Monday, 05 February 2018 11:57


2 - FEBRUARY - 2018



Budget 2018-19 : Mix of populism and prudence :

  • Arun Jaitley pulled out all the stops in Modi’s Govt. last full budget to promise a better deal for farmers, boost the rural economy and make the poor less vulnerable to health exigencies.
  • For Agriculture distress, a Minimum Support Price of 1.5 times expense borne by farmers of all crops.
  • In equity market, reintroduction of Long Term Capital Gains on equity shares @10% for all gains over Rs.1 lakh.
  • No indexation benefit will be granted and the securities transaction tax will continue.
  • In Income tax, the individual business persons paid less average tax than salaried class.
  • So a flat Rs.40,000 deduction from taxable income in lieu of transport allowance and medical expenses.
  • Take- Home salaries has been virtually offset by raising 3% education cess levied on personal income tax and corporate tax. Now 4% education and healthcare cess will apply.
  • No respite in Indirect taxes front with Customs Duty hike on a range of products including mobile phones, wearable devices , TV display panels, furniture, diamonds, footwear, cosmetics and dental floss.
  • A much anticipated rationalization of high Excise duties on petrol and diesel was carried out with a Rs.8 reduction.
  • But no respite to customers as a new road and infrastructure cess of Rs.8 per litre has been levied to fund projects.
  • Fiscal Deficit target of 3.2% could not be achieved and was revised to 3.5% for FY17-18. FD of 3.3% for FY18-19. FD of 3% for FY20-21 was set.
  • Focus of Budget on Farmers, rural india, healthcare and education for the poor, reflected Modi Govt. emphasis on improving the ease of living for the common man.
  • Key Points :

a) Housing Fund : A dedicated Affordable Housing Fund” to be funded from shortfall in priority sector.

b) Capital Gains : Tax on LTCG over Rs.1 lakh @10% without allowing indexation benefit.

c) Standard Deduction : Rs.40,000 in lieu of exemption for transport allowance and medical expenses.

d) Health Insurance: A National Health Protection Scheme(Rs.5 lakh coverage) for over 10 crore poor families.

e) Agriculture: With 86% of farmers small and marginal, the Budget proposes to help facilitate market access by                           upgrading 22,000 rural “haats” into Gramin Agricultural Markets

Key Amendments proposed in PMLA : Govt

  • The Central government has proposed changes to various provisions of the Prevention of Money Laundering Act (PMLA) through the Finance Bill.
  • Included a crucial amendment that empowers the Special Court to restore confiscated assets to the rightful claimants even during the trial.
  • Welcoming the decision, Enforcement Directorate chief Karnal Singh told that the amendments would make the implementation of PMLA more effective.
  • The amendment to Section 8(8) allows the Special Court, if it deems fit, to consider the claims for the purposes of restoration of such properties also during the trial.
  • Earlier, the assets could be restored only after completion of the trial.
  • “It will help provide quick relief in cases involving public money, including Ponzi scams,” said a senior official.
  • The government has introduced a new Sub-Section (2) of Section 66, making it mandatory for the ED to share relevant details with other agencies.
  • “In case we come across any information that can be pursued by other agencies, it will have to be shared with the agency concerned for necessary action,” said the official.

Common Citizen & Eco-friendly Budget: Modi

  • Prime Minister Narendra Modi hailed the Union Budget 2018-19 as farmer-friendly, common citizen-friendly and development-friendly.
  • He said it focussed on the needs of rural areas and paid attention to all sectors, from agriculture to infrastructure.
  • “It will give pace to the development of the country...the government is focussed not just on ‘ease of doing business’ but also on ‘ease of living’,” he said.
  • Ayushman Bharat Yojana, aimed at giving the poor up to Rs. 5 lakh a year for treatment.
  • “The scheme is a path-breaking initiative to provide quality and affordable health care. It will benefit approximately 50 crore Indians. The scale of this scheme is unparalleled and it will bring a paradigm shift in our health sector”, he said.
  • “It will help them get rid of the worry of incurring cost to get quality treatment. It will help 10 crore families (45-50 crore people),” he said.
  • This would be the biggest government-funded health care scheme in the world.
  • Mr. Modi said his government would soon announce measures to address non-performing assets and the ‘stress account’ issues of the micro, small and medium enterprises (MSME) sector.
  • “For a long time, MSMEs faced a lot of burden on the tax front. In this budget, we have also reduced the corporate taxes that MSMEs owe. Now, they have to pay only 25% tax instead of 30%,” he said.
  • “This budget strengthens the hopes of 1.25 crore Indians... Our farmers have produced record [amounts of] grains and vegetables. To strengthen farmers further, we have taken several important steps,” he said.


World’s largest Health care govt. programme : Jaitley

  • Finance Minister Arun Jaitley unveiled an ambitious plan to launch “the world’s largest government-funded health care programme” that will benefit 10 crore households.
  • The proposed National Health Protection Scheme (NHPS) will provide coverage of up to Rs. 5 lakh per family annually to take care of secondary and tertiary care hospitalisation costs.
  • Mr. Jaitley reckoned that this will benefit around 50 crore people from poor and vulnerable families. The Budget for 2016-17 had a similar announcement offering a Rs. 1 lakh cover for 8 crore families, but that’s yet to take off.
  • The Rashtriya Swasthya Bima Yojana (RSBY) now gives poor families an annual coverage of Rs. 30,000, while several State governments have implemented their own health insurance schemes with varying coverage levels.
  • “My government has now decided to take health protection to a more aspirational level,” Mr. Jaitley said.
  • “We have provided Rs. 2,000 crore for the next financial year under this scheme,” Expenditure Secretary Ajay Narayan Jha said at a press conference after the Budget.
  • “Once the contours take shape, the details will be worked out,” Mr. Jha said. “The present RSBY scheme will be modified for this,” he said.
  • Budget 2018-19… A blessing for elders :
  • The salaried class may feel hard done by and the young may not see a swift surge in employment opportunities as a result of the Budget proposals.
  • However, the Modi government, which will face elections next year, has made sure it will have the blessings of elders.
  • “A life with dignity is a right of every individual, in general, more so for the senior citizens,” Finance Minister Arun Jaitley said in his Budget speech.
  • “To take care of those who cared for us is one of the highest honours,” he stressed, before laying out a series of steps to give them a ‘dignified life.’
  • Mr. Jaitley made an effort to ease the cash flows of senior citizens that are largely dependent on interest income.
  • The exemption limit on interest income on bank and post office deposits has been raised from Rs. 10,000 to Rs. 50,000 a year.
  • The deduction available for health insurance premium and medical expenditure has been raised from Rs. 30,000 to Rs. 50,000.
  • Deductions for medical expenditure on certain critical illnesses have been hiked to Rs. 1 lakh for all senior citizens, up from the prevailing levels of Rs. 60,000 for senior citizens and Rs. 80,000 for very senior citizens.
  • While these concessions are worth Rs. 4,000 crore, the government also extended the Pradhan Mantri Vaya Vandana Yojana up to March 2020, which assures an 8% return, and raised the investment cap from Rs. 7.5 lakh to Rs. 15 lakh.

Home Ministry allocations hiked in Budget 2018-19

  • The Union Home Ministry has been allocated Rs. 92,679.86 crore, an increase of 10.5% over that of 2017-18, with a special emphasis on improving infrastructure of the police forces.
  • The Delhi police, which maintain law and order in the national capital, has been allocated Rs. 6,946.28 crore. A sum of Rs. 1,750 crore has been allocated for the development of border infrastructure.
  • During 2017-18, the Home Ministry got Rs. 83,823.30 crore, according to the Budget papers.
  • The Central Reserve Police Force (CRPF), which is engaged in anti-militancy operations in Jammu and Kashmir and the northeastern States and often deployed on internal security duties, has been allocated Rs. 20,268 crore as against Rs. 18,720.08 crore in 2017-18.
  • The Border Security Force (BSF), which guards the borders with Pakistan and Bangladesh, has been allocated Rs. 17,118.64 crore, as against Rs. 16,188.74 crore in 2017-18.
  • The total allocation to the Central Armed Police Forces, including the CRPF, the BSF, the Indo-Tibetan Border Police, the Central Industrial Security Force, Sashastra Seema Bal, Assam Rifles and the National Security Guard, is Rs. 62,741.31 crore, compared with Rs. 58,148.80 crore in 2017-18.
  • The Intelligence Bureau, responsible for gathering internal intelligence, has been allocated Rs. 1,876.44 crore, Rs. 6.26 crore less than the sum given last fiscal.
  • The Special Protection Group, responsible for the security of the Prime Minister and the former Prime Ministers and their family members, has been allocated Rs. 385 crore as against Rs. 389.5 crore in 2017-18.
  • A sum of Rs. 4,289.05 crore has been allocated for the development of police infrastructure, including the construction of barracks and residential quarters and the purchase of vehicles and arms and ammunition.
  • A total of Rs. 100 crore has been earmarked for Nirbhaya Fund to protect the safety of women, while Rs. 81.75 crore has been allocated for the National Emergency Response System and prevention of cybercrimes against women and children.
  • For the modernisation of the police force, Rs. 897.29 crore has been earmarked, and Rs. 864.10 crore has been allocated for the National Disaster Response Force (NDRF).


India Budget 2018-19, Bhutan, Nepal, Myanmar

  • India’s annual financial allocation to Nepal for 2018-19 has nearly doubled under the Union Budget presented.
  • The External Affairs Ministry has been allocated a total Rs. 15,011 crore, which indicates a marginal increase of Rs. 1,321 crore over the previous year’s grant.
  • For India’s development and diplomatic engagement under the ‘Neighbourhood First’ policy, the Budget has allocated Rs. 5545 crore.
  • Bhutan is traditionally the largest recipient of Ministry’s allocation.
  • It has maintained the same position even as the allocation increased by Rs. 71 crore to touch Rs. 2,650 crore.
  • However, the giant leap in allocation was for Nepal, which received Rs. 650 crore from the Ministry.
  • This year’s allocation is the third consecutive and the largest increase.
  • In 2016-17, Nepal received Rs. 332.72 crore, which was increased to Rs. 375 crore last year. At Rs. 280 crore, Myanmar’s allocation too has improved from Rs. 220 crore of last year.
  • Former Indian Ambassador to Nepal Ranjit Rae said the budgetary increase was a likely step ahead from the Indian commitment to help Nepal recover from the 2015 earthquake.
  • The budgetary increase indicates it is likely to cover the earthquake reconstruction fund that was in the pipeline for some time and was discussed with the Nepalese leaders,” Mr. Rae said.
  • A senior researcher from the Ministry’s think tank, Research and Information System for Developing Countries (RIS), said on condition of anonymity that the Terai road network and railway connectivity plans were also likely to get a part of the increased allocation.
  • Large allocation has also been made for the prominent cultural arm of the Ministry, the Indian Council of Cultural Relations (ICCR), which has received an increased allocation of Rs. 20 crore to touch a total Rs. 255 crore.
  • However, the new initiatives for building infrastructure in Chabahar and the Seychelles have also been granted allocations of Rs. 150 crore and Rs. 350 crore respectively.
  • South Asia University, a major educational initiative for the South Asian region, has received Rs. 375 crore and the Nalanda University got Rs. 200 crore.
  • Indicating the evolving policies of the government, the Ministry has made no allocation for the Haj.
  • The government had allocated Rs. 12.13 crore in 2016-’17. There was no allocation for Haj last year too.

Genocide in Rakhine?

  • The faces of the men half-buried in the mass graves had been burned away by acid or blasted by bullets.
  • They are among more than five mass graves, all previously unreported, that have been confirmed by The Associated Press through multiple interviews with more than two dozen survivors in Bangladesh refugee camps and through time-stamped cellphone videos
  • The Myanmar government regularly claims massacres like Gu Dar Pyin never happened, and has acknowledged only one mass grave containing 10 “terrorists” in the village of Inn Din.
  • The recent findings, however, suggest not only the military’s slaughter of civilians but the presence of many more graves.
  • The graves are the newest piece of evidence for what looks increasingly like a genocide in Myanmar’s western Rakhine State against the Rohingya.
  • Satellite images obtained by the Associated Press from DigitalGlobe show a village decimated.
  • Community leaders have compiled a list of 75 dead so far, and villagers estimate the toll could be as high as 400, based on testimony from relatives and the bodies they’ve seen in the graves and strewn about the area.
  • Almost every villager interviewed by the Associated Press saw three large mass graves at Gu Dar Pyin’s northern entrance, near the main road, where witnesses say soldiers herded and killed most of the Rohingya.
  • Survivors said soldiers planned the August 27 attack, and tried to hide what they had done.
  • Thousands of people from the area hid deep in the jungle, stranded without food except for the leaves and trees they tried to eat.
  • From about 10 miles away, another group of villagers watched from a mountain as Gu Dar Pyin burned, the flames and smoke snaking up into the sky.

U.K on non-EU workers

  • The British industry is calling on the government to raise the annual cap on the number of non-EU workers able to gain work visas, as well as an end to the government’s migration target, after it emerged that the cap had been hit two months in a row.
  • Recent Home Office data revealed that the monthly limits in both December and January for the number of Tier 2 visas available (the government has an annual cap of 20,700) had been reached for the first time since October 2015.
  • Despite a recent hike in the minimum salary for applicants.
  • This had knock-on consequences for industry, including the National Health Service (NHS), with several trusts reporting that they had been unable to recruit some of the doctors they had hoped to.
  • “Hitting the cap and limiting skilled workers coming to work from across the globe damages U.K. competitiveness,” warned Neil Carberry of the Confederation of British Industry. Under the Tier 2 (general) system — the most commonly used work route for Indian workers into the U.K. — once the monthly cap is reached, further certificates of sponsorship are allocated based on a points-based system.
  • It depending on whether work for an occupation on the official shortage list is being applied for, whether the work is PhD level, and also on the basis of salary.
  • The result is that those in non-shortage occupations need higher salaries — £55,000 in December, and £46,000 in January.
  • Applicants for Tier 2 visas must earn at least £30,000 under recent changes, and £20,800 for graduate recruits or under 26s.

Last Updated on Monday, 05 February 2018 13:33