Introduction of the budget has for all time been the most serious business. It concerns every single resident of the nation, however, all may not comprehend its importance.
The Annual budget is presented by the Finance Minister, Arun Jaitley for the Financial Year 2018-19 on 1st of February 2018. This is the last full budget plan of the BJP-drove NDA government before the Lok Sabha polls of 2019 is quite critical. Arun Jaitley while presenting the budget expressed his hope that the nation is ready to end up at $5 trillion economies rapidly from $2.5 trillion at this point. His Union Budget speech concentrated more on the education, healthcare, and agriculture. This is the main budget plan after some important monetary changes, for example, the Goods and Services Tax (GST), dynamic fuel pricing, mega PSU bank recapitalization and more.
Some of the key highlights of Union Budget 2018-19 are mentioned below:
- No changes in personal income tax slabs.
- Salaried tax-payers to get a standard deduction of INR 40,000 in lieu of transport allowance and “other medical expenses”.
- 2,000-crore fund for development of agricultural markets.
- All senior citizens will now be able to claim the benefit of a deduction of INR 50,000 for any medical insurance.
- For critical illnesses, the deduction has been increased to INR 1, 00,000.
- Free power connections to 4 crore homes under Saubhagya Yojana.
- Eight crore free gas connections for poor women through Ujjwala Yojana.
- Govt. to implement minimum support price for all crops; It is hiked to 1.5 times of production costs.
- Govt. to contribute 12% of wages of new employees for all sectors.
- New flagship National Health Protection Scheme, providing a health insurance cover of INR 5 lakh per family per year announced.
- Railway Capital expenditure for 2018-19 is set at INR 1.48 lakh crore.
- Disinvestment target for this year set at ₹80,000 crore.
- Automatic revision of emoluments parliamentarians every five years pegged to inflation.
Detailed analysis of the impact on following essential sectors of the economy:
Rural Economy and Agriculture
Alluding to the Government’s sense of duty regarding the welfare of farmers and multiplying farmers’ wage by 2022, the Finance Minister reported a huge number of new plans and measures.
He stated, that government has chosen to keep minimum support price (MSP) for all unannounced Kharif crops at least one and half times of their production cost in the wake of announcing the same for the dominant part of rabi crops. Jaitley said the volume of institutional credit for agriculture division from year-to-year expanded 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 foundation of Dairy Infrastructure Fund, Shri Jaitley declared setting up a Fisheries and Aquaculture Infrastructure Development Fund (FAIDF) for fisheries division and an Animal Husbandry Infrastructure Development Fund (ADF) for financing framework necessity of animal husbandry area with an aggregate corpus of Rs.10,000 crore for the two new funds. On the lines of ”Operation Flood” another Scheme ”Operation Greens” was declared with a cost of Rs 500 Crore to address the challenge of price unpredictability of perishable items like tomato, onion, and potato with the fulfillment of both the farmers and purchasers. He additionally reported to create and overhaul existing 22,000 rustic haats into Gramin Agricultural Markets (GrAMs) to deal with the premiums of over 86% small and marginal farmers. These GrAMs, electronically connected to e-NAM and exempted from controls of APMCs, will give farmers to make a direct deal with buyers and mass buyers. Additionally, an Agri-Market Infrastructure Fund with a corpus of Rs.2000 crore will be set up for creating and updating rural promoting foundation in the 22000 Grameen Agricultural Markets (GrAMs) and 585APMCs. He stated, so far 470 APMCs have been associated with e-NAM system and rest will be associated by March 2018. Shri Jaitley declared Rs 200 crore for the 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, ideally of 1000 hectares each will be empowered. Thus, distribution of Ministry of Food Processing has been multiplied from Rs.715 crore in 2017-18 to Rs.1400 crore in 2018-19. Naming Bamboo as ‘Green Gold’, the Finance Minister declared a Re-organized National Bamboo Mission with a cost of Rs.1290 crore to advance bamboo division in an all-encompassing way. Under Prime Minister Krishi Sinchai Yojna-Har Khet ko Pani, 96 denied water system regions will be taken up with an assignment of Rs 2600 crore. The Center will work with the state governments to encourage agriculturists for introducing sun oriented water pumps to flood their fields. He likewise proposed to broaden the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to enable them to meet their working capital needs. Shri Jaitley said India’s agri-trades potential is as high as the US $100 billion against current fares of US $30 billion and to understand this potential, exports of agri-items will be liberalized. He additionally proposed to set up state-of-the-art testing facilities in all the forty-two Mega Food Parks. He likewise reported an uncommon Scheme to help the endeavors of the administrations of Haryana, Punjab, Uttar Pradesh and the NCT of Delhi to address air contamination in the Delhi-NCR area 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 expanded to in regards to Rupees 42,500 crore in 2016-17, growing 37% over the earlier year and communicated certainty that advances to SHGs will increment to Rs.75,000 crore by March 2019. He additionally significantly increased the allocation of National Rural Livelihood Mission to Rs 5750 crore in 2018-19.
Alluding to the measures taken for the advantage of lower and middle class, the Finance Minister stated, under Ujjwala Scheme circulation of free LPG connections will be given to 8 crore poor women rather than the past focus of 5 crore women. Under Saubahagya Yojana, 4 crore poor family households are being given power connection with a cost of Rs.16,000 crore. To satisfy the target of ‘housing for All’ by 2022, more than one crore houses will be built by 2019 in rural zones, other than as of now developed 6 crore toilets under Swachh Bharat Mission.
Shri Jaitley focused on that the focus point of the Government one year from now will be on giving maximum livelihood opportunities in the rural territories by spending more on livelihood, agriculture and allied activities and construction of rural infrastructure. He stated, in the year 2018-19, the creation of livelihood and infrastructure in rural areas, aggregate sum to be spent by the Ministries will be Rs.14.34 lakh crore, including additional budgetary and non-budgetary assets of Rs.11.98 lakh crore. Aside from work because of cultivating exercises and independent work, this use will make work of 321 crore person days, 3.17 lakh kilometers of country streets, 51 lakh new rural houses, 1.88 crore toilets, household electric connections other than boosting rural development.
Education and Health
The Finance Minister stated that estimated budgetary use on health, education and social protection for 2018-19 is Rs.1.38 lakh crore against the evaluated consumption of Rs.1.22 lakh crore in 2017-18.
Shri Jaitley on education front reported setting up of Ekalavya Model Residential School comparable to Navodaya Vidyalayas to give the best quality education to the tribal kids in their own environment by 2022 in every block with over half ST populace and no less than 20,000 tribal people with special facilities preserving local art and culture other than giving preparing in sports and skill development. To advance up investments in research about and premier educational institutions, including health institutions, a noteworthy activity named ”Revitalizing Infrastructure and Systems in Education (RISE) by 2022” with an aggregate speculation of Rs.1,00,000 crore in next four years was declared. He said that an overview of more than 20 lakh kids has been led to survey the status on the ground, which will help in devising a district-wise strategy for improving quality of education. To enhance the quality of educators an incorporated B.Ed. program for educators will be started. Shri Jaitley stated the Government would dispatch the ”Prime Minister’s Research Fellows (PMRF)” Scheme this year. Under this, 1,000 best B.Tech students will be distinguished every year from head foundations and give them opportunities to do Ph.D. in IITs and IISc, with a handsome fellowship. Allocation on National Social Assistance Program this year has been kept at Rs. 9975 crores.
The Finance Minister reported the world’s biggest government-supported health care program titled ‘National Health Protection Scheme’ to cover more than 10 crore poor and vulnerable families giving them coverage up to 5 lakh rupees for every family every year for secondary and tertiary care hospitalization. He additionally dedicated Rs 1200 crore for the National Health Policy, 2017, which with 1.5 lakh Health and Wellness Centers will convey health care services nearer to the homes of individuals. The Government likewise chose to assign extra Rs.600 crore to give nutritious help to all TB patients at the rate of Rs.500 every month for the span of their treatment. Shri Jaitley stated, the government will set up 24 new Government Medical Colleges and Hospitals by updating existing region healing centers in the nation.
Repeating that creating openings for work is at the center of Government policies, Finance Minister referred to a free investigation as showing that 70 lakh formal occupations will be created for the current year. To convey forward the force made by the measures taken amid the most recent 3 years to support employment generation, Shri Jaitley declared that the Government will contribute 12% of the wages of the new employees in the EPF for every one of the divisions for next three years. He proposed to make revisions in the Employees Provident Fund and Miscellaneous Provisions Act, 1952 to decrease women employees contribution to 8% for initial three years of their work against existing rate of 12% or 10% with no change in employers’ contribution.
To quote the former finance minister and senior Congress leader P Chidambaram, he says, “Jobs is the number one issue. Jobs are not being created.” He additionally adds, “There is nothing to indicate that farmers income would rise…their distress would continue.” He yet again adds, “FM Jaitely failed the fiscal consolidation test. All deficits have crossed the budget estimates. No measure to boost exports. The promise of Rs 5 lakh per family for secondary and tertiary healthcare a big jumla.”
The Budget has taken India’s middle class out of the equation and is a disappointment for investors, senior journalist and market expert Udayan Mukherjee told Moneycontrol Editor Santosh Nair, analyzing an event that has been dubbed ‘election Budget’.