New Delhi: Finance Minister Arun Jaitley on Thursday presented what was the last full budget of the Narendra Modi government, which focussed on agriculture and rural sectors and announced the 'world's largest' health insurance scheme for India's 50 crore poor.
FM Jaitley's budget, which won broad approval from the Indian Inc and economists, projected the economic growth above 8 percent. Also, PM Modi described it as a vehicle to build a 'new India'. The budget is "farmer friendly, common citizen friendly, business environment-friendly" and will add to "ease of living and ease of doing business," he said in a televised address.
Here is what the FM proposed to do for different sectors and segments of the society.
Healthcare Insurance Scheme
Finance Minister Arun Jaitley announced two new measures under the government's Ayushman Bharat scheme, which are expected to take healthcare to greater heights. (1) Rs 1,200 crores will be allocated towards setting up health and wellness centers in India, which will provide comprehensive healthcare, maternal and child care, free drugs and diagnostics to the poor. The government also called for private sector contribution towards the same.
(2) Announcing the flagship National Health Protection Scheme, which he billed as the world's largest government-funded healthcare programme, Jaitley said the government proposed to cover over 10 crore poor and vulnerable families (approximately 50 crore beneficiaries) providing coverage up to Rs 5 lakh per family per year for secondary and tertiary care hospitalisation.
Apart from the above, Jaitley announced that a sum of Rs 600 crore will be provided for nutritional support to tuberculosis patients at a rate of Rs 500 per month. Additionally, 24 new government medical colleges and hospitals will be set up by upgrading existing district hospitals, thereby moving towards achieving universal health coverage.
Individual Tax Slab
Leaving the individual taxation slabs and rates untouched, Jaitley in his last full budget before the 2019 elections proposed to reintroduce a standard deduction of Rs 40,000 for salaried taxpayers in lieu of present exemption of transport allowance and reimbursement of miscellaneous medical expenses that will involve a revenue sacrifice of Rs 8,000 crore to benefit 2.5 crore people.
In a bid to help senior citizens, the budget proposes to increase the exemption of interest income on deposits with banks and post offices from Rs 10,000 to 50,000 and there will be no TDS deducted on them. The limit for health insurance premium and medical expenditure will go up to Rs 50,000 from Rs 30,000.
For certain illnesses, in case of senior citizens and very senior citizens, the limit will go up to Rs 60,000 and Rs 80,000 respectively, The concessions will cost the government Rs 4,000 crore.
In keeping with his earlier announcement of reducing corporate taxation rate, the Finance Minister reduced the rate for all companies with a turnover of up to Rs 250 crore, up from Rs 50 crore. He said this would take care of almost 99 percent of the companies and would have a negative impact of Rs 7,000 crore on government finances.
Only about 250 companies would have a turnover above the cut-off level and would continue to pay 30 percent tax. An ID on lines of Aadhaar would also be set up for companies, Jaitley said.
Reducing Fiscal Deficit
The Finance Minister indicated a slippage in fiscal deficit for the current year revising it from 3.2 percent to 3.5 percent and from 3 percent to 3.3 percent (Rs 5.95 lakh crore) of the GDP next year, implying that the government will be borrowing more to balance its books.
The government has set a target of Rs 80,000 crore divestment target for 2018-19, Jaitley said adding that target for 2018-19 had exceeded the target of Rs 72,500 crore and would touch Rs 1 lakh crore.
"We" are now a $2.5 trillion economy, and we are firmly on the path to achieve 8 percent plus growth soon. We hope to grow at 7.2 percent to 7.5 percent in the second half of 2017-18. Our exports are expected to grow at about 15 percent in 2017-18," the FM said in the beginning of his speech.
For the Railways, whose budget was merged with the General Budget since last year, the capital expenditure has been fixed at Rs 1,48,528 crore for 2018-19 with a large part devoted to capacity creation. Some 18,000 km of doubling, third and fourth line works and 5,000 km of gauge conversion will be taken up to transform almost the entire network into broad gauge.
While stating that the safety of passengers remains a top priority for the government, Arun Jaitley said that all railways stations and trains will have Wi-Fi and CCTVs progressively.
The minister also pointed out that 600 stations have been earmarked for modernisation by the railways. The focus will also be on a suburban rail network in Mumbai and Bangalore, he added.
The defence budget was increased by a mere 7.81 percent to Rs 2.95 lakh crore against last year's Rs 2.74 lakh crore, belying expectations of a significant hike when the armed forces are facing growing challenge on the borders with both Pakistan and China.
In his budget address, FM said the government will develop two defence industrial production corridors and bring out an industry-friendly military production policy to promote the domestic defence industry. Out of total allocation of Rs 2,95,511 crore for defence budget, only Rs 99,947 crore has been set aside for capital outlay to purchase of new weapons, aircraft, warships and other military hardware.
The allocation has been estimated at around 1.58 percent of the GDP and 12.10 percent of the total budget of Rs 24,42,213 crore for 2018-19.
FM proposed to expand the country's airport capacity by more than five times to handle a billion trips a year under a new "NABH Nirman" initiative. According to Jaitley, the balance sheet of Airports Authority of India (AAI) will be "leveraged to raise more resources for funding" this expansion.
"In the last three years, domestic air passenger traffic grew at 18 per cent per annum and our airline companies placed orders for more than 900 aircraft," Jaitley said in his Budget speech.
"Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) initiated by the government last year shall connect 56 unserved airports and 31 unserved helipads across the country. Operations have already started at 16 such airports," he said adding that the policy initiative has enabled even a ‘hawai chappal' (slipper)-wearing person to avail the benefits of air travel.
MSP For Farmers
In line with the BJP's poll promise before coming to power in 2014, the Finance Minister announced that the Minimum Support Price (MSP) for unannounced Kharif crops will be 1.5 times the input cost and stepped up the institutional credit for the sector to Rs 11 lakh crore -- 1 lakh crore more than last year.
"Now, we have decided to implement this resolution as a principle for the rest of crops. I am pleased to announce that as per pre-determined principle, the government has decided to keep MSP for the all unannounced crops of Kharif at least at one and half times of their production cost. I am confident that this historic decision will prove an important step towards doubling the income of our farmers," Jaitley said.
Ujjwala Scheme; Construction of Toilets
In another populist measure, the Finance Minister announced that as part of Prime Minister's Ujjwala Scheme the government proposed to increase the target of providing free LPG connections to eight crore poor women, three crores up from the original target. He said the focus of the government in the next fiscal will be on providing maximum livelihood opportunities in the rural areas by spending more on livelihood, agriculture and allied activities and construction of rural infrastructure.
"In the year 2018-19, for the creation of livelihood and infrastructure in rural areas, the total amount to be spent by the ministries will be Rs 14.34 lakh crore, including extra-budgetary and non-budgetary resources of Rs 11.98 lakh crore. Apart from employment due to farming activities and self-employment, this expenditure will create employment of 321 crore person days, 3.17 lakh km of rural roads, 51 lakh new rural houses, 1.88 crore toilets, and provide 1.75 crore new household electric connections besides boosting agricultural growth."
In a labour welfare measure, the minister announced an extension of the contribution of 8.33 percent of employee provident fund for new employees by the government for three years to all the sectors and raised it to 12 percent.
In order to create employment and aid growth, the Finance Minister said, the government's estimated budgetary and extra-budgetary expenditure on infrastructure for 2018-19 was being increased to Rs 5.97 lakh crore against an estimated expenditure of Rs 4.94 lakh crore last year.
Social Welfare Surcharge
The Social Welfare Surcharge of 10 percent on all customs duties replaces the education cess on imported goods. The FM also raised the customs duty on mobile phones by 5 percent to 20 percent. He also levied a 15 percent duty on some of the parts and accessories of mobile phones and TV sets to promote the creation of more jobs under the "Make in India" programme.
Finance Minister Arun Jaitley announced that virtual currencies are no legal tender and that the proliferation of its use for illegitimate financing will be curbed.
"Crypto currencies are no legal tender and the government discourages its use. However, the government will look at the utilisation of Blockchain (a distributed digital technology that supports crypto currencies)," Jaitley said in his budget speech in Parliament.
Revision in MPs salaries
Finance Minister Arun Jaitley today said there will be an automatic revision of emoluments of the MPs every five years, indexed to inflation. The proposed law will provide the automatic revision of salaries, with effect from April 1, 2018. "Law will provide the automatic revision of emoluments of the MPs every five years indexed to inflation," said Jaitley during his speech in the much-anticipated budget session.
The Finance Minister also informed the hike in salaries of the President, Vice-President and the Governor.
(With Agency inputs)