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Indian Finance Minister Arun Jaitley Photo Credit: Reuters

Budget 2018: Highlights

01 February, 2018

Finance minister Arun Jaitley on Thursday lowered the government’s fiscal deficit target for the current financial year in the annual budget and proposed a number of measures to boost the agriculture sector and enhance social security.

In his budget speech, Jaitley also imposed a long-term capital gains tax but left individual income tax rates unchanged.

Here are the highlights:

  • Fiscal deficit for 2017/18 eased to 3.5% of GDP from 3.2% targeted earlier.
  • Fiscal deficit target for 2018/19 at 3.3% of GDP.
  • Sets disinvestment target of Rs 80,000 crore for 2018-19; FY18 goal of Rs 72,500 crore exceeded.
  • To list 14 state-run companies; to merge National Insurance, United India Insurance and Oriental Insurance.
  • Venture capital funds and angel investors: More steps in offing to strengthen Alternative Investment Fund industry.
  • Salaried taxpayers: No change in personal income tax. Standard deduction of Rs 40,000 for transport, medical allowance.
  • Long-term capital gains tax on equities at 10% on over Rs 1 lakh. Government expects Rs 20,000 crore as revenue from this tax.
  • Short-term capital gains to be taxed at 15% now.
  • MSME tax benefits: Corporate tax for companies with turnover of up to Rs 250 crore for 2016-17 cut to 25%.
  • Senior citizens: Deduction under health insurance premium increased to Rs 50,000 for all and Rs 1 lakh for those with critical illnesses. Interest income exemption increased to Rs 50,000 from Rs 10,000.
  • Launching flagship health protection scheme—Ayushman Bharat—for 10 crore families (50 crore beneficiaries). This will provide Rs 5 lakh per family per year for secondary and tertiary care hospitalisation.
  • Benefits for farmers: Minimum support price for all rabi crops to be 150% of production cost. Institutional credit to farm sector raised to Rs 11 lakh crore.
  • Proposal to set up an agricultural market fund of Rs 2,000 crore.
  • Proposes to invest Rs 1 trillion to develop premium education infrastructure over next four years.
  • Govt to establish a dedicated affordable housing fund
    under National Housing Bank for priority sector lending.
  • Allocates Rs 9,975 crore for social security schemes.
  • Allocates Rs 2.04 lakh crore for 99 Smart Cities.
  • Budget sets capex for railways at Rs
    1.48 lakh crore.
  • Budget sets Rs 5.97 trillion on infrastructure
    and extra budgetary allocation.
  • Increases custom duty on mobile phones from 15% to 20%.
  • Government to take action to eliminate use of cryptocurrencies for illegal activities.
  • Government to explore blockchain technology for ushering in a digital economy.
  • NITI Aayog to establish a national programme for artificial intelligence.

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Budget 2018: Highlights

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