ALSO READBudget 2018: Budgetary support for Indian Railways to be cut by 27% in FY18 Budget 2018 Could Bring a Change in Income Tax Limits Budget 2018 might have Rs 740-bn allocation towards fertiliser subsidy Budget 2018: New bottoms-up mechanism for farm-gate marketing likely Budget 2018 may waive NOC to streamline transfer of stressed assets
This budget has a negative impact on the economy and causes distress to farmers. There is a pressure on the Modi Government due to elections in eight states and lok sabha elections coming up next year. Let’s look into the highlights of this 2018 Union budget to understand how Mr. Jaitley balanced all these factors before releasing the Union Budget.
- In 2017-18 the fiscal deficit is 3.5 % of GDP which is 5.95 lakh crores. The anticipated fiscal deficit is 3.3% of GDP in the coming next year.
- A Net GST of 21.57 lakh crores was transferred to states as against to a projection of 21.47 lakh cores.
- Income tax filing was done by 85.51 lakh new tax payers in Fiscal Year 2017
- This new budget did not propose any changes in the income tax payable for individuals
- Direct taxes recorded a growth of 18.7% (till Jan 15)
- Income above 50 lakhs and 1 crore has a surcharge is 10pc which is continued for next year also. Surcharge of 15pc on income above 1 crore will also continue next year.
- A 100% tax deduction is given to co-operative societies.
- Companies with a turnover up to 250 crores is in the financial year 2016-17 have to pay 25% of corporate tax.
- An exemption of income of 10,000 is given to senior citizens on bank fixed deposit and post-office savings.
- An exemption of 50,000 is given to senior citizens for medical insurance under section 80D.
- Investment in interest-bearing LIC schemes doubled from 7.5 lakhs to 15 lakhs.
- A standard deduction of 40,000 is allowed for salaried individual tax payers on transport and medical reimbursement.
- Government faced a loss of 8000 crores due to standard deduction allowance to salaried class.
- There is a loss of 7000 crores on the corporate taxes payable by companies with a turnover of 250 crores.
- There is a loss of 19000 on direct taxes in the last fiscal year.
- In reality deals the government has reduced hardships. If circle rate does not exceed 5 pc of sale consideration, there is no need to make any adjustment.
- Taxation of 10% will be levied without indexing on long term capital gains exceeding one lakh.
- There is no change in taxation on short term capital gains which remains at 15%
- An additional 11,000 crore can be collected with an increase on educational cess from 4% to 3%.
- There will be an effect on balance sheets as GS revenue will be received only for 11 months.
- PAN card entry is made mandatory by government for any financial transaction made above 2.5 lakhs.
- Last year the GST revenue was 4.44 lakh crore in nine months of current fiscal year. This year it is projected at Rs 7.43 lakh crore in full year 2018-19.
On Custom Duties
- There is an increase in custom duty for mobile phones and televisions to support “Make in India” program.
- A surcharge of 10% is levied on imported goods as social welfare
- Central Board of Indirect Taxes and Customs is the new name for Central Board of Excise and Customs
- An exemption of custom duty is given to import of solar tempered glass for the manufacture of solar cells.
- Customs duty on crude edible vegetable oils like groundnut oil, safflower seed oil customs duty is increased from 12.5% to 30%; 20% to 35% on refined edible vegetable oil.
- Sunglasses, cigarette lighter, toys, bus and truck tyres, select furniture products have to pay hiked custom duty.
- Imitation jewellery custom duty is hiked from 15% to 20%; Customs duty is doubled on all watched to 20%.
- LCD/LED/OLED panels, parts of TVs have to pay a hiked custom duty to 15%; Products like smart watches, wearable devices, footwear have to pay a custom duty of 20%.
- Electronic assessment scheme is introduced to eliminate person-to-person contact
On Rural Economy
- New LPG connections will be given to 8 crore poor women.
- 4 crore poor people will get power connection according to PM Saubhagya Yojana: A budget of 16,000 crore is allocated.
- Swach Bharat Mission has plans to construct 2 crore toilets next year.
- Government plans to construct 51 lakh affordable houses in rural areas and 50 lakhs affordable houses in urban areas.
- Pradhan Mantri Awas Yojana will build 1 crore houses in rural areas under this scheme.
- National livelihood scheme is allocated 5750 crores of rupees in this budget.
- The government will spend Rs 14.34 lakh crores for creating livelihood in rural areas.
- For the next fiscal year, the government allocated 9975 crore for social security.
- The focus of government is higher income generation for farmers by helping them to produce at less cost and earn higher income for more produce.
- At the presentation of union budget Mr. Jaitley emphasized that our agricultural production is at a high level record. There is a production of fruits and vegetable of 275 million tonne food grains and 300 million tonne.
- The government plans that the farmers to earn 1.5 times the production cost, and 1.5 times of the production price has been set for Kharif crops said Mr. Jaitley. Both the center and states will work together to ensure the farmer gets a fair price.
- Rs 2000 crore fund for agricultural market and infra-fund will be set up to strengthen the market connectivity.
- Operations Green will be launched with a sum of 500cr to promote agricultural products
- Fisheries and animal husbandry will be extended the facility of Kissan credit card.
- Fisheries and Aquaculture Development Fund has 10, 000 crores of budget.
- Animal husbandry infra fund is allocated Rs. 10, 000 crore
- Propose to launch a restructured bamboo mission with a fund of Rs 1200 crore . "Bamboo is green gold," Jaitley said.
- The credit target for Agriculture has increased from Rs 8.5 lakh crore to Rs 11 lakh core
- New and special schemes are introduce crop reduce in Haryana and Punjab. A special scheme is introduced in Delhi for pollution reduction.