Budget 2018 highlights: No tax relief, LTCG dash middle-class, market hopes

Middle-class hopes from a "poll-bound" Budget 2018 were dashed with no change in the personal income tax structure. Finance Minister Arun Jaitley announced standard deduction of Rs 40,000 for salaried employees in lieu of transport and medical expenses. 

Jaitley delivered his Budget 2018 speech on Thursday, with the government focusing on the agricultural sector and farmers' income. 

Signalling that fiscal prudence has gone off track, Jaitley proposed a fiscal deficit target of 3.3 per cent of GDP for 2018-19. The target he had set for 2018-19 last year was 3 per cent.   

Budget 2018 has proposed to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares. However, capital gains made on shares until January 31, 2018, would be grandfathered, the finance minister said. Also, there has been no change in the definition of short-term capital gains tax (STCG). 

Here are the main highlights: 

1) With demonetisation, the quantum of cash currency in circulation has decreased and the tax base has increased. It has improved the digitalisation of our country, says Arun Jaitley. He also added that foreign direct investment has gone up, while the GDP at 6.3% is a signal of a turnaround in the economy. 

2) He added that exports are expected to grow at 15% in 2018-19 and that the government is on track to achieve 8% growth. 

3) Arun Jaitley lists out major government schemes implemented in recent years. "We have worked sincerely without weighing political costs." Services being delivered at doorsteps and into accounts – this has reduced the role of middlemen and corruption, he says.

4) After improvement in ease of doing business, finance minister says the focus is now on "ease of living".

5) This year's budget will particularly focus on strengthening the rural economy, Jaitley says. India has improved by 42 places in the Ease of Doing Business rankings. 

6) Recapitalised PSU banks are ready to support growth; achieved 7.5% average growth in three years of NDA government

7) Want farmers to earn 1.5 times the cost of produce of their crops: Jaitley says on the government's promise of doubling farm incomes in five years.

8) "The government will create an institutional mechanism involving all concerned ministries so that the farmers get a better price for their produce," says Jaitley. 

9) Jaitley said MSP for Kharif Crops will be 1.5 times the Cost Of Produce. 

10) Jaitley proposes Rs 5 billion Budget allocation for Operation Green.

11) Cultivation of horticulture crops in clusters can boost production and marketing, says Jaitley. 

12) Agri-market Development Fund with a corpus of Rs 20 billion to be set up for developing agricultural markets. 

13) India's agriculture export potential is $100 billion as against today's $30 billion, says Arun Jaitley. He also added that food processing sector is growing at 8 per cent. 

14) Grameen Agricultural Market (GRAM) will provide farmers a means to sell directly to buyers, says Jaitley. 

15) Jaitley says allocation to food processing industry doubled to Rs 14 billion (1,400 cr) from Rs 7.15 billion (715 cr). 

16) Finance Minister Jaitley proposes to extend kisan credit card to fisheries and animal husbandry farmers.

17) The government will focus on spending more on livelihood, agriculture and rural infrastructure, says Jaitley. This will get Rs 14.34 trillion (lakh crore) from budgetary and non-budgetary resources.

18) An amount of Rs 160 billion will be spent on providing electricity connection to nearly 40 million (4 crore) poor households.

19) For education sector, the government proposes revitalising infrastructure, opening schools for the ST populations as well as promoting programmes for teachers, in order to improve quality education for students.

20) Jaitley says 80 million (8 crore) poor families will be given free gas connection.  

21) Jaitley says the government aims to build 20 million (2 crore) toilets.

22) Finance Minister says government to allocate Rs 26 billion (2,600 crore) underground water irrigation plan in 96 districts. 

23) Jaitley announces National Health Protection Scheme. Amount of Rs 500,000 per year per family for 100 million (10 crore) families will be allocated, Jaitley added.  Jaitley says scheme to have approximately 500 million (50 crore) beneficiaries.  



24) Jaitley announces govt to bring in Ayushman Bharat Programme, a move towards universal health coverage. Jaitley announces additional allocation of Rs 6 billion (600 crore) for nutritional support for tuberculosis patients.

25) Jaitley says Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJBY) to be expanded to all poor households.

26) Jaitley says an amount of Rs 3 trillion (lakh crore) set aside for Mudra accounts. 

27) Jaitley says government to allocate Rs 1.38 trillion (lakh crore) in FY19 for government health and education programmes. 

28) "Contribution of 8.33% to EPF for new employees by the government for three years and 12% government contribution to EPF in sectors employing large number of people. Women employees' contribution to EPF to be reduced to 8% from 10% for the first three years," announces Jaitley.   

29) A hundred thousand (1 lakh) gram panchayats have been connected to high-speed broadband. Jaitley allocates Rs 100 billion (10,000 crore) to set up 500,000 (5 lakh) Wi-Fi hotspots to provide broadband access to 50 million (5 crore) rural citizens. 

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31) Government does not recognise cryptocurrency as legal currency and will take all steps to curb illegal transactions using cryptocurrencies.

32) The finance minister proposes two defence industrial corridors in the country to promote domestic production in both public and private sectors.

33) Niti Aayog will establish a national programme to direct efforts towards artificial intelligence, including research and development of its applications.

34) Emoluments of the President to be revised to Rs 500,000 (5 lakh), Rs 400,000 (4 lakh) for the Vice-President, and Rs 350,000 (3.5 lakh) for governors: Jaitley. 

35) Jaitley proposes a fiscal deficit target of 3.3 per cent of GDP for 2018-19. The target he had set for 2018-19 last year was 3 per cent. 

36) Jaitley says government to allocate Rs 71.48 billion (7,148 crore) to textile sector.

37) The finance minister says India needs an investment of Rs 50 trillion (50 lakh crore) for infrastructure sector.

38) Despite analysts' and popular expectations, no change in personal income tax structure. Jaitley announces standard deduction of Rs 40,000 for salaried employees in lieu of transport and medical expenses. 

39) Direct tax collections rose 12.6% last year and 18.7% up to January 15. 

40) Corporate tax of 25% will be extended to companies with turnover of up to Rs 250 crore in 2016-17. 

41) BS VIEW: Corporate tax rate cut to 25% for firms with up to Rs 2.5 billion (250 crore) turnover. Promise to big firms unfulfilled; relief for MSMEs.  

42) Jaitley says extra amount of Rs 900 billion (90,000 crore) collected as personal income tax in past one year. The government will continue with tax policies that reward honest tax payers, adds the finance minister. 

43) Finance Minister also says personal tax buoyancy has improved significantly. 

44) Jaitley proposes to allow 100% tax deduction to companies registered as farmer-producer companies with turnover of Rs 1 billion (100 crore). 

45) Jaitley says 2018-19 divestment target set at Rs 800 billion (80,000 crore), while FY18 divestment estimate revised to Rs 1 trillion (1 lakh crore) 

46) Jaitley says infrastructure outlay to increase to almost Rs 6 trillion (6 lakh crore) FY19 from Rs 4.94 trillion (4.94 lakh crore). 

47) Jaitley says Railways capital expenditure for the year 2018-19 to be Rs 1.48 trillion (1.48 lakh crore). FM says Railways will add 90 kilometre of tracks to Mumbai's local train network at cost of Rs 110 (11,000 crore) and that government will also allocate Rs 170 billion (17,000 crore) for Bengaluru Metro Network. 

48) Jaitley says Railways to eliminate 4,267 unmanned rail crossings at broad gauge network. 

49) On the transport front, Jaitley says government proposes to expand airport capacity by five times to handle 1 billion passengers.  

50) Budget 2018 has proposed to levy long-term capital gains tax (LTCG) of 10% on gains exceeding Rs 100,000 from sale of equity shares. However, capital gains made on shares until January 31, 2018, would be grandfathered, the finance minister said. Also, there has been no change in the definition of short-term capital gains tax (STCG). 

51) To boost domestic manufacturing, Jaitley announces customs duty hike on mobiles to 20 per cent from 15 per cent. Duty on TVs hiked to 15 per cent.