TECCI PRESIDENT M.VENKATESHWARLU | SOLAR ENERGY| UNION BUDGET 2018 | FICCI | PWC
The Union Budget for 2018-19 has been announced by Mr Arun Jaitley, Union Minister for Finance, Government of India, in Parliament on February 1, 2018. It focuses on uplifting the rural economy and strengthening of the agriculture sector, healthcare for the economically less privileged, infrastructure creation and improvement in the quality of education of the country.
Highlights of Union Budget 2018-19
Overview of the economy
The GDP grew at 6.3 per cent in the second quarter of 2017-18 and is expected to grow at 7.2-7.5 per cent in the second half of 2017-18.
Growth for 2018-19 is forecasted at 7.4 per cent by the International Monetary Fund (IMF).
Exports are expected to grow at 15 per cent in 2017-18.
Fiscal deficit target for 2018-19 is set at 3.3 per cent of the GDP.
Fiscal deficit for 2017-18 is revised to Rs 5.95 lakh crore (US$ 93.54 billion) at 3.5 per cent of the GDP.
Agriculture and Rural Economy
The government is committed towards doubling the farmers’ income by 2022.
A total of Rs 14.34 lakh crore (US$ 225.43 billion) will be spent for creation of livelihood and infrastructure in rural areas.
Minimum Support Price (MSP) for all announced kharif crops will be at least one and half times of their production cost, similar to the majority of rabi crops.
Institutional credit to the agriculture sector is targeted at Rs 11 lakh crore (US$ 172.93 billion) for 2018-19, compared to Rs 10 lakh crore (US$ 157.2 billion) for 2017-18.
A Fisheries and Aqua culture Infrastructure Development Fund (FAIDF) and an animal Husbandry Infrastructure Development Fund (AHIDF) will be started with a total corpus of Rs 10,000 crore (US$ 1.57 billion).
An Agri-Market Infrastructure Fund will be started with a corpus of Rs 2,000 crore (US$ 314.41 million).
A restructured National Bamboo Mission will be launched with a total outlay of Rs 1,290 crore (US$ 202.79 million).
Allocation for the National Rural Livelihood Mission is increased to Rs 5,750 crore (US$ 903.93 million) for 2018-19.
Health, Education and Social Protection
Budgeted expenditure on health, education and social protection for 2018-19 is Rs 1.38 lakh crore (US$ 21.69 billion) which is expected to increase by Rs 15,000 crore (US$ 2.36 billion) after additional allocations during the year.
Role of technology in the education sector will be increased with a focus on increased digital intensity.
A new initiative named ‘Revitalising Infrastructure and Systems in Education (RISE) by 2022’ will be launched with an investment of Rs 1 lakh crore (US$ 15.72 billion) over the next four years.
A total of Rs 1,200 crore (US$ 188.65 million) is allocated for Health and Wellness Centres under the National Health Policy.
National Health Protection Scheme will be launched, which will cover over 10 million poor families with a coverage of up to Rs 5 lakh (US$ 7,860). This will be the world’s largest government funded health care programme.
A total of 24 new government medical colleges and hospitals will be set up.
Medium, Small and Micro Enterprises (MSMEs)
A total of Rs 3,790 crore (US$ 596.43 million) has been provided for the MSME sector for credit support, capital and interest subsidy and innovations.
Formalisation in the MSME sector is happening at a fast pace after the introduction of the Goods and Services Tax (GST) and demonetisation.
Online loan sanctioning facility for MSMEs will be revamped and public sector banks and corporates will be brought on-board the Trade Electronic Receivable Discounting System (TReDS) platform which will be linked with the GSTN.
Lending under the MUDRA Yojana is targeted at Rs 3 lakh crore (US$ 47.16 billion). At present 76 per cent of loan accounts under the scheme belong to women while more than 50 per cent belong to SCs, STs and OBCs.
Additional measures will be taken by the government for growth and successful operation of alternative investment funds.
As per an independent study conducted, over 7 million formal jobs will be created in the country during 2018-19.
The Government of India will contribute 12 per cent of the wages of the new employees in the Employees’ Provident Fund for all the sectors in the next three years.
As per proposed amendments in the Employees Provident Fund and Miscellaneous Provisions Act, 1952, women employees’ contribution to the EPF will be reduced to 8 per cent for the first three years of their employment with no change in employers’ contribution. This is done to promote more women employment in the formal sector.