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1. Budget:

  • Budget is an obligation the government of India under article 112, 113, 114(3) and 110(a).

  • Historically it is just a proposed balance sheet, and government used it to present it on 1st March

  • This year three major changes have been undertaken in budget:

  • a)Rail budget is merged with Union Budget

  • b)Presentation of budget is preponed by a month

  • c)It has done away with plan and non plan expenditures

  • Two policy decisions that precede Budget

  • a) Demonetisation

  • b) Passing of GST bill

  • Budget 2017 is based on ten themes based with a goal to “Transform, Energize and clean India”

  • i.  Farmers- for whom the budget has committed to double their income in five years

  • ii. Rural population- providing employment and basic infrastructure

  • iii.  Youth- energizing them through education skills and jobs

  • iv.  Poor and unprivileged: strengthening the system of social security and affordable housing

  • v.  Infrastructure for efficiency: productivity and quality of life

  • vi.  Financial sector: growth and stability through stronger institutions

  • vii.  Digital Economy for speed, accountability and transparency

  • viii.  Public service: effective governance and efficient service delivery through people’s participation

  • ix.  Prudent fiscal management

  • x.  Tax administration: Honouring the honest


1.1. SWOT Analysis of Indian economy:


  • Indian economy still presents bright support with growth prediction of 6.5-6.75%

  • FDI reform measures have ensured that India has been receiving largest inflow of FDI investment

  • The large gap existing between the inflation rates measured through WPI and CPI in 2015-16 has been bridged now and the relative prices in economy has been stabilized

  • Successful demonetization of high value currencies is likely to yield long term benefits like reduction in corruption etc

  • GST has been passed which will provide single market

  • India’s share in world manufacturing exports is rising because the country has remained competitive despite of high capital inflows and inflation

  • Internal mobility of goods given by interstate trade in India is about 54% of GDP or 1.7% of international trade

  • In terms of commitment to climate India is on positive side


Advantage of demography

  • A very extensive network and infrastructure is created in the country of JAM

  • There is convergence of health outcomes like life expectancy and fertility rates across states over time in country

  • Indian economy has the potential to grow at 8-10% in real terms

  • Acknowledged democracy, good governance and established decision making process



  • A major weakness of economy in context of its potential is broad societal ideology, mindset and opinions about redistribution of income and wealth, capacity building for   service delivery and curious and confusion about property

  • Even GST implementation to begin with is likely to suffers from sub optional design and too complicated

  • Confusion regarding working and role of public and private sector

  • Efficient delivery of major services is inefficient

  • Private investment is low and exports are no longer growing at high rates

  • Corporate sector and commercial banks are caught simultaneously with their respective stressed balance sheets

  • Non tax revenues of central government have not achieved the target because receipts from the spectrum, disinvestments and dividends to the government

  • Fiscal deficits in the state government budgets have been rising late

  • Heavy reliance on high growth rate of income to reduce debt- GDP ratio rather than reducing primary deficit has not yielded the desired result

  • Distribution of public funds for various schemes

  • Ratio of working to non working population

  • Investments and saving rates have been declining

  • Income and consumption inequalities across states



  • Reform of bankruptcy laws for exits of corporations to release locked up resources

  • Strengthen legal basis for Aadhar cards and allow inter operability to encourage payments for efficient functioning of government schemes to achieve inclusion and equity

  • Focus and competitive and cooperative federalism presents a great potential to attract skills, investment and technology

  • Unfinished agenda on structural reforms

  • Rising dollar on account of developments in the US economy could compel Chinese to reduce its exports

  • Higher growth prospects in advance countries in advance countries like US and Germany can lead to revival of exports from developing countries

  • India has opportunity to sign attractive agreements with UK and Europe after BREXIT

  • Relevance of WTO and other multilateral aggrements to increase

  • There is an opportunity to create a public sector Public sector asset rehabilition agency to address the twin balance sheet problem



  • International rating agencies have not been consistent in upgrading their ratings of different countries

  • Competitive populism in federal democracy can damage fiscal discipline and governance standards

  • International political order and environment are fast changing towards isolationism and protectionism

  • International oil prices are on rise and so also commodity prices

  • As a consequence of developments in US economy, global interest rates and inflation in advanced countries

  • If rising dollar on account of developments in US economy results in dollar induced depreciation in Yuan

  • World’s exports to GDP ratio has been declining for last 6 years


1.2. Rail Budget:

  • In 1920, an East Indian Railway committee was constituted under chairmanship of Sir William Acworth. Based on its recommendations railways budget was separated in 1924

  • Rail budget has been absorbed in General Budget but the budget has ensured that financial autonomy of Indian railways

  • Transport integration is clearly visible as railways are required to implement end to end integrated transport solutions for selected commodities

  • Present budget mandates railways to focus on major 4 areas

  • a) Passenger safety

  • b) Capital and development works

  • c) Cleanliness

  • d) Financing and accounting reforms


Passenger safety

  • a)Upgrading safety

  • b)Special Railway Safety Fund was created on April 1, 2001. It was targeted to wipe out accumulated areas of over aged assets. It was non lapsable and non interest bearing fund of Rs. 17000 crores

  • c)The identified works were listed in a book called ‘Green Book’

  • d)In this budget government announced setting up of Rashtriya Rail Sanraksha Kosh with a corpus of Rs 1 lakh crore over period of 5 years with clear cut guidelines and timeline for implementing various safety works to be funded from this Kosh

  • e)Plan for complete replacement of Integral Coach Factory design coaches by modern LHB

  • f)Budget has outlined complete elimination of unmanned level crossing by 2020


Capital and Development Works

  • a)Gross budgetary allocation has been increased

  • b)Budget targeted commissioning of 3500 km of railway line in 2017-18

  • c)Process of ‘Station Redevelopment’ has been launched. Process has already started Habibganj near Bhopal and Gandhinagar

  • d)Railways shall be setting up joint ventures with 9 state governments



  • a) Swachh Rail project under Swachh Bharat Abhiyan

  • b) SMS based Clean my coach service has gained popularity

  • c) Coach Mitra facility a single window interface to register all coach realted requirements

  • d) Proposes to fit all coaches with bio toilets by 2019

  • e) Environment friendly disposal biodegradable waste into energy are being set up at New Delhi and Jaipur Railway Stations


Finance And Accounting Reforms:

  • a) Key advantage of accrual basis is that matches revenue with related expense, so that complete impact of a business transaction can be seen within a single reporting period

  • b) IRCTC to promote digital ticket booking

  • c) Three railway PSU’s- IRFC, IRCON & IRCTC are proposed to be listed in Stock exchange


Budget and Infrastructure:



  • a)Budget allocation has increased i.e. 27% of total allocation to transport sector

  • b)A specific programme for development of multi modal logistics parks, together with multi modal transport facilities will be drawn and implemented

  • c)PM Gram Sadak Yojana is being implemented at accelerated pace

  • d)With notable exception of NHDP the major focus of this network expansion has been to improve connectivity rather than to increase network capacity



  • a)Airports are being modernized and expanded

  • b)A substantial investment will be required to ensure that the Air Navigation Services (ANS) can continue to deliver safely



  • a)Indian ports are highly constrained for capacity and are likely to remain in near future

  • b)Inland Water Transport (IWT) is one of the most environment friendly mode with excellent fuel efficiency and lower emission levels



  • a)Telecom sector is an important component of infrastructure ecosystem

  • b)A scheme which is a project of national importance is called Bharat Net, a highly scalable network infrastructure on non discriminatory basis

  • c)Optical fibre cable has been laid in 1,55,000 kms.

  • d)In addition ‘DigiGaon’ initiative will be launched to provide tele-medecine, education and skills through digital technology




  • a)100% village electrification by 1st May n2018 under DDUGJY

  • b)Solar energy, is now proposed to take up the second phase of solar development park

  • c)An eco system is also being created to make India a global hub for electronics manufacturing


Oil and Natural Gas:

  • a)Petroleum and natural gas sector has the tremendous amount of scope for expansion and job opportunities

  • b)Strengthening the enegy sector, the government has decided to set up strategic crude oil reserves


1.3. Budget and Rural Welfare:

Better Value for Agri Products

  • a)The coverage National Agricutural Market (e-NAM) will be expanded from current 250 markets to 585 APMCs

  • b)e-NAM helps leverage the physical infrastructure of mandis through an online trading portal

  • c)programme aimed at 21 mandis in 8 states- UP (6), Gujarat(3), Telengana(5), Rajasthan(1), MP(1), Haryana(2), Jharkhand(1), HP(2)

  • d)Government  has declared that dedicated micro-irrigation fund will be set up by NABARD to achieve the goal of ‘Per Drop more crop’

  • e)Fund allocation under PM Fasal Bima Yojana’ has been increased

  • f)Government set up new mini labs in Krishi Vigyan Kendras and ensure 100% coverage of all 648 kendras

  • g)It will undertake a Mission Antyodya to bring 1 crore households out of poverty and to make 50,000 Gram Panchayats poverty free by 2019

  • h)Timing has been linked to 150th anniversary of Mahatma Gandhi- under part of Gandhi Darshan

  • i)Initiative to geo-tag all MGNREGA assets and putting them in public domain will establish further greater transparency


Budget and Agriculture:

  • Healthy growth rate of 4.1% from drought reduced growth rate of 2% in 2015-16

  • Various government schemes like PMKSY, PMFBY and e-NAM to increase income of farmers

  • Budget also stipulates that that a model law on contract farming would be prepared and circulated among states

  • Solil Health card scheme would be strengthened further

  • Setting up of Krishi Vigyan Kendras for soil testing

  • Sum of Rs. 2000 crore has been allocated for new Dairy and Infrastructure Development Fund under NABARD


Budget for Skill and Employment:

  • India’s more than 60% population is below the age of 35 and average age by 2020 will be about 29

  • Challenge is to provide education, skills and gainful employment

  • Rural India has three important concerns- all access is limited, resources are very few and most important is education concerns

  • Education is to play major role in Transforming India and Digital technology is one aspect in it

  • The budget has introduced a system of measuring annual learning outcomes in schools provided for an ‘Innovation, Fund for secondary education’ which proposes to encourage local innovation


Autonomy for higher institutions

  • Government has put system to develop SWAYAM platform by leveraging IT and plans to launch it with at least 350 online courses

  • Budget also proposes a National Testing Agency to be set up as an autonomous and self sustained premier testing organization to conduct all entrance exams for higher education institutions

  • Vocational Education and training (VET) is an important element of nations education initiative

  • Budget has extended the Pradhan Mantri Kaushal Kendras to more than 600 districts across the country

  • Proposes to set up 100 International Skills centres across and across the country

  • Launch SANKALP- Skill Acquisition and Knowledge Awareness for livelihood promotion programme at cost of Rs 4000 crores

  • Announcement to Strengthen Skills for Industrial Value Enhancement (STRIVE)


Some major statistics

  • a)In 2012, 474.1 million workers next to China

  • b)More than 94% work in unincorporated, unorganized enterprises

  • c)Organized sector includes workers employed by Government, state owned enterprises and private enterprises

  • d)60% workforce self employed

  • e)Of remaining 40% nearly 30% are casual workers while only 10% as regular employees

  • f)India has one of the lowest levels of per capita income and productivity

  • g)Around 55% of population dependent on agriculture

  • Product diversification, manufacturing of new products and by products without proportionate rise in capital and material and more importantly, large scale adoption of new technology can result in employment gains

  • Non agricultural investment and growth located largely in the urban areas are likely to suffer raising the urban unemployment rate and underemployment

  • Rural sector unemployment is also feared to rise because given that the agriculture sector is not in a position to absorb labour significantly, many of them take recourse to rural non farm sector where business requires cash on day to day basis

  • Highest ever all allocation to MNREGA

  • PMEGP is basically a credit linked subsidy programme which combines Rural Employment Generation Programme (REGP) and Pradhan Mantri Rozgar Yojana (PMRY)

  • PM Kushal Kendras will be set up

  • Concept of India International Skills Centres (IISC) to be established across the country is really interesting as these centres will offer advanced training courses in foreign languages


Budget and Health:

  • Nearly 59% of health budget gets transferred to states/ UTs under centrally sponsored schemes viz. NHM and National health protection scheme

  • Central sector schemes which include PM Swasthya Suraksha Yojana which deals with setting up of AIIMS like institution and upgradation of medical college institutions

  • Human Resources for health and medical education received the highest increase in Budget

  • NRHM continues to receive the highest allocation in health budget nearly 45% of total allocations made to family of Health

  • National Health Protection Scheme (NHPS):

  • a)PM had confirmed that the government was working on scheme to provide health insurance cover of up to Rs 1 lakh to the poor

  • b)A scheme of cash transfers of Rs 6000 to an expectant mother for promoting institutional deliveries and immunization as well as the ambitious target set for elimination of Kala Azar and Filariasis by 2017, Leprosy by 2018, Measles by 2020 and Tuberculosis by 2025

  • c)FM announced transforming of health sub centres (SCs) across the country into Health and wellness centres


Budget and Weaker Sections:

  • Budget aims at energizing various sections of society, especially the vulnerable sections with the larger objective of unleashing their true potential and improving quality of their life

  • Some allocations for minorities and weaker sections:

  • Divyangs dealt by nodal Department of Empowerment of Persons with Disabilities are other social groups

  • PM Awas Yojana- Rural for affordable housing

  • Free LPG connections to poor households as successful for rural women PM Ujjwala Yojana

  • Inculcating entrepreneurship skills among Scand ST under Stand Up India

  • Launching next phase of STRIVE at cost of Rs 2200 crore to improve quality of market relevant vocational training


SANKALP programme

  • A dairy Processing and Infrastructure Development Fund would be set up in NABARD 

  • Schemes for children and youth, no doubt, should receive high priority as they are the future of the country and without investment in this human capital, the country will not be able to reap the demographic dividend- an excellent opportunity resulting from India’s younger age structure. At the same time in any planning. Adequate provision has to be made for another sizable (about 9 per cent of population) and rapidly increasing vulnerable group i.e. India’s elderly (60+). As compared to 70.6 million in 2001 and 104 million in 2011, they are expected to cross 173 million in 2026.

  • Relief to Senior Citizens proposed in the Union Budget 2018, the proposals are :-

  • Exemption of interest income on deposits with banks and post offices are proposed to be increased from Rs. 10,000 to Rs. 50,000. - under section 8OTTA and the exemption is not only for the interest income from bank deposits in saving accounts and savings in Post Office Schemes but also for interest income from fixed deposits and recurring deposits in banks. (As per BKPAI survey, 21 per cent rural elderly and 28 per cent urban elderly have savings in banks and post office, very few having shares, bonds etc.)

  • TDS shall not be required to be deducted under section 194A. Benefit will also be available for interest from all fixed deposit schemes and recurring deposit schemes.

  • Hike in deduction limit for health insurance premium and/ or medical expenditure from Rs. 30,000 to Rs. 50,000n under section 80D.

  • The budget also provides some relief for senior citizens suffering from critical illnesses as the exemption limit for medical expenditure for specific critical illnesses is raised to Rs. one lakh from the existing Rs. 60,000 for senior citizens and Rs. 80,000/- for the 80+ aged citizens.

  • The budget has re-introduced standard deduction of Rs. 40,000/- from the salaried income (in place of the present deduction of travel allowance and medical allowance for salaried people) Since in the income tax return, pension income falls in the category income from salaries’, hopefully, the pensioner senior citizens are also expected to benefit by this provision

  • Due to these provisions , some senior citizens in the lowest slab will not be required to pay income tax at all, while others are expected to enjoy increased savings.

  • These provisions are also likely to act as incentives for taking larger medical insurance cover and also incentive for keeping more fixed deposits in banks.

  • Concessions will give extra tax benefit of Rs. 4,000 crore to senior citizen. It is also proposed to extend the Pradhan Mantri Vaya Vandana Yojana up to March, 2020. The current investment limit is also proposed to be increased to Rs. 15 lakh from the existing limit of Rs. 7.5 lakh per senior citizen.


Pradhan Mantri Vayavandana Yojana

  • This scheme was started in May 2017 only for one year but in this budget it is extended upto May 2020. Besides, the Investment limit for this scheme is doubled from the existing 7.5 lakhs to 15 lakhs, Under this scheme, operated by LIC for persons above age 60, on survival of the Pensioner during the policy term of 10 years, pension in arrears (at the end of each period as per mode chosen) shall be payable. On death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to the beneficiary. On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension instalment shall be payable. Though the amount received at maturity from investment in this scheme is taxed, this is an attractive option for senior citizens as it gives assured returns at 8 per cent for 10 years.


Overall Impact-Limited

  • These provisions, though important for certain sections of the elderly, overall impact is going to be confined to a very small percentage of elderly. Majority of rural elderly come from agricultural households and will not have benefits of income tax provisions. BKPAI survey shows that only 10 per cent rural elderly and 16 per cent urban elderly receive employer’s pension. Nearly 42 per cent rural elderly and 47 per cent urban elderly have no income at all.

  • In fact, what is really relevant for majority of the elderly is Aayushman Yojana - the huge state funded National Health Protection Scheme. It is a general scheme for all BPL families and not specific for the elderly but if successful, it is likely to have significant impact on the elderly. Apart from economic dependency, the vulnerability of the elderly is due to their physical dependency resulting from poor health and partial or complete disability. As per BKPAI survey, more than 50 per cent elderly reported themselves as not having good health. Nearly one fifth reported having poor health. About 13 per cent reported having acute morbidity. About 8 per cent need assistance for at least one activity of daily living. Nearly 60 per cent reported having partial or full vision disability, and about one fourth reported having full or partial memory disability and walking disability.

  • It is heartening to note that the budget has announced the above income of Rs. 50,000/ and above. The above provisions will be relevant only for those few who are at the top of this income category.


Constraints/Limitations (with a special focus on RSBY)

  • There have been certain limitations and problems with the functioning of RSBY (Rashtriya Swasthaya Bima Yojana) which has affected the elderly specifically-

  • Inadequate Funding — The allocation for RSBY rose to Rs. 2000 crores in the financial year 2019 from Rs. 470 crores Based on the experience of RSBY, it is estimated that the new scheme with the huge coverage is expected to cost Rs. 30,000 crores. It is doubtful whether the States with their limited resources will be able to provide the expected 40 per cent share.

  • There is not enough clarity regarding the implementation mechanism but it appears that states will be given an option to implement it through insurance agencies or by funding the autonomous bodies. Doubts have been expressed as to whether the annual instalment of Rs, 1082/- per registered family will be sufficient to provide the services.

  • National Sample Survey data shows that the experience of RSBY has been very dismal. Hardly 1.2 per cent rural and 6.2 per cent urban families benefitted by it and the scheme did not help to reduce the out of pocket expenditure incurred by families.

  • The new scheme provides only hospitalisation expenses but more than two thirds of the treatment expenses incurred by families are other than hospital expenses. As for the elderly, BKPAI survey shows that only 10 per cent of the elderly were hospitalised during one year preceding the survey.  Often the elderly are hospitalised only at the last stage. The new scheme can act as incentive for timely hospitalisation of the elderly.

  • The scheme covers only hospitalisation expenses but majority of the elderly suffer from age related diseases like Arthritis and. diseases like hypertension, diabetes, various types of fevers for which timely diagnosis , proper medication and frequent monitoring is required. Strengthening of the health infrastructure especially in remote areas is crucial in this respect.

  • Shortage of medical manpower in such areas is also a big constraint. Provision, in this budget, for wellness centres and new medical colleges as well as for nutritional diet for TB patients is certainly a very important step which can indirectly help the elderly.

  • Ultimately, the whole issue boils down to increasing the government expenditure on health and the effective public — private partnership. In spite of these constraints, the attempt made in this budget to bring social sectors, especially the health sector at the centre stage is unprecedented in independent India. This approach will certainly go a long way towards improving the quality of life for the elderly in India


2. Education

2.1. Major Initiatives

  • On education front, goverment announced setting up of Ekalavya Model Residential School on par with Navodaya Vidyalayas to provide the best quality education to the tribal children in their own environment by 2022 in every block with more than 50% ST population and at least 20,000 tribal persons with special facilities for preserving local art and culture besides providing training in sports and skill development.

  • To step up investments in research and related infrastructure in premier educational institutions, including health institutions, a major initiative named ‘‘Revitalising Infrastructure and Systems in Education (RISE) by 2022’’ with a total investment of Rs.1,00,000 crore in next four years was announced . He said that a survey of more than 20 lakh children has been conducted to assess the status on the ground, which will help in devising a district-wise strategy for improving quality of education.

  • To improve the quality of teachers an integrated B.Ed. programme for teachers will be initiated.

  • ‘‘Prime Minister’s Research Fellows (PMRF)’’ Scheme will include 1,000 best B.Tech students will be identified each year from premier institutions and provide them facilities to do Ph.D in IITs and IISc, with a handsome fellowship. Allocation on National Social Assistance Programme this year has been kept at Rs. 9975 crore.

  • In order to take care of the education and health care needs of Below Poverty Line (BPL) and rural families, The Budget proposes to increase the cess on personal income tax and corporation tax to 4 percent from the present 3 percent. The new cess will be called the “Health and Education Cess” and is expected to lead to a collection of an estimated additional amount of Rs. 11,000 crore.

  • It is also proposed to abolish the Education Cess and Secondary and Higher Education Cess on imported goods. In its place it is proposed to impose a Social Welfare Surcharge at the rate of 10 percent of the aggregate duties of Customs, on imported goods, to provide for social welfare schemes of the government. However, goods which were so far exempt from Education Cesses on imported goods, will however continue to be so.

  • Technology must be harnessed in the interest of the education sector, wherever possible; taking a comprehensive approach towards education would result in synergies across levels, while also streamlining bureaucracies and budgets; investment in teachers and their training, if well designed, would have a direct impact on quality in the classroom; district level achievement tests can form the baseline from where regular tracking of learning levels can be planned; investment in research and innovation is an important element in a strategy to maintain quality and finally, the need to extend quality education to tribal areas has long been recognized as necessary.

  • While the total budget of the National Education Mission is up from Rs. 28, 255 crores last year to Rs. 31,212 crores-an increase of Rs.3000 crores-it does not seem adequate for the ambitious plans declared in the budget speech. For instance, digitalizing education in the classroom through Operation Digital Board would require a massive upgrade of basic infrastructure before it can be enabled, as currently only 62 per cent of all schools have an electricity connection, only 24 per cent have functional computers and only 9 per cent have an electricity connection and a functional computer (DISE, 2015-16).


Criticism Of Budget Related To Education

  • Unfortunately, the holistic approach is not reflected in the budget document in any form. For instance, allocations for SSA and RMSA as well as teacher education continue to be separate. For SSA they have increased marginally from 23,500 crores last year to Rs. 26,128 crores this year and for RMSA from Rs. 3915 crores (RE) to Rs. 4213 crores.

  • The announcement of an expenditure of Rs. one lakh crores over the next 4 years for research and innovation must be welcomed, even as it seems ambitious, especially as it is not yet reflected in the allocations made for this year.

  • What has been given for this year is a mere Rs. 350 crores Rs. 45 crore increase from the Rs. 319 crores last year. This implies that in the next 3 years the budget will need to be expanded hugely if this promise is to be upheld.

  • Other elements of quality referred to in the budget speech, such as the National Achievement Survey forming the basis for improving learning outcomes do not have obvious budgetary implications and thus, their absence in the financial statements need not raise eyebrows.

  • Thus far the rural electrification mission has not covered schools either, and unless it does so, it seems unlikely that Operation Digital Board will see much of a take off. The school education budget document certainly makes no mention of how this Operation will be funded. In fact even the budget for digital India e-learning has come down from Rs. 518 crores to Rs. 456 crores

  • Similarly, while teacher training has been emphasized, the budget for the Madan Mohan Malviya National Mission for Teachers and Training has remained stagnant at 120 crores allocated last year.

  • There is, however, an increase in budgetary support for strengthening teacher training institutes of Rs. 70 crores but that appears to have come at the cost of appointment of language teachers to the tune of 40 crores. This does not bode well for the huge shortage of teachers in general, but especially in tribal areas, where language teachers are particularly needed. While it cannot be denied that appropriate teacher training is a crucial element of quality, it must not come at the cost of teacher appointments especially in a scenario where massive shortages are already contributing to the quality crisis. With 11.5 per cent of primary, and 7.5 per cent of all schools being single teacher schools, and the average number of teachers in a government elementary school still at only 4.3 — far below the full complement of one teacher per grade, this element of basic provisioning is a cause for concern.It raises an important question about what we mean by quality.


Union Budget 2018-19

  • (Articles Covered - Taking the Economy Forward, Rejuvenating the Economy & Highlights of Budget 2018-19)

  • The Union Budget 2018-19 is unique in many respects. It comes at a time when the economy is now witnessing the positive effects of two major structural reforms carried out by the Government in the last two years —demonetization and implementation of GST.

  • This budget is different from other budgets in several respects. The main focus of the budget is on spending more money on agriculture and rural economy so that apart from helping the farmers in increasing their income, it results into creation of demand for goods and services which will promote private investment. In the budget, maximum money is going to be spent on creation of rural infrastructure and rural employment. There is an increase in the budget allocation for rural livelihood programmes under which self-help groups, mainly of women, are being helped by corpus funds as well as bank credit. Also wherever required, new warehousing and processing capacities for these crops will be created with the help of a network of Farmers Producer Organizations (FPO). The second most important part of Union Budget 2018-19 is providing the education facilitates to make use of human resource for contributing to the wealth of the nation and to generate incomes for a good living, good health facilitates sustaining such human resource.

  • This year’s Budget will consolidate these gains.


Education, Health and Social Security

  • The budget provision of setting up 1.5 lakh centres to provide health facilities closer to home with an allocation of Rs. 1200 crores under Aayushman Bharat programme is remarkable.

  • Similarly, large amount of allocations made for TB nutritional support is also one of the welcome features in the budget.

  • Finance Minister’s announcement for the world’s largest government funded health care programme titled National Health Protection Scheme to cover over 10 crore poor and vulnerable families covering approximately 50 crore beneficiaries from 10 crore families and providing coverage up to 5 lakh rupees per family per year for secondary and tertiary care hospitalization is a laudable step. This will also help promote business of insurance and generate employment in the country.

  • Budget provision for one lakh crore for infrastructure system in education, setting up 2 new schools for planning and architecture, announcement of setting up one medical college for every three parliamentary constituencies with 24 new medical colleges, and upgrading hospitals to medical colleges will helping making the medical education and medical facilities available in the neighborhood of people around the country.


Infrastructure and Industry

  • To further boost tourism, the Budget proposal to develop ten prominent tourist sites into Iconic Tourism destinations by following a holistic approach involving infrastructure and skill development, development of technology, attracting private investment, branding and marketing are welcome announcements which will generate employment and result into growth.

  • Large amount of allocations have been made in Railways, Aviation, and digitalization of the economy. Railway capes has been pegged at Rs.1.48 crore to eliminate unmanned railway crossing, to build escalators, to provide WiFi and CCTV camera, to eliminate unmanned rail crossings.

  • To further increase Broadband access in villages, the government proposal to set up five lakh Wi-Fi hotspots to provide net connectivity to five crore rural citizens and allocations of Rs. 10000 crore in 2018- 19 for creation and augmentation of Telecom infrastructure would help in Digital India programme of the government.

  • The budget boosts the MSMEs which constitute 99 per cent of the companies, by providing them Rs.3794 crores for giving credit support, capital and interest subsidy and for innovations. MSME change in basis of classifying from investment in plant and machinery/equipments to annual from Rs 50 crore to turnover 250 crore and reducing the tax rate to 25 per cent will encourage ease of doing business, growth oriented and align them to new tax regime resolving around GST. Finance Minister has also offered Rs. 3 lakh crore more of MUDRA loans for MSMEs.


Tax Proposals

  • Long Term Capital Gains (LTCG) tax at a moderate rate of 10 percent based on equity, as there is no justification for incomes of Rs. 3.6 Iakh crores from this asset class to be exempted from tax. The tax on LTCG should have been 20 per cent as had existed earlier. The budget also proposed that all dividends distributed by equity mutual funds have to pay a 10 per cent. This would cut down on the net amount of money that mutual fund houses could distribute to their investors. He has proposed 1 per cent education cess ( tax on tax) for revenue considerations to run massive social security schemes.

  • Allocations for Socially Weaker Sections

  • A New scheme Venture Capital Fund for OBCs on similar lines as Venture Capital Fund for SCs to be launched with an initial corpus of Rs. 200 crore. Rs. 140 crore has been provided for it in 20 18-19.

  • The Skill Development Training has been given to 13,587 manual scavengers and their dependents. 809 manual scavengers and their dependents have been provided bank loans.

  • For the Pre-Matric Scholarship for OBC, the income eligibility has been increased from Rs.44,500/- per annum to Rs. 2.5 lakh per annum. For Pre-Matric Scholarship for SC, the income eligibility has been raised from Rs.2.00 lakhs to Rs. 2.5 lakhs.

  • Stipend for day scholars has been raised from Rs. 150 to Rs. 225 and for hostelers it has been raised from Rs. 350 to Rs. 525/-.

  • For Free coaching for SC and OBC students, the income eligibility has been raised from Rs. 4.5 lakhs to Rs. 6 lakhs. Stipend has been raised from Rs. 1500/- Rs. 2500/- for local students and from Rs. 3000 to Rs. 5000 for outstation students. For Pre-matric Scholarship for OBC, the rates of scholarships has been increased substantially.


2.2. Defence Sector

  • Private sector and MSMEs to be promoted in defence by formulation of and industry friendly defence production policy 2018.

  • Two defence-manufacturing corridors to be established to boost defence manufacturing in the country.

  • Foreign Direct investment to be liberalized in the defence sector.


Enterprise/Industry reforms

  • A unique Adhaar like ID to be given to each and every enterprise big or small to help in easy roll out of schemes and benefit and easy and effective collection of taxes and duties etc.

  • The government's plan to develop a National Logistics Portal as a single online window to link all stakeholders will significantly help the logistics industry by dealing with a single ministry than with seven different ministries.


Tax related reforms

  • With the roll out of GST, the union government has acquired the concurrent powers of taxation when it comes to indirect taxes. Hence, the Central Board of Excise and Customs (CBEC) is being renamed as Central Board of Indirect Taxes & Customs.

  • 100 percent deduction proposed to companies registered as Farmer Producer Companies with an Annual turnover upto Rs. 100 crore on profit derived from such activities, for five years from 2018-19.

  • Deduction of 30 percent on emoluments paid to new employees Under Section 80-JJM to be relaxed to 150 days for footwear and leather industry, to create more employment

  • Proposal to extend reduced rate of 25 Percent currently available for companies with turnover of less than 50 crore (in Financial Year 201 5-16), to companies reporting turnover up to Rs. 250 crore in Financial Year 2016-17, to benefit micro, small and medium enterprises

  • Standard Deduction of Rs. 40,000 in place of present exemption for transport allowance and reimbursement of miscellaneous medical expenses. 2.5 crore salaried employees and pensioners to benefit. .

  • Relief to Senior Citizens proposed Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50000; TDS not required to be deducted under section 194A. Benefit also available for interest from all fixed deposit schemes and recurring deposit scheme; Hike in deduction limit for health insurance

  • Increase in deduction limit for medical expenditure for certain critical illness from Rs. 60,000 (in case of senior citizens) and from Rs. 80,000 (in Rs. 1 lakh for all senior citizens undersection 8ODD); Proposed to extend Pradhan Mantri Vaya Vandana Yojana up to March, 2020. Current investment limit proposed to be increased to Rs. l5lakh from the existing limit of 7.5 lakh per senior citizen.

  • Proposal to introduce tax on distributed income by equity oriented mutual funds at the rate of 10 percent.

  • Proposal to increase cess on personal income tax and corporation tax to 4 percent from present 3 percent.

  • Proposal to roll out E-assessment across the country to almost eliminate person to person contact leading to greater efficiency and transparency in direct tax collection.

  • Customs act to be changed to improve ease of doing business.


Other Highlights of Budget 2018-19

  • MSP for all unannounced kharif crops will be one and half times of their production cost like majority of rabi crops Institutional Farm Credit raised toll lakh crore in 2018-19 from 8.5 lakh crore in 2014-15.

  • 22,000 rural haats to be developed and upgraded into Gramin Agricultural Markets “Operation Greens” launched to address price fluctuations in tomato, Onion and potato for benefit of farmers and consumers

  • Two new funds of Rsl0,000 crore announced for Fisheries and Animal Husbandry sectors;

  • Re-structured National Bamboo Mission gets R5.l290crore Loans to Women Self Help Groups will increase to Rs. 75,000 crore in 2019 from 42,500 crore last year.

  • Higher targets for Ujjwala, Saubhagya and Swachh Bharat Mission to cater to lower and middle class in Providing free LPG connections, electricity and toilets.

  • Outlay on health, education and social protection will be 1.38 lakh crore. Tribal students to get Ekalavya Residential School in each tribal bloEk by 2022. Welfare fund for SCs gets a boost.

  • World’s largest Health Protection Scheme covering over 10 crore poor and Vulnerable families launched with a family limit upto 5 lakh rupees for secondary and tertiary treatment.

  • Fiscal Deficit pegged at 3.5 per cent, projected at 3.3 per cent for 2018-19.

  • Rs. 5.97 lakh crore allocation for infrastructure; Ten prominent sites to be developed as Iconic tourist destinations

  • NITI Aayog to initiate a national programme on Artificial Intelligence; Centres of excellence to be set up on robotics, Al, Internet of things etc

  • Disinvestment crossed target of Rs 72,500 crore to reach Rs 1,00,000 crore.

  • Comprehensive Gold Policy on the anvil to develop yellow metal as an asset class Articles Covered - Women Empowerment and the Budget 2018-19 (Shahin Razi))

  • India has been working towards empowering her women ever since independence, and especially since the 1990s. The government and non- government sectors have both been pushing ahead with programmes aimed at imparting education to women, giving them better health care, providing them with means of livelihood and opportunities to participate in the decision making process at home and in the society. Special attention is being paid to improve the lot of the girl child giving her better chances of survival and opportunities for living a life of fulfillment.

  • The 73rd Amendment to our constitution in 1993 was a major milestone in this direction. The amendment made provision for reservation of seats for scheduled castes and tribes proportionate to their population in the panchayat area. The impact of reserving one third of seats for women in the Panchayati Raj Institutions (PRI) has been fruitful, and has empowered women both politically and socially. At present, there are approximately 200,000 panchayat representatives in India, out of which around 75,000 are women making it the largest number of elected women in the world.

  • The Government is considering introducing Womens’ Reservation Bill which seeks to reserve one third of all seats for women in the Lok Sabha and State Legislative Assemblies.

  • While reservation in panchayats or Parliament is important, the real challenge is to ensure that women are involved in the decision making process at home, and in the society. The challenge will be to develop their capacity so that they can perform their roles properly.  But more than half-a-century after independence, shackles remain tightly bound around women’s feet. It begins at birth as the evidence of female foeticide and gender bias in the richer states of Punjab, Delhi and Haryana shows, sparing neither the villager nor the urban sophisticate

  • Therefore, Budget 2018-19 has launched various schemes to empower Indian Women:

  • 1. The Prime Minister’s Ujjwala Scheme, under which free LPG connection were given to 50 million people will now be targeted at 80 million poor women.

  • The budget’s pro-women focus is seen in the announcement of a special mission to provide LPG connection in the name of women members of poor households.

  • The government aims to resolve two critical issues through this initiative. First, address the health concern of women, especially those in rural areas who use traditional biomass fuel such as wood, dung or agricultural residues for their daily cooking and second, reduce the existing high levels of indoor pollution.

  • This measure will empower women and protect their health. It will reduce drudgery and the time spent on cooking. It will also provide employment for rural youth in the supply chain of cooking gas. Various studies by government and advocacy groups have revealed that household air pollution is actually responsible for around five lakli deaths in India every year.

  • This will ensure universal coverage of cooking gas in a country where traditionally, gas cylinders were considered an upper middle class luxury. The Finance Minister said that though gradually, the luxury is spreading to the middle class, the poor still do not have access to cooking gas. However, the BPL families are now being provided with a cooking gas connection.

  • 2. So far, this was being done with Corporate Social Responsibility (CSR) funds of state fuel retailers. While providing the new connections to BPL households, priority would be given to states where coverage is poor. Under the PM’s Saubhagyayoja for providing electricity to all households, the government is spending 160 billion rupees. 19.75 crore rupees have been sanctioned for women safety e.g. for Nirbhaya Fund.

  • Rs. 75,000 crore rupees will be provided as loans to Women Self Help Groups till March, 2019.

  • 3. For organic farming, Women Self Help Groups will be given loan and encouragement for their ventures.

  • 4. A new Gold Policy is in the anvil whereby women can deposit their gold in the bank and earn interest in the range of 2.25 per cent to 2.5 per cent.

  • 5. For women employees their contribution to EPF has been cut from 12 per cent to 8 per cent for first three years. There will be no change in employer’s contribution.

  • 6. Six months maternity leave with full salary will be given to women employees. The Department of Personnel and Training has instructed all ministries and departments to implement a 2015 order of the Delhi High Court for granting maternity leave to women employees who choose to have a child by commissioning a surrogacy. Such leave would include the pre-natal and postnatal period.

  • 7. Rs.24 crores have been sanctioned for National Women’s Commission.

  • 8. 20 million new toilets will be constructed under the aegis of the Swachh Bharat Mission. This will have a positive impact on women’s dignity, girl’s education and overall health of the family,

  • 9.Rs. 280 crores have been provided for ‘Beti Bachao Beti Padhao’ programme. ‘Beti Bachao Beti Padhao’ is another social campaign of the Government of India that aims to generate awareness and improve the efficiency of welfare services intended for girls. The scheme has been launched with an initial funding of Rs. 100 crores. Women upliftment is nearly impossible if issues like illiteracy, inequality, sexual harassment and female infanticide are not combated in the right manner.

  • Beti Bachao Beti Padhao is a collaborative initiative being run by Ministry of Women and Child Development, Ministry of Human Resource Development and Ministry of Health and Family Welfare and it covers all Indian States and Union Territories. This flagship scheme was launched in the year 2015. The scheme has three primary objectives:


Prevent Female Foeticide

  • Devise new schemes and work cohesively to ensure that every girl child is secured and protected.

  • Ensure every child gets quality education.

  • 10. Sukanya Samridhi Yojana is a small deposit scheme for the girl  child launched as part of the ‘Beti Bachao, Beti Padhao’ campaign by the Government of India. It is meant exclusively for a girl child. The scheme is meant to meet the education and marriage expenses of a girl child. The scheme offers 9.1 per cent tax free rate of interest which is compounded annually. A legal guardian/natural guardian can open an account in the name of the girl child. The account can be closed after completion of 21 years. Normal premature closure will be allowed after completion of 18 years provided that girl is married.

  • 11. Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJBY) has benefitted 5.22 crore families with a life insurance cover of Rs.2 Iakh on payment of a premium of only Rs.330/- per annum. Likewise, under Pradhan Mantri Suraksha Bima Yojana, 13 crore 25 lakh persons have been insured with personal accident cover of Rs.2 lakh on payment of a premium of only Rs. 12 per annum.

Yojana March 2018

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