Arun Jaitley, Indias finance minister, looks on during a panel discussion at the Bloomberg India Economic Forum in Mumbai.

Union Budget 2018: Key Highlights

Finance Minister Arun Jaitley today presented a rural-focused Union Budget for financial year 2018-19 that provides for higher minimum support prices and an increased farm credit target. He also introduced a health insurance scheme for over 10 crore families with a cover of Rs 5 lakh a year. Jaitley brought back the Long-Term Capital Gains Tax on equity gains of above Rs 1 lakh.

Here are the key announcements:

Fiscal Deficit

FY19 fiscal deficit estimated at 3.3 percent of the GDP.
  • Fiscal deficit for 2017-18 is likely to be higher at 3.5 percent compared to the targeted 3.2 percent of the GDP.
  • FY18 revenue receipts revised estimates of Rs 21.5 lakh crore versus budget estimate of Rs 21.4 lakh crore.
  • Direct taxes rose 18.6 percent as of Jan. 15.

Direct Taxes

No change in income tax slabs for individuals.
  • Standard deduction of Rs 40,000 for the salaried for transport and health.
  • Senior citizen deduction for health insurance raised to Rs 50,000.
  • To allow 100 percent deduction to some farmer producer companies.
  • Reduced corporate tax of 25 percent extended to companies with an annual turnover of Rs 250 crore.

Long-Term Capital Gains Tax

10 percent long-term capital gains tax on equity gains above Rs 1 lakh.
  • Short-term capital gains tax for selling shares within one year remains at 15 percent.
  • Health and education cess increased to 4 percent from 3 percent.

Indirect Taxes

  • Customs duty on mobile phones raised to 20 percent from 15 percent.
  • Customs duty on raw cashew reduced to 2.5 percent from 5 percent.
  • Customs duty on some mobile and television parts increased to 15 percent.

Divestment

Target to raise funds by selling stakes in state-run companies raised to Rs 80,000 crore.
  • National Insurance Company, United Insurance Company, United India Assurance and Oriental Insurance will be merged and listed.
  • Government to raise more than Rs 1 lakh crore through divestment in the ongoing financial year against a target of Rs 72,500 crore.

Agriculture

  • To raise minimum support price for kharif season crops to 1.5 times of agri production cost—that is cost plus 50 percent.
  • Total credit to agriculture target set at Rs 11 lakh crore for FY19.
  • Strengthening the e-national agricultural market network.
  • The government will spend Rs 14.34 lakh crore on rural infrastructure across various schemes and departments.

Healthcare

  • National Health Protection Scheme for 10 crore families.
  • It provides a health cover of Rs 5 lakh per family a year.
  • Rs 600 crore to provide nutritional support for tuberculosis patients.

MSMEs, Startups

Mudra scheme lending target set at Rs 3 lakh crore for FY19.
  • Government to work towards resolving bad loans of micro, small and medium enterprises.
  • To contribute 12 percent of wages of new Employees’ Provident Fund subscribers for three years.
  • Additional measures to aid venture capital/angel investors in startups.

Education

  • To invest Rs 1 lakh crore on education infrastructure over four years.
  • To initiate integrated B.Ed programme for aspiring teachers
  • Amended RTE Act to train 13 lakh teachers.
  • 18 schools of planning and architecture to be set up.

SC/ST Upliftment

  • FY19 allocation for scheduled tribes at Rs 39,135 crore.
  • FY19 allocation for scheduled caste allocation at Rs 56,619 crore.


Infrastructure

Rs 5.97 lakh crore for infrastructure in FY19 compared with Rs 4.94 lakh crore in the revised estimates of FY18.
  • Smart city projects worth Rs 20,852 crore in progress.
  • Plan 99 smart cities with outlay of Rs 2.04 lakh crore.
  • To complete 9,000 km of National Highways in FY18.
  • NHAI to organise road assets into an special purpose vehicle.

Railways, Air Connectivity

Railways to get Rs 1.48 lakh crore for capital expenditure.
  • Rs 40,000 crore will be spent on upgrading Mumbai train systems.
  • Plan for 160 km suburban rail line in Bengaluru at Rs 17,000 crore.
  • Aim to electrify 4,000 km of railway lines in FY19.
  • Railway stations with more than 25,000 footfalls to have escalators.
  • Regional air connectivity scheme UDAN to connect 56 unserved airports, 31 heliports.

Digital India

Government doesn’t consider cryptocurrencies as legal tender.
  • One lakh gram panchayats have been connected under BharatNet.
  • FY19 allocation for rural telecom set at Rs 10,000 crore.
  • To allocate Rs 3,073 crore under Digital India programme.

Other Schemes

  • Free cooking gas aim raised to 8 crore poor households under Ujjwala Scheme.
  • Under the ‘Swacch Bharat’ scheme, six crore toilets made so far, aim to make two crore more. To increase spending on rural sanitation.
  • Dedicated affordable housing fund to be set up.
  • Scheme to combat air pollution in National Capital Region to be launched.