Finance Minister Arun Jaitley presents the Union Budget 2018-19 on 1st February 2018. In his speech, he said that “When our government took over, India was part of “fragile five,” but now are now the fastest growing economy in the world. He also said that Indian economy is a $2.5 trillion economy. India is expected to become the fifth largest economy very soon. Let us now learn about budget analysis.
According to Article 112 of the Indian Constitution, the Union Budget of a year, also referred to as the annual financial statement, is a statement of the estimated receipts and expenditure of the government for that particular year. Union Budget keeps the account of the government’s finances for the fiscal year that runs from 1st April to 31st March. Union Budget is classified into Revenue Budget and Capital Budget.
Capital Budget includes capital receipts and payments of the government. Loans from the public, foreign governments and RBI form a major part of the government’s capital receipts. Capital expenditure is the expenditure on development of machinery, equipment, building, health facilities, education etc. The fiscal deficit is incurred when the government’s total expenditure exceeds its total revenue.
Highlights of Budget 2018 – 19
The following is the summary and objectives of the upcoming Union budget.
Finance Minister Shri Arun Jaitley presents general Budget 2018-19 in Parliament.
Budget guided by the mission to strengthen agriculture, rural development, health, education, employment, MSME, and infrastructure sectors.
The 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.
MSP for all unannounced Kharif crops will be one and half times of their production cost like the 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 has to be developed and upgraded into Gramin Agricultural Markets to protect the interests of 86% small and marginal farmers.
“Operation Greens” launched to address price fluctuations in potato, tomato, and onion for benefit of farmers and consumers.
Two New Funds of Rs10,000 crore announced for Fisheries and Animal Husbandry sectors; Re-structured National Bamboo Mission gets Rs.1290 crore.
Loans to Women Self Help Groups will increase to Rs.75,000 crore in 2019 from 42,500 crores 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 1.38 lakh crore. Tribal students to get Ekalavya Residential School in each tribal block by 2022. Welfare fund for SCs gets a boost.
World‟s largest Health Protection Scheme covering over 10 crore poor and vulnerable families launched with a family limit up to 5 lakh rupees for secondary and tertiary treatment.
Fiscal Deficit pegged at 3.5 %, projected at 3.3 % for 2018-19.
Rs. 5.97 lakh crore allocation for infrastructure
- Ten prominent sites to be developed as Iconic tourist destinations.
- NITI Aayog to initiate a national programme on Artificial Intelligence (AI).
- Centers of excellence to be set up on robotics, AI, Internet of things etc.
- Disinvestment crossed target of Rs 72,500 crore to reach Rs 1,00,000 crore
- Comprehensive Gold Policy on the anvil to develop yellow metal as an asset class.
- 100 percent deduction proposed to companies registered as Farmer Producer Companies with an annual turnover up to Rs. 100 crore on profit derived from such activities, for five years from 2018-19.
- 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.
- No adjustment in respect of transactions in immovable property where Circle Rate value does not exceed 5 percent of consideration.
- Proposal to extend the reduced rate of 25 percent currently available for companies with a turnover of fewer than 50 crores (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.
- 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:- Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
- Benefit also 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.
- Increase in deduction limit for medical expenses 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.
Similarly, you may find out about the previous Union budgets.
Q 1: The following will be the main concerns of the budget of the year 2018-2019:
A) Agriculture B) Infrastructure C) Education D) All of the above
Ans: D) All of the above.