Union Budget 2018 Highlights
Union Budget 2018 Highlights
Union Budget 2018 Highlights
fifth budget
Budget 2018 highlights: This is the first budget after big-ticket economic
reforms like the Goods and Services Tax, dynamic fuel pricing, mega PSU
bank recapitalisation etc. The Rail Budget, like last year, will be presented as
part of the Union Budget.
Union Budget 2018: Assurance on MSP but for govt, rural is more about infrastructure
than agriculture
Union Finance Minister Arun Jaitleypresented the Union Budget 2018-19 in Parliament on
Thursday. This budget, Jaitley’s fifth, is the last full budget of this NDA government before
India goes to polls for the General Elections due to take place in 2019. This is the first budget
after big-ticket economic reforms such as the Goods and Services Tax (GST), dynamic fuel
pricing, mega PSU bank recapitalisation and more. The Union Budget 2018 also includes the
Railway Budget, the latter was presented separately till it was decided to present a joint annual
budget in 2017.
This budget session kicked off on January 29 when Chief Economic Adviser Arvind
Subramanian tabled the Economic Survey 2017-18 in the Lok Sabha. The survey predicted
India’s economy to revive after the slowdown of 2017 and pegged India’s GDP growth rate
forecast at 7-7.5 per cent. From 2014-15 to 2017-18, the average GDP growth rate was 7.3 per
cent. The survey also found that the tax net widened in the 2017 fiscal with a huge increase in
individual taxpayers, rollout of GST and demonetisation.
Taxation
The government proposes no change in personal income tax rates for salaried class. Jaitley said
in his speech that there has been a 12.6% growth in direct taxes in 2017-18; 18.7% growth in
indirect taxes in 2017-18. As many as 85.51 lakh new taxpayers filed their tax returns in 2017-
18, as against 66.26 lakhs in 2016-17. The number has increased from 6.47 crore in 2016-17 to
8.27 crore by end of 2017.
Jaitley proposed liberalisation of presumptive income schemes for small businesses with income
below Rs 2 crore, similar schemes for professionals with income below Rs 50 lakh. Rs 90,000
crore additional income tax collection was seen in 2016-17 and 2017-18.
Corporate tax reduced has been reduced from 30 per cent to 25 per cent for companies with
turnover up to Rs 250 crore, move to boost MSME sector. The finance minister has proposed
revision in monthly emoluments of President of India at Rs 5 lakh,, Rs 4 lakh for vice president
and Rs 3.5 lakh for governors.
Standard deduction of Rs 40,000 for salaried taxpayers was announced. In terms of capital gains
tax, long-term capital gains are proposed to be taxed at 10 per cent on investments over Rs 1
lakh. Short term capital gains tax to remain unchanged at 15 per cent.
For senior citizens, Jaitley proposed exemption of interest income on bank deposits raised to Rs
50,000 for senior citizens as well as exemption of Rs 10,000 on income from Bank FDs and post
offices. The budget proposes 10 per cent tax on distributed income by equity-oriented mutual
funds as well as 100 per cent deductions for cooperative societies.
In the realty sector, Jaitley proposed that were to be made when circle is at or below 5 per cent of
sale consideration.
In terms of revenue loss, Jaitley siad Rs 8,000 crore revenue was lost due to standard deductions
for salaried employees. Also, Rs 7,000 crore forgone due to lower corporate tax on firms with
turnover not exceeding Rs 250 crore. Rs 19,000 crore was lost last fiscal in terms of revenue
from direct taxes.
Infrastructure
Jaitley said that there is a requirement of Rs 50 lakh crore for the infrastructure sector. He said
that construction of a new tunnel at Sera Pass will also work in promoting tourism. A total 10
prominent tourist sites will be upgraded as iconic tourist destinations.
In the flagship Bharatmala project that aims to connect India’s eastern and western ends with a
35,000 km highway and roads network, an outlay was announced to the tune of Rs 5.35 lakh
crore under phase 1. For toll payments on highways, Jaitley said that the government will
introduce a new system called “pay as you use”.
Trade
Customs duty on mobile phones, TVs hiked for providing fillip to Make in India initiative.
Government also proposes 10 per cent social welfare surcharge on imports.
Budget for employees
Government pledges contribution of 12 per cent in wages of new employees in all sectors for the
upcoming 3 years under EPF scheme. Women contribution to EPF slashed for initial three years
to 8 per cent.
Defence
The total outlay for defence in budget 2018 is Rs 2.95 lakh crore, according to PTI, up from Rs
2.74 lakh crore last year. Jaitley expressed his intention to boost manufacturing in defence sector
and asserted the need to strike a balance between foreign procurements to meet immediate needs
and Make in India initiative for defence sector.
Jaitley said that during the course of this government, emphasis was given on modernisation and
enhancement of operational capabilities of the armed forces. Government will bring a new
industry-friendly defence production policy 2018 for giving a boost to domestic production for
private sector, public sector as well as MSMEs. Jaitley said that the government will take
measures to develop two defence industrial production corridors.
Technology
An allocation of Rs 3,073 crore was done for Digital India scheme. As many as 5 lakh WiFi
hotspots will be snstalled to give access of broadband services to 5 crore rural citizens. An
allocation of Rs 10,000 crore was proposed for the same.
Government will now explore the usage of Blockchain technology but it will also take steps to
prohibit circulation of cryptocurrencies as they are not classified as legal tenders as of now.
Miscellaneous
The food subsidy has been increased for the from Rs 1.4 lakh crore in 2017-18 to Rs 1.69 lakh
crore in 2018-19. To commemorate the 150th birth anniversary of Mahatma Gandhi, Rs 150
crore have been set aside. Also, it has been proposed that the emoluments of MPs may be
increased based on index to inflation.
Markets, Finance and insurance
Government to encourage a strong environment for VCs and angel investors. Meanwhile SEBI
would make it mandatory for large corporations to meet a quarter of their debt needs from bond
markets.
The disinvestment target for FY2019 has been set for Rs 80,000 crore. The disinvestment targets
for the current fiscal have been set at Rs 1 lakh crore. Government would also evolve a scheme
that would assign unique IDs for companies. The National Insurance Co, Oriental Insurance Co
and United Assurance Co will be merged into one entity which will then be listed. For bank
recapitalisation, Jaitley said it many set the path for public banks to lend an extra Rs 5 lakh crore.