On 1 February 2018, Mr. Arun Jaitely, the Finance Minister of India announced the Union Budget for the session 2018- 2019. The budget this time was presented with a focus to strengthen agriculture, rural development, health, education, employment, MSME and infrastructure sectors
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Agriculture and Rural Development:
- 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 to 11 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 to protect the interests of 86% small and marginal farmers.
- “Operation Greens” launched to address price fluctuations in potato, tomato and onionØ for benefit of farmers and consumers.
- Two New Funds of Rs10, 000 crore announced for Fisheries and Animal Husbandary sectors; Re-structured National Bamboo Mission gets Rs.1290 crore.
- Rs 16,730 crore allocated for rural sanitation.
- 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.
- Tribal students to get Ekalavya Residential School in each tribal block by 2022.
- Education Cess and Secondary and Higher Education Cess to be replaced by Health and Education Cess at the rate of 4% of tax and surcharge.
- Outlay on health, education and social protection will be 1.38 lakh crore.
- Setting up 24 new Government medical colleges.
- Proposal for setting up of one medical college for every three parliamentary constituencies, with 24 new government medical colleges also being envisioned. Government also will work on upgrading hospitals to medical colleges.
- Rs. 5.97 lakh crore allocation for infrastructure.
- 10 prominent sites to be developed as Iconic tourist destinations.
Social Schemes and Women Empowerment
- Higher targets for Ujjwala (LPG distribution), Saubhagya (Household Electrification) and Swachh Mission to cater to lower and middle class in providing free LPG connections, electricity and toilets.
- Loans to Women Self Help Groups will increase to Rs.75, 000 crore in 2019 from 42,500 crore last year.
- Rs 3,794 crore allocated to the MSME sector in the form of capital support and interest subsidy By 2022.
- Rs 3 lakh crore target has been set for the Mudra Yojana .
- Rs 4.6 lakh cr sanctioned under MUDRA Scheme .
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- NITI Aayog to initiate a national programme on Artificial Intelligence(AI)
- Centers of excellence to be set up on robotics, AI, Internet of things etc.
- Allocation to Digital India scheme doubled to Rs 3073 cr
- No change in tax slabs or rates for individual taxpayers.
- 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 from this initiative.
- Corporate tax 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-JJAAØ 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 2015-16), to companies reporting turnover up to Rs. 250 crore in Financial Year 2016-17, to benefit micro, small and medium enterprises.
Proposed Relief to Senior Citizens:
- Exemption of interest income on deposits with banks and post offices to be increased from Rs. 10,000 to Rs. 50,000.
- TDS not required to be deducted under section 194A. Benefit also 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. 50,000 under section 80D.
- 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 case of very senior citizens) to Rs. 1 lakh for all senior citizens, under section 80DDB.
- Proposed to extend Pradhan Mantri Vaya Vandana Yojana up to March, 2020. Current investment limit proposed to be increased to Rs. 15 lakhs from the existing limit of Rs. 7.5 lakhs per senior citizen.
Opinions/ Reactions to the Budget
- The impact of 2018 budget is positive for Agriculture and Food Processing sector, affordable housing sector, health insurance industry.
- Due to major focus on agriculture sector and rural economy Demand for agriculture-related products such as fertilisers, crop protection chemicals, micro irrigation equipment will go up. Since the focus will be on technology and modernisation, warehousing and logistics industry will also get benefitted.
- The affordable housing sector will continue to grow in the coming years. Consequently, the related industries such as Steel, Iron, Cement, Construction Materials, and Transportation, will witness growth.
- The announcement of National Health Protection Scheme will boost the health insurance sector, health service providers, and also the pharmaceutical sector in general. This would also augment Public-Private partnership between the government and the Insurance companies.
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Tips to Crack GD Round
Union Budget is a hot topic for GD Round and has been placed before the participants by number of MBA colleges in India. If you follow the few key tips, you can improve your chances to get through the GD round
- If you are clear and know the topic well, it is good to be the first to start the Group Discussion
- If you are not well versed with the topic and feel a bit confused on it, try to gather information from first 1-2 speakers and then place your view point.
- Since GD is a sort of debate, you should have a clear view point on the topic
- Use the quote and data, if you are sure of the source else leave it.
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