Union Budget 2018: Key Highlights

Here are the key announcements from the Union Budget...

Arun Jaitley, Indias finance minister, looks on during a panel discussion at the Bloomberg India Economic Forum in Mumbai.
Arun Jaitley, Indias finance minister, looks on during a panel discussion at the Bloomberg India Economic Forum in Mumbai.

Finance Minister Arun Jaitley today presented a rural-focused Union Budget for financial year 2018-19 that provides for higher minimum support prices and an increased farm credit target. He also introduced a health insurance scheme for over 10 crore families with a cover of Rs 5 lakh a year. Jaitley brought back the Long-Term Capital Gains Tax on equity gains of above Rs 1 lakh.

Here are the key announcements:

Fiscal Deficit

FY19 fiscal deficit estimated at 3.3 percent of the GDP.
  • Fiscal deficit for 2017-18 is likely to be higher at 3.5 percent compared to the targeted 3.2 percent of the GDP.
  • FY18 revenue receipts revised estimates of Rs 21.5 lakh crore versus budget estimate of Rs 21.4 lakh crore.
  • Direct taxes rose 18.6 percent as of Jan. 15.

Direct Taxes

No change in income tax slabs for individuals.
  • Standard deduction of Rs 40,000 for the salaried for transport and health.
  • Senior citizen deduction for health insurance raised to Rs 50,000.
  • To allow 100 percent deduction to some farmer producer companies.
  • Reduced corporate tax of 25 percent extended to companies with an annual turnover of Rs 250 crore.

Long-Term Capital Gains Tax

10 percent long-term capital gains tax on equity gains above Rs 1 lakh.
  • Short-term capital gains tax for selling shares within one year remains at 15 percent.
  • Health and education cess increased to 4 percent from 3 percent.

Indirect Taxes

  • Customs duty on mobile phones raised to 20 percent from 15 percent.
  • Customs duty on raw cashew reduced to 2.5 percent from 5 percent.
  • Customs duty on some mobile and television parts increased to 15 percent.


Target to raise funds by selling stakes in state-run companies raised to Rs 80,000 crore.
  • National Insurance Company, United Insurance Company, United India Assurance and Oriental Insurance will be merged and listed.
  • Government to raise more than Rs 1 lakh crore through divestment in the ongoing financial year against a target of Rs 72,500 crore.


  • To raise minimum support price for kharif season crops to 1.5 times of agri production cost—that is cost plus 50 percent.
  • Total credit to agriculture target set at Rs 11 lakh crore for FY19.
  • Strengthening the e-national agricultural market network.
  • The government will spend Rs 14.34 lakh crore on rural infrastructure across various schemes and departments.


  • National Health Protection Scheme for 10 crore families.
  • It provides a health cover of Rs 5 lakh per family a year.
  • Rs 600 crore to provide nutritional support for tuberculosis patients.

MSMEs, Startups

Mudra scheme lending target set at Rs 3 lakh crore for FY19.
  • Government to work towards resolving bad loans of micro, small and medium enterprises.
  • To contribute 12 percent of wages of new Employees’ Provident Fund subscribers for three years.
  • Additional measures to aid venture capital/angel investors in startups.


  • To invest Rs 1 lakh crore on education infrastructure over four years.
  • To initiate integrated B.Ed programme for aspiring teachers
  • Amended RTE Act to train 13 lakh teachers.
  • 18 schools of planning and architecture to be set up.

SC/ST Upliftment

  • FY19 allocation for scheduled tribes at Rs 39,135 crore.
  • FY19 allocation for scheduled caste allocation at Rs 56,619 crore.


Rs 5.97 lakh crore for infrastructure in FY19 compared with Rs 4.94 lakh crore in the revised estimates of FY18.
  • Smart city projects worth Rs 20,852 crore in progress.
  • Plan 99 smart cities with outlay of Rs 2.04 lakh crore.
  • To complete 9,000 km of National Highways in FY18.
  • NHAI to organise road assets into an special purpose vehicle.

Railways, Air Connectivity

Railways to get Rs 1.48 lakh crore for capital expenditure.
  • Rs 40,000 crore will be spent on upgrading Mumbai train systems.
  • Plan for 160 km suburban rail line in Bengaluru at Rs 17,000 crore.
  • Aim to electrify 4,000 km of railway lines in FY19.
  • Railway stations with more than 25,000 footfalls to have escalators.
  • Regional air connectivity scheme UDAN to connect 56 unserved airports, 31 heliports.

Digital India

Government doesn’t consider cryptocurrencies as legal tender.
  • One lakh gram panchayats have been connected under BharatNet.
  • FY19 allocation for rural telecom set at Rs 10,000 crore.
  • To allocate Rs 3,073 crore under Digital India programme.

Other Schemes

  • Free cooking gas aim raised to 8 crore poor households under Ujjwala Scheme.
  • Under the ‘Swacch Bharat’ scheme, six crore toilets made so far, aim to make two crore more. To increase spending on rural sanitation.
  • Dedicated affordable housing fund to be set up.
  • Scheme to combat air pollution in National Capital Region to be launched.