School of Economics | Union Budget 2018: Key Highlights at a Glance
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Union Budget 2018: Key Highlights at a Glance

Finance Minister Arun Jaitley  before announcing the budget for the fiscal year 2018-19

India is the world’s fastest growing economy, said Finance Minister Arun Jaitley as he announced the Budget 2018 for the fiscal year 2018-19. Lauding the major moves to contain black money and encourage tax formalisation, he said that while GST ensured tax simplicity, demonetisation paved the way for a digital economy.

“When the Narendra Modi government took over, India was considered to be one of the fragile five economies of the world. Our government reversed the trend,” the FM said.

Here are the key highlights from Arun Jaitley’s Budget speech:

  • Introduction of GST has made indirect tax system simpler
  • Demonetisation kept a check on liquidity in the economy, promoted digital transactions
  • India is currently a USD 2.5 trillion economy and will become fifth largest economy in the world from the present seventh largest
  • Exports to grow by 17 percent in 2017-18
  • Budget 2018 will focus on strengthening agricultural and rural economy
  • LPG relief for the poor; 4 crore households to get electricity
  • Economy to grow by 7.2-7.5 percent in second half of current fiscal year
  • Emphasis on generating higher income for farmers

  • India produced over 275 million tonnes of foodgrains and 300 million tonnes of fruits and vegetables in 2016-17
  • Crop production at record high; government is committed to giving 50 percent more than cost of crop production to farmers in Budget 2018
  • Direct Benefit Transfer is a global success story
  • Government to set MSP at 1.5 times the cost of production for Kharif crops
  • Government will ensure farmers get MSP if prices fall; Niti Aayog will discuss with state governments for mechanism to ensure farmers get better prices
  • Rs 2,000 crore fund to be set up for upgrading rural agriculture markets
  • Government has promoted organic farmers in a big way; women self-help groups to be encouraged to take up organic farming
  • Agriculture ministry will reorient ongoing programmes to promote cluster-based horticulture production
  • In Budget 2018, Food processing sector growing at 8 percent; allocation for food processing ministry being doubled to Rs 1400 crore
  • India’s agriculture export potential set at $100 bn as against current $ 30 bn exports
  • Government to allocate Rs 500 crore for ‘operation green’ to promote FPOs, agricultural logistics and processing
  • Kisan credit card facility extended to fisheries and animal husbandry sectors
  • Government to restructure national bamboo mission with an outlay of Rs 1,290 crore
  • Surplus power produced by solar-powered generators used by farmers will be bought by state distribution utilities under Budget 2018
  • Institutional credit to agriculture to be raised to Rs 11 lakh crore in 2018-19
  • Govt to set up fisheries and aqua-culture infrastructure fund and animal husbandry infrastructure fund with an outlay of Rs 10,000 crore
  • Special scheme to support efforts of Haryana, Punjab, UP and Delhi to tackle air pollution through use of in-situ machinery for disposing crop residue
  • Rs 16,000 crore to be spent on providing electricity connection to 4 crore poor households
  • Govt to provide free LPG connection to 8 crore households under Ujwala scheme, up from earlier target of 5 crore
  • Over six crore toilets built under Swachh Bharat Mission; government to build another two crore toilets
  • One crore houses to be built under Pradhan Mantri Awas Yojana in rural areas
  • Government to establish a dedicated affordable housing fund under National Housing Bank for priority sector lending in Budget 2018.
  • Government to substantially increase allocation under national livelihood mission to Rs 5,750 crore in next fiscal year
  • Focus of the government will be to provide maximum livelihood projects in rural areas
  • We have managed to get children to school but quality of education still a concern
  • Education to be treated holistically without segmentation from class nursery to 12th under Budget 2018
  • By 2022, every block with more than 50 percent ST population will have Ekalvya schools at par with Navodaya Vidyalayas
  • Government to launch Prime Minister’s Research Fellow Scheme which will identify 1000 B.Tech students to do Ph.D at IITs
  • Two new schools of planning and architecture to be set up; 18 more in IITs and NIITs under Budget 2018 plan
  • Rs 1,200 crore to be allocated for Ayushman Bharat programme in 2018-19
  • Government to launch flagship National Health Protection scheme to cover 10 crore poor and vulnerable people
  • The 10 crore families will be provided Rs 5 lakh cover per family per year for treatment
  • Govt to allocate Rs 600 crore towards nutritional support of tuberculosis patients
  • Government to set up 24 new medical colleges and hospitals by upgrading district level ones under Budget 2018 plan
  • Government is slowly but steadily progressing towards universal health coverage
  • Government identifies 115 ‘aspirational districts’ to make them model districts of development
  • Government’s budget for health, education and social security increased to Rs 1.38 lakh crore for 2018-19 from Rs 1.22 lakh crore in current fiscal year
  • Rs 4.6 lakh cr sanctioned under MUDRA Scheme under Budget 2018
  • Government to soon announce scheme to address the issue of Non- Performing Assets
  • Target for loan disbursement under Mudra scheme set at Rs 3 lakh crore under Budget 2018
  • Mass formalisation of MSME sector is happening after demonetisation and GST
  • Government to take additional measures to strengthen environment for venture capitalists and angel investors
  • Employees PF Act to be amended to reduce contribution of women to 8 percent from 12 percent with no change in employer’s contribution
  • Rs 50 lakh crore needed for infrastructure building
  • Govt to allocate Rs 7,140 crore for textiles sector
  • 99 cities selected for smart cities project with an outlay of Rs 2.04 lakh crore
  • 10 prominent tourist sites to be developed as iconic tourist spots
  • National Highways exceeding 9,000-km will be completed in 2018-19
  • Over Rs 1.48 lakh crore to be allocated for railways in next fiscal
  • 36,000-km of rail track renewal targeted under Budget 2018
  • 4,267 unmanned railway crossings on broad gauge routes to be eliminated in next two years
  • Wifi, CCTVs to be progressively provided at all trains; escalators at stations with 25,000-plus footfall
  • Regional air connectivity scheme shall connect 56 unserved airports and 31 unserved helipads
  • Government to expand capacity of airports by five times to cater to one billion trips a year
  • SEBI may consider mandating large corporates to use bond market to finance one-fourth of their fund needs
  • NITI Aayog to establish a national programme for artificial intelligence
  • Government will monetise select central public sector enterprises using Infrastructure Investment Trusts
  • 5 lakh WiFi hotspots to provide broadband access to 5 crore rural people
  • Government does not consider crypto-currency as legal; will take all measures against its illegal use
  • Government to bring out industry-friendly defence production policy
  • A scheme to provide a unique ID to every enterprise on lines of Aadhaar will be developed
  • Food Corporation of India capital being restructured under Budget 2018 plan
  • Government has initiated strategic disinvestment in 24 PSUs, including Air India
  • More exchange traded funds (ETF) on offer including debt ETF under Budget 2018 plan
  • Rs 80,000 crore disinvestment target for 2018-19; Rs 1 lakh crore receipt expected in current year
  • Government to formulate a comprehensive gold policy to develop gold as an asset class; gold monetisation scheme to be revamped
  • To provide RBI an instrument to deal with excess liquidity, RBI Act and other laws being amended
  • National Insurance Co, Oriental Insurance Co and United Assurance Co to be merged into one entity and subsequently listed
  • President’s emolument raised to Rs 5 lakh, Vice President’s to Rs 4 lakh and Governors’ to Rs 3.5 lakh per month
  • New law to provide automatic revision of emoluments indexed to inflation for MPs under Budget 2018 plan
  • GST revenue for 2017-18 will be for 11 months; shortfall of non-tax revenue due to deferment of spectrum auction
  • Government earmarks Rs 150 cr to commemorate 150 years of birth of Mahatma Gandhi
  • Expenditure for 2017-18 pegged at Rs 21.57 lakh crore, as against Rs 21.8 lakh crore previously estimated
  • Fiscal deficit for 2017-18 raised to 3.5 percent of GDP as against 3.2 percent previously estimated; for FY-19 deficit pegged at 3.3 percent as against 3 percent targeted previously
  • 12.6 percent growth rate in direct taxes in FY-18
  • Rs 90,000 crore additional income tax collection in 2016-17 and 2017-18 due to measures against tax avoidance
  • Huge increase in tax returns filed; 85.51 lakh people filed returns in 2017-18, as against 66.26 lakh in 2016-17
  • Reduced corporate tax by 25 pc extended to companies with turnover of Rs 250 crore to benefit small, micro and medium enterprises
  • Rs 7,000 crore revenue forgone on account of lower corporate tax for Rs 250 crore turnover
  • Standard deduction of Rs 40,000 allowed for transport, medical reimbursement for salaried tax payers
  • Rs 8,000 crore revenue lost due to standard deduction allowed to salaried employees
  • Senior citizens allowed Rs 50,000 deduction on health insurance premium paid in a year from earlier Rs 30,000 under Budget 2018 plan
  • Rs 7.5 lakh per senior citizen limit for investment in interest-bearing LIC schemes doubled to Rs 15 lakh
  • Cash payments exceeding Rs 10,000 by trusts and institutions will be disallowed in a bid to curb cash economy
  • Strong case for long term capital gains from equities; 10 percent tax on long term capital gains in excess of Rs 1 lakh
  • Jaitley announces tax on distributed income of equity oriented mutual funds at the rate of 10 percent
  • Education cess increased to 4 percent from 3 percent to collect additional Rs 11,000 crore under Budget 2018
  • New scheme for providing electronic assessment to eliminate person-to-person contact under Budget 2018 plan
  • Customs duty on mobile phones to be hiked to 20 percent from 15 percent
  • Customs duty on raw cashew cut from 5 percent to 2.5 percent
  • Central Board of Excise and Customs renamed as Central Board of Indirect Taxes and Customs
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