- MSP for farmers of kharif crops to be at least 1.5 times of cost of production
- Ayushman Bharat: 1.5 lakh health and wellness centres to be established under Ayushman Bharat
- National Health Protection Scheme: To cover 10 crore families, 50 crore beneficiaries by providing them up to Rs 5 lakh per family, per year. This will be the world’s biggest state-funded healthcare programme
- Health sector growth to propel job creation
- Rs 14.34 lakh crore to be spent in 2018-19 for creation of livelihood and infrastructure in rural areas
- Infrastructure allocation enhanced to Rs 5.97 lakh crore — transport sector gets all-time high allocation
- Railway’s capex for 2018-19 pegged at Rs 1,48,528 crore — only a third of this will be funded from the general exchequer. The rest to be funded via borrowings and monetisation of assets
- 12% EPF to be provided for new employees for the next 3 years. Women to get a reduced slab at 8%, with employer contribution remaining the same for 3 years
- Standard deduction of Rs 40,000 for salaried employees
- Corporate tax rate cut to 25% from current 30% for companies with annual turnover of up to Rs 250 crore
- 70 lakh formal jobs created in the past year
- Fiscal deficit projected at 3.3% of GDP
- Growth projected at 7.5% in second half of fiscal 2017-18
- Forecast of 7.4% growth next year as services resume high growth rates of 8%-plus, exports expectedly grow at 15% in 2017-18, and manufacturing back on a good growth path.
On February 1, 2018, Finance Minister Arun Jaitley presented the Union Budget for fiscal 2018-19 in Parliament, outlining the achievements of the government led by Prime Minister Narendra Modi and what is expected to be achieved in the next fiscal. Below we present the main takeaways of key sectors covered by the Budget.
- MSP for all unannounced kharif crops will be at least 1.5 times their production cost like most rabi crops
- Restructured National Bamboo Mission gets Rs 1,290 crore
- 100% deduction proposed for companies registered as Farmer Producer Companies, with an annual turnover up to Rs 100 crore on profit derived from such activities, for five years from 2018-19
- “Operation Greens” has been launched to address price fluctuations in potato, tomato and onion for the benefit of farmers and consumers. It has an allocation of Rs 500 crore
- 22,000 rural haats to be developed and upgraded into Gramin Agricultural Markets to protect the interests of 86% small and marginal farmers so to enable them to directly sell to consumers and bulk purchasers
- Agri-Market Infrastructure Fund has a corpus of Rs 2,000 crore — for developing and upgrading agricultural marketing infrastructure in the 22,000 Grameen Agricultural Markets (GrAMs) and 585 APMCs
- Institutional credit for agriculture has been raised to Rs 11 Lakh crore for 2018-19 from Rs 10 Lakh crore in 2017-18
- Cluster farming and organic farming are to be promoted and latter linked to the NRLPS
- Rs 11 lakh crore has been allocated for instant farm credit
- Rs 200 crore has been allocated for enhancing infrastructure connectivity for the agriculture sector
- Rs 2,600 crore has been allocated under the Prime Minister Krishi Sinchai Yojna to provide assured irrigation in 96 deprived irrigation districts
- For the revitalisation of highly specialised medicinal and aromatic plants and associated industry, Rs 200 crore support is being given
- Operation Green to be launched along the lines of Operation Flood with a corpus of Rs 500 crore and will focus on provision of agri-logistics.
- Emphasis has been put on food processing to increase farmers’ incomes and the allocation has been doubled this fiscal
- Removal of crop residue to be subsidised so as to encourage institutional management to tackle the air pollution in Delhi, Haryana and Punjab
- Kisan credit cards have been extended to fisheries and animal husbandry farmers to meet their working capital needs
Fisheries and Animal Husbandary
- Emphasis has been put on developing agri-allied sectors like fisheries and animal husbandry
- The facility of Kisan Credit Cards (KCC) has been extended to fisheries and animal husbandry farmers
- Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for fisheries sector and an Animal Husbandry Infrastructure Development Fund (AHIDF) for financing infrastructure requirement of animal husbandry sector have been announced with a total corpus of these two new funds at Rs 10,000 crore
- 51 lakh new taxpayers filed income tax returns in 2017-18
- Growth in direct taxes (April 2017-January 2018) is at 18.7%
- Taxpayer base has risen from 6.47 crore in 2014-15 to 8.27 crore in 2016-17
- Excess revenue from personal income tax is at Rs 90,000 crore
- Corporate tax rate has been reduced to 25% from the current 30% in case of companies that have an annual turnover of up to Rs 250 crore
- Reduced corporate tax will benefit 99% of firms, which are mostly MSMEs
- It will also benefit about 7,000 companies directly. The government will forego revenue of about Rs 7,000 crore
- There is a 100% deduction for farmer-producer companies, with up to Rs 100 crore turnover
- Employees Provident Fund Act will be amended to reduce contribution of women to 8% from the current 12%, with no change in employer’s contribution
- For senior citizens, the exemption of interest income for deposits in banks and post offices (including TDS) will be increased from Rs 10,000 to Rs 50,000
- Senior citizens will now be able to claim the benefit of a deduction of Rs 50,000 for medical insurance. For critical illnesses, the deduction has been increased to Rs 1 lakh
- A standard deduction of Rs 40,000 for transport and medical reimbursements for salaried individuals has been proposed. This will cost the government revenue of Rs 8,000 crore
- Two initiatives have been announced under the ‘‘Ayushman Bharat’’ programme aimed at making path breaking interventions to address health holistically, in primary, secondary and tertiary care system.
- National Health Protection Scheme to cover over 10 crore families (approx. 50 crore beneficiaries) by providing them up to 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.
- Under the National Health Policy, 2017, 1.5 lakh centres to be established around the country. The flagship programme has a budget of 1200 crore. 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.
- Rs 600 crore allocated for provision of nutritional care of Rs. 500 per day to TB patients
- To enhance accessibility of quality medical education and health care, 24 new government medical colleges and hospitals to be set up by upgrading existing district hospitals
- This ensures that there is at least 1 medical college for every 3 parliamentary constituencies and at least 1 government medical college in each state.
- By the year 2022, every block with more than 50% ST population and at least 20,000 tribal persons to have Ekalavya Model Residential Schools. These schools will have special facilities for preserving local art and culture besides providing training in sports and skill development.
- Integrated BEd programme to be launched for improving quality of teachers. Right to Education Act amended to enable more than 13 lakh untrained teachers to get trained.
- Use of technology in class-room education through ‘Black board to Digital Board’ and in teacher training through the e-portal, ‘Deeksha’
- 1,000 best B-tech students to be selected for PhD under PM Research Fellow Scheme
- 1 lakh crore allotted for Revitalizing School Infrastructure in Education (RISE) over a period of 4 years.
SC-ST & Senior Citizens
- Allocation of Rs 56,619 crore for SC welfare and Rs 39,135 crore for ST welfare has been made
- No TDS for senior citizens on fixed deposits or post office deposits for up to Rs 50,000.
- 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
- Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs 30,000 to Rs 50,000 under Section 80D
MSMEs & Employment
- Rs 3,794 crore has been allocated to the MSME sector for giving credit support, capital and interest subsidy and innovations
- Rs 3 lakh crore has been proposed as lending target for MUDRA for 2018-19 to enhance financial access
- NBFCs to review refinancing policy and eligibility criteria set by MUDRA for better refinancing
- Additional measures to be taken to strengthen the growth and successful operation of Venture Capital Funds and the angel investors in India
- Government to contribute 12% of the wages of the new employees in the EPF for all the sectors for next three years.
- Amendments proposed in the Employees Provident Fund 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.
- Corporate tax reduced to 25% for companies earning less than 250 crore
- Infrastructure allocation has been enhanced to Rs 5.97 lakh crore
- The transport sector is to get an all-time high allocation of Rs 1,34,572 crore
- To develop disaster resilient infrastructure, an allocation of Rs 60 crore has been made
- The Nabh Nirman initiative has been announced to expand airport capacity and 10 iconic tourism destinations will be developed
- The allocation for Digital India has been doubled, with a mission on cyber physical systems set to be launched
- Rs 10,000 crore has been provided for the creation and augmentation of telecom infrastructure
- Online monitoring system Pragati is helping track infrastructure projects valued at Rs 9.46 lakh crore
Rural Infrastructure & Welfare for Poor
- Rs 14.34 lakh crore will be spent in 2018-19 for livelihood and infrastructure in rural areas
- Apart from agricultural employment and self-employment, this fund will generate employment of 321 crore person days, 3.17 lakh kilometres of rural roads, 51 lakh new rural houses, 1.88 crore toilets, and it will also provide 1.75 crore new household electric connections
- Also, the allocation for National Rural Livelihood Mission has been raised to Rs 5,750 crore in 2018-19
- Rs 2,600 crore allocated under Prime Minister Krishi Sinchai Yojna to provide assured irrigation in 96 deprived irrigation districts
- Under Swachh Bharat Mission, more than more than 6 crore toilets have already been constructed. A further 2 crore toilets are to be constructed
- Pradhan Mantri Ujjwala Yojana started with a target of providing free LPG connections to about 5 crore poor women. Due to its success and pace of implementation, the target has been revised to 8 crore poor women
- Pradhan Mantri Saubhagya Yojana is proving free electricity connections to 4 crore poor households. The government is spending Rs 16,000 crore on the scheme
- 115 aspirational districts have been identified and the government will work on improving the quality of life l by investing in social services like health, education, skill upgrade, portable drinking water, among many other provisions in an accelerated and time bound manner.
- Under the first phase of the BharatNet project, 1 lakh gram panchayats have been connected to high-speed broadband
- Rs 10,000 crore has been allocated to set up 5 lakh Wi-Fi hotspots to provide broadband access to five crore rural citizens
- Railway’s Capex for the year 2018-19 has been pegged at Rs 1,48,528 crore
- 600 major railway stations to be redeveloped
- All stations with more than 25,000 footfalls will have escalators
- All stations and trains to be progressively provided with wi-fi
- CCTVs to be provided at all stations and on trains to enhance security
- Over 3,600 km of track renewal is targeted during 2018-19
- 4,267 unmanned level crossings (broad gauge) to be eliminated over next two years
- 4,000 km of railway network to be commissioned for electrification during 2017-18
- 12,000 wagons, 5,160 coaches and approximately 700 locomotives will be procured in 2018-19.
- Work on Eastern and Western Dedicated Freight Corridors is in full swing
- Mumbai and Bengaluru rail networks are being expanded
- First modern train-sets will be commissioned during 2018-19
- An institute to train manpower for high-speed rail projects is coming up in Vadodara
As is well-known, the current administration has undertaken several bold and major structural reforms in the last three-plus years, demonetization and GST being only two of the biggest. At the same time the government has been consistently undertaking other major as well as incremental reforms aimed at benefiting the economy, health and living standards as a whole. What Budget 2018 appears to demonstrate is the fact that the benefits accruing from such structural changes and others have been steadily and consistently directed to benefit all sections of the Indian population, be these urban or rural, farmers or traders and manufacturers, self-employed or salaried.
In light of the above, Budget 2018 particularly seeks to consolidate these gains and displays that objective clearly by focusing on agriculture and the rural economy, as well as on healthcare. Perhaps the single biggest takeaway of the Budget is the announcement of the new healthcare programme which would effectively give India the largest government-funded healthcare programme in the world.