Finance Minister Shri Arun Jaitley presented general
Budget 2018-19 in Parliament.
1)Budget guided by mission
to strengthen agriculture, rural development, health, education, employment,
MSME and infrastructure sectors
2)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.
3)MSP for all unannounced kharif crops will be one and 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.
4)22,000 rural haats to be
developed and upgraded into Gramin Agricultural Markets to protect the
interests of 86% small and marginal farmers.
5)“Operation Greens” launched to address price fluctuations in potato,
tomato and onion for benefit of farmers and consumers.
6)Two New Funds of
Rs10,000 crore announced for Fisheries and Animal Husbandary
sectors; Re-structured National Bamboo Mission gets Rs.1290
crore.
7)Loans to Women Self Help
Groups will increase to Rs.75,000 crore in 2019 from 42,500 crore last year.
8)Higher targets for
Ujjwala, Saubhagya and Swachh Mission to cater to lower and middle class
in providing free LPG connections, electricity and toilets.
9)Outlay on health,
education and social protection will be 1.38 lakh crore. Tribal students
to get Ekalavya Residential School in each tribal block by 2022. Welfare fund
for SCs gets a boost.
10)World’s largest Health
Protection Scheme covering over 10 crore poor and vulnerable families launched
with a family limit upto 5 lakh rupees for secondary and tertiary treatment.
11)Fiscal Deficit pegged
at 3.5 %, projected at 3.3 % for 2018-19.
12)Rs. 5.97 lakh crore
allocation for infrastructure
13)Ten prominent sites to
be developed as Iconic tourist destinations
14)NITI Aayog to initiate
a national programme on Artificial Intelligence(AI)
15)Centres of excellence
to be set up on robotics, AI, Internet of things etc
16)Disinvestment crossed
target of Rs 72,500 crore to reach Rs 1,00,000 crore
17)Comprehensive Gold
Policy on the anvil to develop yellow metal as an asset class
18)100 percent 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.
19)Deduction of 30 percent
on emoluments paid to new employees Under Section 80-JJAA to be relaxed to 150
days for footwear and leather industry, to create more employment.
20)No adjustment in
respect of transactions in immovable property where Circle Rate value does not
exceed 5 percent of consideration.
21)Proposal to extend reduced
rate of 25 percent currently available for companies with turnover of less than
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.
22)Standard Deduction of
Rs. 40,000 in place of present exemption for transport allowance and
reimbursement of miscellaneous medical expenses. 2.5 crore salaried employees
and pensioners to benefit.
Relief to Senior
Citizens proposed:-
23)Exemption of interest
income on deposits with banks and post offices to be increased from Rs. 10,000
to Rs. 50,000.
24)TDS not required
to be deducted under section 194A. Benefit also available for interest from all
fixed deposit schemes and recurring deposit schemes.
25)Hike in deduction limit
for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs.
50,000 under section 80D.
26)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.
27)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.
28)More concessions for
International Financial Services Centre (IFSC), to promote trade in stock
exchanges located in IFSC.
29)To control cash
economy, payments exceeding Rs. 10,000 in cash made by trusts and
institutions to be disallowed and would be subject to tax.
30)Tax on Long Term
Capital Gains exceeding Rs. 1 lakh at the rate of 10 percent, without allowing
any indexation benefit. However, all gains up to 31st January,
2018 will be grandfathered.
31)Proposal to
introduce tax on distributed income by equity oriented mutual funds at the rate
of 10 percent.
Proposal to increase cess
on personal income tax and corporation tax to 4 percent from present 3
percent.
32)Proposal to roll
out E-assessment across the country to almost eliminate person to person
contact leading to greater efficiency and transparency in direct tax
collection.
33)Proposed changes
in customs duty to promote creation of more jobs in the country and also
to incentivise domestic value addition and Make in India in sectors such as
food processing, electronics, auto components, footwear and furniture.
Summary
Government says that it is
firmly on course to achieve high growth of 8% plus as manufacturing, services
and exports are back on good growth path. While GDP growth at 6.3% in the
second quarter of 2017-18 signalled turnaround of the economy, growth in the
second half is likely to remain between 7.2% to 7.5%. The Union Minister
for Finance and Corporate Affairs Shri Arun Jaitley while presenting the
General Budget 2018-19 in Parliament today said that Indian society, polity and
economy had shown remarkable resilience in adjusting with the structural
reforms. IMF, in its latest Update, has forecast that India will grow at 7.4%
next year in the backdrop of services resuming high growth rates of 8% plus,
exports expected to grow at 15% in 2017-18 and manufacturing back on good
growth path.
Reiterating the pledge given to the people of India four years ago to give this
nation an honest, clean and transparent Government and to build a strong,
confident and a New India, Shri Jaitley said, the Government led by Prime
Minister, Shri Narendra Modi, has successfully implemented a series of
fundamental structural reforms to propel India among the fastest growing
economies of the world.
The Finance Minister said that Government has taken up programmes to direct the
benefits of structural changes and good growth to reach farmers, poor and other
vulnerable sections of our society and to uplift the under-developed regions.
He said, this year’s Budget will consolidate these gains and particularly focus
on strengthening agriculture and rural economy, provision of good health care
to economically less privileged, taking care of senior citizens, infrastructure
creation and working with the States to provide more resources for improving
the quality of education in the country. He said, the Government has ensured
that benefits reach eligible beneficiaries and are delivered to them directly
and said that Direct Benefit Transfer mechanism of India is the biggest such
exercise in the world and is a global success story.
Agriculture and Rural
Economy:-
Referring to the Government’s commitment to the welfare of farmers and doubling
farmers’ income by 2022, the Finance Minister announced a slew of new schemes
and measures.
He said ,that government
has decided to keep MSP for all unannounced kharif crops atleast one and half
times of their production cost after declaring the same for the majority of
rabi cops. He said,the volume of institutional credit for agriculture sector
from year-to-year increased from Rs.8.5 lakh crore in 2014-15 to Rs.10 lakh
crore in 2017-18 and he proposed to raise this to Rs.11 lakh crore for the year
2018-19. After the establishment of Dairy Infrastructure Fund, Shri
Jaitley announced setting up a Fisheries and Aqua culture Infrastructure
Development Fund (FAIDF) for fisheries sector and an Animal Husbandry
Infrastructure Development Fund (AHIDF) for financing infrastructure
requirement of animal husbandry sector with a total corpus of Rs.10,000
crore for the two new funds. On the lines of ‘‘Operation Flood’’ a new
Scheme ‘‘Operation Greens’’ was announced with an outlay of Rs 500 Crore to
address the challenge of price volatility of perishable commodities like
tomato, onion and potato with the satisfaction of both the farmers and
consumers. He also announced to develop and upgrade existing 22,000 rural haats
into Gramin Agricultural Markets (GrAMs) to take care of the interests
of more than 86% small and marginal farmers. These GrAMs, electronically
linked to e-NAM and exempted from regulations of APMCs, will provide farmers
facility to make direct sale to consumers and bulk purchasers. Moreover, an
Agri-Market Infrastructure Fund with a corpus of Rs.2000 crore will be setup
for developing and upgrading agricultural marketing infrastructure in the 22000
Grameen Agricultural Markets (GrAMs) and 585APMCs. He said, so far 470 APMCs
have been connected to e-NAM network and rest will be connected by March, 2018.
Shri Jaitley announced Rs 200 crore for organized cultivation of
highly specialized medicinal and aromatic plants and said that the organic
farming by Farmer Producer Organizations (FPOs) and Village Producers’
Organizations (VPOs) in large clusters, preferably of 1000 hectares each will
be encouraged. Similarly, allocation of Ministry of Food Processing has been
doubled from Rs.715 crore in 2017-18 to Rs.1400 crore in 2018-19. Terming
Bamboo as ‘Green Gold’, the Finance Minister announced a Re-structured National
Bamboo Mission with an outlay of Rs.1290 crore to promote bamboo sector in a
holistic manner. Under Prime Minister Krishi Sinchai Yojna-Har Khet ko
Pani, 96 deprived irrigation districts will be taken up with an allocation of
Rs 2600 crore. The Centre will work with the state governments to facilitate
farmers for installing solar water pumps to irrigate their fields. He also
proposed to extend the facility of Kisan Credit Cards to fisheries and animal
husbandry farmers to help them meet their working capital needs. Shri Jaitley
said India’s agri-exports potential is as high as US $100 billion against
current exports of US $30 billion and to realize this potential, export of
agri-commodities will be liberalized. He also proposed to set up
state-of-the-art testing facilities in all the forty two Mega Food Parks. He
also announced a special Scheme to support the efforts of the governments of
Haryana, Punjab, Uttar Pradesh and the NCT of Delhi to address air
pollution in the Delhi-NCR region by subsidizing machinery required
for in-situ management of crop residue.
On the loans to Self
Help Groups of women, the Finance Minister said it increased to about Rupees
42,500 crore in 2016-17, growing 37% over previous year and expressed
confidence that loans to SHGs will increase to Rs.75,000 crore by March,
2019. He also substantially increased allocation of National Rural Livelihood
Mission to Rs 5750 crore in 2018-19.
Referring to the measures taken for the benefit of lower and middle class, the
Finance Minister said, under Ujjwala Scheme distribution of free LPG
connections will be given to 8 crore poor women instead of the previous target
of 5 crore women. Under Saubahagya Yojana, 4 crore poor households are
being provided with electricity connection with an outlay of Rs.16,000 crore.
To fulfil target of housing for All by 2022 ,more than one crore houses will be
built by 2019 in rural areas, besides already constructed 6 crore toilets under
Swachh Bharat Mission.
Shri Jaitley stressed that the focus of the Government next year will be on
providing maximum livelihood opportunities in the rural areas by spending more
on livelihood, agriculture and allied activities and construction of rural
infrastructure. He said, in the year 2018-19, for creation of livelihood and
infrastructure in rural areas, total amount to be spent by the Ministries will
be Rs.14.34 lakh crore, including extra-budgetary and non-budgetary resources
of Rs.11.98 lakh crore. Apart from employment due to farming activities
and self employment, this expenditure will create employment of 321 crore
person days, 3.17 lakh kilometers of rural roads, 51 lakh new rural houses,
1.88 crore toilets, and provide 1.75 crore new household electric connections
besides boosting agricultural growth.
Education, Health
and Social Protection:-
The Finance Minister said that estimated budgetary expenditure on health,
education and social protection for 2018-19 is Rs.1.38 lakh crore against
estimated expenditure of Rs.1.22 lakh crore in 2017-18
On education front,
Shri Jaitley announced setting up of Ekalavya Model Residential School on
par with Navodaya Vidyalayas to provide the best quality education to the
tribal children in their own environment by 2022 in every block with more than
50% ST population and at least 20,000 tribal persons with special facilities
for preserving local art and culture besides providing training in sports and
skill development. To step up investments in research and related
infrastructure in premier educational institutions, including health
institutions, a major initiative named ‘‘Revitalising Infrastructure and
Systems in Education (RISE) by 2022’’ with a total investment of Rs.1,00,000
crore in next four years was announced . He said that a survey of more than 20
lakh children has been conducted to assess the status on the ground, which will
help in devising a district-wise strategy for improving quality of education.
To improve the quality of teachers an integrated B.Ed. programme for teachers
will be initiated. Shri Jaitley said, the Government would launch the ‘‘Prime
Minister’s Research Fellows (PMRF)’’ Scheme this year. Under this, 1,000
best B.Tech students will be identified each year from premier institutions and
provide them facilities to do Ph.D in IITs and IISc, with a handsome
fellowship. Allocation on National Social Assistance Programme this year has
been kept at Rs. 9975 crore.
The Finance Minister announced the world’s largest government funded health
care programme titled National Health Protection Scheme to cover over 10 crore
poor and vulnerable families (approximately 50 crore beneficiaries) providing
coverage upto 5 lakh rupees per family per year for secondary and tertiary care
hospitalization. He also committed Rs 1200 crore for the National
Health Policy, 2017, which with 1.5 lakh Health and Wellness Centres will
bring health care system closer to the homes of people. The Government also
decided to allocate additional Rs.600 crore to provide nutritional support to
all TB patients at the rate of Rs.500 per month for the duration of their
treatment. Shri Jaitley said, the government will be setting up 24 new
Government Medical Colleges and Hospitals by upgrading existing district
hospitals in the country.
On cleaning the Ganga, the
Finance Minister said, a total of 187 projects have been sanctioned under the
Namami Gange programme for infrastructure development, river surface cleaning,
rural sanitation and other interventions at a cost of Rs.16,713 crore. 47
projects have been completed and remaining projects are at various stages of
execution. All 4465 Ganga Grams – villages on the bank of river -
have been declared open defecation free. He said, the government has identified
115 aspirational districts taking various indices of development in
consideration for making them model districts of development.
Medium, Small and Micro
Enterprises (MSMEs) and Employment:-
The Budget has given a big thrust to Medium, Small and Micro Enterprises
(MSMEs) to boost employment and economic growth. A sum of Rs. 3794 crore
has been provided for giving credit support, capital and interest subsidy and
for innovations. MUDRA Yojana launched in April, 2015 has led to
sanction of Rs.4.6 lakh crore in credit from 10.38 crore MUDRA loans. 76% of
loan accounts are of women and more than 50% belong to SCs, STs and OBCs.
It is proposed to set a target of Rs.3 lakh crore for lending under MUDRA for
2018-19 after having successfully exceeded the targets in all previous
years.
Employment Generation
Reiterating that creating job opportunities is at the core of Government
policies, Finance Minister cited an independent study as showing that 70 lakh
formal jobs will be created this year. To carry forward the momentum
created by the measures taken during the last 3 years to boost employment
generation, Shri Jaitley announced that the Government will contribute 12% of
the wages of the new employees in the EPF for all the sectors for next three
years. He proposed to make amendments 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.
The Budget proposed an outlay of Rs.7148 crore for the textile sector in
2018-19 as against Rs.6,000 Crore in 2016.
Infrastructure and
Financial Sector Development:-
Emphasising that infrastructure is the growth driver of economy, the Finance
Minister estimated that investment in excess of Rs.50 lakh crore is needed to
increase growth of GDP and connect the nation with a network of roads,
airports, railways, ports and inland waterways. He announced increase of
budgetary allocation on infrastructure for 2018-19 to Rs.5.97 lakh crore
against estimated expenditure of Rs.4.94 lakh crore in 2017-18.
The Government has made an all-time high allocation to rail and road sectors
and is committed to further enhance public investment. The Prime Minister
personally reviews the targets and achievements in infrastructure sectors on a
regular basis. Using online monitoring system of PRAGATI alone, projects
worth 9.46 lakh crore have been facilitated and fast tracked.
To further boost tourism, the Budget proposes to develop ten prominent tourist
sites into Iconic Tourism destinations by following a holistic approach
involving infrastructure and skill development, development of technology,
attracting private investment, branding and marketing.
Under the Bharatmala Pariyojana, about 35000 kms road
construction in Phase-I at an estimated cost of Rs.5,35,000 crore
has been approved.
Railways:-
Railways Capital Expenditure for the year 2018-19 has been pegged at
Rs.1,48,528 crore. A large part of the Capex is devoted to capacity
creation. 4000 kilometers of electrified railway network is slated for
commissioning during 2017-18. Work on Eastern and Western dedicated
Freight Corridors is in full swing. Adequate number of rolling stock –
12000 wagons, 5160 coaches and approximately 700 locomotives are being procured
during 2018-19. Over 3600 kms of track renewal is targeted during the current
fiscal. Redevelopment of 600 major railway stations is being taken
up.
Mumbai’s local train network will have 90 kilometers of double line tracks at a
cost of over Rs.11,000 crore. 150 kilometers of additional suburban network is
being planned at a cost of over Rs.40,000 crore, including elevated corridors
on some sections. A suburban network of approximately 160 kilometers at an
estimated cost of Rs.17,000 crore is being planned to cater to the growth of
the Bengaluru metropolis.
Air Transport
The Budget proposes to expand the airport capacity more than five times to
handle a billion trips a year under a new initiative - NABH Nirman. Under
the Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik)
initiated by the Government last year, 56 unserved airports and 31 unserved
helipads would be connected.
Finance
To encourage raising funds from bond market, the Finance Minister urged
regulators to move from ‘AA’ to ‘A’ rating for investment eligibility. He said
that the Government will establish a unified authority for regulating all
financial services in International Finance Service Centre (IFSCs) in India.
Digital Economy
The Finance Minister said that NITI Aayog will initiate a national program to
direct efforts in artificial intelligence.
Department of Science & Technology will launch 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. The Budget doubled the allocation on Digital India programme to
Rs 3073 crore in 2018-19.
To further
Broadband access in villages, the Government proposes to set up five lakh wi-fi
hotspots to provide net connectivity to five crore rural citizens. The Finance
Minister allocated Rs. 10000 crore in 2018-19 for creation and augmentation of
Telecom infrastructure.
Defence
Recognizing the sacrifices made by the Armed Forces in meeting the security
challenges, the Finance Minister proposed development of two defence industrial
production corridors.
Shi Jaitley
announced that a scheme will be evolved to assign every individual enterprise
in India a unique ID, on the lines of Aadhar.
Disinvestment :-
The Finance Minister announced that 2017-18 disinvestment target of Rs.72,500
crore has been exceeded and expected receipts of Rs.1,00,000 crore. He
set disinvestment target of Rs.80,000 crore for 2018-19.
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.
The Finance Minister announced that a comprehensive Gold Policy will be
formulated to develop gold as an asset class. The Government will also
establish a system of consumer friendly and trade efficient system of regulated
gold exchanges in the country. Gold Monetization Scheme will be revamped to
enable people to open a hassle-free Gold Deposit Account.
The Budget proposes to revise emoluments to Rs.5 lakh for the President, Rs 4
lakhs for the Vice President and Rs.3.5 lakh per month to Governor.
These emoluments were last revised in 2006.
With regard to the emoluments paid to the Members of Parliament, the Finance
Minister proposed necessary changes to refix the salary and allowances with
effect from April 1, 2018. He said the law will also provide for
automatic revision of emoluments every five years indexed to inflation and
hoped that the Hon’ble Members will welcome this initiative.
To celebrate the 150 Birth Anniversary of Mahatma Gandhi, Father of the Nation
from 2nd October 2019, the Budget set aside Rs.150 crore for
the activities leading to the commemoration programme.
Fiscal Management :
The Budget Revised Estimates for expenditure in 2017-18 are Rs.21.57 lakh crore
(net of GST compensation transfers to the States) as against the Budget
Estimates of Rs.21.47 lakh crore.
Continuing
Government’s path of fiscal reduction and consolidation, the Finance Minister
projected a Fiscal Deficit of 3.3% of GDP for the year 2018-19. The
Revised Fiscal Deficit estimates for 2017-18 were put at Rs. 5.95 lakh crore at
3.5% of GDP. He also proposed acceptance of key recommendations of the
Fiscal Reform and Budget Management Committee to bring down Central
Government’s Debt to GDP ratio to 40%.
Presenting
his direct tax proposals,
the Finance Minister said that attempts to reduce the cash economy and increase
the tax net have paid rich dividends. The growth rate of direct taxes in
financial years 2016-17 and 2017-18 have been significant, he said. The growth
of direct taxes in financial year 2016-17 was 12.6 percent, and for financial
year 2017-18 (upto 15th January, 2018) is 18.7 percent.
Therefore Shri Jaitley said buoyancy in personal income tax for financial
year 2016-17 and 2017-18 (RE) are 1.95 and 2.11 respectively. This the Finance
Minister said, indicates that additional revenue collected in the
last two financial years from personal income tax compared to average buoyancy
for the pre 2016-17 period, amounts to a total of Rs. 90,000 crore, which is a
result of a strong anti-evasion measures by the government.
The
Finance Minister also said that there has been a huge increase in the number of
returns filed by tax payers. The 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.
Shri Jaitley has
proposed 100 percent deduction to companies registered as Farmer Producer
Companies with an annual turnover upto Rs. 100 crore on profit derived from
such activities, for a period of five years from financial year 2018-19.
This he said will promote post harvest agriculture activities and also
encourage “Operation Greens” announced earlier and would give a boost to
the Sampada Yojana.
In order to encourage creation of new employment the deduction of 30 percent
Under Section 80-JJAA with a further relaxation to 150 days in the case of the
apparel industry, has been proposed to be extended to the footwear and leather
industry. The Finance Minister has also proposed to rationalise the deduction of
30 percent by allowing the benefit for a new employee employed for less than
the minimum period during the first year, but continues to remain employed for
the minimum period in the subsequent year.
Turning to the real estate sector, the Finance Minister has proposed that no
adjustment shall be made in respect of transactions in immovable property,
where the Circle Rate value does not exceed 5 percent of the consideration.
This would minimize hardship in real estate transactions.
In fulfilment of the promise to reduce the corporate tax rate in a phased
manner, Shri Jaitley has proposed to extend the reduced rate of 25 percent
currently 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. This would benefit the entire class of
micro, small and medium enterprises, which account for almost 99 percent of
companies filing tax returns, he said. The estimated revenue forgone
during Financial Year 2018-19 will be Rs. 7,000 crore. This lower corporate
income tax rate would leave such companies with higher investible surplus,
which would create more jobs.
The Budget proposals also seek to provide relief to salaried tax payers by
allowing a Standard Deduction of Rs. 40,000 in place of the present exemption
allowed for transport allowance and reimbursement of miscellaneous medical
expenses. However, transport allowance at enhanced rate is proposed to be
continued for differently abled persons. Further, it is also proposed to
continue medical reimbursement benefits in case of hospitalization etc. for all
employees. The proposed Standard Deduction will help middle class employees
even further in reducing their tax liabilities. It will also significantly
benefit pensioners, who normally do not enjoy any allowance for transport and
medical expenses, Shri Jaitley said. 2.5 crore salaried employees and
pensioners would benefit from this proposal and the revenue cost would be
approximately Rs. 8,000 crore.
Relief to Senior Citizens has also been proposed. The proposals are :-
Exemption of interest
income on deposits with banks and post offices are proposed to be increased
from Rs. 10,000 to Rs. 50,000. TDS shall not be required to be deducted under
section 194A. Benefit will also be available for interest from all fixed
deposit schemes and recurring deposit schemes.
Hike in deduction limit
for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs.
50,000 under section 80D.
Increease 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. Concessions will
give extra tax benefit of Rs. 4,000 crore to senior citizen. It is also
proposed to extend the Pradhan Mantri Vaya Vandana Yojana up to March, 2020.
The current investment limit is also proposed to be increased to Rs. 15 lakh
from the existing limit of Rs. 7.5 lakh per senior citizen.
It is proposed to provide
more concessions for International Financial Services Centre (IFSC), in order
to promote trade in stock exchanges located in IFSC. The concessions propose
transfer of derivatives and certain securities by non- residents from capital
gains tax, and non corporate tax payers operating in IFSC to be charged
Alternate Minimum Tax (AMT) at concessional rate of 9 percent at
par with Minimum Alternate Tax (MAT) applicable for corporates.
In a measure that proposes
to control the cash economy, payments exceeding Rs. 10,000 in cash made
by trusts and institutions shall be disallowed and would be subject to tax. In
order to improve TDS compliance by these entities, the Finance Minister has
proposed to provide that in case of non deduction of tax, 30 percent of the
amount shall be disallowed and would be taxed.
Turning to rationalization
of Long Term Capital Gains (LTCG), the Finance Minister noted buoyancy in the
equity market, as a result of reforms and incentives given so far. The
total amount of exempted capital gains from listed shares and units is around
Rs. 3,67,000 crore (as per returns filed for A.Y. 2017-18). Shri Jaitley said
that a major part of this gain has accrued to corporates and LLPs. This has
also created a bias against manufacturing, leading to more business surpluses
being invested in financial assets. Due to attractiveness on return on
investment on equity, even without tax exemption, there is a strong case for
bringing Long Term Capital Gains from listed equities in the tax net, the
Finance Minister said. He has however only proposed a modest change in
the present regime, recognizing that a vibrant equity market is essential for
economic growth. Shri Jaitley has proposed to tax such Long Term Capital Gains
exceeding Rs. 1 lakh at the rate of 10 percent, without allowing any indexation
benefit. However, all gains up to 31st January, 2018 will be
grandfathered. The Finance Minister has also proposed to introduce a tax on
distributed income by equity oriented mutual funds at the rate of 10 percent,
to provide a level field across growth oriented funds and dividend distributing
funds. The proposed change in Capital Gains Tax will bring marginal revenue
gain of about Rs. 20,000 crore in the first year, in view of grandfathering.
In order to take care of
the education and health care needs of Below Poverty Line (BPL) and rural
families, The Budget proposes to increase the cess on personal income tax and
corporation tax to 4 percent from the present 3 percent. The new cess will be
called the “Health and Education Cess” and is expected to lead to a collection
of an estimated additional amount of Rs. 11,000 crore.
The Finance Minister also
announced a proposal to roll out E-assessment across the country to
almost eliminate person to person contact leading to greater efficiency and
transparency in direct tax collection. E-assessment had been introduced on a
pilot basis in 2016 and extended to 102 cities in 2017.
On the indirect taxes
side, this being the first budget after the roll out of the Goods and Services
Tax (GST), the budget proposals are mainly on the customs side. The Finance
Minister has proposed changes in customs duty to promote creation of more jobs
in the country and also to incentivise domestic value addition and Make
in India in sectors such as food processing, electronics, auto components,
footwear and furniture. Therefore it is proposed to increase customs duty
on mobile phones from 15 percent to 20 percent, on some of their parts and
accessories to 15 percent and on certain parts of televisions to 15 percent.
Customs duty is proposed
to be reduced on raw cashew from 5 percent to 2.5 percent, to help the cashew
processing industry.
It is also proposed to
abolish the Education Cess and Secondary and Higher Education Cess on imported
goods. In its place it is proposed to impose a Social Welfare Surcharge at the
rate of 10 percent of the aggregate duties of Customs, on imported goods, to
provide for social welfare schemes of the government. However, goods which were
so far exempt from Education Cesses on imported goods, will however continue to
be so. In addition, certain specified goods, mentioned in Annexure 6 of the
Budget speech, will attract the proposed Surcharge, at the rate of 3 percent of
the aggregate duties of customs only.
With the roll of GST, the
Budget also proposes to change the name of the Central Board of Excise and
Customs (CBEC) to the Central Board of Indirect Taxes and Customs
(CBIC).
=============================================================================================
BUDGET AT A GLANCE
Budget at a Glance
presents broad aggregates of the Budget in a reader-friendly document. This
document shows receipts and expenditure as well as the Fiscal Deficit (FD),
Revenue Deficit (RD), Effective Revenue Deficit (ERD), and the Primary Deficit
(PD). of the Government of India. Besides, it presents a pictorial account of
sources of receipts, their application, the details of debt and deficit
indicators, sources of deficit financing and trends and composition of
important budgetary variables through charts and graphs.
2. Fiscal Deficit
is the difference between the Revenue Receipts plus Non-debt Capital Receipts
(NDCR) and the total expenditure. FD is reflective of the total borrowing requirements
of Government.
Revenue Deficit refers to the excess of revenue expenditure over
revenue receipts.
Effective Revenue Deficit is the
difference between Revenue Deficit and Grants for Creation of Capital Assets.
Primary Deficit is measured as Fiscal Deficit less interest payments.
3. Budget 2018-19 reflects
the Government’s firm commitment to substantially boost investment in
Agriculture, Social Sector, Digital Payments, Infrastructure and Employment
Generation on the one hand and simultaneously stick to the path of fiscal
rectitude by aiming for a reduction of FD by 0.2% of GDP over RE 2017-18. This
is substantiated by increase in expenditure of
Rs.2,24,463 crores over RE (2017-18) while simultaneously keeping the
fiscal deficit at 3.3% of GDP.
4. In RE 2017-18, the
total expenditure has been kept at Rs.22,17,750
crore and is more than BE 2017-18 by Rs. 71,015 crore. The increase in total
expenditure is mainly due to the outgo on account of GST Compensation to
States, increased outlays on some important schemes and also to meet the
recommendation of 7th CPC with respect to allowances and pensions.
5. The devolution of
States’ share in taxes witnessed a major jump after the implementation of XIV
Finance Commission from 2015-2016 onwards. Continuing with this trend, the
total resources going to States including the devolution of State’s share in
taxes, Grants/Loans, and releases under Centrally Sponsored Schemes in BE
(2018-19) is Rs.12,69,435 crore, with a jump of `1,53,558 crore over RE
(2017-18) and Rs. 2,83,760 crore more than the Actuals (2016-17).
KEY
TO BUDGET DOCUMENTS
BUDGET 2018-2019
1.
The list of
Budget documents presented to the Parliament, besides the Finance Minister's
Budget Speech, is given below:
A.
Annual Financial Statement (AFS)
B.
Demands for Grants (DG)
C.
Finance Bill
D.
Statements mandated under FRBM Act:
i.
Macro-Economic Framework Statement
ii.
Fiscal Policy Strategy Statement
iii.
Medium Term Fiscal Policy Statement
E.
Expenditure Budget
F.
Receipts Budget
G.
Expenditure Profile
H.
Memorandum Explaining the Provisions in the Finance Bill
I.
Budget at a Glance
J.
Outcome Budget
The
documents shown at Serial A, B, and C are mandated by Art. 112,113, and 110(a)
of the Constitution of India respectively, while the documents at Serial No. D
(i) (ii) and (iii) are presented as per the provisions of the Fiscal
Responsibility and Budget Management Act, 2003
(i) The Consolidated Fund
of India (CFI) draws its existence from Article 266 of the Constitution. All
revenues received by the Government, loans
raised by it, and also receipts from recoveries of loans granted by it,
together form the Consolidated Fund of India. All expenditure of the Government
is incurred from the Consolidated Fund of India and no amount can be drawn from
the Consolidated Fund without due authorization from the Parliament.
(ii) Article 267 of the Constitution
authorises the existence of a Contingency Fund of India which is an
imprest placed at the disposal of the President of India to facilitate meeting
of urgent unforeseen expenditure by the Government pending authorization from
the Parliament. Parliamentary approval for such unforeseen expenditure is
obtained, ex- post-facto, and an equivalent amount is drawn from the
Consolidated Fund to recoup the Contingency Fund after such ex-post-facto
approval. The corpus of the Contingency Fund as authorized by Parliament
presently stands at Rs. 500 crore.
No comments:
Post a Comment