Union Budget 2018 Highlights - Latest
A lot was expected from Union Budget 2018 since it was the first post-GST budget and last budget by the current government before the nation heads for fresh elections in 2019.
FY 2018 budget will have a positive impact on agriculture & food processing sector, health insurance industry, affordable housing sector, & textile sector. Now, the demand for agriculture-oriented products like fertilizers, micro-irrigation equipment, crop protection chemicals will soar. Government’s focus seems to be locked on modernization and technology and it is expected that logistics and warehousing sector would be benefitted. Funding for these industries is expected to increase. With various food-testing labs being set up, increase in export of processed foods is likely.
The affordable housing industry will grow manifold in the coming times. Increased growth of small budget houses in tier 1 cities is being predicted. A growth in housing sector in tier 2 & 3 cities is expected. Therefore, the industries related to construction such as supply chain of iron, steel, construction materials, cement, and transportation, will witness a tremendous growth.
Union Budget 2018- What’s in Store?
Taxpayers across the country hoped for higher tax benefits. Let’s jump straight to the highlight of budget 2018.
- Long Term Capital Gain Tax- 10 percent tax is to be levied on Long Term Capital Gain (LTCG) above Rs 1 lakh. Exclusive terms and conditions will be applicable.
- Tax Benefit on Health Insurance- As per section 80D, tax benefit for the premium paid towards health insurance has been increased to Rs 50 thousand from Rs 30 thousand per year.
- Critical Illness Tax Exemption for Senior Citizens- Tax exemption based on critical illness expenditure for senior citizens has been increased to Rs 1 lakh annually.
- Standard Deduction For Salaried Tax Payers- Standard deduction of Rs 40 thousand is to be provided to salaried taxpayers each year.
- Unchanged Tax Slab for Individuals- There are no changes in tax slab for individual taxpayers.
- Salaried Professionals and Average Tax Paid- Average tax paid by salaried professionals is now Rs 35 thousand.
- Growth in Taxes- In the financial year 2017-18, there was 12.6 percent growth in direct taxes & 18.7percent growth in indirect taxes.
- Fiscal Deficit- For the financial year 2019, the fiscal deficit is projected at 3.3 percent of Gross Domestic Product and 3.5 percent for the financial year 2018.
- Development of Gold Policy- In order to make gold an asset class, gold policy will be developed.
- Merger- United India Insurance, Oriental Insurance, and National Insurance will be merged into a single
- Disinvestment Target- For the financial year 2018-19, disinvestment target is Rs 1.8 lakh crore.
- Wi-Fi Spots for Rural Citizens- 5 lakh Wi-Fi spots will benefit 5 crore rural
- Digital Toll Payment- Toll payment will be made digital.
- Bad News for Cryptocurrencies- Government will take measures to prohibit cryptocurrencies.
- Digital India Allocation- Digital India allocation has been doubled to Rs 373 crore.
- Railway Stations Renovation- 600 railway stations across the nation will be renovated and upgraded.
- Enhanced Railway Safety- Railway safety will be improved with the help of technology.
- Smart City project- 99 cities have been selected for Smart City project and Rs 2.04 lakh crore is allocated for this project.
- Reduction in Women EPF Contribution- Women Employee Provident Fund Contribution has been reduced to 8 percent for first 3 years of their employment.
- Infrastructure Investment Target- Rs 50 lakh crore is the Infrastructure investment target for FY 2018-19.
- MSME growth Target- Government aims to help financial technology sectors to contribute to the growth of Micro, Small and Medium Enterprises (MSMEs).
- MUDRA Allocation- Rs 3 lakh crore will be allocated for loans under Micro Units Development & Refinance Agency.
- Online Loan Sanction- Sanctioning of loans for MSME will be done online.
- Health & Wellness Centers- Rs 1200 crores will be allocated to health & wellness centers.
- National Health Protection Scheme- Government has set up National Health Protection Scheme and has allocated Rs 10 lakh crore to provide cover for 10 crore poor families. Every year, each family will get health insurance coverage of up to Rs. 5 lakh.
- Digital Education System- Government will focus on digitalization of the current system of blackboard-based education.
- Rural Development- Additionally, Rs 14.3 lakh crore will be allotted to rural livelihood and infrastructure development.
- New Toilets- 2 crore new toilets will be created under Swachh Bharat Abhiyan.
- Animal Husbandry and Fishery- 10 thousand crores will be allocated to animal husbandry and fishery.
- Ujjwala Yojana- For poor families, Ujjwala Yojana will include 8 crore additional gas connections.
- Small Scale Industries- Rs 200 crore will be allocated to help small scale industries.
- Agricultural Development- New agricultural development fund will be introduced and Rs. 2000 crore will be allocated to it.
- Gross Domestic Product- It is expected that GDP will rise 7.5 percent in the financial year 2018-19.
- Agricultural Products Support-Government will hike minimum support price to 5X of the production cost of agricultural products.
- Agriculture as a Business Enterprise- Government will focus on agriculture and treat it as a business enterprise.
While Budget-2017 was labeled as mediocre, expectations were high from Modi-led NDA government for budget 2018. Under Ayushman Bharat Programme, 2 new initiatives have been announced in the Union Budget 2018-19.
Finance Minister launched National Health Protection Scheme in order to provide health insurance coverage of Rs. 5 lakh to a poor family for every consequent year. The NHPS will provide insurance coverage to 10 crore needy families and will have approx 50 crore beneficiaries.
As per Finance Minister, India is slowly progressing towards universal health cover. NHPS will be the world’s largest health care program.
The Government has declared an outlay of INR 7,148 crore for the textile industry, focusing on the apparel segments in 2018-19. It aims to revive the apparel and fabric industry of India. This sector is fragmented with a lot of SMEs, and the growth has been unpredictable in the past 3 years. It’s majorly because of demonetization, weakening of rupee, and GST.
Written By: PolicyBazaar - Updated: 20 November 2020