Highlights of the Union Budget 2018 

Budget guided by mission to strengthen agriculture, rural development, health, education, employment, MSME and infrastructure sectors

General highlights

• 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.
• Fiscal deficit pegged at 3.5%, projected at 3.3% for 2018-19
• Disinvestment crossed target of Rs 72,500 crore to reach Rs 1,00,000 crore
• Proposal to extend reduced rate of 25% currently available for companies with a turnover of less than Rs.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.

Taxes

• No change in income tax for individuals
• Standard deduction of Rs. 40,000 for salaried employees in lieu of transport and medical expenses. 2.5 crore salaried employees and pensioners to benefit.
• Corporate tax rate for companies generating up to Rs. 250 crore turnover reduced to 25% from 30%
• The existing 3% education cess will be replaced by a 4% health and education cess
• Tax on long-term capital gains exceeding Rs. 1 lakh at the rate of 10%, without allowing any indexation benefit. However, all gains up to 31st January, 2018 will be grandfathered.
• Short term capital tax remains at 15%
• A 10% tax on distributed income by equity oriented mutual funds has been proposed

For Senior Citizens

• Senior citizens allowed Rs 50,000 deduction on health insurance premium paid in a year from the earlier Rs 30,000.
• 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.
• 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.
• The government proposed to extend Pradhan Mantri VayaVandana 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.

Financial sector

• The Government will expand the coverage under Prime Minister Jan DhanYojana by bringing all 60 crore basic accounts within its fold and undertake measures to provide services of micro insurance and unorganized sector pension schemes through these accounts.
• Government makes PAN mandatory for any entity entering into a financial transaction of Rs. 2.5 lakh or more. 
• Comprehensive Gold Policy on the anvil to develop yellow metal as an asset class

Agriculture

• MSP for all unannounced kharif crops will be one and a 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. An Agri-Market Infrastructure  Fund with a corpus of Rs. 2,000 crore will be set up for developing and upgrading agricultural marketing infrastructure.
• ‘Operation Greens’ launched to address price fluctuations in potato, tomato and onion for benefit of farmers and consumers.
• Two new funds of Rs. 10,000 crore announced for Fisheries and Animal Husbandary sectors; re-structured National Bamboo Mission gets Rs.1,290 crore.
• Rs. 200 crore for supporting the cultivation of highly-specialized medicinal and aromatic plants, and supporting cottage industries that manufacture perfumes, essential oils, and associated products.
• Agricultural credit target increased from Rs. 10 lakh crore in 2017-18 to Rs. 11 lakh crore for 2018-2019.
• 100% 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.
• Food processing sector allocation almost doubled from Rs. 715 crore in 2017-18 to Rs. 1400 crore in 2018-19

Infrastructure

• Rs. 5.97 lakh crore allocated for infrastructure
• Proposed spending on rural infra is Rs. 14.34 lakh crore
• Smart Cities Mission aims at building 100 Smart Cities with state-of- the-art amenities. Projects worth Rs. 2350 crore have been completed and works of Rs. 20,852 crore are in progress.
• The AAI (Airports Authority of India) has proposed to expand airport capacity to 1 billion trips a year.

Defence

The government will develop two defence industrial production corridors and bring out an industry-friendly Defence Production Policy 2018 to promote domestic production by public sector, private sector and MSMEs.

Railways

• Rs. 1.48 lakh crore for railways, capacity expansion is priority
• 4,000km of new railway track will be laid down by 2019
• All railways stations with footfall of more than 25,000 to have escalators
• The government will undertake redevelopment of 600 major railway stations across the country
• Allocated Rs. 11,000 crore for expansion of Mumbai’s suburban train network and Rs. 17,000 crore for the Bengaluru rail network
• The government has also planned to allocate an additional Rs. 40,000 crore for Mumbai’s rail network.

Digital

• 5 lakh WiFi hotspots to provide broadband access to 5 crore rural people
• All crypto currencies, which include bitcoins, are considered illegal, and the government will take all measures to eliminate their use.
• 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

Education

• The government launches a major initiative named ‘Revitalising Infrastructure and Systems in Education (RISE) by 2022’ with a total investment of Rs. 1 lakh crore in the next 4 years.
• Ekalavya Model Residential Schools to be started by 2022 for blocks with more than 50% scheduled tribe population and at least 20,000 tribal persons.
• Launch of National Apprenticeship Scheme with stipend support and sharing of the cost of basic training by the government to give training to 50 lakh youth by 2020.

Housing and Real Estate

• 51 lakh affordable homes will be made
• The government to reduce hardships faced in realty deals
• No adjustment to be made in a case where circle rate value does not exceed 5% of sale consideration

Health

• The World’s largest Health Protection Scheme covering over 10 crore poor and vulnerable families launched with a family limit upto Rs. 5 lakh rupees for secondary and tertiary treatment.
• Under the Aayushman Bharat programme, 1.5 lakh centres will be set up to provide health facilities closer home.
• Earmarked Rs. 600 crore to provide nutritional support to all TB patients
• 1 medical college for every three parliamentary constituencies and at least 1 government medical college in each state of the country

Social sector

• 4 crore poor households will be provided with electricity connections under the Prime Minister SaubhagyaYojana
• The government announces Amrut Programme to provide water supply to all households in 500 cities. Water supply contracts for 494 projects worth Rs. 19,428 crore will be awarded
• Government plans to construct 2 crore toilets in next financial year under the Swachh Bharat Mission
• Target of 3 lakh crore for lending under PM Mudra Yojana
• The government gives Rs. 9,975 crore for social security and protection programme for all widows and orphaned children for the next fiscal year 
• The National Rural Livelihood Mission gets Rs. 5,750 crore
• Loans to women self help groups will increase to Rs.75,000crore 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 Rs. 1.38 lakh crore. Welfare fund for scheduled castes gets a boost.

For Women

• Contributions from women employees will be brought down from 12 % to 8 % to enable them to get a higher take-home pay
• Women below the poverty line to get 8 crore free gas connections under Prime Minister’s Ujjwala Scheme

Miscellaneous

• Customs duty on mobile phones has been increased from 15% to 20% in a bid to promote 'Make in India' and create jobs in the country.
• A social welfare surcharge at the rate of 10% is imposed in place of the Education Cess and Secondary and Higher Education Cess on imported goods.
• National Heritage City Development and Augmentation Yojana (HRIDAY) has been undertaken to preserve and protect heritage cities in the country.
• 10 prominent sites to be developed as iconic tourist destinations

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