The Union Budget 2017-18 was presented by the Union Finance Minister Arun Jaitley yesterday . This is the first annual budget after demonetisation and his fourth annual budget. This years Union Budget 2017 was broadly
focused on 10 ‘main themes.
Report:- Capt. Munish Kishore
These main themes of the budget are :
- Farmers,
- Rural Population,
- Youth,
- Poor and Health Care for the Underprivileged;
- Infrastructure;
- Financial Sector for Stronger Institutions;
- Speedy Accountability,
- Public Services,
- Prudent Fiscal Management,
- Tax Administration for the honest.
Detailing the Fiscal situation at present the Finance Minister gave the following remarks :
- Total expenditure – Rs 21,47,000 crore
- Abolition on plan, non-plan expenditure, focus on capital expenditure (Capital expenditure will be 25.4 per
cent) - Rs 3,000 crore under Department of Economic Affairs for implementing Budget announcements.
- Defence expenditure, excluding pension, at Rs 2,74,114 crore
- Expenditure in science and technology — Rs 37,435 crore
- Total resources transferred to States and UTs is Rs 4.11 lakh crore
- Recommended 3% fiscal deficit for three years with deviation of 0.5% of GDP.
- Revenue deficit – 1.9 %
- Pegged fiscal deficit of 2017-18 at 3.2% of GDP and remain committed to achieving 3% in the next year.
Some of the highlights of Union Finance Minister Arun Jaitley’s Budget speech are as follows:
DEMONETISATION:
Demonetisation is expected to have a transient impact on Indian economy. As per the Finance Minister we will have a great impact on the economy and lives of our people and the effects of demonetisation are not expected to spill over next year. Demonetisation a bold and decisive measure and will lead to higher GDP growth.
AGRICULTURE
Sowing farmers should feel secure against natural calamities. In a bold move the Finance Minister has declared Rs 10 lakh crore as credit to farmers with 60 days interest waiver. Further NABARD fund to be increased to Rs 40,000 crore. The government will set up mini lab in Krishi Vigyan Kendras for soiling. A dedicated micro irrigation fund will be set up for NABARD with Rs 5,000 crore initial corpus.
The Irrigation corpus was increased from Rs 20,000 crores to Rs 40,000 in this Union Budget. Dairy processing infrastructure fund with be created initially with a corpus of Rs 2000 crore. The Issuance of Soil cards has gained momentum. As a new initiative a model law on contract farming will be prepared and shared with States
RURAL SECTOR
In the upcoming few years the government targets to bring 1 crore households out of poverty with a target for 2019. During 2017-18, 5 lakh farm ponds to be taken up under MGNREGA. Further over Rs 3 lakh crore will be spent for rural India. The finance minister announced MGNREGA to double farmers’ income with participation of women in MGNREGA to be increased up to 55%.
The finance minister proposed to complete 1 crore houses for those without homes and allocated Rs 19,000 crores for Pradhan Mantri Gram Sadak Yojana in 2017-18. He said that we are well on our way of achieving 100% rural electrification by March 2018.
In his speech he stated that Swachh Bharat Mission has made tremendous progress with sanitation coverage gone up from 42% in Oct 13 to 60% now.
FOR YOUTH
The Finance Minister has introduced a system for measuring annual learning outcomes and innovation fund for secondary education. There will be a focus on 3,479 educationally-backward blocks, and colleges will be identified based on accreditation. Skill India mission was also launched to maximise potential. 100 India International centres across country would be set up with courses on foreign languages to be introduced with steps to create 5000 PG seats per annum
HEALTH CARE (FOR THE POOR)
This year’s budget has allocated Rs 500 crores for Mahila Shakthi Kendras. Nationwide scheme for pregnant women with a transfer of Rs 6000 each would be implemented. An investment of Rs 1,84,632 crores has been allocated for women and Kids. This year would see infrastructure status for affordable housing. There is surplus liquidity and banks have already started reducing lending rates for housing. The finance minister said that an action plan to eliminate leprosy by 2018, TB by 2025, reduce IMR to 29 by 2019 has been initiated. Further 7. 1.5 lakh health sub centres to be transformed into health wellness centre. Two new AIIMS in Jharkhand and Gujarat would be constructed.
The finance minister said that there would be Structural transformation of regulatory framework for medical education in India with Aadhaar-based smartcards for senior citizens to monitor health. The government will work with Life Insurance Corporation to implement a scheme for senior citizens with 8 percent return on annuity.
An amount of Rs 52,393 crore has been allocated for Scheduled Caste – Rs 52,393 crore
INFRASTRUCTURE: RAILWAYS
In his budget speech the finance minister allocated of Rs Rs 1,31,000 crore for railways. No Service charge while booking tickets with IRCTC. As a development initiative the following has been planned for the Railway Sector :
- Raksha coach with a corpus of Rs 1 lakh crore for five years (for passenger safety)
- Unmanned level crossings eliminated by 2020
- 3,500 km of railway lines to be commissioned this year up from 2,800 km last year.
- SMS based clean my coach service
- Coach Mitra Facility – to register all coach related complaints
- 2019 – bio toilets for all trains
- 500 stations to be made differently-abled friendly
- Railways to partner with logistics players for front end and back end solutions for select commodities.
- Railways will offer competitive ticket booking facility
- 2,000 km for coastal connectivity of roads
- Rs 64,000 crore allocation for highways.
- Allocation of high speed Internet 1,50,000 gram panchayats
- Total allocation to transport sector at Rs 2 trillion
- Telecom sector: Allocation to Bharat Net programme at Rs10,000 crore
- New Metro rail policy to be announced with new modes of financing
ENERGY SECTOR
The finance minister had announced a strategic policy for crude reserves. He said that Rs 1,26,000 crores for energy production-based investments were received. Trade infra export scheme will be launched 2017-18
FINANCIAL SECTOR
The finance minister said that more than 90% of FDI inflows are now automated under the FDI policy reforms. Further shares of Railway PSE like IRCTC would be listed on stock exchanges. Bill on resolution of financial firms to be introduced in this session of parliament. He stated that FIPB would be abolished (Foreign Investment Promotion Board) in 2017-18. This was recommended by Administrative Reforms Commission.
Revised mechanism would be in place to ensure time bound listing of CPSEs. The Computer emergency response team for financial sector to be formed. The Pradhan Mantri Mudra Yojana lending target were set up at Rs 2.44 lakh crore for 2017-18. Under the Digital India scheme BHIM app will unleash mobile phone revolution with two new schemes to promote the app namely – referral bonus for users and cash back for traders.
He stated that Chandigarh is kerosene free now with 84 Government schemes on the DBT platform.
Head post office would be introduced as the central office for rendering passport services with easy online booking system for defence personnel.
For big-time offences – including economic offenders fleeing India, the Government, will introduce a
legislative change or new law to confiscate the assets of these people within the country
DIGITAL ECONOMY
Some of the major decisions made for Digital Economy under the budget are as follows :
- India at cusp of massive digital revolution
- Government to launch two new schemes to promote BHIM app, including cashback scheme for merchants
- Aadhaar Pay to be launched for people who don’t have mobile phones
- Focus on rural and semi-urban areas
- To strengthen financial inclusion fund
- Panel on digital payments has recommended structural reforms
- To create payment regulatory board at RBI
- Cyber-security: Computer emergency response team to be set up
ON FUNDING OF POLITICAL PARTIES
Talking on the the funding of political parties the Mr. Jaitely said that the maximum amount of cash donation for political parties will be Rs 2,000 from any one source. The Political parties will be entitled to receive donations by cheque or digital mode from donors. Amendment is being proposed to RBI Act to enable issuance of electoral bonds. Donor can purchase these bonds from banks or post office via cheque or digital transactions. They can be redeemed only by registered political parties.
TAX PROPOSALS
Talking about the taxation system the finance minister said that India’s tax to GDP ratio is not favourable. Out of 13.14 lakh registered companies, only 5.97 lakh companies have filed returns for 2016-17. Further the proportion of direct tax to indirect tax is not optimal. He said that 4. 1.95 crore individuals showed income between Rs 2.5 lakh to Rs 5 lakh and out of 76 lakh individual assesses declaring income more than Rs 5 lakh, 56 lakh are salaried. Only 1.72 lakh people showed income of more than Rs 50 lakh a year and 1.95 crore individuals showed income between Rs 2.5 lakh to Rs 5 lakh.
He said that after demonetisation between Nov 8 to Dec 30: Deposits between Rs 2 lakh and Rs 80 lakh was made in 1.09 crore accounts. He has proposed to have carry-forward of MAT for 15 years
Since the proposed GST is expected to be rolled out soon, indirect taxes largely untouched expect for some changes in duties on tobacco products, solar panels and circuit for mobile phones.
In other major decisions :
- Capital gains tax to be exempted for persons holding land from which land was pooled for creation of state
capital of Telangana. - Corporate tax: In order to make MSME companies more viable, propose to reduce tax for small companies
of turnover of up to Rs 50 crore to 25%. About 67 lakh companies fall in this category. 96% of companies to
get this benefit. - Propose to reduce basic customs duty for LNG to 2.5% from 5%
- SIT on black money suggested no cash transactions of more than Rs 3 lakh. Government has accepted this
proposal. - Income Tax Act to be amended. No transaction above Rs 3 lakh to be permitted in cash.
- Limit of cash donation by charitable trust reduced to Rs 2,000 from Rs 10,000.
- Net revenue loss in direct tax could be Rs 20,000 crore.
PERSONAL INCOME TAX
Talking about the personal Income Tax the Finance Minister said that the existing rate of tax for individuals between Rs 2.5- Rs 5 lakh would be reduced to 5% from 10%. All other categories of tax payers in subsequent brackets will get benefit of Rs 12,500. A Simple one-page return was introduced for people with annual income of Rs 5 lakh other than business income.
People filing I-T returns for the first time will not come under Government scrutiny.
10% surcharge on individual income above Rs 50 lakh and up to Rs 1 crore to make up for Rs 15,000 crore
loss due to cut in personal I-T rate. 15 surcharge on individual income above Rs 1 crore to remain.
Holding period for immovable property for applicability of long-term capital gains (LTCG) tax reduced to 2 years from 3 years. Also tax will be levied for unoccupied houses a year after getting completion certificate. No cash transactions above Rs 3 lakh will be allowed.
