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Feb 01, 2018 10:36 PM IST | Source: Moneycontrol.com

Budget 2018 Highlights: Arun Jaitley's booster dose for rural India, bitter pill for investors

FM Arun Jaitley has presented the Union Budget for 2018-19 in Parliament. The Budget was perceived as favouring the rural populace but wasn't very well received by financial markets.


22:22 Budget 2018: Indian Railways set to get a major security upgrade

Railway Minister Piyush Goyal today said the national transporter would focus on technology this year to ensure safety on its network.

Finance Minister Arun Jaitley allocated Rs 2,025 crore for an overhaul of the signaling and telecommunication system of the Indian Railways in 2018-2019. Rs 11,450 crore has been earmarked for track renewal.

21:58 Budget 2018: Govt cuts excise duty by Rs 2, but petrol, diesel won’t get cheaper — here’s why

In his Budget 2018 speech on Thursday, Finance Minister Arun Jaitley slashed basic excise duty on petrol and diesel by Rs 2. The government also cut additional excise duty on the fuels by Rs 6. The cuts, however, were offset by the introduction of a new road cess of Rs 8 per litre. Therefore, petrol and diesel prices will likely remain unchanged.

Earlier, the excise duty was levied at Rs 14.14 — for unbranded and branded petrol — the overall excise duty cut for the petrol amounts to Rs 10.14. Similarly, for diesel, an excise duty of Rs 19.02 was levied which is now stands at Rs 15.02.

21:44 Budget 2018: Apple phones may get costlier as govt hikes customs duty on imported mobiles

If you have been planning to buy a mobile phone but haven’t yet, it may be time to do it soon as it is set to cost more. Finance Minister Arun Jaitley on February 1 raised the customs duty on imported mobile phones to 20 percent from 15 percent earlier.

A few brands, particularly in the premium space, are most likely to be affected by this decision, say experts.

19:55 "Exemptions on interest from banks FD of Senior Citizens to Rs 50,000 may increase the flow of funds to banks. Bank credit off take may pick up on cement and construction sector due to the focus on rural housing, rural roads and rural infrastructure spending," said Subramaniakumar, MD & CEO, Indian Overseas Bank.

"Reduction in tax rate to 25% for MSME who have reported turnover of up to Rs 250 crore, will not only create job prospects but also expand their business by additional investments which in turn will increase the demand for credit. Allocation of  Rs 10,000 crore under telecom infrastructure areas for easy internet access to 50 million rural Indians will help the financial inclusion initiatives of the banks," he said.

19:35 “The Union Budget 2018-19 has done a commendable job in holistically addressing the various priorities of the Indian economy. It has addressed social sector priorities and charted out a clear plan to boost infrastructure, while maintaining fiscal discipline," said Chanda Kochhar, MD and CEO, ICICI Bank.

"Expenditure has been divided between budgetary and non-budgetary sources. The adoption of a maximum level for public debt to GDP will instil even more confidence in the fiscal framework. The far-reaching National Health Protection Scheme, which will be the largest of its kind in the world, along with measures taken to enhance education, skilling and research & development are indeed welcome steps,” she said.

19:27 “A very comprehensive Budget comprising key measures that would have a positive impact on various segments including tenant farmers, 10 crore poor families, senior citizens, among others. Combined with these, the idea of a national gold policy and integration of the TReDS platform with GSTN for the SME are all significant policy changes aimed at transforming the overall economy," said Rajnish Kumar, Chairman, SBI.

"Further, retaining net market borrowings for FY19 at almost the same level as in the current year will compensate for higher fiscal deficit envisaged in the Budget.”

19:03 Reacting to the Budget 2018, Govind Shrikhande, Customer Care Associate & Managing Director, Shoppers Stop, said that overall it appears to be a Bharat Budget aimed to inject rural growth and maintain the fiscal deficit at 3.3%. But on the flipside, lack of definitive measures to drive consumption leaves us wanting.

"On the business side, we were expecting a change in Corporate Taxation for big companies however that did not make the cut – pun intended. We were also hopeful that the FM would reduce and revise GST rates for pertinent categories to drive consumption and contain inflation. Instead, we are met with an increase in customs duty for Perfumes, Toiletries, Sunglasses and Footwear by almost 10% which will have a significant impact on prices, directly driving inflation and impacting consumption. This coupled with the introduction of 10% LTCG tax (exceeding 1 lac) in the equities market may dampen consumer sentiment," he said.

18:26 It’s a super flop Budget, there is no mechanism to meet the projection. The expectations were high but the country did not get anything to cheer about, said Mamata Banerjee, reports CNN News18

17:47 The government has tempered its expectation from the spectrum auction for the coming financial year, given that most of the companies in the sector are not in the best of health and may hence not bid aggressively.

The 2018-19 Union Budget presented by Finance Minister Arun Jaitley has set a target of Rs 48,661.42 crore from all the levies the sector is subjected to. This is higher by more than 50 percent from the Rs 30,736.47 crore Jaitley expects to garner from the sector in 2017-18.

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17:38 Rs 80,000-crore divestment target is reasonable, nothing stops us from increasing it later, Adhia said.

We would like to keep divestment candidates under radar to avoid price manipulation, he added.

16:18 This year's Budget accounts for 11 months of GST revenue collections, which has had an impact on fiscal deficit, said Jaitley.

15:35 Market closes lower amidst volatility. Nifty holds 11,000 whlie Sensex closes just above 35,900. Market breadth mildly in favour of declines.

15:25 In every Budget, I have given some relief to middle class, said Jaitley.

Tax slabs

 

15:20 FM Jaitley explains how India is a country where there is lot of tax non-compliance and the rule is to keep nudging. The quantum of taxes paid — both direct and indirect — is insufficient, he told DD. There is no LTCG on gains up to Rs 1 lakh. So the small investors need not worry. We have aimed at taxing big corporates and LLPs, he said.

15:16 India has the lowest income tax in the world. There was no possibility to change it, said Finance Minister Arun Jaitley in an interview to DD after presenting his fifth Budget. 

15:08 Expenditure secretary has said no capital infusion in cash will happen for public sector banks in FY19. Instead, the quantum of recapitalisation bonds has been increased. The government will issue recap bonds worth Rs 65,000 crore to PSU banks in the fiscal year instead of Rs 55,000 crore.

15:00  The GST compensation cess has been budgeted  at Rs 90,000 cr for FY19, while revised estimates for FY18 are at  Rs 61,000 cr. The GST compensation cess funds are to be kept under public accounts.

14:55 Market seems to have digested both the fiscal deficit blow and the reintroduction of capital  gains tax. Sensex has retraced its way back although its slipped into the red after a briefly trading positive. Experts suggest the market was anticipating the capital gains and although the fiscal deficit was a bit stretched, it was well taken.

14:15 
Here's a short list of allocation to various plans of the government

  • Rs 27,500 cr to PM Affordable Housing Plan FY19

  • Rs 19,000 cr to PM Rural Road Plan FY19

  • Rs 32,600 cr to National Education Mission FY19

  • Rs 17,800 Cr to Swachh Bharat Mission in FY19

  • Rs 600 cr for nutritional  support to all tuberculosis patients

  • Rs 5,750 cr to national livelihood mission

  • Rs 10,000 cr for fisheries & aquaculture, animal husbandry funds

  • Rs 1,290 cr to national bamboo mission


14:00 The price of petrol and diesel will effectively come down by up to Rs 2 per litre due to the cut in excise duty.

13:55 Customs duty on imported watches and completely knocked down vehicle units have been increased to 20% and 15%, respectively.

13:49 Economic affairs secretary Subhash Garg has said that the government is amending the FRBM Act to specify 3% fiscal deficit target by 2021.

13:46 Economic affairs secretary Subhash Garg has said that the tax revenue projections made by the government for the next fiscal year are realistic. He said that the higher MSP will have a marginal fiscal impact in the next financial year.

13:42 "For calculation of LTCG now 1) date of purchase / acquisition will be the original date of which investment was made 2) cost of acquisition will be the rate as on 31 Jan 2018 . Investors should keep a record of the closing price of their holdings as on 31 Jan 2018." - Harshvardhan Roongta, Principal Financial Planner, Roongta Securities.

13:39 Prime Minister Narendra Modi now takes stage to express his views on the Budget. This Budget has focussed on creation of a new India, he says.

"It must be noted that this Budget has given importance to ease of living alongside ease of doing business," he says. He notes the government needs to consolidate farmer's incomes as the country has seen large production thanks to our farmers.

The PM terms the Budget as 'Farmer friendly, business friendly, development friendly'

13:39 The bond market could be slightly worried about the announcement on MSP resulting in higher inflation, which could push the RBI to hike rates.

13:36 For cigarette makers, the lack of any announcement in the Budget seems to be coming across as a major positive. Stocks of all cigarette manufacturers have risen prolifically since the conclusion of the Budget speech.

13:24 A quick glance at key takeaways of Budget 2018

-  The government estimates 7.2-7.5% GDP growth in second half of the current FY18. Fiscal deficit for 2017-18 at 3.5% and projected for 2018-19 at 3.3%

-  Proposed spending on rural infra is Rs 14.34 lakh crore.

-  Rs 5 lakh per family annually has been announced for medical reimbursement under the National Health Protection Scheme.

- Personal income tax slabs remain unchanged. However, standard deduction has been reintroduced at Rs 40,000 in lieu of the medical and transport allowance currently available.

- Deduction on medical insurance premium for senior citizens has been raised to Rs 50,000. For senior citizens with critical illnesses will get deduction of Rs 1 lakh.

- Capital gains tax has been reintroduced, with certain caveats, at 10% on gains of over Rs 1 lakh on investments. Capital gains made on shares until Jan 31 will be grandfathered. Short term capital gains remains unchanged at 15%.

13:00 "The reduction in corporate tax for companies with turnover upto Rs 250 cr to 25% will help companies will help small cap companies.  No change in tax structure for individuals this year.  Additional benefits for senior citizens- pension scheme increased, medical insurance limits and deductions for interest.  Some respite to senior citizens.  LTCG introduction @10% on equity is a negative without removal of STT.  Would have preferred increasing STT or increasing the tenure  (to say 2 years), rather than change the tax rate; so as to reward long term investing." - Anil Rego, CEO & Founder, Right Horizons.

12:54 Most of the listed universe would be unhappy on the tax front with this Budget because the only cut in corporate tax came for companies with turnover of up to Rs 250 crore. Even the salaried class would not be overjoyed with the token Rs 40,000 standard deduction.

12:49 "LTCG over 1 lakh in a year will only attract tax @ 10%. So it still make sense for investors in equity funds to opt for growth option in stead of dividend option." - Balwant Jain, CA & CS.

12:36 So finally, something for the middle class, that section of society that is usually the most-ignored. Jaitley has said that the government has decided to allow a standard deduction of Rs 40,000 for salaried taxpayers, keeping in mind that they have been paying way more tax than individual business owners.

12:32 Jaitley has said that 41% more returns were filed this year under the simplified tax scheme. This has to be considered a success for the government, especially considering our past problems with tax compliance. If more number of people start paying their taxes, it will be easier for the government to ease tax burden on people.

12:24 So that answers all the concerns about fiscal deficit, doesn't it. A deficit of Rs 5.95 lakh crore for the current year might come as a pleasant surprise for many, particularly because Jaitley has said that the target is to bring it down to 3.3% of GDP in the next fiscal. This year's estimated figure is 3.5% of GDP.

12:19 "Need to be seen how they will popularise InVITs for Road Projects - especially after tepid market response to IRB, etc." - Ambareesh Baliga, Fundamental Analyst.

12:16 It doesn't look like the government wants to slow down divestment at all, especially since it is likely to be one of the most important modes of financing budget deficit in the coming fiscal year. Divestment target for FY19 has been set at Rs 80,000 crore.

12:15 "MSP to have inflationary effect on food." - Ambareesh Baliga, Fundamental Analyst.

12:14 Below are CRISIL's like takeaways from the Budget speech

- Increase in MSP will further boost tractor sales, currently growing at 16%
- Of 2,000 APMCs, those connected to E-NAM is 470, which is less than the target of  585 for last fiscal #budget2018
Liberalisation of agri exports to benefit the pulses sector
- Out of a production of 22 MT in 2016, exports were just 1.3 MT
- LPG demand growth to rise to over 10% next 2 years given 8 crore new BPL connections targeted
- Power, LPG via Ujala and Saubhagya remains area of concern for discomsOMCs because of lack of recovery
- Dedicated fund for affordable housing to improve formal finance penetration
- Focus on rural housing, rural roads and rural infra spend will push up employment
- Rs 10,000 cr for fisheries to boost seafood exports
- India already world’s largest shrimp exporter
- Rising rural income to improve demand for cement
- Rural demand is 33% of total cement demand
- Massive health insurance plan a boost for hospitals, health insurers
- 18 architecture schools show construction sector importance to economy, govt
- Ragi, jowar, moong, maize, paddy to benefit the most
- Increase in MSP by 1.5 times cost of production
- Huge health insurance plan could cost govt around Rs 50,000 crore annually
- 3.7 lakh km rural roads plan huge boost for construction cos
- Rail University in Vadodara to boost R&D initiatives, help improve rly ops
- Micropension, insurance via Jan Dhan to boost fin inclusion
- 23% growth in Mudra target will help micro-entrepreneurs
- Agri-commodity exports limited now
Liberalisation is a big boost to sector
- 1 cr houses under PMAY augurs well for lenders
- Growth in affordable housing loans to remain strong
- Govt’s 12% contribution to EPF for new employees
- Will encourage formal sector coverage
- Textiles subsidy under TUFs up 18% at Rs 7,140 cr
- Textiles subsidy under TUFs up 18% at Rs 7,140 cr

- Fisheries fund a big boost to Rs 140,000 cr seafood industry

12:13 "Cryptocurrency not recognised. Will that money now come to the stock markets?" - Dr CK Narayan, Chart Advise.

12:12 "Focus of government seems to be rural India even in the case of infrastructure like roads. On the other hand government is trying to encourage private investments into infrastructure through innovative structures like InvITs and AIFs." - Anil Rego, CEO & Founder, Right Horizons.

12:11 Cryptocurrency investors in India have to bear in mind that the government doesn't consider them legal tender. But they needn't worry too much because Jaitley has only said that the government will look to eradicate their usage for illegitimate activities, nothing about investing in them.

12:06 Will flying soon become the primary mode of travel for the Indian citizen? It certainly seems that way because Jaitley just said that the government intends to multiply India's 124 airports to 5 times that number.

12:04 Mumbai locals are going to get even better at getting you to your destination on time. The government will spend as much as Rs 11,000 crore to add tracks to the Mumbai local train network, Jaitley said.

12:03 "The reduction of EPF contribution to 8% in the first three year for women does not seem to add any significant benefit in terms of cash flow. It will only increase administrative & compliance burden." - Harshvardhan Roongta, Principal Financial Planner, Roongta Securities.

12:02 At this rate, the country is not going to be looking the same this time next year. Jaitley has said that the government will complete constructing 9000 km of national highways by the end of FY19. A huge number of train coaches and new tracks are also in the works.

11:58 For those of you who are about to start your first job, the government has decided to try and make it worth your while. Jaitley has announced that the government 12% EPF in wages of new employees in all sectors. This news is as good as one can expect for the job sector.

11:55 If this is not a people's Budget, nothing is or ever can be. Roads and railways, both of which have been cause for complaint for the Indian citizen in the past, have been given a record allocation in this Budget, no doubt with an eye toward next year's general election. Hope the government finds a way to fund this without widening fiscal deficit.

11:54 One of the banking sector's major concerns is likely to be addressed soon, going by Jaitley's speech. The finance minister has said that he will soon be announcing measures to help deal with NPAs of SMEs, reiterating that MSMEs are extremely important for our economy.

11:53 "As expected the first half of the budget was for Bharat, kisan, women, senior citizens, rural areas - a pro people's budget.  As we move into the second half of the speech, we will move to India." - Manoj NagpalMoneycontrol Consulting Editor.

11:43 "The government’s focus on futures and warehousing for agriculture is welcome. In a way it revives the WDRA provisions (Warehousing Development Regulations Act) which have been languishing since 2012.  But all this requires two major conditions. First, the government needs to create more incentives for warehousing.  It needs to reduce the role of the FCI (which has provide to be both corrupt and collusive with rich farmers at the cost of small farmers).  It needs to appoint assayers ad auditors who will audit the warehouse receipts and stocks to prevent another NSEL type scam. The budget does not talk about this. Secondly, the biggest hurdle to any futures market is the proper functioning of commodity exchanges.  Till now, the government has banned trade, disrupted trade, and even closed down commodity exchanges. These do not augur well for commodity exchanges. Moreover, the government will have to create adequate funds to purchase crops at MSP rates from any farmer who can then deposit this at the warehouses and then sell the crop through commodity exchanges. The budget does not give any indication that it has worked this out as yet. This also means that the government's procurement programme has to move away from rice and wheat only." - RN Bhaskar, Moneycontrol Consulting Editor.

11:36 If you thought the country doesn't have enough reputed architecture institutes, the government is about to change all that. New architecture colleges are being proposed, something that country has direly needed for quite some time.

11:35 "Harshvardhan Roongta: Increasing the holding period of equities to 2 years to be eligible for LTCG is desirable as it alligns with the philosophy of investing in equities for long term besides helping weed out bogus transactions in penny stocks to convert black money. Taxing the LTCG will be detrimental to the sentiments and the disinvestment program of the government." - Harshvardhan Roongta, Principal Financial Planner, Roongta Securities.

11:32 "The budget has a clear agriculture push as expected. A number of initiatives for agriculture and food processing have been announced.  Policies like MSP being at 1.5 times the cost of produce need to be understood, to assess impact of inflation on agri commodities." - Anil Rego, CEO & Founder, Right Horizons.

11:27 "Given that this government understands the role of insurance in providing financial security ( introduction of PM Jeevan Jyoti Bima Yojana & PM Jeevan Suraksha Bima Yojana ) it's keenly expected that specific tax deductions be introduced for pure protection policies in line with NPS which is a retirement security instrument. There have been exponential rise in premiums for health insurance. The deduction limit u/s 80D needs upward revision. Quite likely we will see the revision in this budget." - Harshvardhan Roongta, Principal Financial Planner, Roongta Securities

11:24 So it is not just agricultural farmers who have something to cheer. The government has announced a Rs 10,000 crore allocation for fisheries, aquaculture and animal husbandry funds. This is going to go along way in improving the standard of animal rearing in the country and may even significantly improve the quality of meat available in the market.

11:19 Farmers can cheer for everyone to hear! Jaitley says that minimum support price for kharif crops will now be 1.5 times the production cost. If market prices are lower than MSP, it is the government's duty to make sure farmers get their due.

11:18 Govt will create institutional mechanism to take decisions on various measures to ensure the farmers income is doubled as per target. Most farmers are small and marginal and not in position to transaact at .APMCs. We will set up GRAMS and 470 APMCs connected to eNAM

11:17 MSP for Kharif crops will be 1.5x cost of production. If prices are lower than MSP then the government has to ensure there are ways to make sure the farmers receive necessary MSP or an apt price for their products.

11:15 It looks like Jaitley will be delivering the entire speech in both Hindi and English. Don't think anyone will have any reason to complain at the end of it, at least about the language used.

11:14 As expected, the finance minister has started talking about reforms for farmers inside the first 10 minutes of his speech. Farmers across the country better listen carefully to what he is going to say next.

11:03 "This is a keenly awaited budget, especially because this is a year ahead of elections. The finance minister will have to balance between political considerations and fiscal discipline. FIIs would be keenly watching this. One of the key consideration for markets is whether the finance minister would introduce Long Term Capital Gains Tax (LTCG) on equities. There have been a lot of rumours doing the rounds. With some expectation buildup over the last few days on this, just non introduction of LTCG could be viewed positively by markets. One expects a continued thrust on disinvestment as a means to fund possible initiatives. One expects thrust on agriculture (also keeping in mind elections are round the corner) and also continued focus on infrastructure to propel growth. One also hopes that simplification is given sufficient focus so as to improve the ease of doing business." - Anil Rego, CEO & Founder, Right Horizons.

11:01 "True test of this year's Budget is the how the Finance Minister will balance the fiscal deficit with the high expectations from each of the constituency, and the disinvestment target of next year will be keenly watched numbers." - Manoj Nagpal, Moneycontrol Consulting Editor.

11:00 "I do not think the finance minister will raise the income tax exemption limit as it will be counter to what the government  has been doing to broad base the tax base. The FM may increase the rebate under section 87A to effectively grant exemption to people in lower income base without letting them go out of tax information network." - Balwant Jain, CA & CS.

10:44 Here's a quick analysis by Moneycontrol Research's Madhuchanda Dey on how the math makes sense for Jaitley to introduce long-term capital gains

Whether Finance Minister Arun Jaitley will introduce a long-term capital gains tax on equity or not has grabbed a disproportionate amount of the market’s attention. Here’s the logic in favour of the move:

Let us first take a look at how much government garners from Securities Transactions Tax (STT) that is levied on every equity transaction. For FY18, it is budgeted to be Rs 7,767.9 crore, or 0.4% of gross tax revenue for the year. Going by the total turnover data of BSE and NSE (Rs 10,04,31,415 crore) it works out to 0.01%.

So should STT get abolished and get replaced by Long Term Capital Gains, on a conservative basis, the earnings can actually double.

The total cash market turnover in FY17 was Rs 60,54,174 crore in FY17. As per our calculation, 50% of this was buy transactions which is approximately Rs 30,77,087 crore. If 25% of this transaction is meant for holding for the long-term (beyond one year), the value of such long-term transactions is Rs 7,69,272 crore.

Taking a historic average gains percentage of 15%, the average long-term gains works out to Rs 1,15,390 crore. The intended 15% long-term capital gains tax works out to close to Rs 17,308 crore, which is much more than the revenue sacrificed by abolishing STT. So it does make immense economic sense.

Whether Mr Jaitley will choose to bite the bullet or not will be clear in less than half an hour from now.

10:37  In his last Budget, FM Jaitley had announced cut in holding period for LTCG  tax on immovable property from 3 years to 2 years resulting in lower taxes for those selling property at a profit. Reintroduction of capital gains tax or extension of period was widely anticipated but the FM left it as is.

However, not much relief was provided in personal income taxes except a cut in the lowest slab rate to 5 percent from 10 percent for salary bracket between Rs 2.5 lakh to Rs 5 lakh. For those in 20 percent (Rs 5 lakh-Rs 10 lakh) and 30 percent (Rs 10 lakh plus), there was a Rs 12,500 rebate.

It remains to be seen if the FM is able to appease the working salaries population of his country who are eagerly awaiting relief after a troubled past year grappling with demonetisation and shift to GST.

 

10:15 While this Budget is widely expected to be populist keeping the general elections in sight and the fact that eight states are going to polls this year, factors such as rising oil prices could become a cause of worry for the finance minister. Oil prices have risen nearly 30% in the last one year compared to the first three years of the NDA regime when falling oil prices provided an unexpected boost to the economy. Subdued oil prices had helped tide over multiple hurdles like nearly double-digit inflation and a weak growth trajectory inherited from the United Progressive Alliance (UPA).

09:58 With only about an hour to go for FM Jaitley to take centrestage, here's a quick recap of 5 things that will be most closely watched during his speech.

Reintroduction of Standard Deduction: Abolished in 2006-07, there has been suggestions from multiple quarters about reintroducing standard deduction. It is part of income that is deducted from taxable income for purpose of income tax calculation without need for proof. Finance Minister can help millions of salaried class by bringing this back

No change in Long Term Capital Gains: While Sensex and Nifty have been on a roll recently, they could be spooked by long term capital gains tax re-introduced, especially when Securities Transaction Taxes are already paid

Higher 80C limits: Investments under 80C is one of the most used tax savings instruments used by salaried class (investments into ELSS, 5 year Fixed Deposits, Public Provident Fund, et al ); government could help put some money in the pocket of middle class by perhaps increasing the limit to RS. 2-2.5 lakhs from the current Rs. 1.5 lakhs; it will also help in inculcating savings habit in milllenials coming into workforce

Increase in Section 80D deduction and Medical bills reimbursement limits : With burgeoning healthcare costs, especially in private sector, flexibility and higher limits for tax benefits and deductions on medical insurance and other expenses would not leave families desolate if an unplanned medical emergency occurs

Exemptions for skill building: A large section of our IT workforce is under stress as their skills are  running the risk of getting redundant; they need to up-skill and thus, tax breaks on amounts spent on education (not just education loans) can alleviate the stress from lower pay hikes or risk of pink slips; encouraging re-skilling of labor also is an investment in future by the government which could otherwise need to battle with increase in unemployment

09:45 Why is Budget 2018 different this year? (podcast)

The Budget for 2018-19 will mark the beginning of a new public accounting process in India. This Moneycontrol Insight18 podcast explains why the exercise is different from previous ones.

09:39 What is Expense Account? (podcast)

Expense Account is a plan meant to prioritise fund allocations for infrastructure, subsidies and welfare schemes, among others. This Moneycontrol Insight18 podcast delves into the nitty-gritties of Expense Account.

09:36 What happens after FM’s Budget speech? (podcast)

Once the Finance Minister presents the Budget speech, the same is tabled in Parliament. This Moneycontrol Insight18 podcast takes you through the various steps taken before Budget proposals are implemented.

09:31 The Making of Budget (podcast)

A government’s Budget-making process is a long-drawn one. It begins as early as August goes through several checks before it is presented by the Finance Minister. This Moneycontrol Insight18 podcast details the Budget-making process.

09:26 What comprises Budget Speech? (podcast)

This Moneycontrol Insight18 podcast tells you why the Budget speech is a showcase event for the government and the country.

09:23 What is fiscal deficit?

Fiscal deficit is an indicator of borrowings needed by the government. Essentially, it is the difference between the government’s total expenditure and total revenue generated. This Moneycontrol Insight18 podcast simplifies fiscal deficit and the measures the government takes to bridge the deficit.

09:19 The Nifty and Sensex are trading mildly higher at 11,068.30 and 36,107.38, respectively.

08:58 Minister of State for Finance Shiv Pratap Shukla said the government cannot ignore public welfare and hence the Budget will be on these lines. “We must fulfil everyone's expectations,” he told CNBC-TV18.

08:45 Throwback Budget 2012: Retrospective Amendments to Income Tax Act, 1961

Finance Minister Pranab Mukherjee in Budget 2012-13 proposed to amend the Income Tax Act, 1961 with retrospective effect. The proposal was to allow the country to retrospectively tax cross-border transactions in which the underlying assets are located in India.

08:36 Finance Ministers who went on to become Prime Minister or President

Finance ministers are known to hold the most important portfolios across the world. In India, a lot of these ministers went on to lead the country taking the post of a Prime Minister or even a President. Jawaharlal Lal Nehru, Indira and Rajiv Gandhi have presented the Budget while serving as the Prime Minister of India. As Arun Jaitley get set to present his fifth Union Budget, we take a look at the Finance Ministers who went on to take larger roles.

08:31 Arun Jaitley to break tradition, to deliver speech in Hindi

In a break from tradition, Finance Minister Arun Jaitley is likely to deliver his Budget speech in Hindi, reports Deccan Chronicle. Sources said the main idea is to establish a direct connect with the rural populace as this being the last full Budget of the Narendra Modi government, agriculture is going to be the major focus area in the annual exercise.

By delivering the Budget speech in Hindi, Jaitley will not only become the first Union FM to do so since Independence, but this will also help in establishing the fact that the Budget is going to be an aam budget for aam admi and therefore a Hindi speech will have a greater connect with the people for which it is intended, especially the farmers.

08:15 Union Budget 2018 simplified: What is an expense account

The government’s financial plans, like those of households, are about prioritising spending. It has to set aside funds for infrastructure, welfare schemes like NREGA, subsidies, and salaries among other requirements. From 2017-18, all government spending will be listed under two heads: Revenue Expenditure and Capital Expenditure. Watch the video to know more…

08:12 The Making of Union Budget 2018-19

A government’s Budget-making process is a long-drawn one. It begins as early as August goes through several checks before it is presented by the Finance Minister. This Insight18 video details the Budget-making process.

08:09 Watch: What is fiscal deficit?

Fiscal deficit is an indicator of borrowings needed by the government. Essentially, it is the difference between the government’s total expenditure and total revenue generated. This Insight18 video simplifies fiscal deficit and the measures the government takes to bridge the deficit.

08:03 Union Budget 2018 simplified: What comprises the Budget speech?

On February 1, Finance Minister Arun Jaitley will present his fifth Budget. This Insight18 video tells you why the Budget speech is a showcase event for the government and the country.

07:58 Watch what happens after FM’s Budget speech?

Once the Finance Minister presents Budget speech, the Budget is tabled in Parliament. This Insight18 video takes you through the various steps taken before Budget proposals are implemented.

07:55 Union Budget 2018 Simplified: Why is it different this year?

Budget 2018-19 will mark the beginning of a new public accounting process in India. This Insight18 video explains why the exercise is different from previous ones.

07:37 Core sector growth slows to 4% in Dec

On the eve of Budget 2018, Growth of the eight core sectors slowed to a five-month low of 4% in December 2017 due to negative performance of segments like coal and crude oil. The output growth recorded in December is the lowest since July 2017, when these core sectors had witnessed 2.9% expansion.

These eight industries - coal, crude oil, natural gas, refinery products, fertilisers, steel, cement and electricity - had witnessed a growth of 5.6% in December 2016. The output of coal and crude oil sectors contracted 0.1% and 2.1% respectively during the month under review.

Growth in steel and electricity generation slowed to 2.6% and 3.3% respectively in December last year as against 15.9% and 6.4% in the same month of 2016. Refinery products, natural gas, fertiliser and cement recorded healthy growth last month. Cumulatively, the growth in the eight core sectors during April-December this fiscal slowed to 4% as against 5.3% in the same period last fiscal.

07:32 FY16 GDP growth revised up to 8.2%, FY17 unchanged at 7.1%

On the eve of Union Budget 2018, the Central Statistics Office revised the Gross Domestic Product (GDP) growth rate for 2015-16 to 8.2% from the earlier estimates of 8% and kept the 2016-17 growth unchanged at 7.1%. The real GDP or GDP at constant (2011-12) prices for the years 2016-17 and 2015-16 stands at Rs 121.96 lakh crore and Rs 113.86 lakh crore respectively, showing growth of 7.1% during 2016-17 and 8.2% during 2015-16. In terms of real GVA (gross value added), it said the GVA at constant (2011-12) basic prices grew 7.1% in 2016-17, as against a growth of 8.1% in 2015-16. According to advance GDP estimates of CSO, the GVA growth on 2011-12 price was estimated at 6.6% for 2016-17.

07:25 NGO demands greater transparency in budgetary process

As Finance Minister Arun Jaitley gears up to present the Union Budget 2018-19, NGO Transparency International India said on parameters of international standards on budget transparency, the Indian budget was considered "less transparent" as it put only "limited" information in the public domain. "Budgetary process in India is still non-transparent, non-participative with poor accessibility by citizenry," it said.

07:17 Throwback to Budget 1947: The first Budget of independent India

Independent India's first ever Budget was presented by RK Shanmukham Chetty, the Finance Minister of the free country, on November 26, 1947. Partition, a destabilised economy and political upheavals formed the core factors that determined the budgetary provisions.

07:11 Throwback Budget 2000: Yashwant Sinha's Millennium Budget was a shot in the arm for IT industry

In the first budget of the new millennium, the then Finance Minister Yashwant Sinha earned a lot of flak for not introducing long-term economic reforms, but where he scored was on making the India a software export hub. In his Budget speech, Sinha laid out his objectives, one of them was to “strengthen our role in the world economy through rapid growth of exports, higher foreign investment and prudent external debt management.”

07:06 Complex Budget terminology simplified

Though the Budget document is very crucial, it can be a tad detailed and hence, be confusing for many. It is easy, however, to understand this complex document through simplest parallels drawn from our daily lives.

A person’s monthly salary is his income, just as the government’s revenue is through tax collection, loans from foreign governments, etc. Expenditure in a household would be for food, water, electricity and other luxuries. The government’s chief expenses are for the economy’s growth, social schemes, security, accommodation and education of its citizens.

When you borrow money from another entity, it places you in debt. Similarly, when a government borrows money, that debt is called national debt. At the end of the month, you have earned some money and spent some. If you spend more than your salary by borrowing money from your friends, you have entered a fiscal deficit, same as when a country’s expenses are more than its revenue. For more such simplified terms, click here

06:57 Throwback to Budget 1997: Chidambaram's 'Dream Budget' for all

Palaniappan Chidambaram’s Budget of 1997 came at a time when no one expected bold reforms from a weak United Front government, but the man, known for never mincing his words, introduced measures that put India on the world map. He believed in the principle that lower tax rates would boost compliance and hence make more people and corporates pay taxes.

06:51 What is mini Budget? All you need to know about special budgetary proposals in history

Since India's independence, there were four instances when special-occasion budgetary proposals were presented, which were also known as mini Budgets.

06:46 West Bengal Chief Minister and Trinamool Congress Chief Mamata Banerjee will not be attend today’s meeting of opposition parties called by Sonia Gandhi in New Delhi. Described it as a "routine meeting," Banerjee said she will not be able to attend the meeting because of some other preoccupation.

06:41 Throwback Budget 1951: The budget Surplus

Just four years after fighting a bloody war with Pakistan and surviving the aftermath of partition, India’s economy was quick on its feet. This period witnessed a marked reduction in expenditure compared to revenue receipts unlike previous years. The budget for 1950-51 saw a surplus of Rs 71 lakh

06:35 6 things that will be most tracked in FM Jaitley’s speech

The Budget Speech on Thursday assumes significance for a lot of reasons, prime among them will be taxes and fiscal deficit target. Click here to read the six things that will be on everyone’s radar.

06:30 Honest taxpayer wants standard deduction back

Taxpayers feel the current Income Tax slabs fail to reflect rising inflation and income levels. Hence, there are seeking the basic exemption limit to be enhanced to Rs 3 lakh. Also, the maximum investment limit set under section 80C of the Income Tax Act can be hiked to Rs 2.5 lakh from Rs 1.5 lakh at present.

There is also a clarion call to re-introduce standard deduction which was abolished in Budget 2005 and re-look older deductions like medical reimbursement. Tax payers want these outdated and inadequate deductions scrapped and instead introduction of one standard deduction of Rs 1 lakh at least.

The National Pension Scheme must be made more attractive in Budget 2018. It should be given exempt- exempt- exempt status and the extant tax break of Rs 50,000 for contribution to NPS should be hiked to at least Rs 1 lakh.

06:22 Ensure more money in the purses of homemakers, but is the Finance Minister listening

With inflation rising, homemakers are a worried lot. So, it comes as no surprise when households are calling for GST rates on necessities be kept at the bare minimum or completely removed. GST rates on many other products including sanitary napkins need to be reviewed in Budget 2018. The government should also consider reducing GST or abolish it altogether on low ticket spends below Rs 500.

Rising cost of education is raising calls on increasing the tax benefit available under section 80C for payment of school fees to Rs 2 lakh from Rs 1.5 lakh. If this is not possible, Finance Minister Arun Jaitley should introduce a special section for education-related expenses up to Rs 1 lakh.

Homemakers want Jaitley to launch an easy to understand investment scheme that offers to invest in shares, bonds and gold and delivers healthy risk adjusted returns. The schemes should also have the feature of regular pension at the discretion of the contributor. This will ensure regular income for home makers in their golden years.

06:12 Brokers say cut cost, rationalise taxation to attract more investors

Though last year there was no adverse announcement, the broking community is apprehensive of any adverse announcement on the long-term capital gains (LTCG) front. If the government decide to loosen its purse’s string there is a possibility that it may overshoot its fiscal deficit target for the year. This may lead to higher volatility in stocks. Brokers hence want the Finance Minister to stick to targets set on the fiscal front and government borrowing.

Brokers want GST on brokerage charged reduced in Budget 2018-19. The securities transaction tax and commodities transaction tax should be reduced if not removed altogether.

The government should also offer some incentive for the newly launched commodity options product on commodity exchanges. Mutual funds should be encouraged to launch commodity focussed investment schemes and allowed to invest in commodity options and futures along with other institutional investors.

There is a demand for rationalisation of taxation aspects related to Real Estate Investment Trusts. The government should ensure that a robust regulatory framework in place for REIT.

05:50 Senior citizens seek better interest income, cheaper healthcare

Falling interest rates on fixed deposits and small saving schemes have made most senior citizens scamper around for regular income. Some are either forced (or mis-sold) to take on additional risks by investing in equity/balanced funds. Rising markets and monthly dividends by fund houses further fuelled the mis-selling to gullible investors. The situation worsened at the beginning of 2018 when most public sector non-life insurance companies decided to raise health insurance premiums.

In comes as no surprise then that senior citizens are begging for relief. Last year, the Pradhan Mantri Vaya Vandana Yojana offered some relief to senior citizens by offering a fixed 8% interest rate for 10 years. However, this is inadequate. The small saving schemes should offer an additional 1% interest rates over and above the card rate for senior citizens.

There is also a need to increase the basic exemption for senior citizens and super citizens to Rs 8 lakh and Rs 10 lakh, respectively.

Rising healthcare costs and insurance premiums have most senior citizens worried. They want the Finance Minister to raise the tax benefit under section 80D to Rs 50,000. Moreover, the insurance premium paid is inflated by GST at the 18% tax rate. Senior citizens are thus calling for a complete GST waiver for all insurance purchases in Budget 2018-19.

Senior citizens are also demanding introduction of zero GST on goods and services. This can be enforced by using the Aadhaar network and crediting back the GST paid to their bank accounts post verification.

05:31 Investors seek clarity on policy, tax laws

Investors who bought stocks and equity mutual funds are now wondering if the Finance Minister will change rules pertaining to the long-term capital gains in Budget 2018. This year there is a talk that the holding period to be eligible for long-term gains will be hiked to two or three years for stocks, as compared to one-year now. Though the move is a push in the right direction in terms of directing retirement savings and investments for the long-term, the move is making investors jittery.

In the past financial year government has directed to link mutual funds and insurance policies and other financial assets with Aadhaar. It also rolled out the Goods & Services Tax and The Real Estate (Regulation and Development) Act, 2016. Before that, Budget 2016 saw the introduction of tax on dividends received in excess of Rs 10 lakh. This resulted in a slew of share buybacks. Though all the above measures are laudable, investors are seeking a clear roadmap on policy and tax laws.

Investors want the government to reduce the securities transaction tax (STT), thus lowering transaction costs in the capital market. With interest rates payable on the RBI Bond reduced by 25 basis points, conservative investors want long-term tax free bonds to help lock-in interest rates. These investors want the Finance Minister to offer infrastructure bonds of 10 years, by carving out a separate segment under section 80C. The limit under section 80C too should be enhanced.

05:19 Increase allocation to education sector, say students

Budget 2017 announced investments in quality education. A portal offering more than 350 online courses – SWAYAM, was launched. The Finance Minister also launched a National Testing Agency along with the extension of Pradhan Mantri Kaushal Kendra (PMKK).

However, students opting for an education loan want these loans subsidised in next year’s budget. Given the high cost of higher education in India are banks turning sceptical while sanctioning due to rising non-performing loans, students want Jaitley to allow principle repayment as a tax admissible expense under section 80C. At present, only the interest paid receives tax benefits under section 80E.

They want the government to remove shackles that throttle businesses under its ‘ease of doing business’. This should boost private investments and in turn result in further job creation for students completing their formal education.

Skill India, PMKK and Swayam should also work in sync with each other. A nodal agency to co-ordinate the activities by all three and other such bodies is required. Budget 2018 should fund such an agency and ensure that the students are encouraged to develop skills that will fetch them jobs.

04:56 FM Jaitley has tough task to choose between populism, fiscal prudence

Finance Minister Arun Jaitley will present the current NDA government's fifth and arguably his toughest Budget yet as he seeks to address agriculture distress, create jobs and boost growth while at the same time stick to fiscal prudence. With upcoming assembly polls in eight states - including three major states ruled by the Bharatiya Janata Party (BJP) – and general elections next year, the Budget may see new rural schemes and stepping up of funding towards existing programmes like MNREGA, rural housing, irrigation projects and crop insurance.

Small businesses, which have traditionally formed the core support base of the BJP, may get some sops to ease pain caused to them due to chaotic rollout of the Goods & Services Tax (GST) and demonetisation.

There is also an expectation that common man may get some relief in income tax by way of a raise in the exemption limit.

Also on Jaitley's menu may be upping spending on infrastructure projects like highways and modernisation of railways to boost economic growth that is at a four-year low.

But he has to do all this while sticking to the road map of narrowing one of Asia's largest budget deficits, as failing which, India may fall on the wrong side of global investors and credit rating agencies which had late last year handed out a rare sovereign upgrade. The target Jaitley had previously set out was to lower the fiscal deficit to 3.2% of GDP in FY18 and to 3% in FY19.

In India's first post-GST Budget, there are talks that tax break on capital gains from stock investments may go. Also, it remains to be seen if Jaitley will finally come true on his 2015 promise to lower corporate tax rate to 25% from 30% over four years. He has limited scope to manoeuvre with tax rates as central excise duty, which was levied on goods manufactured in the country, and service tax have both been subsumed in the GST. Constraining him would be the rise in global oil prices.

Some kind of incentives to boost exports of certain sectors may be announced while there may be announcements for start-ups as well as for promoting entrepreneurship.
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