Bud­get 2018

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Fi­nance Min­is­ter Arun Jait­ley's de­liv­ered this gov­ern­ment's fifth and last full Bud­get amid sub­dued eco­nomic growth, chal­leng­ing fis­cal sit­u­a­tion and farm dis­tress. What makes it all the more im­por­tant is the up­com­ing elec­tions in eight states this year and the Lok Sabha elec­tion next year, all of which put tough de­mands on him. How has Jait­ley man­aged to bal­ance pop­ulist de­mands, the need to sup­port eco­nomic growth and PM Modi's fo­cus on fis­cal dis­ci­pline and re­forms? Read the high­lights from from Bud­get 2018 be­low to find out:

Fis­cal Sit­u­a­tion

• Fis­cal deficit is 3.5% of GDP at Rs 5.95 lakh crore in 2017-18. Pro­ject­ing fis­cal deficit to be 3.3% of GDP in the next fis­cal

• Rs 21.57 lakh crores trans­ferred as net GST to states against a pro­jec­tion of Rs 21.47 lakh crores

Tax

• 85.51 lakh new tax pay­ers filed in­come tax re­turns in FY17

• NO PER­SONAL IN­COME TAX CHANGES PRO­POSED IN BUD­GET

• Growth in di­rect taxes (till Jan 15) is 18.7 %

• Sur­charge of 10 pc on in­come above Rs 50 lakh but less than Rs 1 cr to be con­tin­ued next year; 15 pc on in­come above Rs 1 cr to also con­tinue.

• 100% tax de­duc­tion is al­lowed to co-op­er­a­tive so­ci­eties

• Cor­po­rate Tax of 25% ex­tended to com­pa­nies with turnover up to Rs 250 cr in fi­nan­cial year 201617

• In­cen­tives for Se­nior cit­i­zens: Ex­emp­tions in in­come of Rs 10,000 from Banks FD and post of­fices

• Se­nior cit­i­zens to get Rs 50,000 per an­num ex­emp­tion for med­i­cal in­sur­ance un­der Sec 80D

• Rs 7.5 lakh per se­nior cit­i­zen limit for in­vest­ment in in­ter­est- bear­ing LIC schemes dou­bled to Rs 15 lakh

• Stan­dard de­duc­tion of Rs 40,000 al­lowed for trans­port, med­i­cal re­im­burse­ment for salaried tax pay­ers

• Govt to re­duce hard­ships faced in re­alty deals; no ad­just­ment to be made in case cir­cle rate does not ex­ceed 5 pc of sale con­sid­er­a­tion

• Rs 8,000 crore rev­enue lost due to stan­dard de­duc­tion al­lowed to salaried em­ploy­ees

• Rs 7,000 cr rev­enue for­gone on ac­count of lower cor­po­rate tax for Rs 250 cr turnover cos

• Rs 19,000 cr rev­enue loss on

di­rect tax in last fis­cal

• LONG TERM CAP­I­TAL GAINS EX­CEED­ING RS 1 L AKH WILL BE TAXED AT 10% WITH­OUT IN­DEX­ING

• Short term cap­i­tal tax re­mains at 15%

• A tax on dis­trib­uted in­come at 10%

• Ed­u­ca­tion cess in­creased to 4% from 3% to col­lect ad­di­tional Rs 11,000 cr

• GST rev­enue will be re­ceived only for 11 months, that will have an ef­fect on bal­ance sheets

• GST col­lec­tions pro­jec­tion pegged at Rs 7.43 lakh crore in full year 2018-19 as against Rs 4.44 lakh crore in nine months of cur­rent fis­cal.

• Govt makes PAN manda­tory for any en­tity en­ter­ing into a fi­nan­cial trans­ac­tion of Rs 2.5 lakh or more.

Cus­toms Du­ties

• Cus­toms Duty on cer­tain prod­ucts, such as mo­bile phones and tele­vi­sions has been in­creased, to pro­vide a fil­lip to 'Make in In­dia'

• So­cial wel­fare sur­charge of 10% on im­ported goods.

• Cen­tral Board of Ex­cise and Cus­toms re­named as Cen­tral Board of In­di­rect Taxes and Cus­toms

• Im­port of so­lar tem­pered glass for man­u­fac­ture of so­lar cells ex­empted from cus­toms duty.

• Cus­toms duty on crude ed­i­ble veg­etable oils like ground­nut oil, saf­flower seed oil hiked from 12.5% to 30%; on re­fined ed­i­ble veg­etable oil from 20% to 35%

• Cus­toms duty on sun­glasses, cig­a­rette lighter, toys, bus and truck tyres, se­lect fur­ni­ture hiked.

• Cus­toms duty on im­i­ta­tion jew­ellery hiked from 15% to 20%; dou­bled on all watches to 20%.

• Im­port duty on LCD/LED/ OLED pan­els, parts of TVs hiked to 15%; duty on smart watches, wear­able de­vices, footwear dou­bled to 20%.

• New scheme for pro­vid­ing elec­tronic assess­ment to elim­i­nate per­son-to-per­son con­tact

• The gov­ern­ment's em­pha­sis will be on gen­er­at­ing higher in­comes for farm­ers, by help­ing them pro­duce more with lesser cost, and in turn, earn higher in­come for their pro­duce.

• Jait­ley stressed on the fact that In­dia's agri­cul­tural pro­duc­tion is at a record high level to­day. 275 mil­lion tonne food­grains and 300 mil­lion tonne fruits and veg­etable have been pro­duced in the coun­try.

• The FM said the gov­ern­ment wants farm­ers to earn 1.5 times the pro­duc­tion cost, and the Min­i­mum Sell­ing Price (MSP) for the Kharif Crops has been set at 1.5 times the pro­duce price. Jait­ley said the Cen­tre will work with states to en­sure that all farmer get a fair price.

• Agri­cul­tural mar­ket and in­fra fund of Rs 2000 crore fund will be set up to strengthen the mar­ket con­nec­tiv­ity.

• A sum of Rs 500 cr will be al­lo­cated for Op­er­a­tion Green to be launched. It will pro­mote agri­cul­tural prod­ucts.

• Ex­tend the fa­cil­ity of Kisan credit card to fish­eries and for an­i­mal husbandry

• Rs 10,000 crore set aside for Fish­eries and Aqua­cul­ture De­vel­op­ment Fund

• Rs 10,000 crore set aside for an­i­mal husbandry in­fra fund

• Pro­pose to launch a re­struc­tured bam­boo mis­sion with a fund of Rs 1200 crore . "Bam­boo is green gold," Jait­ley said.

• Agri­cul­tural credit tar­get in­creased from Rs 8.5 lakh crore to Rs 11 lakh core

• Spe­cial scheme to man­age crop re­duce in Haryana, Pun­jab and

Ru­ral Econ­omy

• 8 crore poor women will get new LPG con­nec­tions.

• PM Saub­hagya Yo­jana: 4 crore poor peo­ple will get power con­nec­tion.

• The gov­ern­ment will spend Rs 16,000 crore on this scheme.

• Govt plans to con­struct 2 crore toi­lets in next fis­cal year un­der Swach Bharat Mis­sion

• Gov­ern­ment tar­get house for all by 2022. 51 lakh houses have been con­structed af­ford­able houses in ru­ral and fur­ther 50 lakh houses in ur­ban ar­eas.

• 1 cr houses to be built un­der Prad­han Mantri Awas Yo­jana in ru­ral ar­eas

• Na­tional liveli­hood scheme gets Rs 5,750 crore .

• In 2018-19, min­istries will be able to spend Rs 14.34 lakh crores for cre­ation of liveli­hood in ru­ral ar­eas.

• Govt gives Rs 9,975 crore for so­cial se­cu­rity schemes for the next fis­cal year. Delhi to re­duce pol­lu­tion

Quotes on Bud­get

Mr. R. Narayan, CEO Pow­er2SME “The gov­ern­ment’s in­tent of pro­mot­ing ‘ease of do­ing busi­ness’ among MSME play­ers was ev­i­dent in the an­nounce­ments made by FM Arun Jait­ley for MSMEs. With ma­jor fo­cus on im­prov­ing lend­ing in the MSME sec­tor, the gov­ern­ment has an­nounced a num­ber of mea­sures to ease the lend­ing process and has also ad­dressed to im­prove loan ac­ces­si­bil­ity for MSMEs. The al­lo­ca­tion of Rs 3 lakh crore for lend­ing un­der Mu­dra will def­i­nitely boost the sec­tor fi­nan­cially and help the MSME’s grow their busi­nesses more ef­fi­ciently. Fur­ther, re­duc­tion of the cor­po­rate tax to 25% for small com­pa­nies with an­nual turnover of up to Rs. 250 crore is a mas­ter stroke

and this will bring re­lief to about 90% of MSME play­ers in In­dia. The gov­ern­ment has also pro­posed re­vamp­ing the sys­tem of sanc­tion­ing of loans to SMEs by link­ing it with GSTN. This will im­mensely help MSMEs with bet­ter man­age­ment of work­ing cap­i­tal and faster dis­count­ing of the bills. Bank re­cap­i­tal­iza­tion will en­able the pub­lic sec­tor banks to lend an ad­di­tional credit of 5 lakh crore, thereby al­low­ing more com­pa­nies and MSMEs to ac­cess re­quired busi­ness loans. The FM’s agenda to pro­vide vi­able en­vi­ron­ment for Fin­Tech com­pa­nies to grow will fur­ther help bridge MSME lend­ing gap. Mr. Su­jay Ojha, Ad­vi­sor to Weather Risk Man­age­ment Ser­vices Pvt. Ltd. “The bud­get 2018 has cre­ated an op­ti­mistic en­vi­ron­ment for the farm­ers and agri­cul­ture and given the im­pe­tus which so far was lack­ing. The gov­ern­ment has surely en­sured that the sec­tor was one of the top pri­or­i­ties. There is op­er­a­tion green fund, a fund for im­prov­ing cold chain fa­cil­i­ties, MSP has in­creased to 1.5 times by which farmer gets bet­ter sale pro­ceeds, credit fa­cil­i­ties have in­creased. There is also sep­a­rate fund for fish­eries and an­i­mal husbandry sec­tor. Farmer pro­ducer or­ga­ni­za­tions have been given the much-needed tax cuts and in­cen­tive. Kisan credit card scheme has been ex­tended to other sec­tors. The bud­get 2018 is a “Game changer”. It is pro-farmer, pro-agri­cul­ture, propoor. In fact, it is a true pro-re­pub­lic and pro-In­dia bud­get when we talk of the larger pic­ture. The bud­get has also in­ter-linked var­i­ous seg­ments. The gov­ern­ment has done a big job".

Fi­nance Min­is­ter Arun Jait­ley

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