Finance Minister Arun Jaitley presented the Union Budget 2018-19 in Parliament on Thursday. With a focus on the rural economy and farmers, the government proposed a string of measures for the agriculture sector. He also announced a new national health insurance scheme, set to be the largest government-funded programme in the world, which will cover 10 crore poor and marginalised families, translating to 50 crore beneficiaries.
This was the last full Budget of the Prime Minister Narendra Modi government ahead of elections to eight state Assemblies this year, and before the 2019 Lok Sabha polls.
Express Explained | Breaking down the Budget in 20 questions
Agriculture and rural economy
Rural poor is focus, cost is breach of fiscal target
In the 35 minutes of Jaitley’s 105-minute Union Budget speech there were 38 references to the word “agri,” 39 mentions of the word “farm,” 35 references to “rural.” It had a clear political overtone: to reinforce the Narendra Modi government as one with pro-poor credentials and dissipate mounting pressure to address discontent over falling farm income and economic slowdown. Read more here.
Assurance on MSP but for govt, rural is more about infrastructure than agriculture
The Union Budget Thursday promised that the minimum support prices (MSP) for all crops will be fixed so as to guarantee farmers a 50 per cent return over their production cost. And that the Centre would ensure that farmers will “get the full benefit of the announced MSPs”. Read more here.
Fertiliser subsidy may slip on rising oil prices
Rising global oil prices could lead to the Centre’s fertiliser subsidy Bill overshooting the budget estimate (BE) of Rs 70,079.85 crore for the coming fiscal, even as the Narendra Modi government is unlikely to allow the rates paid by farmers to increase in its last year ahead of the general elections in 2019. Even for the current fiscal, the Centre had budgeted a figure of Rs 70,000 crore, which has, however, been slashed to Rs 64,973.50 crore in the revised estimates (RE). Read more here.
Farmer companies reap benefits, tax holiday for 5 years
The five-year tax holiday for Farmer Producer Organisations (FPOs) with turnover of Rs 100 crore, announced by Finance Minister Arun Jaitley in his Budget speech on Thursday, addresses a longpending demand and is aimed at helping the farmers get better prices for their produce. Read more here.
Another Rs 1,000-crore push for irrigation
Carrying forward the work it started in the Union Budget two years ago, the government has made an additional allocation of almost Rs 1,000 crore for extending and strengthening irrigation facilities, and improving groundwater management in rural areas. Read more here
Defence gets 1.58% of GDP, lowest allocation since 1962
While the government has increased the defence budget by 5.91 per cent for FY 2018-19 to Rs 2,95,511.41 crore, the allocation is estimated at around 1.58 per cent of the country’s GDP — the lowest since 1962. An additional amount of Rs 1,08,853.30 crore has been provided for defence pensions. Click here to know more.
Also read | Rising costs in Railways worrying signal
Big investment in island nations, with eye on maritime diplomacy
A quiet maritime strategic diplomacy has emerged as the key theme of this year’s Union budget, as the government has allocated large sums of money — hitherto meant for key neighbouring countries. Read more here.
10.5% hike for MHA, gets Rs 92,000 crore
Union Home Ministry’s budgetary provisions have been pegged at over Rs 92,600 crore for the next fiscal, a hike of 10.5 per cent over 2017-18, with a special emphasis on improving infrastructure of the police forces. Rs 1,750 crore has been allocated for the development of border infrastructure, amidst tension along the Indo-Pak and Sino-Indian borders. Click here to know more.
Capital spending pegged at Rs 1.5 lakh crore for railways
The Railways may chart a course to spend the highest ever plan size in Budget 2018-19 with sources pegging a figure close to Rs 1.5 lakh crore of capital expenditure. Unlike the last Budget, the Railways will allocate resources on broad categories while detailed projects will be fitted into them later, sources said. Click here for more.
10 per cent market tax in name of helping real economy
Jaitley announced 10 per cent taxation on long-term capital gains exceeding Rs 1 lakh arising from sale of listed equity shares or units of equity-oriented mutual funds. He suggested this as part of a strategy to route business surpluses to manufacturing and real economy sectors, away from financial assets. Here’s what this means.
Accounted for 11 months, GST revenue to fall Rs 50K crore short
With the government accounting for 11 months of revenues under GST for 2017-18, it said it would face a shortfall of Rs 50,000 crore in revenue under the indirect tax regime in the current financial year. The government has pegged GST revenue for the current financial year at Rs 4.45 lakh crore, and for 2018-19 at Rs 7.44 lakh crore. Click to read more.
E-way bill system for transport of goods on hold
The government deferred Thursday the rollout of an e-way bill system for inter-state movement of goods exceeding Rs 50,000 in value and 10 km in travel. Here’s why.
Mobiles to cars to fruit juice, imports costlier
The Union Budget for 2018-19 proposes a hike in customs duty on 46 items including mobile phones, automobiles and components, imitation jewellery, video game consoles, smart watches, electronic items such as TV/LED panels and fruit juice, a move aimed at protecting the domestic industry. The hiked duty on the wide range of items is estimated to result in revenue flow of about Rs 6,000 crore annually, officials said. See the full list here.
BharatNet Project: FinMin proposes allocation of Rs 8,175 crore to complete phase-II
To further promote the Centre’s BharatNet project for providing broadband services in 2.5 lakh gram panchayats of the country, the finance ministry has proposed an allocation of Rs 8,175 crore, which will be used towards completing the second phase of the programme under which 1.5 lakh gram panchayats will be covered. Click for more.
Airports and connectivity
Govt to raise airport capacity to handle 1 billion trips a year
Apart from its push to expand airport infrastructure in priority areas to promote the regional connectivity scheme, the Centre has also proposed expansion of airport capacity by more than five times to handle a billion trips a year, compared with nearly 180 million trips now. Click to know how much domestic passenger traffic grew last year.
Govt allocates Rs 1,014.09 crore for Northeast aviation infrastructure
The finance ministry announced an allocation of Rs 1,014.09 crore for the upcoming financial year towards revival of 50 airports and viability gap funding for improving aviation infrastructure in the area under the flagship regional connectivity scheme. This amount is nearly five times the allocation of Rs 200.11 crore as per the revised estimates of 2017-18. Click for more.
Rs 4,469 crore for two new aircraft
The Union Budget for 2018-19 has earmarked Rs 4,469.50 crore for “purchase of two new aircraft for special extra section flight operations”, out of the ministry’s total allocation of Rs 6,602.86 crore. This is one of the highest allocations for the Ministry of Civil Aviation.
Despite farm push, govt spending slowest in three pre-poll years
For 2018-19, the Budget Estimate for total expenditure of the Centre is pegged at Rs 24.42 lakh crore with an increase of Rs 2.24 lakh crore or 10.1 per cent over the revised estimates of 2017-18. Read more here.
Banks get a breather as firms told to tap bonds
What this means is that some of India’s top business houses, which had traditionally been borrowing huge amounts from local banks, will increasingly need to go out to the bond market and raise funds from investors local and foreign. Click to know more.
E-assessment: Transparency push for companies, individuals
Finance Minister Arun Jaitley announced introduction of e-assessment for all taxpayers in 2018-19 Budget. The government said that by amending the Income-tax Act, a “team-based assessment with dynamic jurisdiction” will be rolled out across the country that will almost eliminate person-to-person contact. Read more here.
Health: Rs 5 lakh health cover for 10 crore poor, prescription awaited
The showpiece of the Modi government’s pre-poll Budget Thursday is an ambitious National Health Protection Scheme (NHPS) for over 10 crore “poor and vulnerable” families — an estimated 50 crore individual beneficiaries — with coverage of up to Rs 5 lakh per family per year. Described as “the world’s largest government-funded healthcare programme.” here’s what’s in store.
Education: Loans to replace infra grants to IITs and IIMs
Centrally funded institutions (CFIs) such as IITs, IIMs, NITs, and central universities will no longer receive budget grants for expanding and building new infrastructure. Instead, financing will be moved to Higher Education Funding Agency (HEFA), set up by the government last year to mobilise funds from the market and offer 10-year loans to CFIs. More, here.
Little on offer for women, say experts
Home for every poor by 2022, dedicated fund for housing
Union Finance Minister Arun Jaitley on Thursday said that his government has fixed a target so that “every poor of this country may have his own house by 2022.” Under the Prime Minister Awas Yojana, 51 lakh houses will be constructed exclusively in rural areas.In urban areas, the assistance has been sanctioned to construct 37 lakh houses. Click to know more.
MAT relief for resolution of stressed companies, but experts want more
The government will amend the Income Tax Act in order to provide relief with respect to Minimum Alternate Tax (MAT) and carry forward of losses by companies undergoing insolvency proceedings. Here’s what the industry thinks about this.
Corporate tax on SMEs with up to 250 crore turnover cut to 25%
In a big boost to the small and medium enterprises, the finance minister Arun Jaitley announced a reduction in corporate tax rate from existing 30 per cent to 25 per cent, for companies with turnover of up to Rs 250 crore. Read more here.
Some PSU assets to be monetised via InvIT route
Jaitley said that some assets of public sector units will be monetised through the infrastructure investment trust (InvIT) route. He also proposed a unified regulator for financial services in International Financial Service Centre (IFSC) at Gift City. Click here for more.
Centre tweaks start-up definition to include non-tech ventures
The Union Budget for 2018-19 has not only extended tax exemption for start-ups by two years but also changed the definition to widen the ambit beyond technology-related venture. Startups that are incorporated on or after April 1st, 2016 but before April 1st, 2021 will be eligible for this benefit. Click to know more.
Day after budget: 10% tax, fiscal slip; Market wakes up rattled, slides over 800 points
Personal Income Tax: Tax slabs unchanged; sops for senior citizens
Finance Minister Arun Jaitley said the government had decided not to change the structure of personal income tax, as it has made many “positive changes” in the last three years. Know more here.
A comprehensive gold policy to be formulated
The centre will formulate a comprehensive gold policy in order to develop it as an asset class, finance minister Arun Jaitley announced on Thursday in his Budget speech. He added that the Central government is going to revamp the gold monetisation scheme and develop “trade-efficient system of regulated gold exchanges in the country”. Click to know more about the policy.
Lock-in period for capital gains from property sale increased from 3 to 5 years
Finance Minister Arun Jaitley proposed to increase the investment tenure of capital gains arising out of sale of land or building into bonds issued by National Highways Authority of India or by Rural Electrification Corporation from the existing three years to five years. Read more here.
To end stubble-burning and fight pollution, a scheme for farmers
Acting on its promise of taking concrete measures to put a stop to stubble burning in states such as Haryana and Punjab — a major cause of air pollution in north India in October and November — the Centre Thursday announced a ‘special scheme’ to encourage farmers in these states to shift to alternative ways of dealing with agricultural waste. Click to read more
Focus on women, kids as Delhi Police get Rs 1,048 cr more
The Delhi Police has been allocated Rs 7,426 crore in the 2018-19 annual budget — an increase of Rs 1,048 crore over the current year. In the coming financial year, the force is planning a separate building for the Special Police Unit for Women and Children (SPUWAC) in Nanakpura as well as technology to improve investigation into cyber crimes and financial frauds. Click to read more
President, Vice President, governors & MPs get hike
The passage of the Finance Bill in March will be followed by amendments to four Bills to effect a salary increase for President, Vice President, Governors and MPs, as announced by Finance Minister Arun Jaitley in the Budget on Thursday. Know how much they will earn here
What Rashtrapati Bhavan, SC, other institutions got
Even with a larger paycheck for the President of India, the overall budgeted expenditure for the President’s House has come down from Rs 66 crore last year to Rs 60.05 crore this time. As per the revised estimates for 2017- 18, Rashtrapati Bhavan spent Rs 57.45 crore in the last fiscal. Read more here