Union Finance Minister Arun Jaitley presented the Budget for the fourth time in the Lok Sabha on Thursday with emphasis on agriculture and healthcare.
While there are unlikely to be any major changes in indirect tax as most of them are now under the purview of the Goods and Services Tax Council, Budget 2018 could have several positive changes on the direct tax side, according to analysts.
Govt. confident of hitting fiscal deficit target: Jaitley
"This budget blends fiscal prudence with the requirements and needs to the economy. This year there was series of circumstances, including one month less in GST revenue, this needs to kept in mind," said Mr. Jaitley in a post-Budget press conference.
"Step by step, in every Budget, I have been putting surplus money in the hands of the middle-class taxpayer. The contribution of the salaried class has been recognised for the first time," said the Finance Minister.
"We are confident of limiting the fiscal deficit target for 2018-19 within 3.3 per cent," he added.
Here are the live updates of Mr. Jaitley's Budget speech:
Customs duty
''We are making calibrated departure from trend to reduce Customs duty. Customs duty on mobile phones will be increased to 20 per cent and parts of televisions will be increased to 15 per cent. Customs duty on raw cashew will also be reduced from 5 per cent to 2.5 per cent.
The Education Cess and the Secondary and Higher Education Cess on imported goods will be abolished. Instead a Social Welfare Surcharge of 10% will be introduced.''
Mr. Jaitley proposes to change the name of the Central Board of Excise and Customs to the Central Board of Indirect Taxes and Customs.
He quotes Swami Vivekananda. "You merge yourselves in the void and disappear, and let new India arise in your place. Let her arise — out of the peasants’ cottage, grasping the plough; out of the huts of the fisherman. Let her spring from the grocer’s shop, from beside the oven of the fritterseller. Let her emanate from the factory, from marts, and from markets. Let her emerge from groves and forests, from hills and mountains."
The Minister tables the Budget. He now introduces the Finance Bill, 2018.
The House is adjourned, to meet on February 5.
Salaried taxpayers
No changes in personal income tax rates, Mr. Jaitley says.
A major portion of the personal income tax collection comes from the salaried class. Returns numbering 1.89 crore were filed last year, and ₹1.44 lakh crore was paid as taxes.
He proposes a standard deduction of ₹40,000 in lieu of the current exemption for medical and transport allowances. Revenue cost of this is ₹8,000 crore.
Exemption of interest income for deposits in banks and post offices will be increased from ₹10,000 to ₹50,000 for senior citizens, and TDS shall not be deducted from this income.
All senior citizens will now be able to claim benefit of a deduction of ₹50,000 for medical insurance premium.
For critical illnesses, ₹1,00,000 deduction will be given for medical expenditure.
Taxation
The growth rates of direct taxes in 2016-17 and 2017-18 have been significant. A growth of 12.6% was recorded last year, and 18.7% till January 2018.
New taxpayers numbering 85.51 lakh filed their returns. The number of effective taxpayers has increased from 6.47 lakh crore to 8.27 lakh crore. The excess revenue from personal income tax was ₹90,000 crore.
Mr. Jaitley proposes 100 per cent deduction to farmer-producer companies having a ₹100 crore turnover. Corporate tax will be reduced to 25 per cent for companies that have a turnover of up to ₹250 crore.
Estimates of revenue foregone due to this measure is ₹7,000 crore.
Long term capital gains tax of 10 per cent is proposed for amounts exceeding ₹1 lakh. Health and Education Cess will be increased to four per cent.
Members' salaries
Emoluments will revised for the President to ₹5 lakh, ₹4 lakh for Vice-President and ₹3.5 lakh a month for Governors.
The Minister proposes changes to refix emoluments to MPs with effect from April 1, 2018. The law will provide automatic revision of emoluments every five years indexed to inflation.
Total revenue expenditure of the government is ₹21.57 lakh crore.
Fiscal deficit in 2013-14 was 4.4 per cent of the GDP. I n 2017-18 it was 3.5 per cent of the GDP. Projected fiscal deficit 3.3 per cent of the GDP.
A sum of ₹150 crore for the year 2018-19 for activities leading to the commemoration of Mahatma Gandhi's 150th birth anniversary.
Defence, investments and public service delivery
The government will bring out an industry friendly defence policy. ''We have taken measures to develop two defence industrial production corridors in the country,'' says the Minister.
Unique ID for enterprises too.
To carry out business reforms for ease of doing business deeper and in every State, the Centre has identified 372 specific business reform actions. The capital of the Food Corporation of India will be restructured.
Disinvestment target for this year is set at ₹80,000 crore. The government will recapitalise the public sector banks to help them lend an additional ₹5 lakh crore.
United India Insurance, Oriental Insurance and National Insurance will be merged and then listed. Gold monetisation scheme will be revamped to allow people to open hassle-free gold deposit accounts.
Outward Direct Investment (ODI) from India has grown to US$15 billion per annum.
Infrastructure and financial sector
A sum of ₹50 lakh crore is needed to create world class infrastructure in the country. Ninety-nine cities have been selected with an outlay of ₹2.09 lakh crore under the Smart City programme.
Ten prominent tourist sites will be developed into iconic ones to boost tourism.
The AMRUT programme focuses on providing water supply to all households in 500 cities. State level plans of ₹77,640 crore for 500 cities have been approved. Water supply contracts for 494 projects, worth ₹19,428 crore, and sewerage work contract for 272 projects, costing ₹12,429 crore, has been awarded.
Railway capex for 2018-19 is ₹1,48,528 crore. Over 18,000 km of doubling and 5000 km of gauge conversion will eliminate capacity constraints.
''We are moving towards optimal electrification of railway networks. 4000 km are targeted for commissioning in 2017-18. Work on the Eastern and Western dedicated freight corridors are also in progress. Maintenance of track infrastructure is being given special attention.
''Increasing use of technology, fog safe train protection and warning system are other focuses. A decision has been taken to eliminate 4267 unmanned level crossings in the broad gauge network in the next two years.''
Redevelopment of 600 major railway stations has been taken up. All stations with more than 25,000 footfalls will have escalators. All trains to be progressively provided with Wi-FI, CCTV and other state-of-the-art amenities.
An institute is coming up at Vadodara to train manpower for high-speed railway projects.
UDAN shall connect 56 unserved airports and 31 unserved helipads in the country. The AAI has 124 airports. ''We propose to expand our airport capacity to handle more than one billion trips a year.''
a SUM OF ₹60 crore has been allocated for disaster resilient infrastructure.
The RBI has issued guidelines to nudge corporates to access the bond markets. Corporate bonds rated at BBB are investment grade. The government and concerned regulators will take necessary action. We will take reform measures with respect to the stamp duty regime.
The Finance Minister doubles the allocation to the Digital India programme to ₹3073 crore in 2018-19.
a SUM OF ₹10,000 crore has been allocated for creation and augmentation of telecom infrastructure.
The Commerce Ministry is developing a national logistics portal as a single window programme to boost the logistics sector.
Niti Aayog will establish a programme to direct initiatives to develop artificial intelligence initiatives. Phase 1 of Bharat Net programme has been completed.
The government will explore use of blockchain technology proactively to boost digital economy. It will not consider cryptocurrency as legal tender.
The government’s estimated budgetary and extra budgetary expenditure on infrastructure for 2018-19 is being increased to ₹5.97 lakh crore against estimated expenditure of ₹4.94 lakh crore in 2017-18.
MSMEs and employment
Mass formalisation of MSMEs (Micro, Small & Medium Enterprises) is taking place following demonetisation and GST. It has created a big database. Online loan sanctioning facility will be revamped to speed up sanction of loans by banks.
A sum of ₹3 lakh crore is set as target for the Mudra Yojana in FY19. Additonal measures will be taken to boost the growth of venture capital funds and angel investors.
The government will contribute 12 per cent of wages of new employees for all sectors.
Women's contribution to provident fund (PF) will be reduced to 8 per cent for the first three years of their employment, with no reduction in employer's contribution.
Over 300 Pradhan Mantri Kaushal Kendra have been established for imparting skill training through such centers.
The government allocates ₹7,148 crore for the textile sector.
Health, education and social welfare
Allocation on National Social Assistance Programme this year has been kept at ₹9,975 crore.
Our government is implementing a comprehensive social security scheme. We have managed to get children to school but quality of education is still a cause for concern. We now propose to treat education holistically without segmentation from pre-nursery to Class 12. We will initiate an integrated B-Ed programme for teachers. We propose to move gradually from blackboard to digital board.
By the year 2022, every block with more than 50 per cent ST population and at least 20,000 tribal persons, will have an Ekalavya Model Residential School. Ekalavya schools will be on par with Navodaya Vidyalayas and will have special facilities for preserving local art and culture besides providing training in sports and skill development.
He proposes to launch the Revitalising of Infrastructure and Systems of Education (RISE) with an investment of ₹1,00,000 crore by next year. We propose to set up two new full-fledged schools of planning and architecture. 18 new schools of planning and architecture will be set up in the IITs and NITs. He also announces the Prime Minister's fellowship programme to subsidise research. Under this 1,000 B.Tech students will be identified every year and provided facilities to pursue PhDs in IITs and IISc.
The National health Policy 2017 has envisioned health and wellness centres as the foundation of India's healthcare system. He commits ₹1,200 crore for this flagship programme and invites contributions from the private sector.
We are launching a flagship National Health Protection Scheme to cover 10 crore poor and vulnerable families. We will provide them with upto ₹5 lakh per family per year in secondary and tertiary care institutions. He says this scheme will have 50 crore beneficiaries.
These schemes will generate lakhs of jobs, aprticularly for women, The government is progressing towards universal health coverage.
Tuberculosis claims more lives every year than any other disease. The government will provide ₹600 crore for nutrititonal support to all TB patients.
24 new government medical colleges will be set up by upgrading existing district hospitals in the country. At least one medical college for three parliamentary constituencies.
The Jivan Bima Yojana has benefited 5.22 crore families. 187 projects have been sanctioned under Namami Gange. All 4,465 Ganga gram villages have been declared open-defecation free. The government has identified 115 aspirational districts and will invest in social services.
The government has earmarked allocation of ₹56,619 crore for SCs and ₹39,135 crore for STs in 2018-19.
Agriculture and rural economy
Doing the year 2016-17 we achieved a record food grain production of around 275 million tonnes and around 300 million tonnes of fruits and vegetables.
Our emphasis is on generating higher income for farmers, and generating productive and gainful employment on farms, and non-farm workers. We want to help the farmers produce more from the same land, at a lesser cost, and get a better price. Niti Ayog, in consultation with Central and State Governments, will put in place a fool-proof mechanism so that farmers will get adequate price for their produce.
He says that this year's Budget will focus on strengthening agriculture and the rural economy.
For better price realisation, farmers need to make decisions based on prices likely to be available in the market.
The Finance Minister says that APMCs will be linked with ENAM. The government will develop 22,000 Gramin agricultural markets. The cluster-model approach will be adopted for agricultural production. Organic farming with farmer-producer organisations, rural-producer organisation and women self-help groups will be encouraged.
Cultivation of horticulture crops in clusters bring advantages of scales of operations and can spur establishment of entire chain from production to marketing, besides giving recognition to the districts for specific crops.
Minimum Support Price shall be increased by 1.5 times. Operation Green will be launched for agriculture and the Minister allocates ₹500 crore for this.
Our ecology supports cultivation of highly specialized medicinal and aromatic plants. India is also home to a large number of small and cottage industries that manufacture perfumes, essential oils and other associated products. Our Government shall support organized cultivation and associated industry. I propose to allocate a sum of ₹200 crore for this purpose.
The Minister proposes to liberalise export of agricultural products. He says agricultural exports have a potential of $100 billion as against reality of $30 billion. He also allocates ₹1,290 crore for development of the bamboo production sector.
He proposes to extend the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital needs.
The government has been steadily increasing the volume of institutional credit for agriculture sector from year-to-year from ₹8.5 lakh crore in 2014-15 to ₹10 lakh crore in 2017-18. He proposes to raise this to ₹11 lakh crore for the year 2018-19.
Ujjwala Yojana, the free LPG connection scheme, has been expanded to eight crore households.
The Saubhagya Yojana will be another focus for the government. Six crore toilets have been built already, and in the next year, two crore additional toilets will be constructed.
He says the government will establish a dedicated affordable housing fund.
Loans to self-help groups will increase to ₹75,000 crore. He allocates ₹5,750 crore to National Livelihood Mission and ₹2,600 crore to the groundwater irrigation scheme.
Anil Talreja
Partner, Deloitte India
The Finance Minister has, in his speech, laid out a powerful report card by referring to the commitments made by him with regard to the farm and consumer sectors in the earlier years and not only giving the status of the outcome of various measures but also announcing various measures to promote this key sector.
He has re-iterated the Government's promise of doubling the income of the farmers by 2022 and also announced various additional allocation and funds in this sector.
With 150% increase in MSP for crops, support to organic farming, doubling the expenditure allocation to INR 1,400 crores for food processing sector, state of the art facilities to 42 food parks, liberalisation of agricultural exports, allocation of INR 10, 000 crore to fisheries, animal husbandries and related infrastructure, this budget is in true sense a Roti-Kapada and Kisaan budget.
Perhaps for the first time there is a special attention to the ancillary sector including infrastructure which will help the overall consumer and farm sector. The focus of these measures to ensure that the farm produce reach the ultimate consumers from the farms with maximum returns for farmers, introduction of facilities and technology leading to reduction in wastage in the sector, a boost to the fishery, aquaculture and animal husbandry sectors.
Markets react
Agriculture stocks gained ground with Bayer Corpscience up by 0.67 per cent, BASF India by 3.12 per cent, Monsanto India up by 4.44 per cent, Rallis India by 2.04 per cent and Coromandel Agro Products by 4.88 per cent.
Finance Minister Arun Jaitley presents the Union Budget. When our government took over India was part of "fragile five," we have successfully reverted it. We are now the fastest growing economy of the world, he says .
Demonetisation has reduced the quantum of cash currency and spurred digitisation of the economy, says Mr. Jaitley.
Indian economy is a $2.5 trillion economy. India is expected to become the fifth largest economy very soon. Indian society, polity and economy have shown remarkable resilience in adjusting to structural reforms. We will grow 7.2-7.5% in the second half of this year. Manufacturing sector is back on the growth path. Exports are expected to grow 15% in 2018. We have taken up programmes to direct the benefits of structural reforms to the poor.
The services, mainstay of our growth, have also resumed their high growth rates of 8% plus.
The Minister cites India's improvement in the Ease of Doing Business ranking by 42 places. He mentions the government's schemes for providing free LPG connections and electricity to underprivileged sections. He states that the government has eliminated middlemen through the direct benefit transfer programme.
Under Saubhagya Yojna 4 crore household are being provided with electricity connections. More than 800 medicines are being sold at lower price through more than 3 thousand Jan Aushadhi Centres. Cost of stents have been controlled. Special scheme for free dialysis of poor have been initiated. Persons belonging to poor and middle class are also being provided a great relief in interest rates on housing schemes. Efforts are being made to provide all government services, whether bus or train tickets or individual certificates on line.
The Minister states that the government targets to provide every poor person in the country with a house of their own by 2022.
Lok Sabha proceedings begin. Speaker Sumitra Mahajan is in the Chair. She announces the demise of Lok Sabha member Chintaman Wanga. The House pays silent tribute to the departed MP.
Ms. Mahajan says the Budget will be presented today, despite the usual procedure of the House adjourning for the day to mourn the demise of a sitting member.
Job creation
The Union Budget 2018-19 comes at a time when slowing growth and subdued investment sentiment have emerged as major concerns for the economy. The slowdown in growth has had an impact on job creation as well.
In such a scenario, the macro backdrop of the Budget calls for stepping up public investment in specific infrastructure segments which would revive investment and create employment.
Farmers want a "water budget"
A special meeting of the representatives from various agriculturists’ associations have called upon the Union and State Governments to introduce the practice of micro-level preparations of “water budget” and “crop budget” to make farming more viable.
A separate budget for agriculture has also been a long pending demand.
Though the country witnesses floods in various parts, the monsoon wasn't abundant and agriculture is still rain-dependent here.
The Economic Survey 2018 pointed out that the mechanisation is picking up in farm sector. The Survey also suggested land holdings can be consolidated to reap the benefits of agricultural mechanisation. The Survey explained how more women are taking up cultivation now.
Renewables sector expecting package
Industry players in the renewable energy sector are of the view that there are a number of policy decisions related to import duties and domestic manufacturing, which, if taken, could further boost the sector.
The Centre had allocated ₹5,472.8 crore to MNRE in last year’s Budget and approved demand for grants for ₹10,814.5 crore. Both these figures are higher than during the tenure of this government as can be seen from the table.
At the same time, renewable energy generation had grown significantly over the years, touching 70,134.4 million units in the April-November 2017 period. In other words, in 2017-18, India generated 85.6% of the renewable energy it did in the full year 2016-17 with a third of the year still to go.
However, industry players said achieving the target of 175 GW of renewable energy capacity and generation by 2022 requires a lot more to be done than simply increasing Budgetary allocation.
Finance Minister Arun Jaitley with the Union Budget 2018, to be presented in the Parliament later in the day. 
The Finance Minister and his juniors have arrived at the Parliament. The Budget will be presented at 11 am in Lok Sabha and will be tabled in Rajya Sabha later in the day.
With Finance Minister Arun Jaitley getting ready to present the Budget on February 1, it’s also time for us to learn and ready ourselves for a long speech. And a part of this long speech involves terms that aren’t used in daily conversation. Here is a ready reckoner for some of these terms.
This will be Mr. Jaitley's and Narendra Modi-led NDA government's fourth budget, the penultimate one before the nations goes to polls in 2019. It may be noted that if the General Elections are announced earlier next year, the fifth budget will only have to be a Vote on Account.
