see an allocation of Rs. 1290 crore.
  • Credit for agricultural activities went up to Rs. 11 lakh crore from Rs. 10 lakh crore.
  1. Housing and Infrastructure
  • The budget streamlined aspirations of equipping poor people with houses to live in by 2022. It also targeted to construct 2 crore toilets by the next financial year.
  • 5 lakh WiFi hotspots are to be set up in the rural areas for providing better and easy internet access.
  • A 7 lakh km rural roads plan will be a huge boost to the construction industry.
  • Bharatmala project for better road connectivity has been approved at Rs. 5.35 lakh crore to complete 35,000 kms.
  • Rs 5.97 lakh crore will be spent on infrastructure growth in India.
  • To provide for the livelihood of rural India, Rs. 14.34 lakh crore will be spent to build infrastructure.
  • AMRUT programme to focus on the water supply to households in at least 500 cities. There would be water supply contracts for 494 projects amounting to Rs. 19,428 crore.
  1. Taxation, Cess, Subsidy and Custom Duty
  • 100 per cent tax deduction is enabled for the first 5 years to companies with a turnover of Rs. 100 crore and above, but these companies must be registered as farmer producer companies.
  • The proposal laid for extending the benefit of the reduced corporate rate of 25% to companies with turnover of up to Rs. 250 crore. 7000 crore revenue will be forgone for the reduced corporate tax on the MSMEs.
  • No changes were made to the structure of income tax for individuals. However, a standard deduction of Rs. 40,000 applies for salaried individuals in lieu of transport and medical allowance. Another medical reimbursement for hospitalization will continue.
  • There would be an increase in education and health cess to 4%.
  • Textiles subsidy under TUFs is up 18% at Rs 7,140 crore.
  • There would be an increase from 15 per cent to 20 per cent in custom duty levied on mobile phones and for some other mobile and television parts, the customs duty will be up to 15%.
  • Income from capital gains in real estate: There will be no adjustment when the circle rate does not exceed 5 per cent of considerations.
  • Proposal to tax long term capital gains, which exceed Rs. 1 lakh in listed stock at 10 per cent. Gains grandfathered till 31 January 2018. Short term capital gains remain at 15%.

Read More: Income Tax Slab 2018-19

  1. Credit Facilities and Systems
  • The SME loan sanctioning system will be revamped. Information needed to sanction the loan shall now be linked with GSTN. All information can be referred to from the GSTN portal.
  • It was announced that loans to self-help groups will be increased to Rs. 75,000 crore by March 2019.
  • 1 crore houses under PMAY (Pradhan Mantri Gramin Awaas Yojana) will be promising for lenders.
  • Rs 3 lakh crore was dedicated to PM MUDRA Yojana.
  • PSU banks’ recapitalization will enable them to lend Rs. 5 lakh crore.
  1. Healthcare Sector
  • One of the largest health programmes in the world, the budget outlined a National Health protection scheme of Rs 5 lakh per family per year for 10 crore poor families and 50 crore beneficiaries, for the purpose of secondary and tertiary care hospitalization.
  • To offer nutritional support to patients of TB (tuberculosis), Rs. 600 crore as aid was announced.
  • A flagship programme will encompass Rs. 1200 crore for health wellness centres. Around 1.5 lakh centres will offer free essential drugs, and child and maternal services.
  1. Investments and Savings
  • Rs. 50,000 additional benefit has been dedicated for senior citizens for investments in medi-claim.
  • FD (Fixed deposit) and post office interest will now be exempted till Rs. 50,000. Thus, the 80D benefit is enhanced to Rs. 50,000.
  • The contribution of women reduced to 8 per cent to Provident Fund in the first 3 years of new EPF accounts. 12% of EPF (Employees Provident Fund) contribution for new employees in every sector will be done by the government.
  1. Education Sector
  • Technology will be enhanced to improve the educational experience. Integrated B.Ed programmes will be introduced for teachers.
  • A scheme (RISE – Revitalizing Infrastructure in School Education) of Rs 1 lakh crore will be provided in the next 4 years to revitalize research-based education.
  • 18 new schools to be set up for planning and architecture. Railway University was proposed in Vadodara. By 2022. Eklavya schools shall be started for every block that has more than 50 per cent of the Scheduled Tribe population.
  • One medical college will be dedicated to every three constituencies.
  • By upgrading existing district hospitals, there is a plan to set up at least 24 new hospitals and new government medical colleges.
  1. Railway and Other Transportation and Tourism Sector
  • Capital expenditure for the Indian Railways for 2018-19, is Rs 1, 48,528 crores.
  • 600 major railway stations will undergo redevelopment, instalment of wifi, CCTV cameras, and 25,000 escalators.
  • First, a new-generation trainset will be rolled out by Integrated Coach Factory in 2018-19.
  • Mumbai’s transport system will be expanded. For Bengaluru, a suburban network of 160 km is planned. Rs 11,000 crore is dedicated to the Mumbai rail network. Rs 17,000 crore is dedicated to Bengaluru Metro Network.
  • An institute will be established in Vadodara for the purpose of a bullet train programme training people.
  • UDAN will connect at least 56 un-served airports in India. The government plans to multiply the nation’s 124 airports by 5 times this number.
  • The proposal announced the development of 10 prominent tourist destinations to Iconic tourism destinations.
  1. Disinvestment Programme
  • The government insurance companies (The Oriental Insurance Company Ltd, National Insurance Company Ltd, United India Insurance Company Ltd), will be merged into a single entity. This will be listed on the stock exchange and made a part of the disinvestment programme.
  • There was a collection of Rs. 1 lakh crore, which exceeded the disinvestment target.
  • The divestment target for FY19 is Rs 80,000 crore.
  1. Tackling Pollution
  • Special schemes will be formed to address air pollution affecting the Delhi-NCR region. Also, the removal of crop residue will be subsidized to take care of the pollution problems caused by the burning of crop residue.
  • 187 projects were sanctioned under the Namami Gange Programme.
  1. Government Administration Pay Structure
  • Emoluments of Vice President, President, and Government have been revised to Rs. 4 lakhs, Rs 5 lakhs, and Rs. 3.5 lakhs per month, respectively.
  • The re-fix allowances payable to MPs will be revised every 5 years.
  • Indexed to inflation, there would be a revision of MPs’ emoluments, every 5 years.
  1. Other Measures
  • The government will remove stamp duty from financial transactions. The government will also use selected InvITs for infrastructure funding. The government will also explore the use of blockchain in governance.
  • Introduction of e-governance initiatives in central ministries.
  • Sebi norms were amended to provide greater freedom to levy penalties for infractions. Sebi will also see to it that corporate India uses the bond market to meet 1/4 of funding needs.
  • Bond market: Move from AA to A-grade ratings.
  • A unified regulator was announced for IFSC, the Gift city.
  • Ujwala will provide 8 crore, women, with new LPG connections.
  • Encouragement to strong RRBs to raise capital from the market.
  • Digital India: The allocation has been doubled to Rs373 crore.
  • The Commerce Department will develop a national logistic portal.
  • Revamp will be initiated for regulated gold exchanges and gold monetization schemes.
  • The government will provide each enterprise in India with a unique ID on par with Aadhaar regulations.
  • 372 basic business reform actions have been identified, and every state has to take up these reforms, as needed.
  • ETF Bharat 22: Dipam shall continue with more ETF offers with debt ETF.
  • Cryptocurrency will not be considered legal tender in India. The government will take steps to eliminate any illegitimate use of Cryptocurrency. No announcements have been made about Cryptocurrency investment.

Stay tuned at Loanbaba.com for more news and reactions on Union Budget India 2018-19. Do share your opinions and views in the comment section.

You may also like...