Synopsis : In what could be seen as adopting a middle path – bit of politics as well as economics – the Finance Minister Arun Jaitley’s Budget 2018-19 had a lot for rural India, providing much needed support to the distressed farm sector [ Click here to read the details ].

Quick view: Budget 2018 is one for the voter, writes Raghuvir Srinivasan

What's getting costlier, what's getting cheaper

Budget 2018: Highlights

Sensex, Nifty end the day in red

The S&P BSE Sensex ended down by over 58 points in a highly volatile trade as markets gave a thumbs down to the Budget proposals such as long-term capital gains tax on equities.

Sentiment was also hit after the fiscal deficit target for 2017-18 was raised to 3.5 per cent of GDP as against 3.2 per cent earlier.

After opening on a positive note at 36,048.99, the Sensex rose to 36,256.83 points during the presentation of the Budget but turned negative after Arun Jaitley announced long-term capital gains tax, hitting a low of 35,501.74. However, it bounced back to close at 35,906.66, still down 58.36 points, or 0.16 per cent.

The NSE Nifty too saw volatility and ended at 11,016.90, down 10.80 points, or 0.10 per cent. It hovered between 11,117.35 and 10,878.80 during the day.

Finance Minister Arun Jaitley quotes Swami Vivekananda and concludes Budget 2018-2019 speech: You merge yourself in the void and disappear and let new India arise

Budget addresses concerns of each and every section of people. It is a budget for future India. It's a forward looking budget, says @sureshpprabhu

Budget 2018: Resources transferred to States

Boost for Make in India

• Customs duty on mobiles to increase to 20 from 15 per cent

• Import duty on raw cashews cut to 2.5% from 5%

Tax proposals

• Direct taxes growth at 12.6 per cent this year

• No. of tax payers increased to 8.27 crore from 6.47 crore

• Demonetisation celebrated by honest tax payers

• 41 per cent more returns were filed under the Presumptive Income Scheme

• 100% tax reduction available for FPOs turnover of Rs 100 crore

• Farmer producer companies with turnover of Rs 100 crore or more to get 100 per cent reduction under I-T Act for next 5 years

• Propose to extend tax relaxation up to 150 days to footwear and leather industry for employement creation

• Corporate tax to be reduced to 25 per cent for MSMEs with turnover of Rs 250 crore

Individual taxes

• Salaried tax payers 1.89 cr returns filed Rs.1.44 lakh crore tax paid

• Introduces standard deduction of Rs 40,000  in lieu of transport and medical allowance. No other proposal for the salaried class.

• Incentives for senior citizens. Senior citizens interest income exemption increased to Rs 50,000 from Rs 10,000 for all fixed and RD schemes, including small savings

• Sec 80 D increased from Rs 30,000 to Rs 50,000 for senior citizens

• Increases health and education cess to 4 per cent. It was earlier 1 per cent.

Rationalising LTCG gains

• Strong case for imposing LTCG but proposing only "modest" change

•  LTCG exceeding Rs 1 lakh to be subject to 10% tax without indexation. Gains made until January 31, 2018 to be grandfathered. #complicated

• Tax dividend on equity funds to be brought on par with others

Sensex falls nearly 375 points on announcement of LTCG(Follow our live market updates here)

• Accept key recommendations of FRBM committee
• Fiscal deficit target revised for 2017-18 to 3.5 %
• For 2018-19 target of 3.3%
• In 2017-2018 Cente will receive a GST revenue for 11 months. There was a shortfall due to the deferment of spectrum auctions.
• Central revenue for FY17-18 would be Rs 21.57 lakh crore as against the target of Rs 21.47 lakh crore

• Emoluments for President hiked to Rs 5 lakh, Vice-President Rs 4 lakh, Governors Rs 3.5 lakh per month
• Emoluments of Members of Parliament will be indexed to inflation and revised every 5 years from April 1, 2018

Disinvestment and investments

• Private investment in Defence has been increased, Government will bring out a friendly defence production policy in FY18; 2 defence corridors to be set up.
• Propose Rs 5.97 lakh crore additional budgetary allocation for infrastructure
• 372 basic reform actions identified for improving ease of doing business
• National Logistics Portal to link all stakeholders
• National Insurance, United India Assurance and Oriental Insurance to be merged and then listed
• Bank recapitatilisation will allow banks to lend an additional Rs 5 lakh crore
• Disinvestment target of Rs.72,500 crore already exceeded. Target of Rs.80,000 crore for next year
• Comprehensive gold policy to develop gold as an asset class; gold monetisation scheme to be revamped
• Every Enterprise in India will get a unique Aadhaar ID
• Rs 7,100 crore for textiles and apparel sector
• Rs 150 crore for commemoration of Gandhi Jayanti in 2019-20

• Allocation to Digital India Rs 373 crore. Government to explore use of Block Chain Technology for payments
• SEBI to consider mandating large corporates to raise one fourth of their capital requirement from the Bond Market
• India's first IFSC at GIFT city will compete with the world Financial Centers. Govt plans to establish a unified regulator for entities operating at IFSCs
• Government will consult states to amend India Stamps Act
• Do not consider crypto-currencies as legal tender, Government to take measures to curb use of Crypto-currencies

Proposals for the transport sector

• All railway stations with more than 25,000 footfalls will have escalators

• Focus on safety in railways. Titagarh, Siemens, ABB, BEML stocks in focus

• Bengaluru to get suburban rail network of over 100 km. Rs.17,000 crore for Bengaluru Metro.... Karnataka elections, asks @srirags?

• WiFi and CCTVs on all trains

• Those wearing 'havai' slippers can aspire to have 'havai' tour (air travel) under Udaan scheme of affordable air travel

• Propose to expand airport capacity by 5 times to handle 1 billion passengers annually

• Toll system on 'pay as you use' basis to be introduced

• 10 prominent tourist sites to be developed into "iconic" tourist sites
• Now comes urbanization: 99 cities to be 'Smart Cities', allocation increased; Heritage cities scheme to get a push. 10 'Adarsh' monuments
• NHAI to organize road assets in to a special purpose vehicle and then raise capital
• Confident of completing highways of 9000 kilometers in 2017-2018
• Need investment of Rs 50 lakh crore for Infrastructure sector
• 372 basic reform actions identified for improving ease of doing business

India Inc all cheers for UnionBudget2018

Jobs and savings

Govt to contribute 12 per cent of wages for new employees for all sectors for the next 3 years

Women's contribution to retirement savings reduced to 8% from 12% in first 3 years. [ More take home pay but bad savings precedent for young women, asks @tanyakondody]

Anshul Prakash, Partner, Khaitan & Co says: The proposal to amend the EPF Act to provide specific reduction of the EPF contribution rate for women employees for a period of three years appears to aim at appeasing the significant female workforce in India. The modalities will have to be looked into considering that the employer will be required to contribute at the extant rate of 12% against 8% proposed for the women employees.

MSME proposals

• Rs 3,794 crore allocated for credit support to through capital and interest subsidy to Micro Small and Medium Enterprises
• Government to announce measures to ease NPA burden on MSMEs
• Online sanction of loans to MSMEs will be increased
•  Use of fintech will help MSME to grow
• In 2018-19, to allocate Rs 3 lakh cr lending under MUDRA scheme. Targets crossed during the previous year

• All poor households to be covered under PMJDY and pension, insurance schemes on mission mode

• Identified 115 aspirational districts for better development in healthcare, education, electricity
• Rs 16,730 crore allocated for rural sanitation
• 4400 villages along the Ganga river have been declared Open Defecation Free
• 47 projects under Namani Gange have been completed
• Microfinance, unorganised sector pension schemes thru jan dhan yojana
• Education and healthcare allocation increased to Rs 1.38 lakh crore

Healthcare sector proposals

• Government launches world's largest health care programme

• Focus on comprehensive social security plan
• Flagship national health protection scheme to cover 10 crore families -- Rs 5 lakh cover
• Ayushman Bharat initiative to provide comprehensive healthcare with focus on maternal and child health services. Rs 1,200 crore for the programme
• Government allocates Rs 600 crore to provide nutritional support to Tuberculosis patients @ Rs 500 a month through treatment period
• 24 new government medical colleges and hospitals to be established by upgrading existing district hospitals

Education sector proposals

• Huge outlay - one lakh crore over the next four years for revitalising educational infrastructure

• 13 lakh teachers to be trained

• Education to be treated holistically from pre-nursery to class 12

• Schools to move from blackboard to digital board gradually

• Every block in the country with 50% tribal people will have a school under Eklavya scheme

• Govt will launch PM's research fellows this year for BTechs from premier institutes.

• Dedicated affordable housing fund to be financed from priority sector allocation
• Focus on maximum livelihood in rural areas in next year
• Over 6 crore toilets built under Swachh Bharat; 2 crore toilets to be built under in 2018-2019
• 4 crore houses in rural India to get free electricity. Rs 14,000 crore allocated
• Government aims to disburse 8 crore gas connections under UJJWALA scheme, up from 5 crore
• Rs.16,000 crore set apart for PM Saubhagya Yojana

Agriculture proposals

• Focus of govt is to provide maximum livelihood in agriculture sector with an expenditure of Rs 14.34 lakh crore
• Govt announces Operation Green on the lines of Operation Flood to realise agriculture potential of the country. Rs 500 crore allocation made
• 470 APMC connected to e-nam
• More than 80% are small and marginal farmers
• To develop 22,000 gramin agri markets
• NITI Aayog to work on mechanism so that farmers get better price on their products
• An Agrimarket infrastructure fund with a corpus of Rs 2,000 crore will be created
• Farmers cooperatives, women's self-help groups to be encouraged to take up  organic farming
• Food processing sector growing 8% a year. Allocation doubled. Will allocate Rs 1400 crore for the same. 

• Rs 500 crore for agri logistics

• Budgetary allocation for agriculture credit raised to Rs 11 lakh crore. Will announce favourable tax treatment for farmer organisations

• To encourage farmer producers organisations and agri marketing mechanisms, Govt to have favourable taxation structure for FPOs

• Kisan credit card scheme to be extended to fisheries, animal husbandry farmers

• Export of agri goods to be liberalised

Rural economy

Committed to welfare of farmers, doubling farmers incomes, higher income for farmers.  Focus on farm and non farm employment.  Says agriculture production at record levels.  We consider agri as an enterprise.   MSP to be 1.5x above the cost of produce.  Govt will create institutional mechanism for demand forecast of crop and forward & spot market facilities.

Manufacturing sector back on the revival path, with exports expected to grow at 15% in FY18

Indian economy on track for a period of high growth. Budget to focus on agri, senior citizens and infra and education.  Budget will strengthen rural economy.

The journey of economic reforms for the past few months have been challenging but rewarding.  Structural reforms to help in medium and long term.  Average growth of 7.5% in first three years of this govt.  We hope to grow to 7.2-7.4 per cent in the second half. Firmly on path to achieve high growth of 8%.

Finance Minister Arun Jaitley rises to present the Budget 2018-19

Cabinet approves Union Budget for 2018-19

Will Jaitley cut corporate tax rate?

As Finance Minister Arun Jaitley sets out to present the last full Budget of this government in less than a fortnight, there are speculations on whether he will keep his promise of further reducing the corporate tax rates. While a view is emerging that Jaitley may not reduce the rates given the fiscal situation, a section of India Inc still remains optimistic. Read more here

The Sensex is trading 197.87 points or 0.55 per cent higher at 36,162.89 while the NSE Nifty is up 49.45 points or 0.45 per cent at 11,077.15.  The Sensex hit a high of 36,226.97 in morning trade. Fresh positions have been created by retail and domestic institutional investors on hopes of an investor-friendly and growth-oriented budget lifted the sentiment, brokers said. Besides, positive leads from other Asian markets, tracking overnight gains on the Wall Street following the Federal Reserve’s decision to keep rates unchanged, influenced sentiments here, they said. Capital goods, consumer durables and infrastructure stocks were lapped up, accounting for much of the gains. Follow our markets live blog here

Finance Minister Arun Jaitley arrives in Parliament

Budget papers arrive at Parliament House in New Delhi.

Will the Budget bring relief for the middle class? In the last Budget, Finance Minister Arun Jaitley left the slabs unchanged but gave marginal relief to small tax payer by reducing the rate from 10 per cent to 5 per cent for individuals having annual income between Rs 2.5-5 lakh. It is widely expected that the government could lower tax rate by 10 per cent on income between Rs 5-10 lakh, levy 20 per cent rate for income between Rs 10-20 lakh and 30 per cent for income beyond Rs 20 lakh. At present, there is no tax slab for income between 10-20 lakh. Read more here: Individual taxpayers have a long list

As per tradition, Finance Minister Arun Jaitley calls on  President Kovind at Rashtrapati Bhavan before presenting the Union Budget.

As per tradition, Finance Minister Arun Jaitley calls on President Kovind at Rashtrapati Bhavan before presenting the Union Budget.

Economic reforms will be key : Will Finance Minister Arun Jaitley’s Budget 2018-19 be governed by populism or will he stick to economic reforms? While a strong view is emerging that since it will be an election Budget, Jaitley may adopt a populist approach, NITI Aayog Vice-Chairman, Rajiv Kumar, thinks otherwise. Read what he had to say here: Fiscal stress may restrain tax cuts

Markets in early trade : Ahead of the Budget session, the Sensex was trading 152 points or 0.42 per cent higher at 36,117.49. Similarly, the NSE Nifty too climbed 33 points or 0.30 per cent to 11,060.80. 

Markets will be focused on how much India widens its fiscal deficit beyond the 3 percent of gross domestic product projected for 2018/19.

FM A run Jaitley leaves North Block for Rashtrapati Bhavan ahead of the Budget presentation.

What India Inc wants :  The banking sector is betting on reforms, tax waivers while power sector wants more teeth for major schemes. The agriculture sector is llikely to get top priority in the Budget. The auto sector witnessed multiple challenges last year from the after-effects of demonetisation in late 2016, the changeover to BS IV emission norms from April 2017 and the implementation of GST from July 2017. Favourable budget moves will keep the momentum going in the segment. The oil and gas sector will be hoping for the Budget to rationalise cess on crude oil, cut import duty on liquefied natural gas (LNG) further, reduce excise duty on compressed natural gas (CNG) and provide incentives for domestic production. And, of course, the real estate sector. The sector’s nearly decade-long request has been to get infrastructure status, which will enable it get lower cost of funds. Will Jaitley oblige? Read more

This time few are trying to second guess Finance Minister Arun Jaitley as he prepares to present the last full Budget of the present government on February 1. Economists, sector experts as well as consultants all want to know whether Jaitley will remain true to himself and continue with the task of economic reforms he had set for himself when he presented his maiden Budget or will he adopt a populist approach with general elections next year? Read more

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