[Filler] Budget 2018: Key Highlights

There is no love for cryptocurrencies among India policymakers whatsoever and the finance minister makes it clear. He said the government does not consider any cryptocurrencies as legal tender. In fact, he said it is considering all measures to eliminate use of such virtual currencies.

Some Other Notable Announcements:

• Pay To President Of India Revised To Rs 5 Lakh Per Month
• Pay To Vice President Of India Revised To Rs 4 Lakh Per Month
• Pay To Governors Revised To Rs 3.5 Lakh Per Month

The finance minister has pegged FY19 railway capex at Rs 1.48 lakh crore. The government has kept an aim to electrify 4,000 Kms of railway lines in FY19.

Good news for Mumbaikars. The government will spend around Rs 40,000 crore on upgrading the city’s train systems.

Key Railway Budget highlights

• Plan 160 Km Suburban Rail Line In Bengaluru At Rs 17,000 Crore
• Rail Stations With More Than 25,000 Footfalls To Have Escalators

Other key highlights from Budget 2018 so far

• Government To Work Towards Resolving NPAs Of MSMEs
• To Take Additional Measures To Aid VC/Angel Investors In Startups
• To Contribute 12 Percent Of Wages Of New EPF Employees For 3 Years
• FY19 Outlay For Textile Sector Set At Rs 7,100 Crore
• FY19 Allocation For Scheduled Caste Allocation At Rs 56,619 Crore
• FY19 Allocation For Scheduled Tribes At Rs 39,135 Crore

The big healthcare push. The finance minister announced setting up a National Health Protection Scheme for 10 crore families. The scheme will give Rs 5 lakh per family per year.

Budget Impact

Shares of hospital operators rose after government proposed National Health Protection Scheme.

• Apollo Hospital Enterprise up 3.13 percent
• Shalby up 2.35 percent
• Healthcare Global up 2.8 percent
• Kovai Medical Centre and Hospital up 1.28 percent

The government also laid its emphasis on improving the quality of education in the country. From training teachers to increasing the digital foundation in education, a whole host of announcements were made by FM Arun Jaitley.

Here are some of the key announcements:

• To Initiate Integrated B-Ed Programme For Aspiring Teachers
• Digital Intensity In Education To Be Increased
• Amended RTE Act To Train 13 Lakh Teachers
• Govt Committed To Ensure Education To Tribal Children
• To Invest Rs 1 Lakh Crore On Education Infra Over 4 Years

The finance minister has proposed to set up a dedicated affordable housing fund.

FM’s Affordable Housing Push

• Raises Spending On Housing For Poor
• FY19 Total Rural Livelihood Spend Plan At Rs 14.34 Lakh Crore
• FY19 Allocation For National Livelihood Mission At Rs 5,750 Crore
• FY19 Groundwater Irrigation Scheme Allocation Rs 2,600 Crore
• Aim To Provide Houses To Every Poor Person By 2022

Some key announcements so far:

• Fishery Fund, Animal Husbandry Infra Fund Corpus Rs 10,000 Crore
• To Double Allocation To Food Processing Industry
• FY19 Food Processing Ministry Allocation Rs 1,400 crore
• Cluster Based Development Planned for Horticulture
• To Allocate Rs 500 crore For “Operation Green”
• Export Of Agri Commodities Will Be Liberalised
• Propose To Extend Facility Of Kisaan Credit Cards To Fisheries

FM Jaitley at the start of his speech emphasised on this year's budget being rural centric. The government committed to welfare of farmers, said Jaitley. He said the government will focus on farm and non-form employment generation.

He said the agriculture policy had remained production-centric for decades, emphasizing the need for generating higher income for farmers. "Our emphasis is on generating higher income for farmers. India's agricultural output is at record levels due to the effort of our farmers," he said.

The FM also said that the government wants to ensure that the farmer receives at least 50 percent or 1.5 times

The finance minister emphasised on the premium on honesty given by this government. "There was a time when corruption was the norm. But today's youth wants to lead a life on honesty. There is a premium on honesty," he said.

FM On India's Economic Performance:

• Exports expected to grow at 15 percent in 2017-18.
• Hope to grow at 7.2-7.5 percent during the second half of the year.
• Firmly on course to achieve high growth of 8 percent plus. Indian now a $2.5 trillion economy.
• The country’s lenders are in in better place to support growth.

Finance Minister Arun Jaitley started his budget speech saying the government had promised to reduce poverty, expedite infrastructure creation. He said the government had pledged to give India honest, clean government and to build strong, confident, new India.

India’s fiscal deficit—the difference between all its earnings and expenditure—is going to be one of the key numbers to watch out for.

India’s fiscal deficit is forecast to widen to 3.5 percent of the gross domestic product in the year to March, and reach 3.3 percent in the next financial year, according to the median estimate in a Bloomberg survey of economists.

While SBI and HSBC expect the country to meet its fiscal deficit target of 3.3 percent of the gross domestic product, Axis Bank and Kotak say that the metric is likely to slip by 20 basis points to 3.5 percent.

Rathin Roy, Director of the National Institute of Public Finance and Policy said that a fiscal slippage for a second year would be unconscionable.

Total expenditure—which includes revenue and capital expenditure by the government—is expected to be lower than last year’s estimates.

“We expect a cut in capital expenditure by Rs 50,000 crore and postponing Rs 30,000 crore of revenue expenditure to the next year,” SBI said, adding that total expenses are likely to come in at Rs 26.6 lakh crore for the current financial year. Axis expects a Rs 45,000 crore cut in total expenditure, mostly through capital expenditure.

The government's revenue, or what it earns over a financial year through direct and indirect taxes along with other investments, is expected to fall short of estimates for financial year 2018-19.

Total revenue receipts for FY19 will come around Rs 16.66 lakh crore against the budget estimates of Rs 17.26 lakh crore, State Bank of India said in a report ahead of the budget. This is largely because tax collections from the two-year old goods and services tax system have been lower than expected, according to reports by Axis Bank and Kotak Economic Research.

Axis Bank's economists expects Rs 17.31 lakh crore revenue for this financial year and Rs 19.65 lakh crore for financial year 2019-2020.

The Narendra Modi government will present its last budget—a vote on account—tomorrow, highlighting at least its income and expense plan until a new government is formed, or at most some steps to relieve India’s farm distress.

Here are the key numbers to watch out for:

• Total receipts
• Capital expenditure
• Fiscal deficit
• Gross borrowing
• Divestment target

Indian Prime Minister Narendra Modi has a last-ditch attempt to win voters with possible populist spending measures in today’s budget, risking his debt targets in the process.

Piyush Goyal, who is standing in as finance minister while Arun Jaitley takes medical leave, is due to the deliver the budget speech from 11 a.m. on Feb. 1 in New Delhi.

A pre-election budget usually covers the period until a new government takes office, and isn’t typically used to make major announcements, such as tax changes that would carry over into the next administration. But there’s no law that prevents Modi from making significant announcements this week.

While an interim budget usually highlights the basic expenses and revenues of the government until a new one is formed, there’s no law that prevents Modi from making significant announcements this week.