Finance minister Arun Jaitley presented today what will most likely be the Narendra Modi government’s final full budget before the general elections scheduled next year. As he presents the budget, Jaitley will be mindful of the fact that the Bharatiya Janata Party-led first majority government in three decades hasn’t been able to live up to several key promises on which it came to power in 2014.
For one, as a VCCircle analysis pointed out, the government simply hasn’t been able to create as many jobs as it had promised. Second, capital expenditure, a key metric that determines the state of a country’s critical infrastructure, has suffered because the public-private-partnership model of financing has virtually stagnated, potentially creating, as the Economic Survey itself put it, a looming infrastructure investment gap of $526 billion by 2040. And finally, 2018 being a pre-election year, populism will weigh heavily on the finance minister’s mind.
Here's the minute-by-minute snapshot of the budget speech.
12:50 Jaitley ends his budget speech amid din in the house.
12:47 Budget proposes to eliminate education cess, impose social welfare surcharge.
12:45 Jaitley now comes to proposals on customs duty. Cuts tax on raw cashew. Ups customs duty on mobile phones.
12:44 The FM expects Rs 20,000 crore as revenue from long-term capital gains proposals.
12:43 The minister proposes that short-term capital gains to be taxed at 15% as now.
12:42 Jaitley adds that exemptions on long-term capital gains in place till 31 January 2018.
12:40 The FM says strong case for imposing long-term capital gains tax. Long-term capital gain exceeding Rs 1 lakh to be taxed at 10% without indexation. Sensex, Nifty extend losses.
12:39 Jaitley says payments exceeding Rs 10,000 in cash by trusts to be disallowed.
12:37 Health insurance and premium limit raised from Rs 30,000 to Rs 50,000. Concessions up to Rs 1 lakh for critical illnesses, says the FM.
12:36 Exemption of interest income to be increased from Rs 10,000 to Rs 50,000 for senior citizens.
12:35 Rs 40,000 standard deduction allowed for salaried taxpayers on account of medical and transport.
12:34 Jaitley says 1.89 crore salaried individuals paid Rs 1.44 lakh crore in taxes.
12:33 No changes to tax rates for individual taxpayers for FY19, says Jaitley.
12.29 Jaitley says companies with a reported turnover of up to Rs 250 crore to get a 5% corporate tax waiver. This will impact 99% of the companies filing returns, he says. This will create more investable income and create jobs, he says. Rs 7,000 crore is the estimate of revenue forgone due to this measure.
12:26 The FM announces sops to footwear and leather industries to encourage employment.
12:24 Direct taxes growth rate at 12.6% last year and 18.7% till 15 January, says Jaitley. Government recovered Rs 90,000 crore from anti-evasion measures, he says. 41% more IT returns filed this year, says Jaitley.
12:23 Benchmark indices slip into the red. Sensex down 0.15%, Nifty falls 0.1%.
12:22 Jaitley says revised fiscal deficit for FY18 to 3.5% from 3.2%. Next year's target at 3.3%. FRBM recommendations on debt rule accepted. Fiscal deficit target will be accepted as a key operational parameter.
12:21 Jaitley says GST revenue only for 11 months this year. This will have a fiscal effect, though the shortfall has been partly covered, he says.
12:20 Emoluments of president, vice-president and governors to be revised. President to get Rs 5 lakh a month, vice-president Rs 4 lakh a month and governors Rs 3 lakh a month. MPs won’t fix their own salaries and other emoluments; their salaries will be indexed to inflation.
12:18 Comprehensive policy to develop gold as an asset class. Regulated gold exchanges in the country soon. People will be able to open a gold deposit account hassle free, says Jaitley
12:17 The RBI to transfer its stake in the National Housing Bank to the central government.
12:16 Bank recap bonds worth Rs 80,000 crore to be issued this year.
12:16 Jaitley says three insurance companies to be merged into a single entity and listed on stock exchanges. National Insurance, United India Insurance and Oriental Insurance to be merged and listed. Will list 14 CPSEs, including two insurance firms.
12:15 Disinvestment target for financial year 2018-19 at Rs 80,000 crore. This fiscal year's target of Rs 72,500 crore achieved, says Jaitley. Govt expects to collect Rs 1 lakh crore in the current financial year.
12:14 Food Corp of India being restructured. Department of Commerce to develop a single window marketplace
12:13 Jaitley talks of the controversial Aadhaar. Every individual enterprise to have a unique ID, he says
12:12 The FM comes to the defence budget. Government to bring out an industry friendly defence production policy, he says.
12:11 Budget proposes Rs 5.97 lakh crore expenditure on infrastructure.
12:10 Jaitley says 5 lakh WiFi hotspots to be set up across rural areas at Rs 10,000 crore. Indigenous 5G testing to be done at IIT Chennai, he says.
12:09 Govt doesn’t consider cryptocurrencies as legal and will curb its use, says Jaitley. But govt to encourage blockchain technology.
12:08 Mission on cyberspace to be launched with allocation above Rs 3,000 crore.
12:07 NITI Aayog will establish a national program on artificial intelligence, says Jaitley
12:05 Companies to be asked to meet one-fourths of their financing needs from the bond market, says Jaitley. RBI to issue norms to nudge companies to access bond markets for fundraising, he adds.
12:04 The FM says 18% increase in domestic air passenger traffic in past three years. Airport capacity to be expanded more than five times to handle 1 billion passengers a year.
12:02 Mumbai transport system to add 90 km of double-line track; 150 km of additional suburban network planned. Bangalore suburban network to also be expanded.
12:01 Jaitley says 4,267 unmanned railway crossings to be eliminated on the broad gauge network. All railway stations with more than 25,000 footfall to have escalators. All trains to have WiFi, CCTVs.
12:00 Jaitley proposes capex for railways at Rs 1.48 lakh crore. Almost the entire network to be transformed into broad gauge, he says.
11:58 The FM says national highways projects likely to be completed on time. IIFC to be asked to help finance major infra projects, he says. The NHAI to float an SPV for future road projects under the Bharatmala Project.
11:57 Jaitley proposes to develop 10 tourist sites into "iconic" sites.
11:55 The FM now talking about the smart city programme, under which 99 cities have been covered so far. Proposes Rs 2.04 lakh crore for projects related to smart cities.
11:53 The finance minister turns focus on civil and defence infrastructure; announces new tunnels in remote border areas.
11:51 Outlay of more than Rs 7,100 crore for the textile sector.
11:50 Jaitley says government has tweaked several rules for VC and angel funds and that it will take additional measures to strengthen the alternative investment fund industry.
11:48 The FM says Mudra Yojana on credit to lend up to Rs 3 lakh crore.
11:47 Jaitley turns to budgetary allocation for MSMEs and employment. Nearly Rs 4,000 crore being allocated to the MSME sector, he says.
11:43 Government to launch Gobar-Dhan scheme. To expand the scope of the Jan Dhan Yojana, says Jaitley.
11:42 Jaitley says government to allocate Rs 600 crore for TB patients, to set up 24 new medical colleges for TB.
11:40 Government to launch National Health Protection Scheme for poor families. Almost 50 crore will benefit, Jaitley says. Government will provide up to Rs 5 lakh per family per year for hospitalization.
11:37 The government to set up Railway University in Vadodra, Gujarat, says Jaitley.
11:35 Jaitley says the government proposes to treat education holistically, without segmentation. Two new schools of planning to be set up and 18 new schools of planning to be set up within IITs and NITs, he says, adding that 1,000 B.Tech students will be given fellowships for higher research in IITs and the Indian Institute of Science.
11:31 The government is implementing a comprehensive social security scheme for widows, children and the handicapped, says Jaitley.
11:30 Jaitley says more than 1 crore new houses will be built in rural areas and 37 lakh in urban areas. He says loans to self-help groups will increase to Rs 75,000 crore in the coming year.
11:29 The FM says the government is committed to provide housing facilities for all by 2022.
11:28 Jaitley says the Swachh Bharat Mission has helped the poor as more than 6 crore toilets have been constructed. He says 2 crore more toilets to be constructed in the coming year.
11:27 The FM says the government is committed to helping poor women. He says the scope of the Ujwala Yojana will be expanded and 8 crore poor women will get free gas connections. Says 4 crore poor households, at present, being connected with free electricity at a cost of Rs 16,000 crore.
11:25 Jaitley announces special measures for addressing air pollution in Delhi.
11:24 Jaitley says scope of NABARD fund to be increased. Fishery and Aquaculture Development Fund and Animal Husbandry Fund to be set up with a total corpus of Rs 10,000 crore.
11:22 Kisan Credit Cards facility to be extended to fisheries farmers. Restructured national bamboo mission to be launched with an outlay of Rs 1,290 crore.
11:21 Jaitley says organic farming will be encouraged, especially via women self-help groups. Allocation for the food processing ministry is being doubled to more than Rs 1,400 crore. Operation Green on the lines of Operation Flood to support logistics infrastructure for farmers. Export of farm commodities to be liberalised, he says.
11:20 Govt proposal to increase MSP for Kharif crops pushes agriculture and agri-allied stocks higher. Kaveri Seeds gains 2.33%, Escorts is up 5.2%, Mahindra & Mahindra rises 2.4%, Jain Irrigation is up 3.4%.
11:18 He says the task of connecting all eligible habitations to all-weather roads has been majorly completed. He says the third phase of the Pradhan Mantri Gram Sadak Yojana will further improve these linkages.
11:17 Jaitley says that 22,000 rural hubs will be upgraded to link them to APMCs to allow small farmers to sell directly to bulk purchasers.
11:15 The FM says the full MSP will benefit the farmers. He says the NITI Aayog will develop a mechanism for better price realisation for the farmers. Government will create an institutional mechanism for price and demand forecast, use of Futures and Options market and other measures.
11:14 The FM says most rabi crops are being acquired by the government at 1.5 times the input cost on minimum support levels. He announces Kharif crop MSP will be at least 1.5 times the input costs.
11:12 The FM outlines his proposals on agriculture and rural development. Says farm production is at record levels.
11:11 Jaitley says the government has worked "without weighing the political cost" of its actions. He also talks of the direct benefit transfer (DBT) scheme.
11:10 FM now talks of free gas connections, electrification and free medicines. He says many government services are now being provided online or at people's doorsteps, reducing corruption. Says the government is doing away with archaic rules and regulations.
11:09 The government is now focussed on "ease of living", the FM says.
11:08 Jaitley says exports this year will grow by 15%. He says this budget will focus on agriculture, healthcare, infrastructure and education. He also lauds his boss PM Modi (but naturally).
11:07 Jaitley now mentions GST, demonetisation, the bankruptcy code and recapitalisation of banks. He says the first three years of the Modi government saw 7.5% GDP growth. Says India is already the third-largest economy on a PPP basis and is set to achieve 8% growth.
11:06: Jaitley says such measures have pushed FDI higher and improved the ease of doing business. The government is allocating natural resources in a transparent manner, he says.
11:05 Jaitley talks about the structural reforms the Modi government has implemented since coming to office in 2014.
11:04 The FM begins his budget speech.
11:02: The speaker Sumitra Mahajan begins with an obituary reference. She says that despite the demise of a sitting member of the house, the budget speech will go ahead as scheduled and the house will not be adjourned.
11:00 The Lok Sabha starts the day's proceedings.
10:56 It will be interesting to see how Jaitley maneuvers to keep the fiscal deficit targets on track. The government will struggle to meet the 3.2% target for 2017-18, but economists believe that the FM will stick to the long-term goals and target a 3% figure for the coming year.
10:53 Prime Minister Narendra Modi and all cabinet ministers can be seen milling around in Parliament corridors. The cabinet seems to have formally cleared the budget.
10:50 The speech itself is likely to be shorter than previous speeches. This is because with the implementation of the GST, the FM will no longer have to bring any indirect tax proposals as the GST Council now takes a call on them.
10:45 If news reports are to be believed, the FM will deliver his speech in Hindi, the first time he would be doing that for a budget.
10:40 Jaitley reaches Parliament; he is likely to begin his speech by 11 am.
10:30 Sensex, Nifty trade higher ahead of budget speech.
10:15 Jaitley meets President Ram Nath Kovind ahead of budget speech.