Highlights Budget 2017-18

Union Finance Minister Arun Jaitley presented the Union Budget 2017. It was fourth annual budget presented by Arun Jaitley as Finance Minister. This was also first time no separate Railway Budget was presented.
The 2017 Union Budget,was broadly focused on 10 themes. They are farming sector, rural population, youth, poor and underprivileged health care, financial sector for stronger institutions, infrastructure, speedy accountability, prudent fiscal management, public services and tax administration for the honest.

Highlights Budget speech

Demonetisation

• Demonetisation is expected to have a transient impact on the economy.
• It will have a great impact on the economy and lives of people .
• Demonetisation is a bold and decisive measure that will lead to higher GDP growth.
• The effects of demonetisation will not spillover to the next fiscal.

Agriculture sector

• Farmer credit fixed at record level of Rs10 trillion. It will ensure adequate flow to underserved areas.
• Government will set up mini labs in Krishi Vigyan Kendras for soil testing.
• Long-term irrigation fund in NABARD increased from Rs 20,000 crore to Rs40,000 crore.
• Dairy processing infrastructure fund with a corpus of Rs. 2000 crore will be created.
• Model law on contract farming will be prepared and shared with the States.

Rural population

• Over Rs 3 lakh crore will be spent for rural India. Government’s Mission Antyodaya targets to bring 1 crore households out of poverty by 2019.
• MGNREGA: 48,000 crore has been allocated. Participation of women now at 55%. Space technology to be used in a big way to ensure MGNREGA works. 5 lakh farm ponds will be taken up under MGNREGA.
• Pradhan Mantri Awas Yojana: 23,000 crore allocated. Government to complete 1 crore houses for those without homes.
• Prime Minister Gram Sadak Yojana: 19,000 crore allocated. Along with states, Rs. 27,000 crore will be spent in FY18.
• Panchayat Raj: Human resource reform programme to be launched. Mason training to be provided for 5 lakh people
• 100% rural electrification will be archived by May 2018
• Swachh Bharat mission: made tremendous progress, sanitation coverage has gone up from 42% to 60%.

For youth

• Education: System of measuring annual learning outcomes will be introduced with emphasis on science.
• Innovation fund for secondary education. Focus will be on 3,479 educationally-backward blocks. Colleges will be identified based on accreditation.
• Reforms in UGC: Based on ranking colleges to be identified and given more autonomy.
• SWAYAM platform: Leveraging information technology platform for virtual learning
• National testing agency will be established for all entrance exams, freeing up CBSE, AICTE and other bodies.
• 100 Indian international skill centres will established with courses in foreign languages. Rs. 4,000 crore allocated to launch skill acquisition and knowledge awareness.
• Special scheme for creating employment in leather/footwear sector. Five special zones to be set up for tourism sector.

Poor and underprivileged

• Sum of Rs. 1,84,632 crore allocated for women and children.
• 500 crore allocated for Mahila Shakthi Kendras.
• Affordable housing will be given infrastructure status.
• Under a nationwide scheme for pregnant women, Rs. 6000 will be transferred to each person.
• Action plan to eliminate leprosy by 2018, TB by 2025, reduce IMR to 29 in 2019
• Owing to surplus liquidity, banks have started reducing lending rates for housing.
• 5 lakh Health sub centres will be transformed into health wellness centres.
• Two AIIMS will be set up in Gujarat and Jharkhand and.
• Structural transformation of the regulator framework for medical education will be undertaken.
• 52,393 crore allocated for Scheduled Castes.
• Aadhaar-based smartcards will be issued to monitor health of senior citizens.

Infrastructure and railways

• Railways total capex and development expenditure pegged at Rs. 1.31 trillion
• Railways: Passenger Safety fund corpus will be set up. Unmanned level crossings to be eliminated by 2020.
• Railway lines of 3,500km to be commissioned. Dedicated tourism/pilgrimage trains will be launched.
• 500 stations to be made differently-abled friendly
• Rail cleanliness: Introduction of Coach Mitra facility; By 2019, biotoilets for all coaches.
• Competitive ticket-booking facility will be introduced; service charge withdrawn for tickets booked on IRCTC.
• New metro rail policy will be announced.
• Roads sector: 64,000 crore allocated for national highways.
• Airports Authority of India Act will amended to enable monetization of land resources.
• Total Rs. 2 trillion will be allocated to transport sector.
• Telecom sector: 10,000 crore will be allocated to Bharat Net programme.
• Digi-gau initiative will be launched.
• Export infrastructure: New restructured central scheme will be launched.
• Total Rs. 3.96 trillion will be allocated for infrastructure.
• Energy sector: Strategic policy for crude reserves will be set up. Rs. 1.26,000 crore received as energy production based investments.

Financial Sector

• Foreign Investment Promotion Board (FIPB) to be abolished
• Commodities market: Panel will be constituted to study legal framework for spot and derivative markets
• Resolution mechanism for financial firms will be set up.
• Cyber-security: Computer emergency response team (CERT) to be set up
• Listing of PSEs to foster public accountability, mechanism for time-bound listing will be revised.
• New exchange-traded fund (ETF) will be launched
• Pradhan Mantri Mudra Yojana: It will have lending target at Rs. 2.44 trillion.
• Stand-up India scheme: over 16,000 new enterprises will be set up.

Digital Economy

• Government to launch two new schemes to promote BHIM app, including cashback scheme for merchants
• Aadhaar Pay will be launched for people who don’t have mobile phones.
• Focus on rural and semi-urban areas. Financial inclusion fund will be strengthened.
• Panel on digital payments has recommended structural reforms.
• Payment regulatory board will be created at RBI.
• Negotiable Instruments Act might be amended.

Public Services

• Head post-office to be used for passport services.
• Defence: Centralized defence travel system will be developed.
• Centralized pension distribution system to be established
• Government recruitment: Two-tier exam system will be introduced.
• Government to introduce laws to confiscate assets of economic defaulters.
• High-level panel chaired by PM will be formed to commemorate Mahatma Gandhi’s 150th birth anniversary

Fiscal Management

• Total budget expenditure: 21 trillion.
• Defence expenditure: 2.74 trillion (excluding pensions).
• Fiscal deficit for FY18: Pegged at 3.2% of GDP.
• Revenue deficit for FY18: Pegged at 1.9% Fiscal situation.
• Total expenditure: 21, 47,000 crore.
• Plan, non-plan expenditure is abolished; focus will be on capital expenditure which will be 25.4 %.
• 3,000 crore under the Department of Economic Affairs for implementing the Budget announcements.
• Expenditure for science and technology is Rs. 37,435 crore.
• Total resources transferred to States/UTs is Rs 4.11 lakh crore.
• Amendment proposed to the RBI Act to enable issuance of electoral bonds.

Tax Administration

• Direct tax collection not commensurate with income/expenditure pattern of India
• Black money: Cash transactions above Rs. 3 lakh banned.
• Transparency in political funding: Parties continue to receive anonymous donations; propose system of cleaning up.
• Political funding: Maximum amount of cash donation that can be received is Rs. 2,000.
• Political parties can receive donations by cheques or digitally. Every party has to file returns within specified time. Amendment proposed to RBI Act to issue electoral bonds.
• Personal income tax: Rate reduced to 5% for income bracket of Rs. 2.5-5 lakh; All other categories to get uniform benefit of Rs. 12,500 per person; Surcharge on income bracket Rs. 50 lakh-Rs. 1 crore will be levied
• Personal income tax: Simple one-page form for taxable income up to Rs. 5 lakh will be implemented.
• GST: Preparedness of IT system on schedule. Not many changes to excise duties in GST regime.
• FPI category 1 and 2 investors exempted from indirect transfer provisions.
• Time period of revising tax returns reduced to 12 months
• Real estate: Changes will be made in capital gains tax.
• Concessional withholding rate will be extended to 30 June 2020, rupee-denominated masala bonds to be included.
• MAT will be not abolished at present and will be carry-forwarded for 15 years.
• Corporate tax rate: MSMEs’ (annual turnover less than Rs.50crore) rate reduced to 25%.
• LNG: customs duty reduced to 2.5%
• Limit of cash donation for charitable trusts reduced to Rs. 2,000.

Month: Current Affairs - February, 2017