The Union Budget 2018 was presented in parliament today. This budget is especially significant since it is the first budget after the GST was rolled out and is the last pre-election budget of the present government.
The Finance Minister in his introductory statements pointed out that India is one of the fastest growing economies in the world. The focus of the budget was ‘ease of business’ and ‘ease of living’. The launch of the world’s largest government funded health programme with a view of enabling universal health coverage, unchanged income tax rates and a capital gains tax of 10% on equities for gains are the newsmakers from this year’s budget.
Below are some highlights of the budget.
Personal income tax slabs will remain unchanged.
12% of EPF (Employees Provident Fund) contribution for new employees in all sectors to be taken up by government. Employee PF Act to be amended to reduce contribution of women to 8% from 12% with no change in employer's contribution.
Long term capital gain tax set at 10% on equities for gains more than INR 1 lakh
PM Mudra Yojana - Goal of INR 3 lakh crore for lending. Currently, 76% loans are to women with aim to continue initiative.
Number of people filing tax returns increased from 66.26 lakh the previous year to 85.51 lakh this year. A positive impact of the GST.
“MSME enterprises are a major element for growth”, said Finance Mininster Jaitley. He also noted that the MSME sector is witnessing a mass formalisation after demonetisation and GST.
FM asserted, “SMEs can be a powerful vehicle for delivering loans” under Mudra Yojana
INR 3794 crore to be dedicated to MSMEs for credit support
Companies will have Aadhaar like IDs for identification
Last year’s initiative of having reduced income tax to 25% for small companies with annual turnover of up to INR 50 crore is believed to have benefitted 667,000 MSMEs.
Finance Minister proposed to launch the world’s largest government funded health programme to provide health cover to poor and vulnerable families of up to INR 5 lakh per family. This will benefit close to 50 crore poor citizens of the country.
Government to increase MSP (Minimum Support Price) of all crops by at least 1.5 times the production cost. The goal is to give farmers a higher income for expenditure and reinvestment.
Allocation for ‘Digital India’ has doubled. 5 lakh wi-fi hotspots to be erected in rural areas to increase digital penetration.
Proposed improvements to airport infrastructure to enable handling of 1 billion trips every year.
Capital expenditure of Rs 1,48,528 crore allocated for Indian Railways in 2018-19 with renovation of over 600 stations promised. Bengaluru promised a metro system. Mumbai set for local train network expansion.
Science & Education
Niti Aayog will establish a national programme to direct efforts in artificial intelligence. The Department of Science will launch a national programme for cyberspace.
Apart from being a manufacturing stronghold, country to also become a centre for cutting edge research. Major initiatives to bring improvements to higher education.