Finance Minister Arun Jaitley Presented the Union Budget 2018-

19
On February 1, 2018, Union Minister for Finance and Corporate Affairs,
Arun Jaitley presented Union Budget 2018-19 in Parliament.

Quick Facts about Union Budget:

Union Budget of India is referred to as the Annual Financial Statement in

the Article 112 of the Constitution of India.

 Till 2016, it was presented on the last working day of February. In 2017,
it was presented on February 1, so that it could be materialized before
the commencement of new financial year in April.
 Union Finance Minister presents the Budget by means of the Finance bill
and the Appropriation bill which comes into effect from April 1 (the
start of India’s financial year), after being passed by both the Houses of
Parliament.
 From 2017, Railway Budget was merged with General Budget.
 First Union budget of independent India was presented by K.
Shanmukham Chettyon November 26, 1947.
 Till Date, Morarji Desai has presented Union Budget for highest
number of times (10 times).

Focus Areas of Union Budget 2018: To strengthen agriculture, rural

development, health, education, employment, Micro Small and Medium
Enterprises (MSME) and infrastructure sectors.

Highlights of Union Budget 2018

Agriculture

Minimum Support Price (MSP) for all unannounced kharif crops and majority of
Rabi Crops will be at least 1.5 times of their production cost.

 Volume of institutional credit for agriculture sector will be raised to Rs. 11

lakh crore for the year 2018-19 (as compared to Rs. 10 lakh crore in
2017-18).
 Jaitley Jaitley announced setting up Animal Husbandry Infrastructure
Development Fund (AHIDF) for financing infrastructure requirement of
animal husbandry sector and Fisheries and Aqua culture
Infrastructure Development Fund (FAIDF) for fisheries sector. Total
corpus for these two funds will be Rs.10000 crore.
 “Operation Greens” will be launched to address the challenge of price
volatility of perishable commodities like tomato, onion and potato.
Financial outlay for this initiative will Rs 500 Crore.
 Existing 22000 rural haats will be developed and upgraded to Gramin
Agricultural Markets (GrAMs) which will be electronically linked to
‘National Agriculture Market’ portal (e-NAM) and exempted from
regulations of agricultural produce market committee (APMCs). GrAMs will
benefit 86% of small and marginal farmers by providing them facility to
make direct sale to consumers and bulk purchasers.
 Agri-Market Infrastructure Fund (with a corpus of Rs.2000 crore) will
be setup for developing and upgrading agricultural marketing
infrastructure in 22000 Grameen Agricultural Markets (GrAMs) and 585
APMCs.
 All APMCs will be connected to e-NAM network by March, 2018.
 Rs 200 crore has been allocated for organized cultivation of highly
specialized medicinal and aromatic plants.
 Government will encourage organic farming by Farmer Producer
Organizations (FPOs) and Village Producers’ Organizations (VPOs) in large
clusters (preferably of 1000 hectares each).
 Allocation of Ministry of Food Processing has been doubled from
Rs.715 crore in 2017-18 to Rs.1400 crore in 2018-19.
 A Re-structured National Bamboo Mission (with an outlay of Rs.1290
crore) to promote bamboo sector in a holistic manner has been
announced. Jaitley referred to Bamboo as ”Green Gold”.
 Rs 2600 crore has been allocated for 96 deprived irrigation districts Under
Prime Minister Krishi Sinchai Yojna-Har Khet ko Pani.
 Facility of Kisan Credit Cards will be extended to fisheries and animal
husbandry farmers, which shall help them to meet their working capital
needs.
 Export of agri-commodities will be liberalized.
 All the forty two Mega Food Parks will get state-of-the-art testing
facilities.
  Jaitley announced a special Scheme to support the efforts of the
governments of Punjab, Haryana, Uttar Pradesh and Delhi to address air
pollution in the Delhi-NCR region by subsidizing machinery required for
management of crop residue.

Important Allocations:

Volume of institutional credit for agriculture sector

Rs. 11 lakh crore
will be raised to:

Operation Greens Rs. 500 crore

Organized cultivation of highly specialized medicinal

Rs. 200 crore
and aromatic plants

Allocation of Ministry of Food Processing Rs.1400 crore

Re-structured National Bamboo Mission Rs. 1290 crore

96 deprived irrigation districts Under Prime Minister

Rs 2600 crore
Krishi Sinchai Yojna-Har Khet ko Pani

Rural Economy & Livelihood:

In 2018-19, all Union Ministries will spend Rs. 14.34 lakh crore for
creation of livelihood and infrastructure in rural areas.

 This expenditure will create employment of 321 crore person days, 3.17
lakh km of rural roads, 51 lakh new rural houses, 1.88 crore toilets and
will provide 1.75 crore new household electric connections
 Loans to Self Help Groups of women will increase to Rs.75000 crore by
March, 2019.
 Allocation of National Rural Livelihood Mission has been increased to Rs
5750 crore in 2018-19.
 Under Ujjwala Scheme, free LPG connections will be given to 8 crore poor
women instead of the previous target of 5 crore women.
Important Allocations:

Amount to be spent by all Union Ministries for

Rs. 14.34 lakh crore
creation of livelihood and infrastructure in rural areas

Loans to Self Help Groups of women will be

Rs. 75000 crore
increased to:

Allocation of National Rural Livelihood Mission Rs. 5750 crore

Education and Social Protection:

For 2018-19, estimated budgetary expenditure on health, education

and social protection is Rs.1.38 lakh crore. For 2017-18, it was Rs.1.22
lakh crore.

 Ekalavya Model Residential School (on par with Navodaya Vidyalayas) will
be set up by 2022 to provide the best quality education to the tribal
children in their own environment.
 “Revitalising Infrastructure and Systems in Education (RISE) by
2022‟ with a total investment of Rs. 100000 crore (in next four years)
has been announced. Objective of this initiative is to step up investments
in research and related infrastructure in premier educational institutions,
including health institutions. Higher Education financing Agency
(HEFA) will be set up to look after the funding for this initiative.
 “Prime Minister’s Research Fellows (PMRF)” Scheme will be
launched, under which, 1000 best B.Tech students will be identified each
year and will be provided facilities to undertake Ph.D in IITs and IISc.
These students will be given generous fellowship amount.

Health & Social Protection:

Mr. Jaitley announced National Health Protection Scheme to provide

health coverage upto 5 lakh rupees to 10 crore poor and vulnerable
families. This is being termed as world’s largest government funded
health care programme.

 Rs 1200 crore has been committed for the National Health Policy, 2017,
for bringing 1.5 lakh Health and Wellness Centres closer to the homes of
people.
 600 crore has been allocated to provide nutritional support to all TB
patients at the rate of Rs.500 per 10 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.
 Under Namami Gange Programme, 187 projects (entailing Rs.
16713 crore cost) have been sanctioned for infrastructure
development, rural sanitation, river surface cleaning and other
interventions.
 Allocation on National Social Assistance Programme this year has been
kept at Rs. 9975 crores.

Important Allocations:

Estimated budgetary expenditure on health, education

Rs. 1.38 lakh crore
and social protection

Allocation for National Health Policy, 2017 Rs. 1200 crore

Allocation to provide nutritional support to all TB

Rs. 600 crore
patients

Allocation on National Social Assistance Programme Rs. 9975 crore

Medium, Small and Micro Enterprises (MSMEs):

Rs. 3794 crore has been allocated for giving credit support, capital and interest
subsidy and for innovations in MSMEs.

 For 2018-19, target of Rs. 3 lakh crore has been set for lending Micro
Units Development and Refinance Agency (MUDRA) loans.

Employment Generation:

Citing an independent study, Mr. Jaitley stated that 70 lakh formal jobs will be
created in 2018-19.

 Government will contribute 12% of the wages of the new employees in

Employees Provident Fund (EPF) for all the sectors for next three years.
 It has been proposed to make amendments in the EPF and Miscellaneous
Provisions Act, 1952 to reduce women employees’ contribution to 8% for
first three years of their employment against existing rate of 12% or 10%
with no change in employers’ contribution.
 Outlay for the textiles sector in 2018-19 will be Rs.7148 crore.
Infrastructure Development:

For 2018-19, budgetary allocation on infrastructure has been increased

to Rs.5.97 lakh crore against estimated expenditure of Rs.4.94 lakh crore in
2017-18.

 In a bid to boost tourism, ten prominent tourist sites will be developed

into Iconic Tourism destinations.
 Approval for 35000 kms road construction under Phase-I
Bharatmala Programme has been granted. Estimated cost will be
Rs.535000 crore.

Railways:

For the year 2018-19, Railways Capital Expenditure has been pegged at
Rs.148528 crore.

 4000 kilometers of electrified railway network will be commissioned in

near future.
 During 2018-19, 12000 wagons, 5160 coaches and approximately 700
locomotives will be procured.

Important Allocations:

Total allocation on infrastructure Rs.5.97 lakh

Railways Capital Expenditure Rs.148528 crore

Air Transport:

Under a new initiative ‘NABH Nirman’, current airport capacity will be

expanded by more than five times to handle a billion trips a year.

 56 unserved airports and 31 unserved helipads would be connected under

the Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik).

Digital Economy:

NITI Aayog will initiate a national program to direct efforts in artificial

intelligence.

 A Mission on Cyber Physical Systems to support establishment of centres

of excellence for research, training and skilling in robotics, artificial
intelligence, digital manufacturing, big data analysis, quantum
communication and internet of things will be launched by Department of
Science & Technology.
  For 2018-19, allocation on Digital India programme has been
doubled to Rs 3073 crore.
 Five lakh wifi hotspots will be set up to provide net connectivity to five
crore rural citizens.
 For 2018-19, Rs. 10000 Crore has been allocated for creation and
augmentation of Telecom infrastructure.

Defence:

India’s defence budget has been hiked by 7.81% to Rs 295511

crore from Rs 274114 crore last year

Development of two defence industrial production corridors has been proposed.

 Industry friendly Defence Production Policy 2018 will be brought

out to promote domestic production by public sector, private sector and
MSMEs.

Fiscal Management:

Revised Estimates for expenditure in 2017-18 are Rs.21.57 lakh

crore (net of GST compensation transfers to the States).

 For 2018-19, Total Expenditure will be Rs. 17.25 lakh crore.

 Jaitley has projected a Fiscal Deficit of 3.3% of Gross Domestic
Product (GDP) for the year 2018-19.
 It has been proposed to accept key recommendations of the Fiscal Reform
and Budget Management Committee to bring down Central Government’s
Debt to GDP ratio to 40%.
 Number of Effective Tax Payers has increased from 6.47 crore at the
beginning of Financial year 2014-15 to 8.27 crore at the end of 2016-17.
 Companies registered as Farmer Producer Companies, with an annual
turnover upto Rs. 100 crore will be eligible for 100 per cent deduction on
profit for a period of five years from financial year 2018-19.
 For Corporate Tax, it has been proposed to extend the reduced
rate of 25 percentcurrently available for companies with turnover of less
than 50 crore (in Financial Year 2015-16), also to companies reporting
turnover up to Rs. 250 crore in Financial Year 2016-17.
 Salaried tax payers have been allowed a Standard Deduction of
Rs. 40,000 in place of the present exemption allowed for transport
allowance and reimbursement of miscellaneous medical expenses.
 This year, there are no changes in the structure of income tax of
individuals.
 For senior citizens, exemption of interest income on deposits with banks
and post offices are proposed to be increased from Rs. 10,000 to Rs.
50,000.
  Long Term Capital Gains exceeding Rs. 1 lakh will be taxed at the
rate of 10 percent.
 It has been proposed to increase the cess on personal income tax and
corporation tax to 4 per cent from the present 3 percent. The new cess
will be called the “Health and Education Cess” and is aimed to take
care of the education and health care needs of Below Poverty Line (BPL)
and rural families.
 Customs duty on mobile phones has been increased from 15 percent to
20 percent. This is an attempt to incentivise ‘Make in India’.
 Education Cess and Secondary and Higher Education Cess on imported
goods will be abolished and will be replaced by Social Welfare Surcharge
at the rate of 10 percent of the aggregate duties of Customs, on imported
goods.
 It has been proposed to change the name of the Central Board of
Excise and Customs (CBEC) to the Central Board of Indirect Taxes
and Customs (CBIC).

Miscellaneous:

A unified authority for regulating all financial services will be established in

International Finance Service Centre (IFSCs) in India.

 Gold Trading: Policy will be formed to promote Gold as an asset class.

Regulated Gold exchanges will be established. Gold Monetisation scheme
will be revamped.
 Disinvestment target for 2018-19 is Rs.80000 crore.
 Three Public Sector Insurance companies – National Insurance Co.
Ltd., United India Assurance Co. Ltd., and Oriental India insurance
Co. Ltd., will be merged into a single insurance entity.
 Monthly emoluments of President, Vice President and Governor
have been revised to Rs. 5 lakh, Rs. 4 lakh and Rs. 3.5 lakh.
 For emoluments paid to the Members of Parliament, it has been proposed
to make necessary changes to refix the salary and allowances with effect
from April 1, 2018. Besides, the law will also provide for automatic
revision of emoluments every five years.
 150 crore has been set aside for the activities leading to the
commemoration programme to celebrate the 150 Birth Anniversary of
Mahatma Gandhi on October 2, 2019.
 Pradhan Mantri Vaya Vandana Yojana (under which an assured return of 8
per cent is given by Life Insurance Corporation of India) will be extended
up to March, 2020.