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Budget 2018-2019 Speech of Arun Jaitley ( Minister of Finance )

Budget 2018-2019 Speech of Arun Jaitley ( Minister of Finance ) - Budget - Dated:- 1-2-2018 - Delivered on: February 1, 2018 Section I Governance, Economy and Development Madam Speaker, 1. I rise to present the Budget for 2018-19. 2. Madam, four years ago, we pledged to the people of India to give this nation an honest, clean and transparent Government. We promised a leadership capable of taking difficult decisions and restoring strong performance of Indian economy. We promised to reduce poverty .....

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ing the past few years has been challenging but rewarding. As a result of the reforms undertaken by the Government, foreign direct investment has gone up. Measures taken by the Government have made it much easier to do business in India. Natural resources are now allocated in a transparent and honest manner. There is a premium on honesty. There was a time when corruption was commonplace. Today, our people, especially our youths, are curious to lead their lives honestly. The indirect tax system, .....

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t growth. All these structural reforms in the medium and long run will help Indian economy achieve stronger growth for a long time. 4. Indian economy has performed very well since our Government took over in May, 2014. India achieved an average growth of 7.5% in first three years of our Government. Indian economy is now 2.5 trillion-dollar economy - seventh largest in the world. India is expected to become the fifth largest economy very soon. On Purchasing Power Parity (PPP) basis, we are alread .....

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rts are expected to grow at 15% in 2017-18. We are now firmly on course to achieve high growth of 8% plus. 6. We have taken up programmes to direct the benefits of structural changes and good growth to reach farmers, poor and other vulnerable sections of our society and to uplift the under-developed regions. This year s Budget will consolidate these gains and particularly focus on strengthening agriculture and rural economy, provision of good health care to economically less privileged, taking c .....

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king by 42 places in last three years in the World Bank s Ease of Doing Business with India breaking into top 100 for the first time. I would like to congratulate all those who worked to achieve this. 8. Now, our Government has taken Ease of Doing business further by stress on 'Ease of Leaving' for the common men of this country, especially for those belonging to poor & middle class of the society. Good governance also aims at minimum interference by the government in the life of com .....

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f in interest rates on housing schemes. Efforts are being made to provide all government services, whether bus or train tickets or individual certificates on line. These include passports which may be delivered at doorstep in two or three days or Company registration in one day time and these facilities have benefited a large section of our country. Certificate attestation is not mandatory, interviews for appointment in Group C and Group D posts have been done away with. These measures have save .....

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ccounts. It has reduced corruption and cost of delivery and has eliminated middlemen in the process. Direct Benefit Transfer mechanism of India is the biggest such exercise in the world and is a global success story. Section II Investment, Expenditure and Policy Initiatives Agriculture and Rural Economy 11. My Government is committed for the welfare of farmers. For decades, country s agriculture policy and programme had remained production centric. We have sought to effect a paradigm shift. Hono .....

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dam Speaker, as a result of the hard work of our country's farmers agriculture production in our country is at a record level. Doing the year 2016-17 we achieved a record food grain production of around 275 million tonnes and around 300 million tonnes of fruits and vegetables. 13. Madam Speaker, in our party's manifesto it has been stated that the farmers should realize at least 50 per cent more than the cost of their produce, in other words, one and a half times of the cost of their pro .....

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hat this historic decision will prove an important step towards doubling the income of our farmers. 14. Our Government works with the holistic approach of solving any issue rather than in fragments. Increasing MSP is not adequate and it is more important that farmers should get full benefit of the announced MSP. For this, it is essential that if price of the agriculture produce market is less than MSP, then in that case Government should purchase either at MSP or work in a manner to provide MSP .....

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recast, use of futures and options market, expansion of warehouse depository system and to take decisions about specific exports and imports related measures. 16. Madam Speaker, last year, I had announced strengthening of e-NAM and to expand coverage of e-NAM to 585 APMCs. 470 APMCs have been connected to e-NAM network and rest will be connected by March, 2018. 17. More than 86% of our farmers are small and marginal. They are not always in a position to directly transact at APMCs and other whole .....

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gricultural marketing infrastructure in the 22000 Grameen Agricultural Markets (GrAMs) and 585 APMCs. 19. Task of connecting all eligible habitations with an all-weather road has been substantially completed, with the target date brought forward to March, 2019 from March 2022. It is now time to strengthen and widen its ambit further to include major link routes which connect habitations to agricultural and rural markets (GrAMs), higher secondary schools and hospitals. Prime Minister Gram Sadak Y .....

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for industrial sector. 21. Cultivation of horticulture crops in clusters bring advantages of scales of operations and can spur establishment of entire chain from production to marketing, besides giving recognition to the districts for specific crops. The Ministry of Agriculture & Farmers Welfare will reorient its ongoing Schemes and promote cluster-based development of agricommodities and regions in partnership with the Ministries of Food Processing, Commerce and other allied Ministries. 22. .....

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small and cottage industries that manufacture perfumes, essential oils and other associated products. Our Government shall support organized cultivation and associated industry. I propose to allocate a sum of Rs 200 crore for this purpose. 24. Food Processing sector is growing at an average rate of 8% per annum. Prime Minister Krishi Sampada Yojana is our flagship programme for boosting investment in food processing. Allocation of Ministry of Food Processing is being doubled from Rs 715 crore i .....

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ll promote Farmer Producers Organizations (FPOs), agri-logistics, processing facilities and professional management. I propose to allocate a sum of Rs 500 crore for this purpose. 26. India s agri-exports potential is as high as US $ 100 billion against current exports of US $ 30 billion. To realize this potential, export of agri-commodities will be liberalized. I also propose to set up state-ofthe-art testing facilities in all the forty two Mega Food Parks. 27. I propose to extend the facility o .....

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ar electricity is harvesting of Sun by the farmers using their lands. Government of India will take necessary measures and encourage State Governments to put in place a mechanism that their surplus solar power is purchased by the distribution companies or licencees at reasonably remunerative rates. 30. Our Government set up a Long Term Irrigation Fund (LTIF) in NABARD for meeting funding requirement of irrigation works. Scope of the Fund would be expanded to cover specified command area developm .....

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) for financing infrastructure requirement of animal husbandry sector. Total Corpus of these two new Funds would be Rs 10,000 crore. 32. Our Government has been steadily increasing the volume of institutional credit for agriculture sector from year-to-year from Rs 8.5 lakh crore in 2014-15 to Rs 10 lakh crore in 2017-18. I now propose to raise this to Rs 11 lakh crore for the year 2018-19. 33. Presently, lessee cultivators are not able to avail crop loans. Consequently, a significant proportion .....

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all give details in Part B of my speech. 35. Air pollution in the Delhi-NCR region has been a cause of concern. A special Scheme will be implemented to support the efforts of the governments of Haryana, Punjab, Uttar Pradesh and the NCT of Delhi to address air pollution and to subsidize machinery required for insitu management of crop residue. 36. Madam Speaker, the present top leadership of this country has reached at this level after seeing poverty at close quarters. Our leadership is familiar .....

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free from the smoke of wood. Initially our target was to provide free LPG connections to about 5 crore poor women. But in view of the pace of implementation of Ujjwala scheme and its popularity among the women, we propose to increase the target of providing free connection to 8 crore poor women. 39. Our Government has launched Prime Minister Saubhagya Yojana for providing electricity to all households of the country. Under this scheme, four crores poor households are being provided with electric .....

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n the dignity of ladies, education of girls and the overall health of family. Government is planning to construct around 2 crore toilets. 41. Madam Speaker, a roof for his family is another concern of the poor. Far from the Benami properties earned by corruption, the poor only desire to have a roof, a small house by his earning of honesty. Our Govt. is helping them so that they may fulfil the dream of their own house. We have fixed a target that every poor of this country may have his own house .....

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riority sector lending shortfall and fully serviced bonds authorized by the Government of India. 43. Loans to Self Help Groups of women increased to about ₹ 42,500 crore in 2016-17, growing 37% over previous year. The Government is confident that loans to SHGs will increase to Rs 75,000 crore by March, 2019. I propose to substantially increase allocation of National Rural Livelihood Mission to Rs 5750 crore in 2018-19. 44. Ground water irrigation scheme under Prime Minister Krishi Sinchai .....

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ood and infrastructure in rural areas, total amount to be spent by the Ministries will be Rs 14.34 lakh crore, including extra-budgetary and non-budgetary resources of Rs 11.98 lakh crore. Apart from employment due to farming activities and self employment, this expenditure will create employment of 321 crore person days, 3.17 lakh kilometers of rural roads, 51 lakh new rural houses, 1.88 crore toilets, and provide 1.75 crore new household electric connections besides boosting agricultural growt .....

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r has been kept at Rs 9975 crore. 47. We have managed to get children to School but the quality of education is still a cause of serious concern. We have now defined learning outcomes and National Survey of more than 20 lakh children has been conducted to assess the status on the ground. This will help in devising a district-wise strategy for improving quality of education. We now propose to treat education holistically without segmentation from pre-nursery to Class 12. 48. Improvement in qualit .....

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ll also be used to upgrade the skills of teachers through the recently launched digital portal DIKSHA . 50. The Government is committed to provide the best quality education to the tribal children in their own environment. To realise this mission, it has been decided that by the year 2022, every block with more than 50% ST population and at least 20,000 tribal persons, will have an Ekalavya Model Residential School. Ekalavya schools will be on par with Navodaya Vidyalayas and will have special f .....

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this initiative. 52. Our Government has taken major initiative of setting up Institutes of Eminence. There has been tremendous response to this initiative by institutions both in public and private sectors. We have received more than 100 applications. We have also taken steps to set up a specialized Railways University at Vadodara. 53. We propose to set up two new full-fledged Schools of Planning and Architecture, to be selected on challenge mode. Additionally, 18 new SPAs would be established .....

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the Health Sector. is the guiding principle of my Government. Only Swasth Bharat can be a Samriddha Bharat. India cannot realize its demographic dividend without its citizens being healthy. 56. I am pleased to announce two major initiatives as part of Ayushman Bharat programme aimed at making path breaking interventions to address health holistically, in primary, secondary and tertiary care system covering both prevention and health promotion. 57. The National Health Policy, 2017 has envisioned .....

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nd philanthropic institutions in adopting these centres. 58. Madam Speaker, we are all aware that lakhs of families in our country have to borrow or sell assets to receive indoor treatment in hospitals. Government is seriously concerned about such impoverishment of poor and vulnerable families. Present Rashtriya Swasthya Bima Yojana (RSBY) provide annual coverage of only Rs 30,000 to poor families. Several State Governments have also implemented/supplemented health protection schemes providing v .....

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is programme. 60. Madam Speaker, these two far-reaching initiatives under the Ayushman Bharat will build a New India 2022 and ensure enhanced productivity, well being and avert wage loss and impoverishment. These Schemes will also generate lakhs of jobs, particularly for women. The Government is steadily but surely progressing towards the goal of Universal Health Coverage. 61. TB claims more lives every year than any other infectious disease. It affects mainly poor and malnourished people. My Go .....

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uencies and at least 1 Government Medical College in each State of the country. 63. Our resolve of making our villages open defecation free is aimed at improving the life of our villagers. We will launch a Scheme called Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN) for management and conversion of cattle dung and solid waste in farms to compost, fertilizer, bio-gas and bio-CNG. 64. Pradhan Mantri Jeevan Jyoti Beema Yojana (PMJJBY) has benefitted 5.22 crore families with a life insuran .....

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ithin its fold and undertake measures to provide services of micro insurance and unorganized sector pension schemes through these accounts. 66. Our commitment towards Beti Bachao Beti Padhao is unflinching. Sukanya Samriddhi Account Scheme launched in January 2015 has been a great success. Until November, 2017 more than 1.26 crore accounts have been opened across the country in the name of girlchild securing an amount of Rs 19,183 crore. 67. Cleaning the Ganga is work of national importance and .....

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used attention and to achieve our vision of an inclusive society, the Government has identified 115 aspirational districts taking various indices of development in consideration. The Government aims at improving the quality of life in these districts by investing in social services like health, education, nutrition, skill upgradation, financial inclusion and infrastructure like irrigation, rural electrification, potable drinking water and access to toilets at an accelerated pace and in a time bo .....

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rogrammes. I propose an earmarked allocation of Rs 56,619 crore for SCs and Rs 39,135 crore for STs in BE 2018-19. 70. Government s estimated schematic budgetary expenditure on health, education and social protection for 2018-19 is Rs 1.38 lakh crore against estimated expenditure of Rs 1.22 lakh crore in BE 2017-18. Details are in Annexure II. This expenditure is likely to go up by at least Rs 15,000 crore in 2018-19 on account of additional allocation during the year and extra budgetary expendi .....

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nancial information database of MSMEs businesses and finances. This big data base will be used for improving financing of MSMEs capital requirement, including working capital. 72. It is proposed to onboard public sector banks and corporates on Trade Electronic Receivable Discounting System (TReDS) platform and link this with GSTN. Online loan sanctioning facility for MSMEs will be revamped for prompt decision making by the banks. Government will soon announce measures for effectively addressing .....

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. It is proposed to set a target of Rs 3 lakh crore for lending under MUDRA for 2018-19 after having successfully exceeded the targets in all previous years. 74. Non-Bank Finance Companies (NBFCs) stepped up financing of MSMEs after demonetization. NBFCs can be very powerful vehicle for delivering loans under MUDRA. Refinancing policy and eligibility criteria set by MUDRA will be reviewed for better refinancing of NBFCs. 75. Use of Fintech in financing space will help growth of MSMEs. A group in .....

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the special nature of the VCFs and the angel investors. We will take additional measures to strengthen the environment for their growth and successful operation of alternative investment funds in India. 77. Creating job opportunities and facilitating generation of employment has been at the core of our policy-making. During the last three years, we have taken a number of steps to boost employment generation in the country. These measures include:- • Contribution of 8.33% of Employee Provide .....

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akh youth by 2020. • Introducing system of fixed term employment for apparel and footwear sector. • Increasing paid maternity leave from 12 weeks to 26 weeks, along with provision of crèches. 78. These measures have started showing results. An independent study conducted recently has shown that 70 lakh formal jobs will be created this year. 79. To carry forward this momentum, I am happy to announce that the Government will contribute 12% of the wages of the new employees in the .....

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81. The Government is setting up a model aspirational skill centre in every district of the country under Pradhan Mantri Kaushal Kendra Programme. 306 Pradhan Mantri Kaushal Kendra have been established for imparting skill training through such centers. 82. The Government had approved a comprehensive textile sector package of Rs 6000 crore in 2016 to boost the apparel and made-up segments. I, now propose to provide an outlay of Rs 7148 crore for the textile sector in 2018-19. Infrastructure and .....

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ion of key linkages like coal for power, power for railways and railway rakes for coal have been rationalized and made very efficient. Prime Minister personally reviews the targets and achievements in infrastructure sectors on a regular basis. Using online monitoring system of PRAGATI alone, projects worth 9.46 lakh crore have been facilitated and fast tracked. 85. To secure India s defences, we are developing connectivity infrastructure in border areas. Rohtang tunnel has been completed to prov .....

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. Smart Cities Mission aims at building 100 Smart Cities with stateof-the-art amenities. I am happy to inform that 99 Cities have been selected with an outlay of Rs 2.04 lakh crore. These Cities have started implementing various projects like Smart Command and Control Centre, Smart Roads, Solar Rooftops, Intelligent Transport Systems, Smart Parks. Projects worth Rs 2350 crore have been completed and works of Rs 20,852 crore are under progress. To preserve and revitalize soul of the heritage citi .....

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ical Survey of India will be upgraded to enhance visitor experience. 89. The AMRUT programme focuses on providing water supply to all households in 500 cities. State level plans of Rs 77,640 crore for 500 cities have been approved. Water supply contracts for 494 projects worth Rs 19,428 crore and sewerage work contract for 272 projects costing Rs 12,429 crore has been awarded. 90. Reforms are being catalyzed by these missions. 482 cities have started credit rating. 144 cities have got investment .....

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pproved for providing seamless connectivity of interior and backward areas and borders of the country to develop about 35000 kms in Phase-I at an estimated cost of Rs 5,35,000 crore. To raise equity from the market for its mature road assets, NHAI will consider organizing its road assets into Special Purpose Vehicles and use innovative monetizing structures like Toll, Operate and Transfer (TOT) and Infrastructure Investment Funds (InvITs). 93. Strengthening the railway network and enhancing Rail .....

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re moving fast towards optimal electrification of railway network. 4000 kilometers are targeted for commissioning during 2017-18. 95. Work on Eastern and Western dedicated Freight Corridors is in full swing. Adequate number of rolling stock - 12000 wagons, 5160 coaches and approximately 700 locomotives are being procured during 2018-19. A major programme has been initiated to strengthen infrastructure at the Goods sheds and fast track commissioning of private sidings. 96. A Safety First policy, .....

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t of 600 major railway stations is being taken up by Indian Railway Station Development Co. Ltd. All stations with more than 25000 footfalls will have escalators. All railway stations and trains will be progressively provided with wi-fi. CCTVs will be provided at all stations and on trains to enhance security of passengers. Modern trainsets with state-of-the-art amenities and features are being designed at Integrated Coach Factory, Perambur. First such train-set will be commissioned during 2018- .....

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umbai-Ahmedabad bullet train project, India s first high speed rail project was laid on September 14, 2017. An Institute is coming up at Vadodara to train manpower required for high speed rail projects. 100. In the last three years, the domestic air passenger traffic grew at 18% per annum and our airline companies placed orders for more than 900 aircrafts. Regional connectivity scheme of UDAN (Ude Desh ka Aam Nagrik) initiated by the Government last year shall connect 56 unserved airports and 31 .....

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e standards and regulatory mechanism for resilient infrastructure development are moving well. I propose to allocate Rs 60 crores to kick start this initiative in 2018-19. 102. The Government and market regulators have taken necessary measures for development of monetizing vehicles like Infrastructure Investment Trust (InvIT) and Real Investment Trust (ReITs) in India. The Government would initiate monetizing select CPSE assets using InvITs from next year. 103. In the current year, we included, .....

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t grade. In India, most regulators permit bonds with the AA rating only as eligible for investment. It is now time to move from AA to A grade ratings. The government and concerned regulators will take necessary action. 106. We will take reform measures with respect to stamp duty regime on financial securities transactions in consultation with the States and make necessary amendments the Indian Stamp Act. 107. International Financial Service Centre (IFSC) at Gift City, which has become operationa .....

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a, Make in India would help India establish itself as a knowledge and digital society. NITI Aayog will initiate a national program to direct our efforts in the area of artificial intelligence, including research and development of its applications. 109. Combining cyber and physical systems have great potential to transform not only innovation ecosystem but also our economies and the way we live. To invest in research, training and skilling in robotics, artificial intelligence, digital manufactur .....

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ndians in about two lakh fifty thousand villages. The Government also proposes to setup five lakh wi-fi hotspots which will provide broadband access to five crore rural citizens. I have provided Rs 10000 crore in 2018-19 for creation and augmentation of Telecom infrastructure. 111. To harness the benefit of emerging new technologies, particularly the Fifth Generation (5G) technologies and its adoption, the Department of Telecom will support establishment of an indigenous 5G Test Bed at IIT, Chen .....

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ayments physically by cash at road toll plazas is being fast replaced with Fastags and other electronic payment systems to make road travel seamless. Number of Fastags has gone up from about 60,000 in December, 2016 to more than 10 lakh now. From December, 2017 all class M and N vehicles are being sold only with the Fastags. The Government will come out with a policy to introduce toll system on pay as you use basis. 114. In order to create employment and aid growth, Government s estimated budget .....

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cord our appreciation for the efforts and the sacrifices made by the three services in defending the interests of the Nation. 116. Ever since the NDA Government has assumed office in 2014, lot of emphasis has been given to modernizing and enhancing the operational capability of the Defence Forces. A number of initiatives have been taken to develop and nurture intrinsic defence production capability to make the Nation self-reliant for meeting our defence needs. Ensuring adequate budgetary support .....

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o our people. Every enterprise, major or small, also needs a unique ID. The Government will evolve a Scheme to assign every individual enterprise in India a unique ID. 119. To carry the business reforms for ease of doing business deeper and in every State of India, the Government of India has identified 372 specific business reform actions. All States have taken up these reforms and simplifications in a mission mode constructively competing with each other. Evaluation of performance under this P .....

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123. The Government has approved listing of 14 CPSEs, including two insurance companies, on the stock exchanges. The Government has also initiated the process of strategic disinvestment in 24 CPSEs. This includes strategic privatization of Air India. 124. Process of acquisition of Hindustan Petroleum Corporation by the ONGC has been successfully completed. Three public sector general insurance companies National Insurance Company Ltd., United India Assurance Company Limited and Oriental India In .....

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eipts of Rs 1,00,000 crore in 2017-18. I am setting the disinvestment target of Rs 80,000 crore for 2018-19. 127. Bank recapitalization program has been launched with bonds of Rs 80,000 crore being issued this year. The programme has been integrated with an ambitious reform agenda, under the rubric of an Enhanced Access and Service Excellence (EASE) programme. This recapitalization will pave the way for the public sector banks to lend additional credit of Rs 5 lakh crore. 128. It is proposed to .....

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e Bank of India Act is being amended to institutionalize an Uncollateralized Deposit Facility. Securities and Exchange Board of India, Act 1992, Securities Contracts (Regulation) Act 1956, and Depositories Act 1996, are being amended to streamline adjudication procedures and to provide for penalties for certain infractions. These proposals are in the Finance Bill. 130. For easier access, links to all Detailed Demand for Grants will be provided at india.gov.in. The Government will also consider f .....

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d gold exchanges in the country. Gold Monetization Scheme will be revamped to enable people to open a hassle-free Gold Deposit Account. 133. Outward Direct Investment (ODI) from India has grown to US$15 billion per annum. The Government will review existing guidelines and processes and bring out a coherent and integrated Outward Direct Investment (ODI) policy. 134. Hybrid instruments are suitable for attracting foreign investments in several niche areas, especially for the startups and venture c .....

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he recipients to fix their own emoluments which invites criticism. I am, therefore, proposing necessary changes to refix the salary, constituency allowance, office expenses and meeting allowance payable to Members of Parliament with effect from April 1, 2018. The law will also provide for automatic revision of emoluments every five years indexed to inflation. I am sure Hon ble Members will welcome this initiative and will not suffer such criticism in future. 137. Our country will commemorate 150 .....

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memoration Programme. My Government has earmarked Rs 150 crore for the year 2018-19 for the activities leading to the Commemoration. Section III - Fiscal Management 138. I now turn to the fiscal situation for 2017-18 and fiscal estimates for 2018-19. 139. In 2017-18, Central Government will be receiving GST revenues only for 11 months, instead of 12 months. This will have fiscal effect. There has also been some shortfall in Non-Tax revenues on account of certain developments, including deferment .....

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nt have always attached utmost priority to prudent fiscal management and controlling fiscal deficit. As Hon ble Members would recall, we embarked on the path of consistent fiscal reduction and consolidation in 2014. Fiscal Deficit was brought down to 4.1% in 2014-15 to 3.9% in 2015-16, and to 3.5% in 2016-17. Revised Fiscal Deficit estimates for 2017-18 are Rs 5.95 lakh crore at 3.5% of GDP. I am projecting a Fiscal Deficit of 3.3% of GDP for the year 2018-19. 142. In order to impart unquestiona .....

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sent my tax proposals. 144. The attempts made by our Government for reducing the cash economy and for increasing the tax net have paid rich dividends. The growth rate of direct taxes in the financial years 2016-17 and 2017-18 has been significant. We ended the last year with a growth of 12.6% in direct taxes and in the current year, the growth in direct taxes up to 15th January, 2018 is 18.7%. The average buoyancy in personal income tax of seven years preceding these two years comes to 1.1. In s .....

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g anti-evasion measures taken by the Government. 145. Similarly, there has been huge increase in the number of returns filed by taxpayers. In financial year 2016-17, 85.51 lakhs new taxpayers filed their returns of income as against 66.26 lakhs in the immediately preceding year. By including all filers as well as persons who did not file returns but paid tax by way of advance tax or TDS, we can derive the figure of Effective Taxpayer Base. This number of effective tax payer base increased from 6 .....

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traders and entrepreneurs with annual turnover of less than Rs 2 crores and introduced a similar scheme for professionals with annual turnover of less than Rs 50 lakhs with the hope that there would be significant increase in compliance. Under this scheme, 41% more returns were filed during this year which shows that many more persons are joining the tax net under simplified scheme. However, the turnover shown is still not encouraging. The Department has received 44.72 lakh returns for assessme .....

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present, hundred per cent deduction is allowed in respect of profit of co-operative societies which provide assistance to its members engaged in primary agricultural activities. Over the last few years, a number of Farmer Producer Companies have been set up along the lines of co-operative societies which also provide similar assistance to their members. In order to encourage professionalism in post-harvest value addition in agriculture, I propose to allow hundred per cent deduction to these comp .....

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been employed for a minimum period of 240 days during the year under section 80-JJAA of the Income-tax Act. However, the minimum period of employment is relaxed to 150 days in the case of apparel industry. In order to encourage creation of new employment, I propose to extend this relaxation to footwear and leather industry. Further, I also propose to rationalise this deduction of 30% by allowing the benefit for a new employee who is employed for less than the minimum period during the first year .....

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f a variety of factors including shape of the plot and location. In order to minimize hardship in real estate transaction, I propose to provide that no adjustment shall be made in a case where the circle rate value does not exceed 5% of the consideration. Incentivising micro, small and medium entrepreneurs 150. In the Union Budget, 2017, I had announced the reduction of corporate tax rate to 25% for companies whose turnover was less than Rs 50 crore in financial year 2015-16. This benefitted 96% .....

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uring the financial year 2018-19. After this, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above Rs 250 crores will remain in 30% slab. The lower corporate income tax rate for 99% of the companies will leave them with higher investible surplus which in turn will create more jobs. Relief to salaried taxpayers 151. The Government had made many positive changes in the personal income-tax rate applicable to individuals in the .....

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#8377; 1.44 lakh crores which works out to average tax payment of Rs 76,306/- per individual salaried taxpayer. As against this, 1.88 crores individual business taxpayers including professionals, who filed their returns for the same assessment year paid total tax of Rs 48,000 crores which works out to an average tax payment of Rs 25,753/- per individual business taxpayer. In order to provide relief to salaried taxpayers, I propose to allow a standard deduction of Rs 40,000/- in lieu of the prese .....

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ion shall significantly benefit the pensioners also, who normally do not enjoy any allowance on account of transport and medical expenses. The revenue cost of this decision is approximately Rs 8,000 crores. The total number of salaried employees and pensioners who will benefit from this decision is around 2.5 crores. Relief to senior citizen 152. A life with dignity is a right of every individual in general, more so for the senior citizens. To care of those who cared for us is one of the highest .....

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insurance premium and/ or medical expenditure from Rs 30,000/- to Rs 50,000/-, under section 80D. All senior citizens will now be able to claim benefit of deduction up to Rs 50,000/- per annum in respect of any health insurance premium and/or any general medical expenditure incurred. • Raising the limit of deduction for medical expenditure in respect of 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 i .....

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ervices Centre (IFSC) 153. The Government had endeavoured to develop a world class international financial services centre in India. In recent years, various measures including tax incentives have been provided in order to fulfil this objective. To further this objective, I propose to provide two more concessions for IFSC. In order to promote trade in stock exchanges located in IFSC, I propose to exempt transfer of derivatives and certain securities by non-residents from capital gains tax. Furth .....

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er to have audit trail of the expenses incurred by these entities, it is proposed that payments exceeding Rs 10,000/- in cash made by such entities shall be disallowed and the same shall be subject to tax. Further, in order to improve TDS compliance by these entities, I propose to provide that in case of non-deduction of tax, 30% of the amount shall be disallowed and the same shall be taxed. Rationalisation of Long Term Capital Gains (LTCG) 155. Madam Speaker, currently, long term capital gains .....

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more business surpluses being invested in financial assets. The return on investment in equity is already quite attractive even without tax exemption. There is therefore a strong case for bringing long term capital gains from listed equities in the tax net. However, recognising the fact that vibrant equity market is essential for economic growth, I propose only a modest change in the present regime. I propose to tax such long term capital gains exceeding Rs 1 lakh at the rate of 10% without allo .....

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sold after 31st July, 2018. The gains from equity share held up to one year will remain short term capital gain and will continue to be taxed at the rate of 15%. Further, I also propose to introduce a tax on distributed income by equity oriented mutual fund at the rate of 10%. This will provide level playing field across growth oriented funds and dividend distributing funds. In view of grandfathering, this change in capital gain tax will bring marginal revenue gain of about Rs 20,000 crores in .....

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t. The existing three per cent education cess will be replaced by a four per cent Health and Education Cess to be levied on the tax payable. This will enable us to collect an estimated additional amount of Rs 11,000 crores. E-assessment. 157. We had introduced e-assessment in 2016 on a pilot basis and in 2017, extended it to 102 cities with the objective of reducing the interface between the department and the taxpayers. With the experience gained so far, we are now ready to roll out the E-asses .....

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y speech. Indirect Tax. 159. On the Indirect Taxes side, this is the first budget after the roll out of the Goods and Service Tax. Excise duties to a large extent and service tax have been subsumed in GST, along with corresponding duties on imports. Hence, my budget proposals are mainly on the customs side. 160. In this budget, I am making a calibrated departure from the underlying policy in the last two decades, wherein the trend largely was to reduce the customs duty. There is substantial pote .....

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changes made in rates of customs duty as well as certain changes made in the excise duty structure are given in Annexure 6 to my speech. 161. To help the cashew processing industry, I propose to reduce customs duty on raw cashew from 5% to 2.5%. 162. I propose to abolish the Education Cess and Secondary and Higher Education Cess on imported goods, and in its place impose a Social Welfare Surcharge, at the rate of 10% of the aggregate duties of Customs, on imported goods, to provide for social we .....

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