Union Budget 2018-19(Summary)

India achieved an average growth of 7.5% in the last three 3 years since 2014. Indian economy is now 2.5 trillion dollar economy – seventh largest in the world.  On Purchasing Power Parity (PPP) basis it is third largest economy.

‘Ease of Living’ is mentioned in the Budget.

More than 800 medicines are being sold at lower price through more than 3 thousand Jan Aushadhi Centres.

In the year 2016-17 record food grain production of around 275 million tonnes and around 300 million tonnes of fruits and vegetables was achieved. 

470 APMCs have been connected to e-NAM network and all 585 APMCs will be connected by March, 2018.

More than 86% of our farmers are small and marginal. To 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 2000 crore will be set up for developing and upgrading agricultural marketing infrastructure in the 22000 Grameen Agricultural Markets (GrAMs) and 585 APMCs.

Target of connecting all eligible habitations with an all-weather road has been brought forward to March, 2019 from March 2022. It is now time to strengthen and widen its ambit further to include major link routes which connect habitations to agricultural and rural markets (GrAMs), higher secondary schools and hospitals. Prime Minister Gram Sadak Yojana Phase III will include such linkages.

our districts can specialize in some or other agricultural produce and be known for it. There is a need to develop cluster based model in a scientific manner for identified agriculture produces in our districts in the same manner as we have developed model for industrial sector.

Organic farming by Farmer Producer Organizations (FPOs) and Village Producers’ Organizations (VPOs) in large clusters, preferably of 1000 hectares each, will be encouraged.

For the cultivation of specialized medicinal and aromatic plants and associated industry a sum of 200 crore has been allocated.

Food processing sector is growing at an average rate of 8% per annum. Allocation of Ministry of Food Processing is being doubled from 715 crore in RE 2017-18 to 1400 crore in BE 2018-19. Government will promote establishment of specialized agro-processing financial institutions in this sector.

‘‘Operation Greens’’ to be launched on the lines of ‘‘Operation Flood’’. It shall promote Farmer Producers Organizations (FPOs), agro-logistics, processing facilities and professional management. A sum of `500 crore will be allocated for this purpose.

Bamboo is ‘Green Gold’-bamboo grown outside forest areas will be removed from the definition of trees.

A Restructured National Bamboo Mission will be launched with an outlay of `1290 crore to promote bamboo sector in a holistic manner.

The facility of Kisan Credit Cards will be extended to fisheries and animal husbandry farmers.

India’s agri-exports is US $ 30 billion. State-of-the-art testing facilities in all the 42 Mega Food Parks.

Scope of Long Term Irrigation Fund would be expanded to cover specified command area development projects.

 A Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) will be set-up for fisheries sector. Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirement of animal husbandry sector. Total Corpus of these two new Funds would be `10,000 crore.

Target for institutional credit for agriculture sector has been set at `11 lakh crore for the year 2018-19.

To control Air pollution in Delhi NCR a scheme will be implemented to subsidize machinery required for in-situ crop residue.

Target under Prime Minister’s Ujjwala (free LPG cylinders) to be increased from 5 crore to 8 crore.

Prime Minister Saubhagya Yojana for providing electricity to all households of the country. Under this scheme, 4 crores poor households are being provided with electricity connection free of charge with an outlay of Rs 16000 crore.

Under Swachh Bharat Mission more than 6 crore toilets had been constructed. Government is planning to construct around 2 crore more toilets.

Under Prime Minister Awas Scheme, Rural 51 lakh houses constructed in year 2017-18 and 51 lakh houses during 2018-19. In urban areas 37 lakh houses will be constructed.

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.

Loans to Self Help Groups of women increased to about Rupees 42,500 crore in 2016-17, growing 37% over previous year. The Government is confident that loans to SHGs will increase to `75,000 crore by March, 2019.

Allocation of National Rural Livelihood Mission to 5750 crore in 2018-19.

In the year 2018-19, for creation of livelihood and infrastructure in rural areas, total amount to be spent by the Ministries will be 14.34 lakh crore, including extra-budgetary and non-budgetary resources of `11.98 lakh crore. 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.

Health, Education and Social Protection

Allocation on National Social Assistance Programme this year has been kept at `9975 crore.

To improve quality of education learning outcomes has been defined and National Survey of more than 20 lakh children has been conducted to assess the status on the ground. Education will be treated holistically without segmentation from pre-nursery to Class 12.

An integrated B.Ed. programme for teachers will be initiated. Right to Education Act amended to enable more than 13 lakh untrained teachers to get trained.

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. This 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) by 2022’’ with a total investment of `1,00,000 crore in next four years. Higher Education Financing Agency (HEFA) would be suitably structured for funding this initiative.

A specialized Railways University will be set-up at Vadodara.

Two new full-fledged Schools of Planning and Architecture, 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.

‘‘Prime Minister’s Research Fellows (PMRF)’’ Scheme would be launched this year. Under this 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.

‘‘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.

The National Health Policy, 2017 has envisioned Health and Wellness Centres as the foundation of India’s health system. These 1.5 lakh centres will bring health care system closer to the homes of people. These centres will provide comprehensive health care, including for no communicable diseases and maternal and child health services.  These centres will also provide free essential drugs and diagnostic services. 1200 crore allocated in this budget for this flagship programme.  I also invite contribution of private sector through CSR and philanthropic institutions in adopting these centres.

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.  This will be the world’s largest government funded health care programme. Adequate funds will be provided for smooth implementation of this programme.

An additional 600 crore will be allocated to provide nutritional support to all TB patients at the rate of 500 per month for the duration of their treatment.

24 new Government Medical Colleges and Hospitals will be set-up 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.

A new scheme will be launched 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 more than 1.26 crore accounts have been opened across the country in the name of girl-child securing an amount of `19,183 crore.

Under Namami Gangae, all 4465 Ganga Grams – villages on the bank of river – have been declared open defecation free.

To achieve inclusive development in 115 aspirational districts which will become model of development.

Government’s estimated schematic budgetary expenditure on health, education and social protection for 2018-19 is `1.38 lakh crore against estimated expenditure of `1.22 lakh crore in BE 2017-18.

3794 crore to MSME Sector for giving credit support, capital and interest subsidy and innovations.

It is proposed to onboard public sector banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link this with GSTN. Online loan sanctioning facility for MSMEs will be revamped for prompt decision making by the banks.

MUDRA Yojana launched in April, 2015 has led to sanction of `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 `3 lakh crore for lending under MUDRA for 2018-19.

EMPLOYMENT

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 from apparel and footwear sector.

To reduce women employees’ contribution in EPF to 8% for first three years of their employment against existing rate of 12% or 10% with no change in employers’ contribution.

The Government is setting up a model aspirational skill centre in every district of the country under Pradhan Mantri Kaushal Kendra Programme.  306 Pradhan Mantri Kaushal Kendra have been established for imparting skill training through such centers.

A comprehensive textile sector package of 7148 crore in 2018-19.

Infrastructure and Financial Sector Development

Country needs massive investments estimated to be in excess of `50 lakh crore in infrastructure to increase growth of GDP.

Using online monitoring system of PRAGATI alone, projects worth 9.46 lakh crore have been facilitated and fast tracked.

Rohtang tunnel has been completed to provide all weather connectivity to the Ladakh region.  Contract for construction of Zozila Pass tunnel of more than 14 kilometer is progressing well. I now propose to take up construction of tunnel under Sela Pass. For promoting tourism and emergency medical care, Government will make necessary framework for encouraging investment in sea plane activities.

99 SMART Cities have been selected with an outlay of `2.04 lakh crore. These Cities have started implementing various projects like Smart Command and Control Centre, Smart Roads, Solar Rooftops, Intelligent Transport Systems, Smart Parks.

Tourist amenities at 100 Adarsh monuments of the Archaeological Survey of India will be upgraded to enhance visitor experience.

The AMRUT programme focuses on providing water supply to all households in 500 cities. State level plans of `77,640 crore for 500 cities have been approved.

Under SMART city mission 482 cities have started credit rating.  144 cities have got investment grade rating.

Ambitious Bharatmala Pariyojana has been approved for providing seamless connectivity of interior and backward areas and borders of the country to develop about 35000 kms in Phase-I at an estimated cost of `5,35,000 crore.

Railways’

Railways’ Capex for the year 2018-19 has been pegged at `1,48,528 crore.  A large part of the Capex is devoted to capacity creation.  18,000 kilometers of doubling, third and fourth line works and 5000 kilometers of gauge conversion.

A ‘Safety First’ policy, with allocation of adequate funds under Rashtriya Rail Sanraksha Kosh is cornerstone of Railways’ focus on safety. 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.

Redevelopment of 600 major railway stations is being taken up by Indian Railway Station Development Co. Ltd.

Modern train-sets with state-of-the-art amenities and features are being designed at Integrated Coach Factory, Perambur. First such train-set will be commissioned during 2018-19.

An Institute is coming up at Vadodara to train manpower required for high speed rail projects.

Aviation

Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) initiated by the Government last year shall connect 56 unserved airports and 31 unserved helipads across the country. In the last three years, the domestic air passenger traffic grew at 18% per annum.

60 crores to set-up a coalition on Disaster Resilient Infrastructure for developing international good practices, appropriate standards and regulatory mechanism for resilient infrastructure development in 2018-19.

Government would initiate monetizing select CPSE assets using Infrastructure Investment Trust (InvIT) from next year.

Corporate bonds rated ‘BBB’ or equivalent are investment grade. In India, most regulators permit bonds with the ‘AA’ rating only as eligible for investment.  It is now time to move from ‘AA’ to ‘A’ grade ratings.

The Government will establish a unified authority for regulating all financial services in IFSCs in India.  International Financial Service Centre (IFSC) at Gift City has become operational.

NITI Aayog will initiate a national program to direct our efforts in the area of artificial intelligence, including research and development of its applications.

One lakh gram panchayat connection through high speed optical fiber network has been completed which will enabled broadband access to 20 crore rural Indians.

The Government also proposes to setup five lakh wi-fi hotspots which will provide broadband access to five crore rural citizens.

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.

Distributed ledger system or the block chain technology allows organization of any chain of records or transactions without the need of intermediaries.

The system of toll payments physically by cash at road toll plazas is being fast replaced with Fastags.

Estimated budgetary and extra budgetary expenditure on infrastructure for 2018-19 is being increased to `5.97 lakh crore against estimated expenditure of 4.94 lakh crore in 2017-18.

Measures will be taken to develop 2 defence industrial production corridors in the country. An industry friendly Defence Production Policy 2018 will be brought to promote domestic production by public sector, private sector and MSMEs.

Government will evolve a Scheme to assign every individual enterprise in India a unique ID.

Government will evolve a Scheme to assign every individual enterprise in India a unique ID. Government of India has identified 372 specific business reform actions to further Ease of Doing business.

Department of Commerce will be developing a National Logistics Portal as a single window online market place to link all stakeholders.

The Government has approved listing of 14 CPSEs, including two insurance companies, on the stock exchanges. The Government has also initiated the process of strategic disinvestment in 24 CPSEs. This includes strategic privatization of Air India.

Process of acquisition of Hindustan Petroleum Corporation by the ONGC has been successfully completed. 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.

The Government introduced Exchange Traded Fund Bharat-22 to raise `14,500 crore, which was over-subscribed in all segments. DIPAM will come up with more ETF offers including debt ETF.

Against the Disinvestment target of 72500 receipt of 100,000 crore was achieved. The disinvestment target of `80,000 crore for 2018-19. The programme has been integrated with an ambitious reform agenda an Enhanced Access and Service Excellence (EASE) programme. This recapitalization will pave the way for the public sector banks to lend additional credit of `5 lakh core.

Through Amendment in National Housing Bank equity will be transferred from RBI to GOI.

Reserve Bank of India Act is being amended to institutionalize an Uncollateralized Deposit Facility.

Outward Direct Investment (ODI) from India has grown to US$15 billion per annum. The Government will review existing guidelines and processes and bring out a coherent and integrated Outward Direct Investment (ODI) policy.

Separate policy for the hybrid instruments will be evolved for attracting foreign investment.

The emoluments of the President, the Vice President are proposed to be revised to `5 lakh for the President, 4 lakhs for the Vice President and to 3.5 lakh per month for the Governors. Were last revised with effect from 1st January, 2006.

A law will be passed and emoluments of MPs will automatic revise every five years indexed to inflation.

150th birth anniversary of Mahatma Gandhi will be commemorated from 2nd October, 2019 to 2nd October 2020.

Fiscal Management

Total Revised Estimates for expenditure in 2017-18 are `21.57 lakh crore as against the Budget Estimates of `21.47 lakh crore.

 Year Fiscal Deficit  % of GDP
2013-14 4.4%
2014-15 4.1%
2015-16 3.9%
2016-17 3.5%
2017-18 3.5%(5.95 lakh crore)
2018-19 3.3%

Government would accept key recommendations of 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%.

Part-B

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.

100% deduction allowed to Companies registered as Farmer Producer Companies.

As per Budget 2018-19, reduce Corporate Tax of 25% will now apply to companies who have reported turnover upto 250 crores in the financial year 2016-17( In the Union Budget this limit was 50 crores).

Beyond 250 crores turnover tax slab will be 30%.

salaried taxpayers are to be allowed a standard deduction of `40,000/- in lieu of the present exemption in respect of transport allowance and reimbursement of miscellaneous medical expenses.

Relief to senior citizen(tax)

Exemption of interest income on deposits with banks and post offices to be increased from 10,000/- to 50,000/- and TDS shall not be required to be deducted on such income, under section 194A.

Raising the limit of deduction for health insurance premium and/ or medical expenditure from 30,000/- to 50,000/-, under section 80D to all senior citizen.

Raising the limit of deduction for medical expenditure in respect of certain critical illness to `1 lakh in respect of all senior citizens, under section 80DDB.

Pradhan Mantri Vaya Vandana Yojana has been extended up to March, 2020 under which an assured return of 8% is given by Life Insurance Corporation of India. The existing limit on investment of `7.5 lakh per senior citizen under this scheme is also being enhanced to `15 lakh.

Non-corporate taxpayers operating in International financial services centre (IFSC) shall be charged Alternate Minimum Tax (AMT) at concessional rate of 9% at par with Minimum Alternate Tax (MAT) applicable for corporates.

Currently, the income of trusts and institutions is exempt if they utilise their income towards their objects in accordance with the relevant provisions of the Income-tax Act. it is proposed that payments exceeding `10,000/- in cash made by such entities shall be disallowed and the same shall be subject to tax.

Tax will be levied on long term capital gains exceeding `1 lakh at the rate of 10% without allowing the benefit of any indexation.

A tax will be introduced on distributed income by equity oriented mutual fund at the rate of 10%.

The existing Cess of 3% on Personal Income Tax and Corporate Tax will be replaced by a 4%, “Health and Education Cess”.

Old Cess of 3% consists:   primary education=2% & (Secondary +Higher Education)=1%

New Cess of 4% consists:   Health and Education cess

E-assessment introduced on pilot basis in 102 cities will be extended across the country.

I propose to increase customs duty on mobile phones from 15% to 20%, on some of their parts and accessories to 15% and on certain parts of TVs to 15%.

Education Cess and Secondary and Higher Education Cess on imported goods will be replaced by a “Social Welfare Surcharge”, at the rate of 10% of the aggregate duties of Customs to fund social welfare schemes of the Government.
The name of Central Board of Excise and Customs [CBEC] will be changed to Central Board of Indirect Taxes and Customs (CBIC).
  • Pradhan Mantri Vaya Vandana Yojana(extended upto march 2020) Pension to senior citizen at 8% by LIC on subscription amount. The subscription amount limit has been raised from 7.5 lakh to 15 lakh.
  • 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 connection.
  • MSP has been kept at one and half times the production cost.
  • Prime Minister Krishi Sampada Yojana is our flagship programme for boosting investment in food processing.
  • Last year Micro Irrigation Fund (MIF) for facilitating expansion of coverage under micro irrigation and Dairy Processing Infrastructure Development Fund (DPIDF) to help finance investment in dairying infrastructure.
  • Rashtriya Swasthya Bima Yojana (RSBY) provide annual coverage of only `30,000 to poor families.
  • a Long Term Irrigation Fund (LTIF) in NABARD for meeting funding requirement of irrigation works.
  • Certificate attestation is not mandatory, interviews for appointment in Group C and Group D.
  • Prime Minister gave a clarion call to double farmers’ income by 2022 when India celebrates its 75th year of independence.
  • To preserve and revitalize soul of the heritage cities in India, National Heritage City Development and Augmentation Yojana (HRIDAY)

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