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2018 Union budget of India

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The 2018 Union Budget of India (ISO: 2018 Ke Liye Bhārat Kā Saṅghīya Bajaṭ) was the annual financial statement (AFS), demand for grants, appropriation bill and finance bill of India for the financial year 2018–19.[5]

2018 (2018) Union Budget of India
2018 Ke Liye Bhārat Kā Saṅghīya Bajaṭ
Annual Financial Statement of the Central Government for the year 2018–19
The Appropriation Bill, 2018
The Finance Bill, 2018
Emblem of India
Submitted byArun Jaitley
Submitted toParliament of India
Presented1 February 2018
Passed1 February 2018
Parliament16th (Lok Sabha)
PartyBharatiya Janata Party (BJP)
Finance ministerArun Jaitley
Total revenue₹2,399,147 crore (equivalent to ₹34 trillion or US$400 billion in 2023)[1]
Total expenditures₹2,920,484 crore (equivalent to ₹41 trillion or US$490 billion in 2023) (grand total)[2]
Program Spending₹2,442,213 crore (equivalent to ₹34 trillion or US$410 billion in 2023) (through budget)[3]
Tax cuts5% (in corporate tax for companies with turnover up to ₹250 crore (equivalent to ₹334 crore or US$40 million in 2023))
Debt payment₹575,795 crore (equivalent to ₹8.1 trillion or US$97 billion in 2023)[3]
Deficit₹624,276 crore (equivalent to ₹8.8 trillion or US$100 billion in 2023)[4] (3.3%)[4] (Fiscal deficit) ₹416,034 crore (equivalent to ₹5.8 trillion or US$70 billion in 2023)[4] (2.2%)[4] (Revenue deficit)
WebsiteOfficial website
‹ 2017

It was presented to Parliament on 1 February 2018 by Finance Minister Arun Jaitley.[6][7][8]

Premise

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The 2018 budget was considered to be a crucial one,[9][10][11] as it would be the first since the rollout of the Goods and Service Tax (GST) regime in India.[12][13][14] It was widely expected that the budget would either increase the exemption limit, or introduce a standard deduction for salaried people to reduce the tax burden, in addition to a reduction of the tax rate for the ₹5 lakh (equivalent to ₹6.7 lakh or US$8,000 in 2023)–₹10 lakh (equivalent to ₹13 lakh or US$16,000 in 2023) slab from 20% to 10%, and an increase in the 30% band above ₹10 lakh (equivalent to ₹13 lakh or US$16,000 in 2023).[15][16][17] The budget also came on the heels of a cut in the corporate tax rate in the United States.[18][19][20] Printing of the budget began on 20 January 2018 with the traditional Halwa ceremony.[21][22][23]

Significant announcements

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The budget contained a number of significant announcements. It included a healthcare programme called the National Health Protection Scheme (Ayushman Bharat) to cover 10 crore (100 million) poor families.[24][25] The Government proposed to contribute 12% to the Employees' Provident Fund for new employees for three years.[26][27] It was proposed that the medical allowance and transportation allowance be replaced by a standard deduction of ₹40,000 (US$480) for salaried employees.[28][29] The allocation to the Ministry of Defence was ₹404,365 crore (equivalent to ₹5.4 trillion or US$65 billion in 2023),[30] with ₹195,947.55 crore (equivalent to ₹2.6 trillion or US$31 billion in 2023) to be spent on the day-to-day running of the armed forces, and ₹99,563.86 crore (equivalent to ₹1.3 trillion or US$16 billion in 2023) on modernisation, with the rest being allocated for pensions.[31][32]

There was no reduction in personal income tax rates,[33][34] and the Cess on income tax was to be increased from 3% to 4%.[35][36] A 10% tax on long-term capital gains (LTCG) was reintroduced after a 14-year absence.[37][38] The Corporate tax was reduced from 30% to 25% for companies with turnover up to ₹250 crore (equivalent to ₹334 crore or US$40 million in 2023).[39][40] Customs duties were increased for various products.[41][42] A special scheme to tackle air pollution in Delhi was also introduced.[43][44] The salaries of Members of Parliament were doubled and their total emoluments are likely to go up from Rs 1.4 lakh to Rs 2.3 lakh per month.[45][46] Further, the salaries will be increased every five years.[47][48]

Reactions

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Reaction to the budget was mixed-to-positive.[49][50]

Political

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Political reaction to the budget was mixed.[51] Bharatiya Janata Party (BJP) leader and Prime Minister, Narendra Modi said that the budget is "development-friendly," focused on the needs of the rural areas and will strengthen the vision of a "new-India".[52] The Congress leader, former prime minister and noted economist Manmohan Singh suggested that the arithmetic behind the budget was "faulty".[53] The general secretary of the Communist Party of India (Marxist) (CPI (M)), Sitaram Yechury said the budget was "unconnected to ground realities".[54] Andhra Pradesh Chief Minister Sri.N.Chandra Babu Naidu is not satisfied with the budget planning as it completely ignored the special status and special package for the state.[citation needed]

Aam Aadmi Party (AAP) leader and chief minister of Delhi, Arvind Kejriwal said on Twitter that the budget contained nothing for the middle class and traders.[55] Chief Minister of Bihar, Nitish Kumar, Janta Dal (United) (JDU) leader, praised the budget for the proposals on minimum support price for farmers and the healthcare scheme.[56] Congress leader and former finance minister P. Chidambaram said that Finance Minister Arun Jaitley had failed the fiscal consolidation test,[57] and that there was no relief for the average taxpayer.[58]

Stock market

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Both of India's national indices, the BSE SENSEX and NIFTY 50, fell sharply in the aftermath of the budget.[59][60][61] The government, however, said that the fall in the stock market was not solely due to the budget.[62][63] Finance and Revenue Secretary, Dr. Hasmukh Adhia said that fall in stock indices was due to global market meltdown, and not because of the reintroduction of LTCG tax,[64] he added the government will look into the slump.[65]

Others

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Credit rating agency, Fitch, said that the budget, whilst supporting growth, does not address the problem of fiscal consolidation, and leaves the problem of India's relatively weak finances, to the next government.[66][67] Economic Affairs Secretary, Subhash Chandra Garg, said, that the government would try to convince credit rating agencies, like Standard and Poor's and Fitch, on its commitments to fiscal consolidation.[68][69]

References

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  1. ^ "Receipts" (PDF). Ministry of Finance, Government of India. Retrieved 29 January 2018.
  2. ^ "SUMMARY OF EXPENDITURE" (PDF). Ministry of Finance, Government of India. Retrieved 29 January 2018.
  3. ^ a b "Expenditure of Government of India" (PDF). Ministry of Finance, Government of India. Retrieved 29 January 2018.
  4. ^ a b c d "Debt and Deficit Statistics" (PDF). Ministry of Finance, Government of India. Retrieved 29 January 2018.
  5. ^ "Part V of the Constitution of India- The Union – Articles 110(a), 112, 113 and 114(3)" (PDF). Ministry of Law and Justice, Government of India. pp. 44–49. Archived from the original (PDF) on 24 August 2015. Retrieved 30 January 2018.
  6. ^ Khanna, Pretika; Varma, Gyan; Nair, Remya (5 January 2018). "Union Budget 2018 to be presented on 1 February". Live Mint. New Delhi: HT Media Ltd. Retrieved 16 February 2018.
  7. ^ Taneja, Richa, ed. (29 January 2018). "Budget 2018 To Be Presented By Finance Minister Arun Jaitley: Time, Date, All Details Here". NDTV. New Delhi. Retrieved 30 January 2018.
  8. ^ "Union Budget 2018 to be presented on February 1". The Times of India. New Delhi. TIMESOFINDIA.COM. 5 January 2018. OCLC 23379369. Retrieved 16 February 2018.
  9. ^ Seetharaman, G. (28 January 2018). "Budget 2018: Here are the basics of this key annual event". The Economic Times. OCLC 61311680. Retrieved 30 January 2018.
  10. ^ Sultana, Nasrin (29 January 2018). "Economic Survey, Budget 2018 to be keenly watched in crucial week for markets". Live Mint. Mumbai: HT Media Ltd. Retrieved 30 January 2018.
  11. ^ "Union Budget 2018: How Modi government can create more jobs? here is the answer". The Financial Express. New Delhi. FE Online. 23 January 2018. OCLC 30000665. Retrieved 30 January 2018.
  12. ^ Khare, Anurag (25 January 2018). "Impact of Goods and Services Tax (GST) on Budget 2018–19". Business Standard. OCLC 496280002. Retrieved 30 January 2018.
  13. ^ "Budget 2018: Post-GST rollout, Arun Jaitley's power to tax is limited to only these items". India Today. New Delhi. IndiaToday.in. 28 January 2018. ISSN 0254-8399. Retrieved 30 January 2018.
  14. ^ "First post-GST budget likely on February 1". The Times of India. New Delhi. Press Trust of India. 3 December 2017. OCLC 23379369. Retrieved 30 January 2018.
  15. ^ Dutta, Prabhash K (15 January 2018). "Union Budget 2018: What you may expect on income tax front from Arun Jaitley". India Today. New Delhi. ISSN 0254-8399. Retrieved 4 February 2018.
  16. ^ "Income Tax Sops For Middle Class, Rural Focus Likely In Budget 2018: 10 Points". NDTV. NDTV Profit Team. 31 January 2018. Retrieved 4 February 2018.
  17. ^ "Budget 2018: Middle class can hope for tax relief". The Hindu. Business Line. New Delhi. Press Trust of India. 9 January 2018. ISSN 0971-7528. OCLC 456162874. Retrieved 4 February 2018.
  18. ^ Beniwal, Vrishti; Chaudhary, Archana; Zhao, Yinan; Cislo, Connor; Li, Cynthia (29 January 2018). "India's Budget Squeeze May Put Corporate Tax Cuts on Hold". Bloomberg Politics. Bloomberg. Retrieved 16 February 2018.
  19. ^ Roychoudhury, Arup (22 December 2017). "US tax cut may find echo in Budget". Business Standard. New Delhi. OCLC 496280002. Retrieved 16 February 2018.
  20. ^ "Budget 2018: Arun Jaitley may not follow US corporate tax cut, but Arvind Subramanian thinks India can't ignore it either". Business Today. 31 January 2018. Retrieved 16 February 2018.
  21. ^ "Printing of Budget documents begins with 'Halwa' ceremony". Business Line. Press Trust of India. 20 January 2018. ISSN 0971-7528. OCLC 456162874. Retrieved 30 January 2018.
  22. ^ "Printing of Budget documents begins with 'Halwa' ceremony". Business Standard. New Delhi. Press Trust of India. 20 January 2018. OCLC 496280002. Retrieved 30 January 2018.
  23. ^ "Budget 2018: FM Arun Jaitley attends Halwa ceremony, check the ritual of extreme significance". The Financial Express. New Delhi. FE Online. 20 January 2018. OCLC 30000665. Retrieved 30 January 2018.
  24. ^ Kumar, N. Ravi (1 February 2018). "Ayushman Bharat: the big budget scheme". The Hindu. Hyderabad. ISSN 0971-751X. OCLC 13119119. Retrieved 9 February 2018.
  25. ^ Ghosh, Abantika; Mathew, George (2 February 2018). "Union Budget 2018: Rs 5 lakh health cover for 10 crore poor, prescription awaited". The Indian Express. New Delhi/Mumbai. OCLC 70274541. Retrieved 9 February 2018.
  26. ^ Surabhi (1 February 2018). "Budget 2018: Centre to foot 12% PF contribution for new job entrants". The Hindu. Business Line. New Delhi. ISSN 0971-7528. OCLC 456162874. Retrieved 9 February 2018.
  27. ^ Saleem, Shaikh Zoaib (1 February 2018). "Budget 2018: Govt to bear 12% employer contribution in EPF for new workforce for 3 years". Live Mint. New Delhi: HT Media Ltd. Retrieved 9 February 2018.
  28. ^ Kapoor, Pragati (5 February 2018). "Budget 2018 gives Rs 40,000 standard deduction, removes other allowances: Salaried may be left poorer". The Economic Times. OCLC 61311680. Retrieved 9 February 2018.
  29. ^ "Budget 2018: No I-T relief but Rs 40,000 standard deduction on transport, medical expenses". Hindustan Times. New Delhi. Press Trust of India. 1 February 2018. Retrieved 9 February 2018.
  30. ^ Behera, Laxman K. (2 February 2018). "Defence Budget 2018–19: The Imperative of Controlling Manpower Cost". Institute for Defence Studies and Analyses. Retrieved 19 February 2018.
  31. ^ Peri, Dinakar (1 February 2018). "Modest hike in defence budget, pensions see sharp rise". The Hindu. New Delhi. ISSN 0971-751X. OCLC 13119119. Retrieved 19 February 2018.
  32. ^ Pandit, Rajat (1 February 2018). "Budget 2018: Govt hikes defence budget by 7.81%, but it's just 1.58% of GDP & lowest since 1962". The Times of India. New Delhi. OCLC 23379369. Retrieved 18 February 2018.
  33. ^ Gunjan, Rounak Kumar (1 February 2018). Yechury, Ashish (ed.). "No Personal Income Tax Relief in Union Budget 2018". News18. New Delhi. Retrieved 9 February 2018.
  34. ^ "Budget 2018: No change in the income tax exemption limit, cess hiked to 4% for taxpayers". The Economic Times. ET Online. 6 February 2018. OCLC 61311680. Retrieved 9 February 2018.
  35. ^ Motiani, Preeti (1 February 2018). "Budget 2018 hikes cess on income tax to 4 per cent from 3 per cent: Here's how much more you will pay". The Economic Times. OCLC 61311680. Retrieved 9 February 2018.
  36. ^ "Budget 2018: No Change In Income Tax Rates But Cess Hiked By 1%". NDTV. New Delhi. Indo-Asian News Service. 1 February 2018. Retrieved 9 February 2018.
  37. ^ Dhawan, Sunil (2 February 2018). "Budget 2018: FM proposes to re-introduce LTCG tax on gains above Rs 1 lakh". The Economic Times. OCLC 61311680. Retrieved 9 February 2018.
  38. ^ Chowdhury, Abhijit Roy (1 February 2018). "India to Propose Long-Term Capital Gains Tax on Equities". Bloomberg Markets. Bloomberg. Retrieved 9 February 2018.
  39. ^ Tyagi, Chhavi (1 February 2018). "Budget 2018: Corporate tax rate reduced to 25% for companies with turnover of up to Rs 250 crore". The Economic Times. New Delhi. OCLC 61311680. Retrieved 4 February 2018.
  40. ^ Nair, Remya (1 February 2018). "Budget 2018: Corporate tax cut to 25% to benefit MSMEs, not big corporates". Live Mint. New Delhi: HT Media Ltd. Retrieved 4 February 2018.
  41. ^ Mishra, Lalatendu (2 February 2018). "Customs duty hike to lift mobile prices". The Hindu. Mumbai. ISSN 0971-751X. OCLC 13119119. Retrieved 9 February 2018.
  42. ^ "Budget 2018: Indian mobile manufacturers welcome customs duty hike; here's why Chinese companies are unhappy". The Financial Express. New Delhi. FE Online. 1 February 2018. OCLC 30000665. Retrieved 9 February 2018.
  43. ^ Aggarwal, Mayank (1 February 2018). "Arun Jaitley announces special scheme to tackle Delhi air pollution in Budget 2018". Live Mint. New Delhi: HT Media Ltd. Retrieved 4 February 2018.
  44. ^ "Air pollution rings a bell in Budget, FM vows special scheme". The Economic Times. New Delhi. Press Trust of India. 1 February 2018. OCLC 61311680. Retrieved 4 February 2018.
  45. ^ "Union Budget 2018: Big salary hikes for President, VP, governors and MPs". Hindustan Times. 1 February 2018.
  46. ^ "Budget 2018 doubles MPs' salaries, but they'll no longer decide on their own raises". February 2018.
  47. ^ "Emoluments of MPs to be revised every 5 years automatically: Arun Jaitley". The Economic Times. Indo-Asian News Service. 1 February 2018. OCLC 61311680. Archived from the original on 9 February 2018. Retrieved 9 February 2018.
  48. ^ "Budget 2018: Law to revise salaries for MPs every five years proposed". The Hindu. The Hindu Net Desk. 1 February 2018. ISSN 0971-751X. OCLC 13119119. Retrieved 9 February 2018.
  49. ^ Nayak, Mahesh (1 February 2018). "Budget strikes a fine balance, LTCG was not a shock, say experts". Business Today. New Delhi. Retrieved 19 February 2018.
  50. ^ "Industry experts react to Budget 2018: cheers for agri push, mixed response to corporate taxation". The Hindu. 1 February 2018. ISSN 0971-751X. OCLC 13119119. Retrieved 18 February 2018.
  51. ^ "Political leaders', parties' reactions to Budget". The Hindu. The Hindu Net Desk. 1 February 2018. ISSN 0971-751X. OCLC 13119119. Retrieved 18 February 2018.
  52. ^ De, Abhishek (1 February 2018). "Budget 2018: PM Narendra Modi calls Union Budget progressive, says will help strengthen 'New India' vision". The Indian Express. New Delhi. OCLC 70274541. Retrieved 1 February 2018.
  53. ^ "Union Budget 2018: What worries me is that fiscal arithmetic may be faulty, says Manmohan Singh". The Indian Express. New Delhi. Express Web Desk. 1 February 2018. OCLC 70274541. Retrieved 1 February 2018.
  54. ^ "Budget unconnected to ground realities: Sitaram Yechury". The Economic Times. Indo-Asian News Service. 1 February 2018. OCLC 61311680. Archived from the original on 1 February 2018. Retrieved 1 February 2018.
  55. ^ Shukla, Shuchi, ed. (1 February 2018). ""Step-motherly Treatment": Arvind Kejriwal Slams Budget 2018". NDTV. New Delhi. Retrieved 1 February 2018.
  56. ^ "Nitish Kumar Praises "Best Budget", Congratulates PM Modi, Arun Jaitley". NDTV. Patna. Indo-Asian News Service. 1 February 2018. Retrieved 1 February 2018.
  57. ^ "Jaitley failed fiscal deficit test, thank God this was last budget of this govt: P Chidambaram". The Indian Express. New Delhi. Express Web Desk. 1 February 2018. OCLC 70274541. Retrieved 1 February 2018.
  58. ^ "Budget 2018: Chidambaram calls it a Jumla, Shah says it will give wings to the aspirations of the poor". The Economic Times. New Delhi. ET Online. 1 February 2018. OCLC 61311680. Retrieved 1 February 2018.
  59. ^ Arun, M. G. (7 February 2018). "Why markets are on a free fall after Budget presentation: Explained". India Today. Mumbai. ISSN 0254-8399. Retrieved 18 February 2018.
  60. ^ Mudgill, Amit (6 February 2018). "Rs 5 LAKH CR GONE IN SECONDS: What's driving this mad selloff in equities". The Economic Times. New Delhi. OCLC 61311680. Retrieved 18 February 2018.
  61. ^ Shah, Ami; Sonavane, Ravindra N. (2 February 2018). "Day after 'populist' budget, Sensex crashes 840 points". Live Mint. HT Media Ltd. Retrieved 19 February 2018.
  62. ^ "Budget not cause of market crash, says govt". The Economic Times. New Delhi. Press Trust of India. 2 February 2018. OCLC 61311680. Retrieved 18 February 2018.
  63. ^ Gupta, Vishav; Gupta, Manish (2 February 2018). "Budget not cause of market crash: Government". The Quint. Indo-Asian News Service. Retrieved 19 February 2018.
  64. ^ "Decline in stock indices due to global market meltdown, not LTCG tax: Adhia". Business Standard. New Delhi. Press Trust of India. 6 February 2018. OCLC 496280002. Retrieved 18 February 2018.
  65. ^ Kumar, Manoj (6 February 2018). Menon, Malini (ed.). "CORRECTED-Indian govt will look into local market slump -finmin official". Reuters. New Delhi. Archived from the original on 19 February 2018. Retrieved 18 February 2018.
  66. ^ "Budget Lends Helping Hand To Vulnerable Sections, But Slips on Fiscal Roadmap". BloombergQuint. India Ratings. 12 February 2018. Retrieved 19 February 2018.
  67. ^ "Fitch: India Budget Supports Growth, Delays Fiscal Consolidation". Business Standard. Market Capital. 12 February 2018. OCLC 496280002. Retrieved 19 February 2018.
  68. ^ Sen, Sesa (3 February 2018). "Will try to convince rating agencies on fiscal path: DEA Secy". The New Indian Express. Chennai. OCLC 243883379. Retrieved 19 February 2018.
  69. ^ "Budget 2018: DEA secretary says govt will try to convince Fitch, S&P, other rating agencies on fiscal path". Firstpost. New Delhi. Press Trust of India. 8 February 2018. Retrieved 19 February 2018.
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