Highlights of Union Budget 2017-18
Finance Minister Arun Jaitley presented the Union Budget 2017, his fourth annual budget, on 1st February. In India, the budget is meant to be a roadmap to economic progression, and not just a statement of accounts. The budget this year had a long list of giveaways and government programs. Here are the highlights of this year’s budget:
Demonetisation is expected to have a momentary impact on the economy.
- Effects of demonetisation not expected to spill over to the next fiscal year, says Finance Minister.
- Demonetisation is said to be a bold and influential measure that will lead to higher and cleaner GDP.
- Another benefit will be that demonetisation will help in transfer of resources from tax evaders to the government.
More steps are promised to be taken for the benefit farmers and the weaker sections of the society.
- The government intends to bring 1 crore households out of poverty by 2019. Over 3 lakh crore rupees will be spent on the polishing the lives of the rural population.
- Mahatma Gandhi National Rural Employee Guarantee Act will now double farmer’s income.
- MGNREGA will take up five lakh farm ponds during 2017-18.
- Women participation is expected to be up to 55% in MGNREGA.
- To ensure effective working of MGNREGA, space technology will be used.
- The government intends to complete 1 crore houses for those without homes and also states that the country is on its way to achive 100% rural electrification by March 2018.
- Rupees 19,000 crore will be allocated for Pradhan Mantri Gram Sadak Yojna.
- Remarkable progress has been seen when it comes to Swacch Bharat Mission. Sanitation coverage has increased from 42% in October 2013 to 60% at present.
- Sowing farmers should now feel sheltered against natural calamities.
- A sum of Rs. 10 lakh crore is dispensed as credit to farmers, with 60 days interest waiver.
- NABARD fund will be increased to Rs. 40,000 crore from 20,000 crore last year.
- Mini labs will be set up by the government in Krishi Vigyan Kendras for the purpose of soil testing.
- Dairy processing infrastructure fund will be initially created with a capital of Rs. 2000 crore.
- A model law related to contract farming will be prepared and shared with the States accordingly.
Health Care facilities:
- Maternity benefit will be given to pregnant women under a nationwide scheme where Rupees 6,000 will be transferred to each person.
- The aim is to eradicate tuberculosis by 2025.
- Around 1.5 lakh health sub centers will now be transformed in health wellness centers.
- Two new All India Institute of Medical Science (AIIMS) will be set up in Jharkhand and Gujarat.
- Necessary steps will be taken for the structural transformation of the regulatory framework for medical education and practice.
Facilities for the people:
- Rupees 500 crore has been assigned for Mahila Shakthi Kendras.
- A total sum of Rs. 1, 84,632 crore will be kept aside for women and children.
- Affordable housing will be given infrastructure status.
- Banks have now started reducing lending rates for housing due to surplus liquidity.
- Rupees 52,393 crore is allocated to Scheduled Caste
- Now Aadhaar-based smartcards will be issued to senior citizens to monitor their health status.
Total amount of money allocated for railways is Rupees 1, 31,000 crore.
- In additions to that, no service charge will now be included while booking tickets with IRCTC.
- In order to enhance passenger safety, Raksha coach will be set up with a corpus of Rupees 1 lakh crore for a period of five years.
- Unmanned level crossings to be eliminated by 2020
- 3,500 km of railway lines are to be commissioned this year; as opposed to 2,800 km last year.
- “Clean my coach” SMS service will be started from 2017 onwards.
- Coach Mitra Facility will now commence to record and implement all coach related complaints.
- The goal is to have Bio-toilets for all trains by the year 2019
- 500 stations to be made differently-able friendly
- Railways will now partner with top logistics players for front end and back end solutions for certain commodities.
A total allocation of Rs. 39, 61,354 crore
- A sum of Rupees 64, 000 crore has been issued for highways.
- High speed internet facility to reach 1, 50,000 Gram Panchayats.
- New Metro rail policy to be announced with new modes of financing.
- 2,000 km for coastal connectivity of roads.
- More than 90% of FDI inflows are now automated.
- Shares of IRCTC will now be listed on the Stock Exchange.
- Foreign Investment Promotion Board (FIPB) to be abolished in 2017-18.
- A Computer emergency response team is to be formed for financial sector.
- Rupees 2, 44,000 crore has been allocated for Pradhan Mantri Mudra Yojna.
- Two new schemes have been launched to promote the Digital India BHIM app. The two schemes are referral bonus for users and cash back for traders.
- Negotiable Instruments Act might be amended.
- Chandigarh is now kerosene free however, 84 new government schemes are on the DBT platform.
- Head post office will now be known as the central office for rendering passport services.
- Steps have been taken for quick and easy online booking system for Army and Defense 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.
- A strategic policy for crude reserves will soon be set up
- Rupees 1, 26,000 crore worth of energy production based investments have been received.
- A new Trade Infra Export Scheme will be launched anytime soon.
Funding of Political Parties:
- Maximum amount of cash donation for political parties from any one source has reduced massively from Rupees 20, 000 to Rupees 2, 000. Political parties will be entitled to receive donations by cheque or digital mode from donors.
- An amendment is being proposed to RBI to enable issuance of electoral bonds. Donor can purchase these bonds from banks or post office via cheque or digital transactions and they can be redeemed only by registered political parties.
Personal Income Tax:
- Existing rate of tax for individuals between Rs. 2.5- Rs 5 lakh reduced to 5% from 10%. All other categories of tax payers in subsequent brackets will get benefit of Rs 12,500.
- People filing income tax returns for the first time will not come under the government scrutiny.
- One simple page returns for people with annual income of rupees 5 lakhs other than business income.
- 10% surcharge on individual income above Rs. 50 lakh and up to Rs 1 crore to make up for Rs 15,000 crore losses due to cut in personal I-T rate. 15 surcharge on individual income above Rs. 1 crore to remain.
It is a known fact that India’s tax to GDP ratio is not quite favorable. Also, proportion of direct tax to indirect tax is not constructive at all.
- Out of 13.14 lakh registered companies, only 5.97 lakh companies have filed their returns for the year 2016-17.
- 1.95 crore individuals showed income between Rupees 2, 50,000 to 5, 00,000. Out of 76 lakh individual assesses declaring income of more than Rupees 5, 00,000, around 56 lakh are salaried employees. Whereas, only 1.72 lakh people showed income of more than Rupees 50 lakhs per year.
- Between Nov 8 to Dec 30: Deposits between Rs 2 lakh and Rs 80 lakh was made in 1.09 crore accounts.
- Rate of growth of advance tax in Personal income tax is 34.8% in last three quarters of this financial year.
- Holding period for long term capital gain now lowered to 2 years
- It is now proposed to have MAT carried forward for 15 years.
- Capital gains tax to be exempted for persons holding land from which land was pooled in for creation of state capital of Telangana.
- In order to make Micro, Small and Medium Enterprises (MSMEs) more practical, propose to reduce tax for small companies of turnover of up to Rs 50 crore to 25%. The reason for this is that about 67 lakh companies fall in this category and 96% of companies to get this benefit.
- Basic customs duty for LNG now to be reduced from 5% to 2.5%
- Income Tax Act to be amended, no transaction above Rs 3 lakh to be permitted in cash anymore.
- Limit of cash donation to charitable trust has been capped down to Rs 2,000 from Rs 10,000.
- Net revenue loss in direct tax could be something around Rs. 20,000 crore.
Fiscal Situation of the Country:
Total expenditure for the year is Rupees 21, 47,000 crore out of which:
- Rs. 3,000 crore is under Department of Economic Affairs for implementing the Budget announcements.
- Defense expenditure, excluding pension is provided at Rs 2,74,114 crore
- Expenditure in science and technology shall be allotted Rs. 37,435 crore
- Total resources transferred to States and the Union Territories is Rs 4.11 lakh crore
- Recommended fiscal deficit for three years with deviation of 0.5% of GDP- 3%
Pegged fiscal deficit of 2017-18 at 3.2% of GDP and remain committed to achieving 3% in the next year.
Revenue deficit - 1.9 %