1. UNION
BUDGET
2018-19
Medha Girotra
Head - Delhi and
Public Affairs Lead
Finance Minister Arun Jaitley’s budget speech, the last before the ensuing general elections, focused on a ‘New India’ – marked by
a boost for agriculture, rural prosperity, robust infrastructure, healthcare for all, increased employment, and quality education. MSP
for all unannounced kharif crops will be at least one and a half times of their production cost. A fund with a corpus of ₹2000 crore
was announced for developing and upgrading infrastructure in agricultural markets. Along with proposing cluster-based develop-
ment of agri-commodities and regions, the budget doubled the allocation on food processing. A prominent announcement on the
allied sectors in agriculture included two funds with a total corpus of ₹10,000 crore for infrastructure development in fisheries,
aquaculture, and animal husbandry.
The world’s largest government-funded healthcare programme was a key highlight of the budget. The flagship National Health
Protection Scheme will cover over 10 crore poor and vulnerable families. Besides, announcement of a dedicated Affordable Housing
Fund and construction of 51 lakh houses in rural areas reiterated the government’s commitment to rural development and affordable
housing. The budget provided a slew of measures to strengthen the education sector with a focus on training of teachers, tribal educa-
tion, research and related infrastructure. The Revitalising Infrastructure and Systems in Education (RISE) initiative by 2022 with an investment of ₹1 lakh
crore is a significant announcement.
Despite Mr. Jaitley’s acknowledgment of growth in direct taxes, the expectation of a reduction in income tax rate remained unmet, barring the standard
deduction of ₹40,000 in transport allowance and reimbursement of miscellaneous medical expenses. The corporate sector, however, got limited relief with a
reduced tax rate of 25% extended to companies that reported up to ₹250 crore turnover in 2016-17. While the move will benefit MSMEs, it will not apply to
the wider industry. Another announcement that sent the stock markets tumbling was the 10% tax on long-term capital gains exceeding ₹1 lakh from equities
held for more than a year. While the budget speech did not cover infrastructure in detail, there was a promise of additional railway corridors and increased
focus on smart cities. In a move to further promote Make in India, the budget increased customs duties under various categories including mobile phones
and parts of automobiles and television. Although, the overall sentiment following the budget is yet to be assessed but the plunge in stock markets is an
indication enough. In a volatile trade, the BSE Sensex closed lower by 58.36 points today while the Nifty 50 fell 10.80 points.
A balance between fiscal prudence and populism was critical for this Union Budget. The impact of the various schemes will now determine whether the
budget fulfils the promise.
Contact the PA practice:
Medha Girotra, Head - Delhi and Public Affairs Lead
Medha.Girotra@Edelman.com
Edelman India Private Limited
Vatika Triangle, 6th Floor, Sushant Lok-1, Block A
Gurugram, Haryana 122 002, India
A@EdelmanIndiaP

2. UNION BUDGET 2018-19 2
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AGRICULTURE
• MSP for Kharif crops will be 1.5x cost of production.
• Allocation to Ministry of Food Processing is being
doubled to INR 1400 cr
• INR 500 cr for 'operation green' to promote FPOs, agri
logistics and processing
• Agri-Market Infrastructure Fund with a corpus of INR
2000 cr
• State of art facility for 42 mega food parks for agri
exports
• Allocation of INR 10,000 cr for fisheries, aquaculture
and animal husbandry
POOR & UNDERPRIVILEGED
• 8 cr poor women to be given free LPG connections.
• Government to construct around 2 cr toilets
• Construction of 51 lakh houses exclusively in rural
areas.
• Increased allocation of INR 5750 cr to National Rural
Livelihood Mission
HEALTH & SANITATION
• INR 1,200 cr allocated for 1.5 lakh healthcare centres
• National Health Protection Scheme to provide up to
INR 5 lakh/family/year to over 10 cr poor families
• 24 new medical colleges.
• Additional INR 600 cr to provide nutritional support to all
TB patients
• INR 15,343 cr allocated for construction of 188 lakh
Individual Household Latrines under the Swachh Bharat
Mission (gramin)
EDUCATION
• 13 lakh untrained teachers to get trained under Right to
Education
• Ekalavya Model Residential School by 2020 for blocks
with 50% ST population
• ʻʻRevitalising Infrastructure and Systems in Education
(RISE) by 2022ʼʼ with total investment of INR 1,00,000cr
• 18 new SPAs in the IITs and NITs as autonomous
Schools
• ʻʻPrime Ministerʼs Research Fellows (PMRF)ʼʼ Scheme
for 1,000 best B.Tech students
• INR 4,213 cr under the Rashtriya Madhyamik Shiksha
Abhiyan for in-service training of 4.5 lakh teachers; ICT
infrastructure for 1,500 new schools; 600 new secondary
schools.
MSME
• INR 3794 cr to MSME Sector for giving credit support,
capital and interest subsidy and innovations
• Target of INR 3 lakh cr for lending under MUDRA for
FY18-19
EMPLOYMENT GENERATION
• Govt contribution of 12% of the wages of the new
employees in the EPF for all the sectors for next 3 years
• Facility of fixed term employment to be extended to all
sectors.
• Reduction in women employees' contribution to 8% for
first 3 yrs of their employment against existing rate of 12%
• Setting up of a model aspirational skill centre in every
district of the country.
INFRASTRUCTURE
• Proposed a tunnel under Sela Pass. INR 12,420 cr for
enhancing road connectivity in North-East in areas of
strategic importance and international borders
• INR 29,663 cr Bharatmala project to construct 34,800
km of road
• INR 6,169 cr allocated under the Smart Cities Mission
for smart roads, street redesign, smart parking,
Integrated Command and Control Centre, rejuvenatio
of heritage sites, water bodies and riverfront development
• INR 6,000 cr allocated under AMRUT
• INR 4,515 cr allocated under the Pradhan Mantri Awas
Yojana (Urban) for central assistance to construct 51 lakh
houses, targeting 75% occupancy of houses
• INR 21,000 cr for construction of 49 lakh houses under
the Pradhan Mantri Awaas Yojana (Gramin)
• 8,000 cr allocated to Bharat Net Phase-I and II for
broadband connectivity to 1.5 lakh gram panchayats
RAILWAYS
• Railwaysʼ Capex for the year 2018-19 has been pegged
at INR 1,48,528 cr.
• 15,000 cr outlay for commissioning of 190 km of metro
rail network in Delhi (114 km), Chennai (15.5 km),
Bangalore (12.8 km), Ahmedabad (6.3 km), Nagpur
(11.7 km), and Noida/Gr. Noida (29.7 km)
• INR 28,490 cr for development of 1,000 route km of
new railway lines
• INR 17,359 cr for track doubling of 2,100 route km of
railway lines
• INR 6,302 cr for railway electrification projects
• INR 32,006 cr for railway rolling stock and locomotives
TAXATION
• 100% deduction to companies registered as Farmer
Producer Companies with annual turnover up to INR 100cr
• Reduced rate of 25% corporate tax to companies with
turnover up to INR 250 cr in the financial year 2016-17
• Standard deduction of INR 40,000/- to salaried employees
• Exemption of interest income on deposits with banks and
post offices for senior citizens to be increased to INR
50,000/-
• Long term capital gains from investment in listed equities,
exceeding INR 1 lakh to be taxed at 10%
• 10% tax on distributed income by equity oriented mutual
fund
• Existing 3% education cess will be replaced by a 4%
“Health and Education Cess” to be levied on the tax
payable.
• Increase in customs duty on mobile phones from 15% to
20%,
• Increase in customs duty on certain parts of TVs to 15%.
• 10% Social Welfare Surcharge, on the aggregate duties of
customs, on imported goods
MAJOR
announcements

3. UNION BUDGET 2018-19 3
BALANCING AGE-OLD
PRIORITIES WITH NEW-AGE
OPPORTUNITIES
by Nirankar Saxena
Deputy Secretary General, FICCI
Three years of the Narendra Modi-led BJP Government has
catapulted India to the status of one of the world’s fastest growing
economies. A series of economic reforms has enabled India to
achieve a favorable position on the World Banks’ Ease of Doing
Business Rankings, with the country breaking into the list of top
100 for the first time. In the quarter of September 2017, India’s
GDP growth improved to 6.3% from a three-year low of 5.7%,
suggesting a possible shrugging of the impacts of demonetisation
and GST. The International Monetary Fund (IMF) has also
forecasted a growth of 7.4% for India for the upcoming financial
year.
Capitalising on these gains, the Union Finance Minister has
presented a wide-ranging comprehensive budget for the year
2018-19, emphasising on better health, agriculture and social
security. It is encouraging to see that the Government has
continued to deliver on its promise of improving ease of doing
business. The corporate tax for companies with an annual
turnover of ₹ 250 crores has been lowered to 25%, thus giving a
major boost to the MSME sector. The Government has also
identified 372 basic business reform actions which will be taken
up by each state. On the basis of these actions, states will then
will compete with each other on ease of doing business.
Strengthening of business environment for venture capitalists
and angel investors will further assist budding start- ups. The use
of blockchain technology will help usher in a digital economy.
Together, these shall offer a fillip to the Hon’ble PM ambitious
Startup India initiative.
To encourage corporates to tap the bond market for funds, SEBI
is likely to consider mandating large firms to meet about 1/4th of
their financing needs from bond market. The government has
also committed to evolve a scheme to provide a unique identity
to every enterprise in India on the lines of Aadhaar.
The push to research, innovation and investment on big data
technology, robotics and artificial intelligence are also some
commendable novel initiatives announced as part of the current
budget and reflect the government’s tech savviness.
Overall, Union Budget 2018-19 has proven to be a
comprehensive, wide ranging and balanced budget, emphasising
better health, education, infrastructure and agriculture. If the
fine print delivers on the big promises made in the Budget
speech, then the ease of living will ultimately reflect on
consumption patterns, employment generation, and benefit both
big and small businesses.
RAILWAY MODERNISATION ON TRACK
by Ravi S. Kochak Former Addl. Member (Production Units), Indian Railways
This year’s budget has addressed several areas that are important for the growth of the Indian Railways. These include infrastructure and
redevelopment, freight corridors, safe railway infrastructure, governance, intelligent transport systems, tourism, etc.
While allocating a capital expenditure of ₹1,48,528 crores is much welcome in this regard, it is essential that a mechanism is setup to ensure that
the money is spent efficiently. Steps like redevelopment of 600 railway stations, provision of wi-fi on trains, manufacturing of modern train-sets
at Integral Coach Factory (ICF) and development of railway land near railway stations to garner revenue would go a long way in ensuring
efficient growth of the Indian Railways. However, rail connectivity to ports and industrial clusters as well as railway sidings also need to be
expedited. Similarly, while the dedicated freight corridors (East and West) are in full swing, as mentioned by the Hon’ble Minister, expediting
these in North-South, East-West, East-Coast through Public Private Partnership (PPP) is urgently required. Furthermore, it is essential that
Green Gensets are also used in power cars and standby DG sets in the railway premises to reduce pollution.
This year’s budget also focuses on other safety & welfare aspects. For instance, Fog vision & accident avoidance systems & utilization in next 5
years of ₹1 lakh crores on safety, exhibits the government’s increased commitment towards passenger safety. Specialized knowledge on latest
railway technologies, bullet trains, etc. would be imparted at a railway university which is to be set up in Vadodra for railway engineers. Lakhs of
jobs would also be created in the Indian Railways in the next few years with the doubling, tripling & fourth lines of 18,000kms in 2018-19 and
laying 13kms of track each day. This would generate about 3 lakh jobs per year.
In short, Union Budget 2018 aspires for a world-class railway infrastructure in India with an increased focus on safety and skill development.

4. UNION BUDGET 2018-19 4
MAKE IN INDIA BUDGET:
FIELD DAY FOR AGRI
EXPORTS
by TS Vishwanath, Partner APJ-SLG
Law offices and Senior Advisor,
Edelman India
The Union Budget for 2018-19 presented by Finance Minister
Arun Jaitley in Parliament today focused substantially on the
agriculture sector. Given the fact that nearly all analysts were
expecting a populist Budget, this did not come as a surprise.
However, while pandering to the populist sentiment, the
Minister ensured that the proposals provided a well-rounded set
of initiatives that can boost the agricultural sector.
Importantly, it went beyond just looking at providing assistance
to small and marginal farmers. It also set up a target for
agricultural exports of US$100 billion per annum. The current
exports of agricultural products from the country stands at about
US$30 billion per annum.
The government will now be liberalizing agri-commodity
exports from the country that will help build a strong base for
commodity markets in the country. Further, the government has
realized that agricultural exports cannot happen till the products
meet the high standards that are expected in other markets,
Therefore, the minister announced that the government proposes
to set up state-of-the-art testing facilities in all the 42 Mega Food
Parks. Testing of agricultural products has become a very
important issue given the adherence to strict regulations like
traceability and push towards bringing down the use of
pesticides in agricultural products in global markets.
The government’s proposal for “Operation Greens” that will
promote Farmer Producer Organizations (FPOs), agri-logistics,
processing facilities and professional management to help build
adequate infrastructure to keep vegetables and fruits fresh can
also go a long way in protecting the large-scale rotting of fruits
and vegetables in the country. This move will also help develop a
strong food processing industry that can then export value added
products. The tax benefits that will be available to FPOs will
provide greater incentives to them for exports as also tap the
domestic market. Building a healthy domestic market for
agricultural products can help companies and producer
organisations also look at the lucrative markets in other
countries for value added agricultural products. >>
BOOST TO INFRA, AFFORDABLE HOUSING
REAL-ESTATE LEFT WANTING MORE
by Neeraj Bansal, Partner and Head – ASEAN Corridor and
Building, Construction and Real Estate sector, KPMG in India
As expected, the proposals in the Union Budget tabled today, largely catered to the rural class and farmers.
The investor and corporate class were left wanting and proposals for the real estate and construction sector,
which is currently witnessing considerable headwinds owing to weak demand and transformational reforms
(such as demonetisation, RERA, GST), are no different.
Both the buyers as well as the developers were expecting much from this Budget in terms of improving the
purchasing power of the buyers as well as simplification/clarification on some of the key tax issues
concerning the sector. Amendments were also expected on taxability of REIT structures to augment this
alternate investment mechanism for the investors.
The Budget proposals, however, seem to disappoint the real estate community. While the FM marginally
incentivised the salaried class with a standard deduction of INR 40,000, with no other significant incentives/
exemptions on the personal tax front, there is not much change in the net disposable income. As a specific
measure, 5% leeway in terms of taxability of difference between transaction value and stamp duty value vis-
à-vis transfer of real estate property is a welcome move, however, the impact of the same may be minimal.
For affordable housing, government announced that it would facilitate development of more than 80 lakh
houses in rural and urban areas in 2018-19 and dedicated an affordable housing priority sector fund to be
established under National Housing Bank. Within infrastructure sector, allocations were made in upgrading
railways, education and defence infrastructure.
At the current juncture, the sector required stronger measures to address some of the pertinent issues such
as rationalisation of stamp duty, streamlining the approval process through single window clearance,
according industry status to the sector etc to bring the sector on the path of recovery.

5. UNION BUDGET 2018-19 5
Besides fruits and vegetables, the animal husbandry and fishing
sector also provides a large scale potential to boost exports. The
setting up of setting up a Fisheries and Aquaculture
Infrastructure Development Fund (FAIDF) for fisheries sector
and an Animal Husbandry Infrastructure Development Fund
(AHIDF) for financing infrastructure requirement of animal
husbandry sector with a total corpus of Rs10,000 crore can really
help build this sector in a big way.
The government has also proposed some changes to the Customs
Act, 1962, to further improve ease of doing business in cross
border trade, and to align certain provisions with the
commitments under the Trade Facilitation Agreement of the
World Trade Organization (WTO). The government is also
moving to smoothen dispute resolution processes and reduce
litigation. It is also making certain amendments to provide for
pre-notice consultation, definite timelines for adjudication and
deemed closure of cases if those timelines are not adhered to. All
of these will go a long way in ensuring that with growing
international trade, industry will find it easier to do business in
the country.
The focus of the Budget has been to promote “Make in India” by
ensuring to make it easier to conduct business in the country.
The various commitments made in the Budget towards this
objective is commendable. However, the proof of the pudding
will, as usual, be in its eating.
WINNERS
AGRICULTURE
LOSERS
HEALTHCARE
INFRASTRUCTURE
FINANCIAL SERVICES
REAL ESTATE
AUTOMOTIVE
MARKET REACTIONS - NIFTY 50
Source: Yahoo Finance

6. UNION BUDGET 2018-19 6
INDIA’S MIDDLE CLASS HAS
CAUSE TO BE DISAPPOINTED
by Prof. Geethanjali Nataraj
Professor of Applied Economics, Indian
Institute of Public Administration
The Union government delivered its fifth and last full Budget
today amid subdued economic growth, challenging fiscal
situation and farm distress. What makes it all the more
important is the upcoming elections in eight states this year and
the Lok Sabha election next year, all of which needs to be kept in
mind while analyzing the budgetary announcements.
The focus on farmers and the rural poor is a clear indication of
the fact that the Budget 2018-19 is election-oriented. While the
slew of farm-focused and pro-poor announcements including
raising the minimum support price to 1.5 times the production
cost for Kharif crops; the National Health Protection Scheme to
provide universal healthcare; and free LPG connections to 8
crore households are welcome steps, it is unclear how these
budgetary allotments will be met especially given the slowdown
in growth and revenue receipts not matching expectations. The
government needs to go back to the drawing board and figure
out how it plans to give health cover of Rs. 5 lakh to over 500
million people. This is definitely an ambitious announcement by
the government which will be hard to fulfill.
It is also disheartening to see that the government has not
exhibited more fiscal discipline and has failed to meet its fiscal
deficit target of 3%. Fiscal deficit is 3.5% of GDP at Rs 5.95 lakh
in FY 2017-18 and the projected deficit for the next fiscal year is
3.3%. This is also a cause for worry because the RBI is not likely
to decrease interest rates in such a scenario and as result the
weak investment scenario in the economy will continue.
The MSME sector is, without a doubt, the big winner today.
While industry has received no relief in the form of reduced
corporate taxes, Government’s announcement to bring in more
MSMEs under the tax slab of 25% by increasing the turnover
limit to Rs. 250 crores will hugely boost the sector. More than 2
crore MSMEs will benefit from this move.
The measures announced for women and senior citizens are
welcome. However, it is disappointing to see that there has been
no change in income tax rates for the middle class. The standard
deduction of 40,000 will not make much of a difference on
individual tax liability. The increased health and education cess,
which now stands at 4% (from the earlier 3%) puts additional
burden on India’s struggling middle class. Moreover, the Budget
has made electronic consumables more out of reach for the
middle class due to the imposition of additional import duty on
mobiles and TV.
All in all, Budget 2018-19 is at best an average budget with a big
boost to rural and social infrastructure in the country. However,
increased investment on social sectors was long pending and will
pave the way for more inclusive growth and better standard of
living for the common man.
REVISED ESTIMATES
FY17-18
BUDGET ESTIMATES
FY18-19
3.5%
2.6%
11.6%
3.3%
2.2%
12.1%
Fiscal Deficit
Revenue Deficit
Gross Tax Revenue (as % of GDP)

7. UNION BUDGET 2018-19 7
A ‘HEALTHY' BUDGET
PEPPERED WITH POPULIST
MEASURES WITH FOCUS ON
EARLY ELECTIONS
by Amir Ullah Khan, Professor and
Director, the Maulana Azad National
Urdu University and Visiting faculty,
Economic Policy at the Indian School of
Business
Every year, we classify the budget as being either agri or
industry-centric one; this year, it clearly is a health budget. But
when you look at the big picture, there are two major takeaways
from this year’s budget: Firstly, the government has clear
intentions of early elections, and secondly, that it’s ready to allow
the deficit to increase. That fiscal deficit target is revised to 3.3%
of GDP for FY19 against the earlier target of 3% is not a good
sign, especially because controlling inflation was the biggest
achievement of this government in the last three years. The fiscal
deficit would have been tighter if the government had a long-
term take in mind. Now, there is fear that this will yield an
inflationary impact.
But there is clear confidence in growth. The Finance Minister has
reiterated the findings of the Economic Survey - India will make
a comeback with a growth rate of 7% this year, and subsequently
going up to 8% in 2019. A milestone announcement is the fact
that India is now a $2.5 trillion economy and will be pegged as
the 5th largest economy in the world from the current position
of 7th, in the next two years.
In sector-wise allocation, agriculture has had a field day with
massive outlays. Allocations have been significantly increased.
Uplifting the ban on all agricultural produce going to the future
markets is certainly a populist measure. If you observe closely,
across the budget, the focus in on use of technology and
knowledge. The expansion of the e-agriculture network, under
which all APMCs will be connected with e-NAM by March 2018
is a huge step.
While there is a holistic focus on growth, the education sector
may not have reaped a good harvest, with the emphasis being
only on building more schools, rather than honing the quality of
teachers. But the silver lining is the proposal to launch the
‘‘Revitalising Infrastructure and Systems in Education by 2022’’
with a total investment of Rs 1,00,000 crore in next four years.
This will help step up investments in research and related
infrastructure in premier educational institutions.
Experiencing the feel good factor is the healthcare sector,
especially with the biggest outlay for the flagship National
Healthcare Protection scheme that will benefit approximately 50
crore beneficiaries! Setting up of 24 new medical colleges, ₹Rs
600 crore to meet the nutritional needs of Tuberculosis patients,
₹1,600 crore for comprehensive primary health care in 2019-20
and the provision for senior citizens to claim benefit of a
deduction of ₹50,000 for medical insurance premium are other
plusses. The one percent increase in health and education cess on
tax payable is a big step, as well.
BUDGET ESTIMATES
FY18-19 (INR CRORE)
GROWTH V/S
FY17-18
11,50,000
11,16,000
14.4%
17.3%
Direct Taxes
Indirect Taxes

8. UNION BUDGET 2018-19 8
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