Budget 2018-19 – Analysis
Honorable Finance Minister Mr. Arun Jaitley presented the budget for the year 2018 -2019. The primary area of focus for this year’s budget includes the likes of agriculture, rural development, health, education, employment, Medium/Small/Micro enterprises(MSMe’s) & other infrastructure sectors. Moreover, revival of under-developed regions of the country fall under the purview of the current budget. It is projected that the country will experience a growth of over 8% as the Government foresees the advancement in manufacturing, services & exports sector. The article seeks to draw attention to a few highlights as announced in the Parliament on the 1st of February 2018. The points are being reviewed below based on its priority in the budget.
To start with, let us overview a few general reforms of Budget 2018-19:
- The Government will provide free LPG connections to the needy via “Ujjwala Yojana”.
- The Government, through another initiative called “Saubhagya Yojna“, aims to provide electricity connections to 4 crore households.
- Medical care and health sectors are being given due importance, as a special scheme for dialysis of the poor has been initiated, and a list of 800 medicines have been sold at a lower price.
- Housing schemes for the poor and middle class would attract lower interest rates.
- Provision of Government services like transport tickets, individual certificates or passports will be provided on time.
- Every individual enterprise in India will have a unique ID.
- Scheduled castes and scheduled tribes will enjoy an increased allocation. The allocation for budget 2018-19 will be 52,619 crore, which is a slight increase from the previous allocation, which was 52,719 crore.
Agriculture is the backbone of our economy, hence the Government has decided to implement certain reforms supporting its cause. This might encourage more youngsters to take up farming as a profession. This budget aims at up-lifting farmers by helping them with better prices for all the toil that they have endured while harvesting the crops. The Government accentuated on doubling farmers’ income by 2022, incidentally the year in which India marks its 75 years of Independence. With respect to the objective, a lot of measures has been suggested.
One of the fundamental purposes of this budget is to set up Fisheries & Aqua Culture Infrastructure Development Fund & Animal Husbandry Infrastructure Development Fund for the purpose of financing the sectors. The Centre will co-ordinate with the State Governments to facilitate farmers for installing solar water pumps to irrigate their fields. He also proposed to extend the facility of Kisan Credit Cards to fisheries and animal husbandry farmers to help them meet their working capital requirements. Here is an overview of a few other measures implemented by the Government.
- Honorable finance minister stated that the Government would be exercising “DIRECT BENEFIT TRANSFER MECHANISM” to ensure that the services are delivered directly to the beneficiary.
- The government decided to set up “Minimum support price” for all unannounced kharif crops at least one and half times of their production cost. It is estimated that the volume of institutional credit for the agricultural sector is targeted to raise at Rs. 11,00,000. This will lead to a fool proof mechanism where farmers will be benefited with adequate price for their produce.
- A total amount of Rs. 10,000 crores is being allotted for Fisheries & Aqua Culture Infrastructure Development Fund , and Animal Husbandry Infrastructure Development Fund to assist them with their working capital requirements.
- With reference to “Operation Flood”, a new initiative titled “OPERATION GREENS” was announced with an outlay of Rs 500 Crores to address the challenge of price volatility of perishable commodities such as tomato, onion and potato to the utmost satisfaction of both the farmers as well as consumers. This initiative will help in promoting Farmer Producers Companies (FPC’s), agri-logistics, processing facilities and professional management in the sector.
- Where Farmer Producers Companies (FPC’s) enjoy a turnover of not more than 100 crores for a period ranging to five years from the financial year of 2018-19, 100% deduction in respect of profits would be offered.
- The Government has sought to develop and upgrade existing 22,000 rural haats into Gramin Agricultural Markets (GrAMs) to the benefit of more than 86% small and marginal farmers. This is a measure to help bulk purchasers, and enable farmers in direct selling to consumers.
- In view of setting up an agri-market Infrastructure Fund, Government has allotted a maximum of Rs.2000 crores in order to develop and upgrade agricultural marketing infrastructure in the 22000 Grameen Agricultural Markets (GrAMs) and 585APMCs.
- Rs 200 crores have been assigned for organized cultivation of highly specialized medicinal and aromatic plants. In addition to this, farming by Farmer Producer Organizations (FPOs) and Village Producers Organizations (VPOs) in large clusters, preferably of 1000 hectares each will be encouraged.
- Allocation towards Ministry of Food Processing has been doubled from Rs.715 crores in 2017-18 to Rs.1400 crores in 2018-19. It is to be noted that a sum of Rs.1290 crores has been aligned in order to promote bamboo sector in a holistic manner.
- “Prime Minister Krishi Sinchai Yojna-Har Khet ko Pani” strives to help the cause of 96 deprived irrigation districts with an allocation of Rs 2600 crores.
- Institutional credit to the farming community will hereafter be Rs 11 lakh crore, the credit as previously allocated in Budget 2017-18 was Rs 10 Lakh Crore.
- A Sum of Rs 1290 crores has been invested in “Re-structured National Bamboo Mission”, which is an initiative to promote bamboo sector in a holistic manner. Such an initiative will help the farmers with more income, and provide the skilled and unskilled youth with employment opportunities, particularly in rural areas.
- The food sector gets a boost as the allocation of money to “Ministry of Food processing” is set at 1400 crore, doubling the previous allocation of Rs 750 crores.
- Air Pollution in Haryana, Punjab, Uthar-Pradesh and Delhi, which has been a daunting concern, will be addressed through a special scheme.
- Agriculture is restricted in terms of drive and passion, and not gender anymore as “Women Self Help Groups(SHG’s)” are encouraged to pursue organic agriculture in clusters, thanks to a Government initiative in “National Rural Livelihood Program”
- A sum of Rs 200 crore have been allocated to facilitate organized cultivation of highly specialized and aromatic plants.
Senior citizens are also the beneficiaries among the many appreciable initiatives Here’s an overview:
- Senior citizens are afforded with significant incentives.
- Previously, exemption of interest on income deposited to banks and post offices was Rs 10,000, but the latest ruling increases the limit to Rs 50,000. In addition to it, “Tax Deduction at Source” (TDS) need not be implemented for such incomes. These benefits are also applicable to fixed deposit and recurring deposit schemes.
- Deduction for health insurance premium/medical expenditure will be capped at 50,000 per annum, which is an increase of Rs 20,000 from the previous budget.
- Deduction of medical expenditure for all senior citizens will decidedly be Rs 1,00,000.
- Senior citizens are provided with additional tax benefit of Rs 4,000 crores.
Healthier the man, more efficient his works can be. Honorable Finance Minister Arun Jaitley voiced that the Government seeks to make groundbreaking interventions to address health in a holistic manner, which is inclusive of both prevention and health promotion. Let us examine the various facets of Budget 2018-19 pertaining to health:
National Health Policy
The National Health Policy, 2017, specifies the Health and Wellness Centre to be the foundation of India’s health system. The institution was set-up in order to make healthcare accessible to every household by way of 1.5 lakh centres, the purpose of which is to provide comprehensive health-care. These centres also deal with the provision of free essential drugs and diagnostic services. The budget allocated for this program is Rs 1200 crore. Moreover, the private sector is also encouraged to adopt these institutions.
National Health Protection Scheme
Keeping in mind the best of interests in the Nation’s welfare, Government of India have come up with a flagship program under Ayushman Bharat, which is being referred to as “National Health Protection Scheme“. This initiative strives to cover over 10 crore poor and vulnerable households, which would amount to approximately 50 crore beneficiaries. Each family would receive 5 lakh rupees for their secondary and tertiary care hospitalization, thereby making it the world’s largest government funded health care program.
In addition to this, setting-up of 24 new Government Medical Colleges and Hospitals is being planned, along with the up-gradation of existing district hospitals, which would ensure a minimum of 1 Medical College for every every 3 Parliamentary Constituencies, and at-least one Government Medical College in each state of the country.
SALARIED TAX PAYERS
Salaried employees occupy the length and breadth of the frontiers of the nation, thanks to the requirement of skilled workforce. Budget 2018-19, in a note of glee, is set to benefit 2.5 crore salaried employees and pensioners. Here are a few highlights:
- A standard deduction of Rs 40,000 is being allowed in lieu of the present exemption pertaining to transport allowance and reimbursement of miscellaneous medical expenses.
- Differently-abled persons will continue receiving transport allowance at enhanced rate.
- Employees will continue receiving medical reimbursement benefits for hospitalization and the likes of it.
Few highlights of the budget pertaining to infrastructure:
- The allocation for this sector is 5.97 lakh crore.
- Sensing the need for safety, an amount of Rs 60 Crore have been allocated for development of disaster resilient infrastructure.
- The transport sector gets a staggering allocation. The Government seeks to invest an amount of 1,34,572 crore.
- The Urban Infrastructure Sector will get a lift as the Government proposes to develop ten prominent tourist sites as Iconic Tourism Destinations by way of holistic infrastructure and skill development.
- Tourist utilities will be upgraded at 100 Adarsh monuments of the Archaeological Survey of India (ASI).
- Under project Smart-City, 99 cities have been shortlisted with a budget equaling to Rs 2.04 lakh crore.
- The AMRUT program seeks to provide water supply contracts for 594 projects costing Rs 19,428 crore and sewage work contract for 272 projects amounting to Rs 12,249 crore.
- The Finance Minister has directed that his ministry will leverage the India Infrastructure Finance Corporation Limited (IIFCL) to provide necessary funds to infrastructure projects.
- Talking about the Roadways sector, “Bharatmala Pariyojana”, one of the flagship schemes pertaining to transport, plans in development of 35,000 km of highways, amounting to Rs 5,35,000 crore in its first phase.
- Airport capacity is set to get significantly expanded to handle a billion trips in a year.
- Allocation of digital infrastructure has been doubled to Rs 3073 crore, assisting Department of Science and Technology in launching a mission on Cyber Physical Systems. The purpose of this mission is to support and establish centres of excellence handling research on training and development in the field of robotics, artificial intelligence, digital manufacturing, big-data analysis and quantum communication.
- NITI Aayog will initiate a national program to direct efforts in the area of artificial intelligence.
- Telecom sector has been afforded with a budget Rs 10,000 crore. The underlying objective is to create and expand telecom infrastructure.
- The Government plans to set-up 5 lakh wifi hot spots, thereby providing broadband access to 5 crore rural citizens.
- The Government will pull all its straw towards eliminating the use of crypto-assets in financing illegitimate activities.
- The Government also contemplates the use of block chain technology for ushering in digital economy.
Railways, one of India’s most dominant sectors, is budgeted at Rs 1,48,528 crores. Here are a few highlights from the proposed budget:
- 4000 kilometers of railway network are to be commissioned for electrification.
- Steps are being taken to strengthen infrastructure at the Goods sheds.
- Over 3600 kms of track renewal is targeted during 2018-19.
- Usage of technology such as “Fog Safe” and “Train Protection and Warning System” to be increased.
- Unmanned level crossings in the broad gauge network, numbering 4267 will be eliminated in the next two years.
- Integrated Coach Factory, which is being located at Perambur in Chennai, now houses state-of-the-art amenities and features.
- 600 railway stations is taken up for re-development.
- All stations to house escalators.
- All stations and trains to have wifi connectivity.
- More CCTV’s are proposed to be installed.
- A suburban network averaging 160 kms is being planned, the cost of which is estimated at Rs 17,000 crores.
- An institute is coming-up at Vadodara, the purpose of which is to train manpower required for high speed rail projects.
Medium, small and micro enterprises contribute to the bulk of the economy. Mentioned below are some of the highlights:
- The budget allocation for this sector amounts to Rs 3794 crore. Moreover Rs 7148 crore have been allocated for the Textile Sector alone. The founding objective of the same is to provide credit support, capital and interest subsidy together with innovation.
- The Government will contribute 12% of the wages of the new employees in the Employee Provident Fund for the next three years.
- To the betterment of MSME’s, the Government has extended the benefit of reduced income tax rate of 25% to companies which have reported a turnover up to Rs 250 crore in the Financial Year of 2016-17.
- Efforts are underway to provide incentive for the employment of more women in the formal sector.
- The Government is setting-up a modern aspirational skill centre in every district under the “Pradhan Mantri Kaushal Kendra Program.”
- Online loan sanctioning facility is set for a revamp for quick decision making by the banks.
- Additional measures are being initiated to strengthen the environment for Venture Capital Funds.
DEVELOPMENT OF ONLINE MARKETPLACE
The highlights of the budget in relation to online market place are as follows:
- To pursue the business reforms for ease of doing business in a widespread manner, the Government of India has stipulated 372 specific business reform actions.
- The Department of Commerce will be developing a national logistics portal as a single window online market place to link all stakeholders.
- E-office as well as e-governance initiatives will be brought in by the Government in order to transform its method of disposal.
- Government Integrated Financial Management Information System (GIFMIS), a web-based public system, is being administered by Controller General of Accounts, for the purpose of budgeting and accounting the expenditure and cash management of the Government.
- A common portal, namely Central Public Procurement Portal, provides a one-point access for all information on procurement.
- The Government E-Marketplace (Gem) facilitates procurement at the right price, in right quantity and quality, in a manner which is efficient and transparent. The platform holds seventy-eight thousand buyers, fifty thousand sellers, three lakh seventy five thousand products and twelve services.
Sometimes the best of minds are found in a nations rural habitats. Its budgetary highlights are as follows:
- Rs 14.34 lakh crore to be invested in 2018-19 for creation of livelihood and infrastructure in the rural segment.
- Besides the above, The Government has substantially increased the allocation of National Rural Livelihood Mission to Rs 5750 crore.
- The Government estimates a substantial increase in loans providable to Self Help Groups. It says that that by March 2019, Rs 75,000 crore can be disbursed as compared to the previous 42,500 crore, which amounts to a mammoth 37% growth.
- The Government has allocated Rs 2600 crore for the implementation of Krishi Sanchai Yojana Har KHet Ko Pani, which is a Ground water irrigation scheme.
- To manage and convert cattle dung and solid waste in farms, the Government has announced the launch of “Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN).
- The Government has taken up several important reforms for building institutions to improve the public service delivery across the country.
- The Food Corporation of India would be restructured to enhance equity and to raise long-term debt for meeting its standing working capital requirement.
- India’s contribution in equity and debt of the metro ventures floated by the State Governments would be streamlined.
- The process of acquisition of Hindustan Petroleum Corporation by the ONGC has been successfully completed.
Union Minister for Finance & Corporate affairs Mr. Arun Jaitley proposed to make amendments in the Income Tax Act during the announcements made in the Budget presentation for 2018-19. The Income Tax Assessment will be processed in an electronical mode in order to avoid human intervention leading to accuracy. The main reason for e-assessment is to reduce the gap between the tax department & tax payers.
It has been proposed to extend benefits under section 80-JJAA of Income Tax Act to Footwear and Leather Industry. Employees would be eligible for 100% of benefits if they are employed with the leather, apparel or footwear industry provided they are there in the system for more than 150 days. This was 200 days in the previous budget and it has now been relaxed to coax new employment in the sector. The Government further proposed to rationalize deduction of 30% by sanctioning the benefit for a new employee even if he / she is not in the system for the minimum period (specified above) during the first year, but still continues to remain employed for the minimum period in subsequent year.
CENTRAL EXCISE & CUSTOMS TAX
The Government proposed to reduce customs duty on raw cashew from 5% to 2.5% to aid the cashew processing industry. It was further decided to increase customs duty on mobile phones from 15% to 20%, and some of its parts or accessories to 15% & certain spares of television to 15% to incentivise the domestic value addition and to promote the “Make in India” movement. This would help create a lot of jobs in the country, relatively, this would create high demand for domestic products which becomes cheaper than imported goods; leading to a boom in our employment sector.
Certain changes were made to the existing Customs Act to ease business by smoothening the disputes that might arise during cross border trade as well as during litigation. Further, the Government had proposed pre-notice consultation, definite timelines and adjudication that is deemed to close the cases.
It was announced that the name of Central board of Excise & commissions would be re-named as Central Board of Indirect Taxes and Customs, the law governing the change had been proposed in the Finance Bill.
TAX INCENTIVE FOR INTERNATIONAL FINANCIAL SERVICE CENTRE (IFSC)
The Government strives to develop world class international financial service centres in India. Several methods are being adopted to reach this target. Honorable Union Minister of Finance and Corporate Affairs, Mr. Jaitley, wishes to encourage trade in stock exchanges located at IFSC, additional concessions were planned. Major concessions are listed below:
- Exempt transfer of derivatives & certain securities by non-residents from capital gains tax.
- Non-corporate tax payers operating in IFSC would be charged an alternate minimum tax at concessional rate of 9%
LONG TERM CAPITAL GAINS
The government had projected to tax long term capital gains valued more than Rs. 1 Lakh at the rate of 10% without approving the benefit of any indexation. A vivacious equity market is vital for economic growth, hence all gains till 31-Jan-2018 would be excluded. The Government intends to introduce a tax on distributed income by equity. This would be implemented via oriented mutual fund at the rate of 10% to instigate growth in oriented mutual funds and dividend distributing funds. The change in Capital Gain Tax will bring marginal revenue gain of about Rs. 20,000 crores in the first year 2018-19. The revenues in subsequent years might increase.
Long Term Capital Gains resulting from transfer of listed equity shares, units of equity oriented fund and unit of a business trust are excused from tax. With the reforms introduced by the Government and incentives given so far, the equity market has become resistant.
CASH FLOW BY COMPANIES
In order to govern the cash economy and increase TDS compliance, the Government proposed to impose restriction on entities acquiring expenditure in cash without paying tax. Incomes of trusts and institutions are exempt from tax if they utilise their income towards their objective which meets the agreement matching with the provisions of the Income-tax Act. However, there is no restriction on these entities for incurring expenditure in cash. In order to have audit trail of the expenses incurred by these entities, it is proposed that payments exceeding Rs. 10,000/- in cash made by such entities shall be prohibited and the same would intend to be taxable. Further, it was proposed to provide non-deduction of tax in order to improve TDS compliance by these entities. 30% of the amount shall be forbid and the same shall be taxed.
The Government projected a Fiscal Deficit of 3.3% of GDP for the year 2018-19. The Revised Fiscal Deficit has been estimated at Rs. 5.95 lakh crore amounting to 3.5% of GDP. It was also proposed that acceptance of key commendations of the Fiscal Reform and Budget Management Committee was to bring down Central Government’s Debt to GDP ratio of 40%. The direct tax proposals attempt to reduce the cash economy and increase the tax net of paid rich dividends.
Total expenditure during 2018-19 is estimated to be over Rs. 24.42 lakh crore. Fiscal Deficit at 3.3% is expected to be Rs. 6,24,276 crores which would be financed through borrowings. All the necessary amendments are mentioned in the Finance bill. Many public sector firms have pledged their commitments to substantially boost investment in Agriculture, Social Sector, Digital Payments, Infrastructure and Employment Generation. It has been proposed that 100 percent deduction to companies registered as Farmer Producer Companies with an annual turnover of up to Rs. 100 crores on profit derived from such activities, for a period of five years from financial year 2018-19. It has been decided to promote post 20 harvest agriculture activities and also encourage “OPERATION GREENS” announced earlier and would give a boost to the “SAMPADA YOJANA”. The Finance Minister also announced a proposal to roll out E-assessment across the country to almost eliminate person to person contact leading to greater efficiency and transparency in direct tax collection. He further announced that a scheme will be evolved to assign every individual enterprise in India a unique ID, on the lines of Aadhar.
The Finance Minister proposed development of two defense industrial production corridors. Government promised to bring out industry friendly defense production policy in 2018 to promote domestic production by public sector, private sector and MSMEs. The government made a lot of emphasis on modernizing and enhancing the operational capability of Defense forces. It has been decided to develop and nurture intrinsic defense production, planned to meet all the defense needs and make our nation capable of being self-reliant. Government confirmed that private investment in defense production has been opened up including liberalizing foreign direct investment.
The ministry will influence the India Infrastructure Finance Corporation Limited (IIFCL) to help finance major infrastructure projects, including investments in educational and health infrastructure, on strategic and larger societalbenefit considerations. The government has taken necessary measures for development of monetizing vehicles like Infrastructure, Investment Trust (InvIT) and Real Investment Trust (ReITs) in India. The Reserve Bank of India has issued guidelines to nudge Corporates access bond market. SEBI will also consider GENERAL BUDGET which mandates the beginning with large Corporates, to meet about one-fourth of their financing needs from the bond market.
In India, most regulators permit bonds with the “AA” rating which means eligibility for investment. The Government would take reforms with respect to stamp duty rule on financial securities transactions in discussion with all the states and make necessary amendments to the Indian Stamp Act. The Government plans to establish a unified authority for regulating all financial services in IFSCs located in India.
The budget 2018-2019 has brought in a lot of emphasis on social welfare. We shall discuss a lot of aspects of Social welfare below. We are planning to stabilize the welfare aspect by bring in a lot of extensive schemes. Several programmes are brought in for enhancing the quality of life. This could help curb the basic issues arising for our people. Let’s go ahead with the various aspects of Social Welfare.
- The“Pradhan Mantri Jeevan JyotiBeemaYojana (PMJJBY)” has benefited 5.22 crore families with a life insurance cover of Rs.2 lakhs on payment of a premium of only Rs.330/- per annum.
- Under “Pradhan Mantri Suraksha BimaYojana”, 13 crores 25 lakhs persons have been insured with personal accident cover of Rs.2 lakhs on payment of a premium of just Rs.12 per annum.
- The Government will work to cover all poor households, including SC/ST households keeping social service in mind.
- The Government will expand the coverage under “Prime Minister Jan DhanYojana” by bringing all sixty crore basic versions within its wrinkle and commence methods to deliver services of micro insurance and unorganized sector pension schemes via these versions.
- It has been proposed to abolish Education Cess and Secondary and Higher Education Cess on imported goods, instead we would be imposing a Social Welfare Surcharge at the rate of 10 % of the aggregate duties of Customs, on imported goods, to provide for social welfare schemes of the government.
- Certain specified goods, mentioned in Annexure 6 of the Budget speech, will attract the proposed Surcharge, at the rate of just 3 % of the aggregate duties of customs.
- The Finance Minister estimated that the budgetary expenditure on health, education and social protection for 2018-19 is Rs.1.38 lakh crore against estimated expenditure of Rs.1.22 lakh crores in 2017-18.
- On education front, Shri Jaitley announced setting up of Ekalavya Model Residential School on par with Navodaya Vidyalayas to provide the best quality education to the tribal children in their own environment by 2022.
- More than 50% ST population and at least 20,000 tribal persons will be mentored & trained with special facilities for preserving local art and culture besides providing training in sports and skill development.
- To step up investments in research and related infrastructure in premier educational institutions, including health institutions, a major initiative named “REVITALIZING INFRASTRUCTURE AND SYSTEMS IN EDUCATION (RISE)” would be initiated by 2022 with a total investment of Rs.1,00,000 crores.
- He also added that a survey of more than 20 lakh children would be led to evaluate the status on the ground, which will help in developing a district-wise strategy for cultivating quality of education.
- the Government would unveil the “PRIME MINISTER’S RESEARCH FELLOWS (PMRF)” scheme this year. Under this, 1,000 best Tech students will be recognized each year from premier institutions and supply them facilities to do Ph. D in IITs and IISc, with a handsome fellowship. Distribution on National Social Assistance Programme this year has been kept at Rs.9975 crores.
- The Finance Minister announced the world’s largest government funded health care programme titled “NATIONAL HEALTH PROTECTION SCHEME” to cover over 10 crore needy and vulnerable families (approximately 50 crore beneficiaries) providing coverage up to 5 lakh rupees per family per year for secondary and tertiary care hospitalization.
- On cleaning the Ganga, the Finance Minister announced that a total of 187 projects have been sanctioned under the “NAMAMI GANGE” programme for infrastructure development, river surface cleaning, rural sanitation and other interventions at a cost of Rs. 16,713 crores. The government has recognized 115 aspiring districts taking various directories of development in deliberation for making them model districts of development.
- To improve the quality of teachers an integrated B.Ed. programme for teachers will be initiated. Education would be preserved in a holistic manner from pre-nursery to Class XII.
- It was expressed that the Government would resolve most problems to increase the digital intensity in education. The Government proposed that they would gradually move away from “black board” to “digital board”.
- The Finance Minister highlighted that a district-wise approach for refining the quality of education is being organized.
- It was announced that the proposal to launch a major initiative named “REVITALIZING INFRASTRUCTURE AND SYSTEMS IN EDUCATION (RISE)”.
- A total of Rs.1, 00, 000 crores will be invested in the initiative for over the next four years.
- More than 100 applications have been received with reference to the initiative of setting up “INSTITUTES OF EMINENCE”.
- It has been noted that we have taken giant steps to set up a specialized “RAILWAYS UNIVERSITY AT VADODARA”. 18 new Schools of Planning & Architecture (SPAs) would be established in IITs and NITs as autonomous schools.
- It is essential that all this must reach out to every household of old, widows, orphaned children, DIVYAANG and deprived as defined by the Socio-Economic Caste Census.
- Implementation of a comprehensive social security and protection programme is vital.
- The Government also announced that a sum of Rs.9, 975 crores has been allocated for the National Social Assistance Programme this year.
- The Government cited an independent study that 70 lakh formal jobs will be created this year.
- It was announced that the Government would contribute 12% of the wages for new employees in the EPF for all the sectors for next three years.
- He proposed to make amendments in the Employees Provident Fund and Miscellaneous Provisions Act, 1952 to reduce women employees’ contribution to 8% for first three years of their employment against existing rate of 12% or 10% with no change in employers’ contribution. The Budget proposed an outlay of Rs.7148 crores for the textile sector in 2018-19
The Government has initiated efforts to generate funds as well as to undertake banking sector reforms. The Government has initiated the process of strategic disinvestment in 24 CPSE’s including strategic privatization of Air India. Re-capitalization will pave the way for the Public Sector Banks to lend additional credit of Rs.5 lakh crore. This has been proposed to allow strong Regional Rural Banks to raise capital from the market to enable them to increase their credit to rural economy.
National Housing Bank Act is being amended to transfer its equity from the Reserve Bank of India (RBI) to the Government. Indian Post Offices Act, Provident Fund Act and National Saving Certificate Act are being amalgamated and certain additional people friendly measures are being presented. To provide the Reserve Bank of India an instrument to manage excess liquidity, Reserve Bank of India Act is being amended to institutionalize 48 Uncollateralized Deposit Facility. Securities and Exchange Board of India Act, 1992, Securities Contracts (Regulation) Act 1956, and Depositories Act 1996 are being revised to streamline adjudication procedures and to deliver for penalties for certain infractions.
Few of the major additions to Disinvestment:
- The Finance Minister announced the disinvestment target for the year 2018-19 as Rs. 80,000 crores.
- Three Public Sector Insurance companies- National Insurance Co. Ltd., United India Assurance Co. Ltd., and Oriental India insurance Co. Ltd., would be merged into a single insurance entity.
- A comprehensive Gold Policy would be formulated to develop gold as an asset class. The Government would also establish a system of consumer friendly and trade efficient system.
- Gold Monetization Scheme would be re-vamped to enable people to open a hassle-free Gold Deposit Account.
- The Budget proposes to revise emoluments to Rs.5 lakhs for the President, Rs 4 lakhs for the Vice President and Rs.3.5 lakh per month to Governor as these benefits were last revised in year 2006.
- The Finance Minister proposed necessary changes to re-fix the salary and allowances with effect from April 1, 2018. Also, the law will provide for automatic revision of emoluments every five years indexed to inflation.