Forbes India 15th Anniversary Special

Budget 2018: Key takeaways from the FM speech

Here are the hits and misses from the Budget speech

Published: Feb 1, 2018 11:17:34 AM IST
Updated: Feb 1, 2018 08:09:17 PM IST

Budget 2018: Key takeaways from the FM speechImage: Danish Ismail / Reuters

The Finance Minister, Arun Jaitley unveiled the India government’s last full budget before the general elections of 2019.

Here are the key highlights; the hits and misses.

- Higher allocation to infra capital expenditure in the Budget can be a boost to rural roads construction
- Agri infra fund will boost the logistics sector and facilitate development of cold chains and other hard infrastructure
- Increase in MSP to further boost tractor sales, currently growing at 16%
- Of 2,000 APMCs, those connected to E-NAM is 470, which is less than the target of 585 for last fiscal
- Liberalisation of agri exports to benefit the pulses sector
- Out of a production of 22 MT in 2016, exports were just 1.3 MT
- LPG demand growth to rise to over 10% next 2 years given 8 crore new BPL connections targeted
- Power, LPG via Ujala and Saubhagya remains area of concern for discoms, OMCs because of lack of recovery
- Dedicated fund for affordable housing to improve formal finance penetration
- Focus on rural housing, rural roads and rural infra spend will push up employment
- Rs 10,000 cr for fisheries to boost seafood exports
- India already world’s largest shrimp exporter
- Rising rural income to improve demand for cement
- Rural demand is 33% of total cement demand
- Massive health insurance plan a boost for hospitals, health insurers
- Huge health insurance plan could cost govt around Rs 50,000 crore annually
- Ragi, jowar, moong, maize, paddy to benefit the most
- Increase in MSP by 1.5 times cost of production
- 3.7 lakh km rural roads plan huge boost for construction cos
- Rail University in Vadodara to boost R&D initiatives, help improve railway operations
- Micropension, insurance via Jan Dhan to boost financial inclusion
- 23% growth in Mudra target will help micro-entrepreneurs
- Agri-commodity exports limited now
- Liberalisation is a big boost to sector
- 1 cr houses under PMAY augurs well for lenders
- Growth in affordable housing loans to remain strong
- Govt’s 12% contribution to EPF for new employees
- Will encourage formal sector coverage
- Textiles subsidy under TUFs up 18% at Rs 7,140 cr
- 14% increase in railways outlay from Rs 1.3  trillion to Rs 1.48 trillion
- Monetising road assets, using innovations like Roads SPV, InVITs a positive step
- Monetising road assets, using innovations like Roads SPV, InVITs a positive step
- Iconic status for 10 locales will boost tourism
- Bharatmala to be funded via NHAI’s TOT model & infra fund
- Implementation key after 10% jump in cap development infra for Railways
- Recognition of investments in ‘A’ rating category bonds
- Big boost for corporate bond markets
- Asking large cos to raise 25% of funding needs via bonds
- Another big boost for corporate bond market
- Agri-rural push kicker for 2-wheeler and tractor sales
- Encouraging corp bond market expansion will alter bank-centric financial system
- 10% of total highways in India (9,000 km) built in a single year
- Roads leading the way in infra development
- Unified stamp duty across states will make bond issuances cost-effective, efficient
- 25% bond borrowing + ‘A’ category leeway
- Will bridge demand-supply gap in financing
- Investments in ‘A’ category bonds win-win for investors, issuers
- Risk-adjusted returns key to investment
- Divestment target of Rs 80,000 cr will boost ETFs
- InvITs to monetise infra assets will attract long-term investors
- Infra financing: Partial Credit Guarantee scheme, well capitalised bond guarantee fund needed next
- Asset monetisation will get fast-tracked because extra budgetary resources would be funding infra