Finance Minister Shri Arun Jaitley presented on February 1, 2018 general Budget 2018-19 in Parliament. It was second time the budget was presented on first of February instead following colonial era practices of presenting the general Budget on the last working day of February. The FY 2018-19 budget mainly focuses on poor, farmers rural and job oriented growth.
MSP of Crops Increased to one and half times of production cost
In line with the government’s objective of doubling farmers’ income, the Minimum Support Price (MSP) for all hitherto unannounced crops of Kharif was raised to at least one and half times of their production cost.
Two major initiatives in health sector
(i) Health and Wellness Centre: The National Health Policy, 2017 has envisioned Health and Wellness Centres as the foundation of India’s health system. Under this 1.5 lakh centres will bring health care system closer to the homes of people. These centres will provide comprehensive health care, including for non-communicable diseases and maternal and child health services. These centres will also provide free essential drugs and diagnostic services. The Budget has allocated Rs.1200 crore for this flagship programme. Contribution of private sector through CSR and philanthropic institutions in adopting these centres is also envisaged.
(ii) National Health Protection Scheme: The second flagship programme under Ayushman Bharat is National Health Protection Scheme, which will 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.
In order to further enhance accessibility of quality medical education and health care, 24 new Government Medical Colleges and Hospitals will be set up, by up-grading 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.
Relief to Senior Citizens: Exemption of Interest Income on deposits increased to Rs 50,000
With the objective of providing a dignified life to senior citizens, the general budget proposes significant incentives for senior citizens. Presenting the General Budget 2018-19 in Parliament, the Finance Minister said that the exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000/- to Rs. 50,000/- and TDS shall not be required to be deducted on such income, under section 194A. This benefit shall be available also for interest from all fixed deposits schemes and recurring deposit schemes.
The Finance Minister also announced raising the limit of deduction for health insurance premium and/ or medical expenditure from Rs. 30,000/- to Rs. 50,000/-, under section 80D. All senior citizens will now be able to claim benefit of deduction up to Rs. 50,000/- per annum in respect of any health insurance premium and/or any general medical expenditure incurred.
Allocation for SCs And STs increased
In the General Budget 2018-19 in Parliament the total earmarked allocation for SCs in 279 programmes has been increased from Rs.34,334 crore in 2016-17 to Rs.52,719 crore in RE 2017-18. Likewise, for STs, earmarked allocation has been increased from Rs.21,811 crore in 2016-17 to Rs.32,508 crore in RE 2017-18 in 305 programmes. The Finance Minister said that earmarked allocation has been further increased to Rs.56,619 crore for SCs and Rs.39,135 crore for STs in BE 2018-19.
5.22 Crore families benefitted under Pradhan Mantri Jeevan Jyoti Beema Yojana
The Union Minister for Finance and Corporate Affairs, Shri Arun Jaitely stated that the Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJBY) has benefitted 5.22 crore families with a life insurance cover of Rs.2 lakh on payment of a premium of only Rs.330/- per annum. Likewise, under Pradhan Mantri Suraksha Bima Yojana, 13 crore 25 lakh persons have been insured with personal accident cover of Rs.2 lakh on payment of a premium of only Rs.12 per annum. The Minister further added that the Government will work to cover all poor households, including SC/ST households, under these in a mission mode. 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 ‘‘Beti Bachao Beti Padhao’’, Sukanya Samriddhi Account Scheme launched in January 2015 has been a great success. Until November, 2017 more than 1.26 crore accounts have been opened across the country in the name of girl-child securing an amount of Rs.19,183 crore, the Minister added.
Budget 2018 extends concession to MSMEs in push to formalize Indian economy
The Union Budget 2018 extended concession to micro, small and medium enterprises (MSMEs), as part of the government’s efforts to bring businesses under the formal economy’s fold. The budget proposed to cut the corporate tax rate to 25% for companies with annual revenue of up to Rs250 crore. The budget also earmarked Rs3 trillion for 2018-19 under the Pradhan Mantri Mudra Yojana or Mudra scheme. In addition, the budget provided Rs3,794 crore for credit support, capital and interest subsidy to MSMEs.
Ekalavya schools for tribal children
The Union budget has proposed that the government will launch a series of residential schools for students from the scheduled tribes (STs), in view of the social discrimination faced by tribal communities. By 2022, every block with more than 50% ST population and at least 20,000 tribal persons will have an Ekalavya Model Residential School.
Gobar-Dhan Scheme to improve lives of villagers
In an effort to make the villages open defecation free and improving the lives of villagers, the Union budget planned the launch of Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN). It will manage and convert cattle dung and solid waste in farms to compost, bio-gas and bio-CNG. The Finance Minister Shri Arun Jaitley informed while presenting budget that 187 projects have been sanctioned under Namami Gange Programme for infrastructure development, reverse surface cleaning, rural sanitation and other interventions at a cost of Rs.16, 713 crore. 47 projects have been completed and remaining projects are at various stages of execution All 4465 Ganga Grams villages on the bank of river have been declared open defecation free.
Budget guided by mission to strengthen agriculture, rural development, health, education, employment, MSME and infrastructure sectors
Government says, a series of structural reforms will propel India among the fastest growing economies of the world. Country firmly on course to achieve over 8 % growth as manufacturing, services and exports back on good growth path.
MSP for all unannounced kharif crops will be one and half times of their production cost like majority of rabi crops: Institutional Farm Credit raised to 11 lakh crore in 2018-19 from 8.5 lakh crore in 2014-15.
22,000 rural haats to be developed and upgraded into Gramin Agricultural Markets to protect the interests of 86% small and marginal farmers.
“Operation Greens” launched to address price fluctuations in potato, tomato and onion for benefit of farmers and consumers.
Two New Funds of Rs10,000 crore announced for Fisheries and Animal Husbandary sectors; Re-structured National Bamboo Mission gets Rs.1290 crore.
Loans to Women Self Help Groups will increase to Rs.75,000 crore in 2019 from 42,500 crore last year.
Higher targets for Ujjwala, Saubhagya and Swachh Mission to cater to lower and middle class in providing free LPG connections, electricity and toilets.
Outlay on health, education and social protection will be 1.38 lakh crore. Tribal students to get Ekalavya Residential School in each tribal block by 2022. Welfare fund for SCs gets a boost.
World’s largest Health Protection Scheme covering over 10 crore poor and vulnerable families launched with a family limit upto 5 lakh rupees for secondary and tertiary treatment.
Fiscal Deficit pegged at 3.5 %, projected at 3.3 % for 2018-19.
Rs. 5.97 lakh crore allocation for infrastructure
Ten prominent sites to be developed as Iconic tourist destinations
NITI Aayog to initiate a national programme on Artificial Intelligence(AI)
Centres of excellence to be set up on robotics, AI, Internet of things etc
Disinvestment crossed target of Rs 72,500 crore to reach Rs 1,00,000 crore
Comprehensive Gold Policy on the anvil to develop yellow metal as an asset class
100 percent deduction proposed to companies registered as Farmer Producer Companies with an annual turnover upto Rs. 100 crore on profit derived from such activities, for five years from 2018-19.
Deduction of 30 percent on emoluments paid to new employees Under Section 80-JJAA to be relaxed to 150 days for footwear and leather industry, to create more employment.
No adjustment in respect of transactions in immovable property where Circle Rate value does not exceed 5 percent of consideration.
Proposal to extend reduced rate of 25 percent currently available for companies with turnover of less than 50 crore (in Financial Year 2015-16), to companies reporting turnover up to Rs. 250 crore in Financial Year 2016-17, to benefit micro, small and medium enterprises.
Standard Deduction of Rs. 40,000 in place of present exemption for transport allowance and reimbursement of miscellaneous medical expenses. 2.5 crore salaried employees and pensioners to benefit.
Relief to Senior Citizens proposed:-
Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit schemes.
Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000 under section 80D.
Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in case of very senior citizens) to Rs. 1 lakh for all senior citizens, under section 80DDB.
Proposed to extend Pradhan Mantri Vaya Vandana Yojana up to March, 2020. Current investment limit proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.
More concessions for International Financial Services Centre (IFSC), to promote trade in stock exchanges located in IFSC.
To control cash economy, payments exceeding Rs. 10,000 in cash made by trusts and institutions to be disallowed and would be subject to tax.
Tax on Long Term Capital Gains exceeding Rs. 1 lakh at the rate of 10 percent, without allowing any indexation benefit. However, all gains up to 31st January, 2018 will be grandfathered.
Proposal to introduce tax on distributed income by equity oriented mutual funds at the rate of 10 percent.
Proposal to increase cess on personal income tax and corporation tax to 4 percent from present 3 percent.
Proposal to roll out E-assessment across the country to almost eliminate person to person contact leading to greater efficiency and transparency in direct tax collection.
Proposed changes in customs duty to promote creation of more jobs in the country and also to incentivise domestic value addition and Make in India in sectors such as food processing, electronics, auto components, footwear and furniture.