New Delhi, February 1: Finance Minister Arun Jaitley on Wednesday presented the annual budget for 2017. Government through this budget has brought a big relaxation for middle-income group, lower income group. Government through this budget has focused on fulfilling the dream of people.
Arun Jaitley while presenting the budget said, "India stands out as a bright spot in the world economic landscape." He further said, "My approach in preparing the budget is to spend more on rural areas, infrastructure and poverty alleviation with fiscal prudence."
Jaitley stated saying, "Signs of retreat from globalization have potential to affect exports from many emerging economies, including India." "One of the thrust areas of my tax proposals is to stimulate growth, give relief to the middle class, (promote) affordable housing, curb black money, bring transparency in political funding and simplify tax administration," Jaitley added.
Highlights of the union budget 2017 are as follows.
GROWTH- FM Jaitley said that India is now seen as an engine of global growth
Estimates 2017/18 total expenditure at 21.47 trillion rupees
Capital spending raised by 25.4 percent on year in 2017/18
2017/18 net market borrowing estimated at 3.48 trillion rupees
2017/18 gross market borrowing seen at 6.05 trillion rupees
Government to switch 250 billion rupees of bonds in 2017/18
Consumer price index inflation is expected to remain within the central bank's mandated range of 2 to 6 percent
Demonetisation "a bold and decisive measure", will make GDP bigger and lead to higher tax revenues - finance minister
Hit to economy from government decision to outlaw high-denomination notes will be "transient", effects of demonetization not expected to spill over to next year
Pace of remonetization has picked up and will soon reach comfortable levels
No transaction above 300,000 rupees to be permitted in cash
Surplus money in the banking system will lower borrowing costs, increase credit flow
Projects 2017/18 fiscal deficit at 3.2 percent of GDP
Government remains committed to 2018/19 fiscal deficit at 3 percent of GDP
The 2017/18 budget seeks to pursue prudent fiscal management to preserve financial stability
International Monetary Fund estimates that the world GDP will grow by 3.1% in 2016 and 3.4% in 2017.
TAXATION- While presenting the General Budget, Finance Minister Shri Jaitley said that the present burden of taxation is mainly on honest taxpayers and salaried employees who are showing their income correctly. Therefore, post-demonetisation, there is a legitimate expectation of this class of people to reduce their burden of taxation. The Finance Minister further said that if a nominal rate of taxation is kept for the lower slab, many more people will prefer to come to the tax net. The Finance Minister made an appeal to all the citizens of India to contribute to Nation Building by making a small payment as a tax.
2017/18 total tax revenue seen at 12.27 trillion rupees
2017/18 total revenue receipts seen at 15.16 trillion rupees
Rs 7,200 cr revenue loss due to a reduction in tax on smaller companies.
The net tax revenue grew by 17% in 2015-16.
Proposes to reduce income tax rate for medium and small enterprises with annual turnover up to 500 million rupees to 25 percent
Extends relaxation on withholding tax on foreign investor's interest income from debt until June 30, 2020
Proposes change in capital gains tax in real estate, land
Basic customs duty on LNG to be reduced from 5% to 2.5%
Not to remove Minimum Alternative Tax in 2017-18; Propose to allow a carry forward of MAT for a period of 15 yrs as against 10 yrs now
Propose to reduce existing rate of taxation of those with income between 2.5 lakh to 5 lakh from 10% to 5%
A single one-page form for filing IT returns for taxable income up to 5 lakh rupees
Surcharge of 10% for those whose annual income is Rs 50 lakh to 1 crore
15% surcharge on incomes above Rs 1 crore to continue
Long-term capital gains tax on immovable property to apply after 2 years, instead of 3 years now
GST Council finalized its recommendations; Implementation of GST likely to bring more taxes to Centre, States
Capital gains tax to be exempted, for persons holding land from which land was pooled for creation of state capital of Telangana and Andhra Pradesh
AGRICULTURE- The adequate credit would be made available to the farmers in time and the target for agricultural credit in 2017-18 has been fixed at a record level of 10 lakh crores. FM Jaitley said that special efforts would be taken to ensure adequate flow of credit to the under-serviced areas, the Eastern States and Jammu & Kashmir. The farmers will also benefit from 60 days’ interest waiver announced by the Prime Minister in respect of their loans from the cooperative credit structure.
With a better monsoon agriculture is expected to grow at 4.1 percent in 2016/17
Agricultural credit target fixed at 10 trillion rupees ($147.88 billion) for 2017/18
Long-term irrigation fund allocated 400 billion rupees
Allocates 80 billion rupees for milk processing over 3 years
Farm insurance to cover 40 percent of net sown area, up from 30 percent last year
Modern law on contract farming will be drafted and circulated to states
Allocates 3.96 trillion rupees for infrastructure in 2017/18
Allocates 2.41 trillion rupees for transport sector in 2017/18
Proposes 640 billion rupees investments in national and state highways in 2017/18
Decides to abolish foreign investment promotion board
To exempt some foreign investors from indirect transfer provisions
The government to provide already planned 100 billion rupees capital infusion to state-run banks in 2017/18
Proposes to raise allowable provision for bad loans in banks to 8.5 percent from 7.5 percent
To introduce legislation changes for confiscating assets of economic offenders
2017/18 defence expenditure excluding pensions estimated at 2.74 trillion rupees
Defence capital outlay at 864.88 billion rupees
Total disinvestment target 725 billion rupees in 2017/18
Proposes revised mechanism for time bound listing of public sector companies
Allocation for rural, agriculture and allied areas to increase by 24 percent to 1.87 trillion rupees
Allocates 480 billion rupees to rural jobs scheme in 2017/18, versus a revised estimate of 470 billion rupees in the current fiscal year
Allocates 190 billion rupees for rural road scheme in 2017/18
On course to complete 100 percent electrification by May 1, 2018, allocating 48 billion rupees for rural electrification scheme
Coverage of Fasal Bima Yojana to go up from 30% of cropped area, to 40% in 2017-18 & 50% in 2018-19
Allocation under MNREGA increased to 48,000 crores from Rs 38,500 crore. This is highest ever allocation
RAILWAYS- This Budget is the First combined Budget of Independent India that includes the Railways. For 2017-18, the total capital and development expenditure on Railways has been pegged at Rs. 1,31,000 crores. This includes Rs. 55,000 crores provided by the Government.
Proposes to invest 1.31 trillion rupees in railways in 2017/18; budget 2017/18 allocates 550 billion rupees for railways
Dedicated railway safety fund of 1 trillion rupees over next five years
3,500 km of railway lines to be commissioned in 2017-18 as against 2,800 km in 2016-17
Transformative measures have to be taken to make Indian railways competitive
Railways to withdraw service charges on online booking of tickets
Legislative reforms to be undertaken to simplify, rationalize existing labour laws
MANUFACTURING AND TRADE
Taking steps to make India a global hub for electronics manufacturing; received over 250,000 proposals last year with an investment value of 1.26 trillion rupees
* Announces new trade infrastructure export scheme
* India to spend more in rural areas, infrastructure and poverty alleviation
The government will continue process of economic reforms for the benefit of the poor
To allocate 40 billion rupees for market-relevant training for youth
Total allocation for women and children welfare set at 1.84 trillion rupees
To double lending target under Mudra Yojana (Micro Units Development and Refinance Agency) to 2.44 trillion rupees
Airports Authority of India to monetize land around certain Tier 2 airports, use funds to upgrade airports
To set up two more strategic oil storage in 2 states; proposes to create integrated oil company
Halves import tax on LNG to 2.5 percent
To integrate stock and derivative markets for commodities trading
POLITICAL PARTY FUNDING- In order to curb corruption from the fundings of political parties some important measures are taken by the government.
Political transparency in political party funding; parties will need to file income tax returns
Proposes to amend central bank act for issue of electoral bonds for political funding
Proposes to limit maximum individual donation at 2000 rupees in cash for political funding
HOUSING- Government has stressed out to provide houses to all the families by reducing lending rates etc.
National housing bank to provide 200 billion rupees for housing loans
Affordable housing to be given infrastructure status
Long-term capital gains tax on immovable property to be levied after 2 years instead of 3 years
One crore houses for poor by 2019
Safe drinking water to cover 28,000 arsenic and Fluoride-affected habitations in the next four years
Extension of tenure of loans under Credit Linked Subsidy Scheme of Pradhan Mantri Awas Yojana from 15 to 20 years
A glance of Budget 2017:
Total expenditure in Budget for 2017-18 has been placed at`21.47 lakh crores and this is expected to have multiplier effects and lead to higher growth.
The total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crores in 2017-18, as against Rs.3.60 lakh crores in BE 2016-17.
Defence expenditure excluding pensions stands at Rs. 2,74,114 crore
For the first time, a consolidated Outcome Budget, covering all Ministries and Departments, is being laid along with the General Budget
FM: Revenue Deficit for next year is pegged at 1.9% as against 2% mandated by the FRBM Act.
FM: India seen as an engine of global growth and is expected to be one of the fastest growing major economies in 2017.
Terming demonization a right cause, Finance Minister recalled Mahatma’s quote that “A right cause never fails”.
FM: Agenda is (TEC)- to transform the quality of governance, energise various sections of society and to clean the country from evils of corruption, black money and non-transparent political funding.
FM: Approach is to spend more in rural areas, on infrastructure and poverty alleviation while maintaining fiscal prudence.
The Government will undertake a Mission Antyodaya to bring one crore households out of poverty and to make 50,000-gram panchayats poverty free by 2019, the year marking the 150th birth anniversary of Gandhiji.
Mahila Shakti Kendras to be set up at village level
The budget for the welfare of Women and Children stepped up from Rs. 1,56,528 crores to Rs 1,84,632 crores in 2017-18.
Allocation for infrastructure development in 2017-18 is Rs.3,96,135 crores.
Railways expenditure will be Rs. 1,31,000 crores, Rs.55,000 crores to be provided by the Government.
Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18.
Further liberalisation of FDI policy is under consideration.
The government decided to abolish the Foreign Investment Promotion Board FIPB in 2017-18.
An integrated Public Sector ‘Oil Major’, isto match the performance of huge international and domestic private sector oil and gas companies, is proposed.
The shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges.
The Finance Minister announced that a new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18.
Rs. 10,000 crore are provided for recapitalization of Banks in 2017-18. The Finance Minister says that an additional allocation will be provided, as may be required.
For the The Pradhan Mantri Mudra Yojana the lending target has been set at Rs. 2.44 lakh crores in 2017-18, doubling it from the ones in 2015-16 with priority to be given to Dalits, Tribals, Backward Classes, Minorities and Women.