Janjivan Bureau / New Delhi : A slew of measures for the agriculture and rural sectors, a new health insurance scheme for the poor and some relief in income tax for the salaried class and senior citizens, were announced by Finance Minister Arun Jaitley on Thursday in the last full budget before the general elections.
Presenting his fifth straight budget in the Lok Sabha, Jaitley raised the health and education cess, levied on all taxable income, to 4 per cent from current 3 per cent, and introduced a social welfare surcharge of 10 per cent to fund social welfare schemes.
He lowered the corporate tax for small, micro and medium enterprises with turnover of up to Rs 250 crore to 25 per cent from current 30 per cent, while reintroducing the tax on long-term capital gains of over Rs 1 lakh made from the sale of shares.
While keeping the income tax rates and slabs unchanged, Jaitley introduced a Rs 40,000 Standard Deduction for salaried employees and pensioners in lieu of transport and medical expenses.
For senior citizens, exemption of interest income on bank deposits was raised to Rs 50,000 from the current Rs 10,000, he said, adding that tax would not be deducted at source on fixed deposits.
Also, exemption on medical expenses on critical illness had been raised to Rs 1 lakh, he said in his 110-minute speech.
Jaitley said a 10 per cent tax long on capital gains exceeding Rs 1 lakh made from the sale of shares had been introduced.
A 10 per cent tax on distributed income by equity-oriented mutual funds has also been proposed in the budget.
With excise duty and service tax being subsumed in the Goods and Services Tax (GST), Jaitley made changes only in customs duty–raising them in case of mobile phones and lowering for raw cashew.
Stating that the focus of the government in the coming fiscal would be agriculture and rural India, the Finance Minister announced that all kharif crops would be paid a minimum support price (MSP) that is 50 per cent more than the cost of production.
He announced that credit to agriculture would be raised to Rs 11 lakh crore in the coming fiscal from Rs 10 lakh crore.
Kisan credit card will be extended to fisheries and animal husbandary farmers while Rs 2,000 crore provided for development of agri market.
In a bid to provide universal health care, he announced a National Health Protection scheme to provide health cover of up to Rs 5 lakh to each of the 10 crore poor family per year.
But to fund these, he let go on the fiscal consolidation roadmap. As a result, fiscal deficit for current fiscal will widen to 3.5 per cent of the GDP as against 3.2 per cent previously targeted, and to 3.3 per cent in FY ’19 as opposed to 3 per cent previously targeted.
Fiscal deficit in 2016-17 was 3.5 per cent of the GDP.
“We have worked sincerely without thinking about the political cost,” he said.
Jaitley also announced 100 per cent tax deduction for farm producer firms with Rs 100 crore turnover. The standard deducation allowed will benefit 2.5 crore people.
The target for providing free LPG connection to poor has been raised to 8 crore from 5 crore and 4 crore poor households will be provided free electricity connections.
President’s emoluments have been raised to Rs 5 lakh per month and that of Vice President to Rs 4 lakh and Governors to Rs 3.5 lakh a month.
For Members of Parliament, he announced a new law that would allow for automatic revision in their emoluments every five years based on inflation.
He said the focus would be on agri sector, infrastructure and education sector as he promised to provide education holistically without segmentation from pre-nursery to Class-12 and move from blackboard to digital board.
The emphasis would be on generating higher income for farmers. Our government wants to help farmers produce more and realise higher prices, Jaitley said.
Stating that crop production is at record high, Jaitley said the government is committed to giving 50 per cent more than cost of crop production to farmers.
He said when the NDA government took over, India was considered one of the fragile five economies of the world and the Modi-led government had reversed it.
“India is today fastest growing economy…India is today a USD 2.5 trillion economy and will become fifth largest economy in the world from the present seventh largest,” he said, projecting exports growth at 15 per cent.
In the second half (October-March) the growth is expected to be 7.2-7.5 per cent and firmly on path to achieve 8 per cent growth.
Stating that air pollution in Delhi NCR is a cause for concern, he said the Centre would implement special scheme to support state Governments of Haryana, Punjab, UP and Delhi NCT to address it and subsidise machinery for management of crop residue.
The Budget announced allocation of Rs 600 crore towards nutritional support of tuberculosis patients and setting up of 24 new medical colleges and hospitals by upgrading district level ones.
The government is slowly but steadily progressing towards universal health coverage and total budget for health, education and social security has been increased to Rs 1.38 lakh crore for 2018-19 from Rs 1.22 lakh crore in current fiscal.
Stating that Rs 4.6 lakh crore had been sanctioned under MUDRA Scheme, he said the government would soon announce scheme to address the issue of Non-Performing Assets in MSME sector.
Mass formalisation of MSME sector is happening after demonetisation and GST and the target for loan disbursement under Mudra scheme has been set at Rs 3 lakh crore for next fiscal.
Employees PF Act will be amended to reduce contribution of women to 8 per cent from 12 per cent for first three years, with no change in employer’s contribution, Jaitley said.
The government would contribute 12 per cent of wages of new employees in EPF for all sectors for the next 3 years, he said.
He said Rs 50 lakh crore is needed for infrastructure building and the government would allocate Rs 7,140 crore for textiles sector in next year
National Highways exceeding 9,000-km will be completed in 2018-19 and allocation of over Rs 1.48 lakh crore has been planned for railways.
Regional air connectivity scheme shall connect 56 unserved airports and 31 unserved helipads and Government will expand capacity of airports by five times to cate to one billion trips a year.
Key focus areas of the Budget
*Strengthening of agriculture and rural economy.
*Provision for good health to economically less privileged
*Taking care of senior citizens
*Infrastructure creation
*Improving the quality of education in the country
HIGHLIGHTS OF THE BUDGET
*Customs duty on mobile phones, TVs hiked
*Govt to contribute 12 per cent of wages under EPF
*More than 1 crore houses to be constructed in rural areas
*Gains of more than 1 lakh to be taxed at 10 per cent
*Senior citizens to get interest income exemption of Rs 50,000
*Government committed to farmers’ welfare by doubling their income
*24 new govt medical colleges to ensure one college per 3 parliamentary constituencies
*Allocation of Rs 56,000 crore for Scheduled Castes
