Finance Minister Arun Jaitley presented the Union Budget 2018-19 today at 11 AM. According to Mr. Jaitley, the government has implemented a series of fundamental structural reforms to help the economy.

Sector-wise highlights of the budget:

Fiscal Situation:

  • Fiscal deficit is currently 3.5% of the GDP at 5.95 lakh crore.
  • GST will now be received only for 11 months.

Tax:

  • 100% tax deduction is allowed to co-operative socities
  • Corporate tax of 25% will be extended to companies with turnover of up to Rs.250 crore in FY 2016-17
  • Exemptions in income of Rs. 10,000 from Bank FDs and post offices for senior citizens
  • The government has also proposed an exemption of interest income on bank deposits to Rs. 50,000 for senior citizens
  • No change in personal income tax rates
  • Deduction of Rs.40,000 allowed for transport and medical reimbursement for salaried employees
  • Long term capital gains exceeding Rs.1 lakh will be taxed at 10% with indexation

Rural Economy:

  • 8 crore poor women to get new LPG connections
  • 4 crore poor people to get power connection under PM Saubhagya Yojana
  • Government to give Rs. 9,975 crore for social security schemes
  • Plan to construct 2 crore toilets under Swach Bharat Mission
  • Plan to build 1 crore new houses in rural areas

Education:

  • Focus on improving quality of education using technology
  • Education cess increased from 3% to 4%

Imports & Exports:

  • Social welfare surcharge of 10% to be charged on imported goods
  • Customs on mobile phones will be increased from 15% to 20%, television and accessories at 15%

Health:

  • The government has launched National Health Protection Scheme to cover 10 crore poor families
  • The government plans to give upto Rs.5 lakhs per family for secondary and tertiary care

Agriculture:

  • Government has allocated Rs.200 crore for cultivation and associated industry
  • The Minimum Support Price of all crops to increase to at least 1.5 times that of production cost
  • Government allocated Rs.500 crore for Operation Green to promote processing facilities and professional management
  • Government allocated Rs.1290 crore for the National Bamboo Mission to promote the bamboo sector

MSME:

  • 4.6 lakh crore allotted under the MUDRA scheme
  • 3,794 crore allotted in the form of capital support and interest subsidy

Railways:

  • The government has allotted capital expenditure of Rs.1,48,528 crore
  • 11,000 crore allotted for Mumbai rail network, and Rs.17,000 for Bengaluru Metro

Aviation:

  • Government to expand airport capacity by 5 times to 1 billion trips a year
  • 60 crore allocated to the aviation sector
  • Plan to connect 64 unconnected airports under UDAN scheme

Social Security:

  • Government to expand PM Jan Dhan Yojana by including 16 crore accounts under micro insurance and pension schemes

Employee Schemes:

  • Government to contribute 12% of wages of new employees in EPF in all sectors for next 3 years
  • Women contribution to EPF reduced to 8% for first 3 years

Infrastructure:

  • Government to develop 35000 KM under phase 1 with Rs.5.35 lakh crore under Bharatmala project

Petroleum/Diesel:

  • Excise on unbranded diesel and petrol cut by Rs.2

Markets:

  • Government plans to take additional measures to strengthen environment for venture capitalists and angel investors
  • RBI norms to nudge companies to access bond market for funds

Technology:

  • Allocation to Digital India scheme doubled to Rs.3073 crore
  • Measures to be taken to stop cryptocurrency circulation as it is not considered a legal tender
  • Government to explore usage of Blockchain technology
  • 5 lakh WiFi Hotspots to provide broadband access to rural citizens

Companies:

  • Government plans to assign unique IDs to companies
  • Revised disinvestment target Rs.1 lakh crore
  • National Insurance Company, Oriental Insurance Company and United Assurance Company to be merged into one entity and subsequently listed

Miscellaneous:

  • 7,148 crore allocated for textile sector
  • Food subsidy to rise to Rs.1.69 lakh crore
  • Increase in pay of parliamentarians taking inflation in account
  • Defence allotment increased to Rs.2.82 crore

Though many new announcements have been made, many of them still need clarifications. We will have to wait some more before we know full well how the changes will affect investors and the economy in general.

While the new long-term capital gains tax is a bit of a surprise, investors are very bullish about the long-term performance of mutual funds.

See some of the best mutual funds to invest in 2018 – Grow 30 here.

Happy investing!