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KEY HIGHLIGHTS OF BUDGET 2017-2018

Finance Minister Arun Jaitley presented the Union budget 2017-2018 in Lok Sabha today i.e. 1st February 2017. This was the fourth budget by the Narendra Modi government. The Union Budget 2017 was broadly focused on 10 broad themes - 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. The key highlights of Union Budget 2017-2018 are:

FUNDING OF POLITICAL PARTIES

  • Maximum amount of cash donation for political parties will be Rs 2,000 from any one source from Rs 20,000
  • 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 that government will scheme. 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

  • 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.
  • Proportion of direct tax to indirect tax is not optimal.
  • Between Nov 8 to Dec 30: Deposits between Rs 2 lakh and Rs 80 lakh was made in 1.09 crore accounts.
  • Net tax revenue of 2013-14 was Rs 11.38 lakh crore.
  • Holding period for long term capital gain lowered to 2 years
  • Propose to have carry-forward of MAT for 15 years.
  • 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. Govt has accepted this proposal.
  • Time period of revising tax return reduced to 12 months
  • Income Tax Act to be amended. No transaction above Rs 3 lakh to be permitted in cash.
  • Start-ups: Relaxing holding rules
  • Duties on POS, finger print scanner etc removed to encourage digital participation.
  • 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

  • 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.
  • Simple one page return 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 govt. 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.

INFRASTRUCTURE; RAILWAYS

  • A total allocation of Rs. 39,61,354 crore
  • Total allocation for Railways - Rs. 1,31,000 crore
  • No Service charge while booked tickets with IRCTC
  • Raksha coach with a corpus of Rs. 1 lakh cr 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 started
  • 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

AGRICULTURE

  • Rs. 10 lakh crore as credit to farmers with 60 days interest waiver says FM
  • NABARD fund to be increased to Rs. 40,000 crore
  • Govt 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 cr initial corpus
  • Irrigation corpus increased from Rs 20,000 crores to Rs 40,000
  • Dairy processing infrastructure fund with be created initially with a corpus of Rs. 2000 cr
  • A model law on contract farming will be prepared and shared with States

FOR THE POOR AND UNDERPRIVILEGED

  • Mahila Shakti Kendras - Rs. 500 cr allocated.
  • Nationwide scheme for pregnant women - Rs. 6000 each will be transferred.
  • For women and Kids - Rs. 1,84,632 cr. allocation investment
  • Affordable housing to be given infrastructure status.
  • Surplus liquidity - banks have already started reducing lending rates for housing
  • Elimination of tuberculosis by 2025 targeted.
  • 1.5 lakh health sub centres to be transformed into health wellness centre.
  • Two new AIIMS in Jharkhand and Gujarat.
  • Structural transformation of regulator framework for medical education in India
  • Allocation for Scheduled Caste - Rs. 52,393 crore
  • Aadhaar-based smartcards for senior citizens to monitor health.

FOR YOUTH

  • Education: System of measuring annual learning outcomes, emphasis on science
  • Innovation fund for secondary education
  • Reforms in UGC: Colleges to be identified based on ranking and given autonomy
  • Propose to leverage IT with launch of SWAYAM platform for virtual learning
  • National testing agency to be established for all entrance exams, freeing CBSE and AICTE
  • 100 Indian international skill centres to be established with courses in foreign languages
  • To launch skill acquisition and knowledge awareness--Rs4,000 crore
  • Special scheme for creating employment in leather/footwear sector
  • Steps to create 5000 PG seats per annum

DIGITAL ECONOMY

  • India at cusp of massive digital revolution
  • Govt to launch 2 new schemes to promote BHIM scheme including cashback scheme for merchants
  • AADHAAR Pay to be launched for people who don't have mobile phones
  • Panel on digital payments has recommended structural reforms
  • To create payment regulatory board at RBI.

PUBLIC SERVICE

  • To use head post-office for passport services
  • Defence: centralized defence travel system developed
  • Defence: Centralized pension distribution system to be established
  • Govt recruitment: To introduce two-tier exam system
  • Considering introducing laws to confiscate assets of economic defaulters

FISCAL MANAGEMENT

  • Total budget expenditure: Rs21 trillion
  • Rs3,000 crore to implement various budget announcements
  • Defence expenditure excluding pensions: Rs2,74,114 crore
  • Recommended 3% fiscal deficit for three years with deviation of 0.5% of GDP.
  • Fiscal deficit for FY18 pegged at 3.2% of GDP
  • Revenue deficit for FY18 at 1.9%

ENERGY SECTOR

  • A strategic policy for crude reserves will be set up
  • Rs. 1.26,000 cr for energy production-based investments received
  • Trade infra export scheme will be launched 2017-18

RURAL SECTOR

  • Government targets to bring 1 crore households out of poverty by 2019
  • Over Rs 3 lakh cr spend for rural India. MGNREGA to double farmers income
  • Participation of women in MGNREGA up to 55%
  • During 2017-18, 5 lakh farm ponds to be taken up under MGNREGA
1 February 2017
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