Contents
Economic Survey 2017-18 ..................................................................................................................................... 1
Union budget 2018-19 Highlights ....................................................................................................................... 4
On January 29, 2018, Union Finance Minister, Arun Jaitley tabled the Economic Survey
2017-18 in Parliament. Economic Survey is a flagship annual document of the Ministry of
Finance, Government of India.
• Economic Survey 2017–18 reviews the developments in the Indian economy over the
previous 12 months and provides a summary of the performance on major development
programmes and highlights the policy initiatives of the government and the prospects for
the upcoming year.
• Economic Survey2017–18, has been prepared by Chief Economic Adviser, Arvind
Subramanian.
• This year, the colour of the Economic Survey document is Pink. It has been chosen
to lay special emphasis on Gender and Son meta-preference prevailing in Indian society.
GDP Growth:
As per Economic Survey 2017-18, Indian economy is expected to grow between 7 per cent
and 7.5 per cent in the next fiscal year i.e. April 1, 2018 – March 31, 2019.
• The forecasted growth will primarily come on account of series of major reforms ( including
roll out of Goods and Services Tax, Public sector bank recapitalisation plan, Indian
Bankruptcy Code and relaxations in Foreign Direct Investment limits) undertaken over the
past one year. On attaining 7-7.5% growth, India will regain its status of fastest growing
major economy.
• However, increase in crude oil prices in the international market and protectionist
tendencies adopted by some countries have been identified as key risks to growth
in 2018-19.
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• GDP growth for the current fiscal year, ending March 31, 2018 is expected to be 6.75 per
cent.
• Sectoral Growth: Services growth for FY 2017-18 is expected to be 8.3 percent while
industry and agriculture are expected to grow at 4.4 percent and 2.1 percent respectively.
Inflation:
Economic Survey has revealed that average consumer price inflation based headline
inflation declined to a six-year low of 3.3 per cent in 2017-18.
• Owing to this, Indian economy is now moving from a phase of high and variable inflation to
a more stable price regime.
• During 2017-18, Inflation in 17 Indian states was below 4 per cent.
During April-November 2017 period, direct tax collections of the Centre grew by 13.7 per
cent, which is in line with previous year.
• There has been an addition of about 18 lakh individual income tax filers since
November 2016.
During April-November 2017 period, indirect tax collections of the Centre grew by 18.3 per
cent, which is in line with previous year.
• During April-November 2017, States’ share in taxes grew by 25.2 per cent.
• However, clearer outcome in indirect taxes during this year will depend on the final
settlement of GST accounts between the Centre and the States.
• There has been a fifty percent increase in the number of indirect taxpayers.
• As on December 2017, number of unique GST registrants stood at 9.8 million,
which is slightly more than the total Indirect Tax registrants under old tax system.
Top 1% Indian exporters account for only 38 percent of exports. This proportion is much
higher in other countries - 72, 68, 67, and 55 % in Brazil, Germany, Mexico, & USA, respectively
• For the first time, data on the international exports of states has
been presented in the Economic Survey.
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• Five states - Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana account
for 70 per cent of India’s exports.
• India’s internal trade in Goods & Services is about 60 per cent of GDP.
• Rebate of State Levies (ROSL) has boosted exports of readymade garments (man-made
fibers) by about 16 per cent.
Gender Bias:
Economic Survey 2017-18 outlined that Indian society exhibits a strong desire for a male
child.
• This mindset is reflected from the fact that most parents continued to have children until
they get number of sons.
• Details about various scenarios leading to skewed sex ratios have also been given in the
survey.
Bridging the gender gaps in education, skill development, employment and earnings and reducing
social inequalities have been outlined as underlying goals of the development strategy.
• During 2012-13 to 2014-15, expenditure on social services by the Centre and States as a
proportion of GDP had remained in the range of 6 per cent while in 2017-18, it stood at
6.6 per cent.
Economic Survey has warned that Climate change could reduce annual agricultural incomes
in the range of 15 percent to 18 percent on average, and up to 20 percent to 25 percent
for unirrigated areas.
• This estimate holds lot of significance as agriculture growth and farm revenues have
stagnated in the past four years due to repeated monsoon failures.
• To counter this challenge, the survey has recommended bringing science and technology to
farmers, replacing untargeted subsidies by direct income support, and extending irrigation
through efficient drip and sprinkler technologies.
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Insurance penetration (the ratio of premium underwritten in a given year to the gross domestic
product) in India increased to 3.49% in 2016-17 from 2.71% in 2001.
• About 66 per cent of pending tax dispute cases accounted for only 1.8 per cent of value at
stake.
• The survey mentions, collections of direct taxes by Indian states and other local
governments, is significantly lower as compared to their counterparts in other federal
countries.
• Agriculture, education, and employment will be areas of focus in the medium
term.
• The survey asserted that growth in investments rather than growth in savings leads to
economic growth.
On February 1, 2018, Union Minister for Finance and Corporate Affairs, Arun Jaitley
presented Union Budget 2018-19 in Parliament.
Click here to read the source - http://pib.nic.in/PressReleseDetail.aspx?PRID=1518569
Focus Areas of Union Budget 2018: To strengthen agriculture, rural development, health,
education, employment, Micro Small and Medium Enterprises (MSME) and infrastructure sectors.
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• Rs 2600 crore has been allocated for 96 deprived irrigation districts Under Prime Minister
Krishi Sinchai Yojna-Har Khet ko Pani.
• Facility of Kisan Credit Cards will be extended to fisheries and animal husbandry farmers,
which shall help them to meet their working capital needs.
• Export of agri-commodities will be liberalized.
• All the forty two Mega Food Parks will get state-of-the-art testing facilities.
• Jaitley announced a special Scheme to support the efforts of the governments of Punjab,
Haryana, Uttar Pradesh and Delhi to address air pollution in the Delhi-NCR region by
subsidizing machinery required for management of crop residue.
• Specialised agro-processing and financial institutions in Food Processing Sector to be
promoted.
Important Allocations:
Volume of institutional credit for agriculture sector will be raised to: Rs. 11 lakh
crore
Operation Greens Rs. 500 crore
Organized cultivation of highly specialized medicinal and aromatic plants Rs. 200 crore
Allocation of Ministry of Food Processing Rs.1400 crore
Re-structured National Bamboo Mission Rs. 1290 crore
96 deprived irrigation districts Under Prime Minister Krishi Sinchai Rs 2600 crore
Yojna-Har Khet ko Pani
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• Ekalavya Model Residential School (on par with Navodaya Vidyalayas) will be set up by
2022 to provide the best quality education to the tribal children in their own environment.
• “Revitalising Infrastructure and Systems in Education (RISE) by 2022‟ with a total
investment of Rs. 100000 crore (in next four years) has been announced. Objective of this
initiative is to step up investments in research and related infrastructure in premier
educational institutions, including health institutions. Higher Education financing
Agency (HEFA) will be set up to look after the funding for this initiative.
• “Prime Minister’s Research Fellows (PMRF)” Scheme will be launched, under which,
1000 best B.Tech students will be identified each year and will be provided facilities to
undertake Ph.D in IITs and IISc. These students will be given generous fellowship amount.
• Right to Education Act to be amended to enable training of more than 13 lakh untrained
teachers; Integrated B. Ed programme to be initiated to improve quality of teachers.
• Aims to move from black board to digital board schools by 2022.
• Set up two new full-fledged Schools of Planning and Architecture (SPA) selected on
challenge mode.
• 18 new SPAs would be established in the IITs and NITs as autonomous Schools on
challenge mode.
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Important Allocations:
Estimated budgetary expenditure on health, education and social protection Rs. 1.38 lakh crore
Allocation for National Health Policy, 2017 Rs. 1200 crore
Allocation to provide nutritional support to all TB patients Rs. 600 crore
Allocation on National Social Assistance Programme Rs. 9975 crore
Employment Generation:
Citing an independent study, Mr. Jaitley stated that 70 lakh formal jobs will be created in 2018-
19.
• Government will contribute 12% of the wages of the new employees in Employees
Provident Fund (EPF) for all the sectors for next three years.
• It has been proposed to make amendments in the EPF and Miscellaneous Provisions Act,
1952 to reduce women employees' contribution to 8% for first three years of their
employment against existing rate of 12% or 10% with no change in employers'
contribution.
• Outlay for the textiles sector in 2018-19 will be Rs.7148 crore.
Infrastructure Development:
For 2018-19, budgetary allocation on infrastructure has been increased to Rs.5.97 lakh
crore against estimated expenditure of Rs.4.94 lakh crore in 2017-18.
• In a bid to boost tourism, ten prominent tourist sites will be developed into Iconic Tourism
destinations.
• Approval for 35000 kms road construction under Phase-I Bharatmala Programme
has been granted. Estimated cost will be Rs.535000 crore.
• India needs investment in excess of Rs 50 lakh crore in the infrastructure sector.
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• Under Prime Minister Awas Scheme (Rural), 51 lakhs houses in year 2017-18 and 51 lakh
houses during 2018-19 will be constructed exclusively in rural areas.
• Construction of 37 lakh houses sanctioned under Prime Minister Awas Scheme (Urban).
Railways:
For the year 2018-19, Railways Capital Expenditure has been pegged at Rs.148528
crore.
• 4000 kilometers of electrified railway network will be commissioned in near future.
• During 2018-19, 12000 wagons, 5160 coaches and approximately 700 locomotives will be
procured.
• Government to eliminate 4267 unmanned level crossings in the broad gauge network in the
next 2 years.
• All stations with more than 25000 footfalls will have escalators.
• All trains to be progressively provided with Wi-Fi, CCTV and other state-of-the-art
amenities.
• Specialized Railways University to be set up at Vadodara to train manpower required for
high speed rail projects.
Important Allocations:
Total allocation on infrastructure Rs.5.97 lakh
Railways Capital Expenditure Rs.148528 crore
Air Transport:
Under a new initiative ‘NABH Nirman’, current airport capacity will be expanded by more
than five times to handle a billion trips a year.
• 56 unserved airports and 31 unserved helipads would be connected under the Regional
connectivity scheme of UDAN (Ude Desh ka Aam Nagrik).
• NABH Nirman initiative announced with allocation of Rs 60 crores to expand airport
capacity.
• Rs 51,000 crore allocated to add 90 kilometers of double line tracks and 150 km additional
suburban network in Mumbai.
• Rs 17,000 crore allocated to add 160 km of suburban network in Bengaluru.
• Airport Authority of India (AAI) has 124 airports; Under NABH Nirman propose to expand
airport capacity by more than 5 times to handle 1 billion trips a year.
• UDAN (Ude Desh ka Aam Naagrik) scheme will connect 56 unserved airports and 31
unserved helipads.
Digital Economy:
NITI Aayog will initiate a national program to direct efforts in artificial intelligence.
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Defence:
India's defence budget has been hiked by 7.81% to Rs 295511 crore from Rs 274114 crore
last year
Development of two defence industrial production corridors has been proposed.
• Industry friendly Defence Production Policy 2018 will be brought out to promote
domestic production by public sector, private sector and MSMEs.
Disinvestment:
• Disinvestment target for 2018-19 is Rs.80000 crore.
• Approved listing of 14 Central Public Sector Enterprises (CPSEs), including two insurance
companies, on the stock exchanges.
• A National Committee, chaired by the Prime Minister, which includes Chief Ministers of all
the States, representatives from across the political spectrum, Gandhians, thinkers and
eminent persons from all walks of life, has been constituted to formulate a Commemoration
Programme.
Fiscal Management:
Revised Estimates for expenditure in 2017-18 are Rs.21.57 lakh crore (net of GST
compensation transfers to the States).
• For 2018-19, Total Expenditure will be Rs. 24.42 lakh crore
• Jaitley has projected a Fiscal Deficit of 3.3% of Gross Domestic Product (GDP) for
the year 2018-19.
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• It has been proposed to accept key recommendations of the Fiscal Reform and Budget
Management Committee to bring down Central Government’s Debt to GDP ratio to 40%.
• Number of Effective Tax Payers has increased from 6.47 crore at the beginning of Financial
year 2014-15 to 8.27 crore at the end of 2016-17.
• Companies registered as Farmer Producer Companies, with an annual turnover upto Rs.
100 crore will be eligible for 100 per cent deduction on profit for a period of five years from
financial year 2018-19.
• For Corporate Tax, it has been proposed to extend the reduced rate of 25 percent
currently available for companies with turnover of less than 50 crore (in Financial Year
2015-16), also to companies reporting turnover up to Rs. 250 crore in Financial
Year 2016-17.
• Salaried tax payers have been allowed a Standard Deduction of Rs. 40,000 in
place of the present exemption allowed for transport allowance and
reimbursement of miscellaneous medical expenses.
• This year, there are no changes in the structure of income tax of individuals.
• For senior citizens, exemption of interest income on deposits with banks and post offices
are proposed to be increased from Rs. 10,000 to Rs. 50,000.
• Long Term Capital Gains exceeding Rs. 1 lakh will be taxed at the rate of 10
percent.
• It has been proposed to increase the cess on personal income tax and corporation tax to 4
per cent from the present 3 percent. The new cess will be called the “Health and
Education Cess” and is aimed to take care of the education and health care needs of
Below Poverty Line (BPL) and rural families.
• Customs duty on mobile phones has been increased from 15 percent to 20 percent. This is
an attempt to incentivise ‘Make in India’.
• Education Cess and Secondary and Higher Education Cess on imported goods will be
abolished and will be replaced by Social Welfare Surcharge at the rate of 10 percent of the
aggregate duties of Customs, on imported goods.
• It has been proposed to change the name of the Central Board of Excise and
Customs (CBEC) to the Central Board of Indirect Taxes and Customs (CBIC).
• Indian economy is now 2.5 trillion dollar economy making it the seventh largest in the
world. India is expected to become the fifth largest economy with growth rate of 8 percent
very soon.
• International Monetary Fund (IMF), in its latest update, has forecasted that India will grow
at 7.4% next year.
• Payments exceeding Rs. 10,000 in cash made by trusts and institutions to be disallowed
and would be subject to tax.
• Propose to introduce a tax on distributed income by equity oriented mutual fund at the rate
of 10%.
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• GST collections projection pegged at Rs 7.43 lakh crore in full year 2018-19 as against Rs
4.44 lakh crore in 9 months of current fiscal.
• Govt makes PAN mandatory for any entity entering into a financial transaction of Rs 2.5
lakh or more.
• E-Assessment of Income Tax to be rolled out across the country to transform age old
assessment procedure.
• Changes proposed to the Custom Act to improve Ease of Doing Business.
Miscellaneous:
A unified authority for regulating all financial services will be established in International Finance
Service Centre (IFSCs) in India.
• Gold Trading: Policy will be formed to promote Gold as an asset class. Regulated Gold
exchanges will be established. Gold Monetisation scheme will be revamped.
• Three Public Sector Insurance companies - National Insurance Co. Ltd., United India
Assurance Co. Ltd., and Oriental India insurance Co. Ltd., will be merged into a
single insurance entity.
• Monthly emoluments of President, Vice President and Governor have been revised
to Rs. 5 lakh, Rs. 4 lakh and Rs. 3.5 lakh.
• For emoluments paid to the Members of Parliament, it has been proposed to make
necessary changes to refix the salary and allowances with effect from April 1, 2018.
Besides, the law will also provide for automatic revision of emoluments every five years.
• 150 crore has been set aside for the activities leading to the commemoration programme
to celebrate the 150 Birth Anniversary of Mahatma Gandhi on October 2, 2019.
• Pradhan Mantri Vaya Vandana Yojana (under which an assured return of 8 per cent is given
by Life Insurance Corporation of India) will be extended up to March, 2020.
• Special scheme for free dialysis of poor have been initiated.
• scheme called Galvanizing Organic Bio-Agro Resources Dhan (GOBAR-DHAN) to be
launched for conversion of cattle dung and solid waste in farms to compost, fertilizer, bio-
gas and bio-CNG.
• Proposed to take up construction of tunnel under Sela Pass
• Dedicated Affordable Housing Fund (AHF) to be established in National Housing Bank
(NHB).
• Launch Scheme to assign a unique ID to every individual enterprise in India.
• Department of Commerce to develop National Logistics Portal as a single online window to
link all stakeholders.
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