The 2018 Union Budget was presented by the Finance Minister Arun Jaitley, on 1 Feb 2018. This is the first budget after the introduction of prominent reforms in the Indian economy, such as the Goods and Services Tax implementation, mega PSU bank recapitalisation, and dynamic fuel pricing.
The key features of the Union Budget 2018 are as described below:
- Fiscal situation – In 2018-19, the government is aiming for fiscal deficit target of 3.3% of the GDP.
Infrastructure/ Logistics – The reservations in the infrastructure realm are as follows:
- 10 key tourist spots in the country will be elevated to the level of iconic tourist destinations.
- “Pay as you see” system will be introduced in relation to toll payments on highways.
- An outlay of Rs.5.35 lakh crore has been announced for phase 1 of the Bharatmala project.
Bharatmala Project, is the second largest highways construction project in the country since NHDP, under which almost 50,000 km or highway roads were targeted across the country. Bharatmala will look to improve connectivity particularly on economic corridors, border areas and far flung areas with an aim of quicker movement of cargo and boosting exports.
The project is expected to create nearly 100 million man days of jobs during the road construction and subsequently 22 million jobs as a result of the increased economic activity across the country. The construction will be billed via several routes including debt funds, budgetary allocation, private investment, toll operator transfer model etc.
Bharatmala includes economic corridors of around 9,000 km, inter-corridor and feeder routes of around 6,000 km, 5,000 km roads under the National Corridors Efficiency Program, border and international connectivity roads of around 2,000 km, coastal and port connectivity roads of around 2,000 km, expressways of around 800 km and 10,000 km of NHDP roads. The total length in phase 1 comes to around 34,800 km.
Bharatmala project will start in Gujarat and Rajasthan, followed by Punjab and subsequently traversing the Himalayan belt through Jammu and Kashmir, Himachal Pradesh, Uttarakhand, parts of Uttar Pradesh, Bihar, West Bengal, Sikkim, Assam, Arunachal Pradesh, Manipur (next to the Indo-Burmese border) and then to Mizoram. Northeastern states have been given special focus in the project and international trade is a key aspect as well.
The newer roads are expected to increase the speed of vehicles and decrease supply chain costs from the current average 18 per cent to six per cent. The Union Cabinet gave the nod to two big ticket infra projects on Tuesday with an outlay of Rs 6.92 lakh crore out of which Bharatmala Pariyojana shared Rs 5.35 lakh crore. It will also subsume 10,000 km roads under the National Highway Development Project (NHDP) program.
Trade – The provisions under this sector include the following:
- Hike in customs duty on televisions and mobile phones has been announced to promote the Make in India initiative.
- Imports will be imposed a 10% social welfare surcharge.
Agriculture – The main points highlighted in the segment of agriculture were as follows:
The government resolves to increase the income of farmers to double the current value and hike the minimum support price (MSP) for Kharif crops to 1.5 times the value of production.
- The government will provide the right prices to farmers in case they receive lower market prices than the MSP.
- Organic farming and cluster development model for agriculture will be encouraged.
- Allocation of Rs.500 crore is provided to Operation Green.
- Agricultural segments of bamboo farming, fisheries, and animal husbandry will be encouraged.
- Rs.11 lakh crore will be offered as credit to the farming sector.
Rural – The main points highlighted in the rural segment were as follows:
- Gas connections will be introduced in the households of 6 crore rural women.
- Rs.16,000 crore has been set aside for the Pradhan Mantri Saubhagya Yojana. This would provide free electricity to 4 crore rural households.
- The Swachh Bharat Mission will be extended to offer 2 crore toilets to rural houses.
- Under the Pradhan Mantri Awas Yojana, 51 lakh houses will be constructed in the rural areas.
- Loans for women’s self-help groups has increased to Rs.75,000 crore.
- For housing, livelihood, and infrastructure projects in the rural areas, the government has allocated a total amount of Rs.14.34 lakh crore.
Health and Education – The main points highlighted were as follows:
- Focus will be on incorporating technology into education.
- By the year 2022, every block that houses more than 20,000 tribals and over 50% scheduled tribes will witness the inauguration of an Eklavya school.
- The government will shift to a structure wherein universal health coverage will be offered to citizens.
- Proposal for 2 new schools of infrastructure and planning has been laid down.
- To reduce brain drain, top performers from leading engineering schools will be selected and given an opportunity to study at IIScs and IITs.
- 60 crore bank accounts will be brought under the Jan Dhan Yojana.
- There is a proposal for the allocation of Rs.1 lakh for the overall strengthening of the education sector in the country.
- At least one medical college will be present for three parliamentary constituencies.
- There is an allocation of Rs.52,719 crore for the welfare of the scheduled castes in the country.
Industry – The provisions under this section are as follows:
- The Finance Minister has set aside Rs.3,794 crore as industry subsidy and capital support for the Micro, Small, and Medium Enterprises (MSME) sector.
- Excise cut on fuel has been announced.
Railways – The reservations for this sector include the following:
- The total capital expenditure that is set for the Indian Railways comes up to Rs.1,48,528 crore.
- The infrastructure of some railway stations will be revamped, with escalators making an entry in all stations with footfall of 25,000 passengers.
- All trains will be installed with CCTV cameras and WiFi connectivity.
- Allocation for Bengaluru Metro is Rs.17,000 crore and that for Mumbai rail network is Rs.11,000 crore.