I rise to present the Budget for 2018-19. I extend my warm greetings to everyone on this occasion.
This fiscal year is an important one for the Indian economy. With the introduction of historic reforms such as the Real Estate (Regulation and Development) Act, 2016, demonetisation, the Insolvency and Bankruptcy Code in 2016, the Goods and Services Tax, a new FDI policy and recapitalisation of public sector banks in 2017, the economy is yet to fully adjust to the new rules of the game.
In the backdrop of these reforms, India has improved its credit rating from Baa3 to Baa2, moved to the 100th position in the Ease of Doing Business ranking from 130, and recorded foreign direct investment (FDI) inflows of around $60 billion. On the macro-economic front, inflation and fiscal deficit are well under the target of 4 per cent and 3.2 per cent respectively, and GDP has grown by 6.5 per cent.
There will be a phenomenal transformation in the economy once it adjusts to the new rules. Yet, this government realises that these structural reforms have brought some short-term hardships, particularly in rural areas and to employment generation. Rural wage growth across occupations has slowed to 4-5 per cent, compared to 5-7 per cent in 2016. The fall in prices of agricultural commodities and monsoon failure in some parts of the country have aggravated the situation.
It is the priority of this government to address the plight of farmers; doubling their income by 2022 is a national goal. Madam Speaker, towards this goal, I present the following budgetary proposals:
1) Establish farmer information and farming coordination centres in each district — at ₹5 crore each — where a farmer can access information on farm insurance, soil health card, fertiliser and seed requirements, farming equipment, irrigation techniques and post-harvest preservation.
2) Increase the number of eNAM portals to 1,000 from 417. In addition, the allocation for setting up basic infrastructure facilities is increased to ₹1.5 crore from ₹75 lakh.
3) Establish 100 cold storage units with select eNAMs at ₹250 crore each as a pilot project.
4) Revamp existing procurement centres and cold storage facilities to increase capacity and reduce wastage at a cost of ₹4,000 crore.
5) With 100 per cent FDI norms, the government will pitch for foreign investments in the food processing sector along with direct purchase from farmers.
6) Upgrade 10 national agricultural universities to Centres of Excellence in Horticulture, which can devise region-specific policies to improve horticulture output, cold storage units, value addition and export opportunities for horticulture and fruits.
7) National Organic Farming Centres will be established to train farmers in organic farming.
8) Subsidy at a rate of 40 per cent, along with other incentives, will be provided to farmers and entrepreneurs establishing small to medium-scale food processing units at taluk level.
9) The government will provide export incentive and subsidy in line with global prices to promote export of skimmed milk powder and dairy products from India.
10) Subsidy of 40 per cent will be provided to buy deep-sea mechanised trawlers. A subsidy of 40 per cent will be provided to establish small to medium scale seafood processing industries.
11) Flagship rural employment guarantee scheme MGNREGA will get ₹55,200 crore, an increase of 15 per cent from 2017-18.
12) In a step toward reforming direct taxes, I propose the basic exemption limit be increased to ₹4 lakh, deductions under Section 80C be increased to ₹2 lakh and further deductions allowed under Section 80 EE be increased to ₹0.75 lakh.
13) Allocation for capital expenditure on highways, rural roads and railways will be increased by 15 per cent over last year.
14) For modernisation of 12 major ports and increasing their capacity, I propose to spend ₹24,000 crore.
15) Increase allocation for the Technology Upgrade Fund Scheme in the textile industry to ₹4,000 crore from ₹2,013 crore, which would prop up investments in the downstream segments. Further, commensurate allocations will be made available for interest subvention and Customs duty exemption for raw materials.
16) A package of ₹5,000 crore for the leather and footwear industries including tax and non-tax benefits.
17) Allocation for Pradhan Mantri Awas Yojna is increased to ₹40,000 crore from ₹29,043 crore.
18) Allocation for the 100 per cent electrification scheme is increased to ₹6,000 crore from ₹4,843 crore. An additional ₹3,000 crore will be allocated for modernising the electrical grids.
19) Reduce corporate tax for all companies to 25 per cent from the current 28 per cent.
20) Increase the budget for the technology upgrade fund for SMEs by 15 per cent.
21) Increase allocation for micro loans under the Mudra Scheme to ₹2.8 lakh crore
22) Create a fund of ₹7,000 crore to boost electronic exports from India.