As we all know every year the month of February brings with it new developments in the Indian economy. Here is that time of the year when all of us are eagerly awaiting the Union Budget. The Union Budget 2017-18 was presented in the Parliament by the Finance Minister Arun Jaitely. Read, career story of great politician cum Lawyer Arun Jaitley. The Budget 2017-18 focuses on ten different themes, namely rural population, farmers, poor and underprivileged, energizing youth, financial sector, digital economy, infrastructure, prudent fiscal management, public service and tax administration. The information within this post have been reported in various news publications.
By now you must be aware of a few key highlights of the Union Budget 2017-18. However, being the citizen of India you should know what the Budget 2017-18 has in its bag for you. So, today we have come up with a very important topic of general awareness and group discussion- Union Budget 2017-18. To read an opinionated post ‘Union budget 2017- No bad news is good news’, click here.
Let’s discuss the Union Budget 2017-18 in detail:
Budget 2017-18 highlights under tax administration:
The Finance Minister Arun Jaitley aiming to curb Black money said,“ We are largely a tax non-compliant society; predominance of cash in society enables tax evasion”. Following this certain amendments have been done under taxation. Let’s read on to learn more.
- No cash transactions will be allowed above rupees 3 lakhs.
- Political funding will be translucent, parties can receive donations by cheques or digital method of payments; amendment proposed to RBI Act to issue electoral bonds and every political party has to file Tax returns within specified time. Limit of amount for cash donation to any charitable trust is cut to rupees 2,000.
- Exempt FPI (Foreign Portfolio Investment) category 1 and 2 investors from indirect provisions
- Time period of revising tax return is reduced to 12 months.
- Personal income tax (Tax Slab): Tax Rate is reduced to 5% from 10% for income bracket of rupees 2.5 lakh to 5 lakh. Tax burden for those with income upto rupees 3 lakh would be zero and for those in rupees 3 lakh to 3.5 lakh bracket will be 2500. Income earners of rupees 5 lakh can reduce their Tax liability to ZERO by utilizing the TAX BREAK under section 80 C. All other categories to get uniform benefit of rupees 12,500 per person; to levy surcharge on income bracket of 50 lakh to 1 crore rupees. Now there will be a simple one-page form for taxable income up to Rs. 5 lakhs.
- Direct tax collection not commensurate with income or expenditure pattern of India.
- GST: There is no significant change in excise duties since GST will be implemented soon. LNG reduced customs duty to 2.5%.
- Real estate to make changes in capital gains tax. Corporate tax rate is reduced to 25% MSMEs’ rate whose annual turnover less than rupees 50 crore.
Budget 2017-18 highlights under public service:
- Public will have to use head post-office for passport services.
- Defence- Centralized Defence travel system will be developed. Also, centralized pension distribution system to be established.
- Under Government recruitments two-tier exam system will be introduced.
- Government is considering introducing laws to confiscate assets of economic defaulters.
Budget 2017-18 highlights under fiscal management:
- Total budget expenditure in the year 2017-2018 is Rupees 21 trillion.
- Defence expenditure excluding pensions is Rupees 2,74,114 crore. Consolidated outcome budget for all ministries being created.
- FRBM review panel has recommended debt-to-GDP of 60%.
- Fiscal deficit for Financial Year 2018 pegged at 3.2% of GDP.
- Revenue deficit for financial year 2018 at 1.9%.
Budget 2017-18 highlights under infrastructure:
- Total budget for Railway development and apex expenditure is pegged at Rupees 1,31,000 crore.
- For passenger safety in railways, safety fund corpus will be set up. Unmanned level crossing to be eliminated by 2020.
- Railway lines of 3,500 km to be commissioned. Dedicated tourism or pilgrimage trains will be launched.
- 500 railway stations to be made differently-abled friendly.
- For cleanliness in railways Coach Mitra facility will be introduced and by 2019, bio-toilets for all coaches.
- Service charge is withdrawn for IRCTC and railways to offer competitive ticket-booking facilities.
Budget 2017-18 highlights under digital economy:
- Government to launch 2 new schemes to promote BHIM scheme including cash back scheme for merchants.
- AADHAAR Pay to be launched for people who don’t have mobile phones.
- Focus on rural and semi-urban areas
- Government to strengthen financial inclusion fund
- Panel on digital payments has recommended structural reforms.
- Government to create payment regulatory board at the RBI.
Budget 2017-18 highlights under Financial Sector:
- FDI (Foreign Direct Investment) policy- FIPB Foreign Investment Promotion Board to be abolished.
- For commodities market- Panel will study legal framework for spot and derivative market.
- Resolution mechanism for financial firms
- Computer emergency response team to be set up for Cyber-security.
- Listing of PSEs Public Sector Enterprises will foster public accountability. There will revised mechanism for time-bound listing.
- Government to create integrated public sector oil major.
Budget 2017-18 highlights under poor and unprivileged segment:
- For underprivileged Women, Mahila Shakti Kendras with Rupees 500 crore corpus will be launched or funded. For various schemes of women and children allocation of Rs1,84,632 crore is to be stepped up. Affordable housing to be given infrastructure status.
- Action plan to eliminate leprosy by 2018, TB by 2025, reduce IMR to 29 in 2019.
- There will be new rules for medical devices. Proposal to setup 2 new AIIMS in Jharkhand and Gujarat. Also to create additional Post Graduate medical seats per annum.
- For labour rights- Legislative reforms to simplify existing Labour Laws.
- Fund Allocation for development of SCs to be increased to Rupees 52,393 crore, STs to Rupees 31,920 crore and Minority affairs Rupees 4,195 crore.
- Senior citizens to be given the facility to apply for Aadhaar-based smart cards. These cards must have basic health details.
Budget 2017-18 highlights under Rural population-
- Mission Antyodaya to lift one crore households out of poverty.
- MNREGA-Now 55% of the committee to be composed of women. Additionally, Rs. 48,000 crore allocated to MNREGA. Methods and ways to be formulated to enable MNREGA to use space technology widely.
- Rupees 19,000 crore allocated to Prime Minister Gram Sadak Yojana and Rs. 27,000 crore to be spent in the Financial Year 2018.
- Rupees 23,000 crore to be allocated to Pradhan Mantri Awas Yojana fund.
- Plans to electrify all villages of the country by May 2018.
- Rupees 4,500 crore to be allocated to the project Rural livelihood mission.
Budget 2017-18 highlights under facilities for farmers-
- To ensure adequate flow to underserved areas, NDA fixed farmer credit at a level of Rs.10 trillion.
- Goverment to set up mini-labs in Krishi Vignan Kendras.
- NABARD is to be funded with Rs. 40,000 crore for the long-term irrigation purposes. Also, micro-irrigation fund with Rs. 5,000 crore corpus is to be dedicated to the said purpose.
- Overall approach seen in the budget is to spend more funds in rural areas for their growth and development.
- Budget 2017-18 contains 3 major reforms: advancement of date of presentation, merger of railway budget with general budget, done away with Plan and non-Plan expenditure.
Looking briefly at the Budget 2017-2018 it can be concluded that the overall focus of the budget is on poverty, digitalization, rural areas, farmers and the youth. Please share your views on Union Budget 2017-18 in the comments below.