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Budget 2017-18: Historical budget at glance
Pankaj Tripathi | 08 Feb 2017

The government's administration is systematic and transparency based. Economy has moved on a high growth path. India's Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17. FDI grew 36% in H1 2016-17 over H1 2015-16, despite 5% reduction in global FDI inflows.

The Indian economy has been robust to mild shocks and IMF forecasts, India to be one of the fastest growing major economies in 2017.

Agenda for 2017-18 is: "Transform, Energies and Clean India" - TEC India

TEC India seeks to:

Transform the quality of governance and quality of life of our people;

Energies various sections of society, especially the youth and the vulnerable, and enable them to unleash their true potential; and

Clean the country from the evils of corruption, black money and non-transparent political funding.

Key Features of Budget 2017-2018

Transformational reforms in last year

  • Budget 2017-18 contains 3 major reforms. First, presentation of Budget advanced to 1st February to enable the Ministries to operationalise all activities from the commencement of the financial year. Second, merger of Railways Budget with General Budget to bring Railways to the centre stage of Government's Fiscal Policy and Third, removal of plan and non plan classification of expenditure to facilitate a holistic view of allocations for sectors and ministries.

  • Passage of the Constitution Amendment Bill for GST and the progress for its introduction.

  • Government's dynamic decisive measure to curb tax evasion and parallel economy and resolve to eliminate corruption, black money, counterfeit currency and terror funding . Drop in economic activity, if any, to be temporary but in long run it will contribute to prosperity for the economy.

  • Enactment of the Insolvency and Bankruptcy Code; amendment to the RBI Act for inflation targeting; enactment of the Aadhar bill for disbursement of financial subsidies and benefits.

Farmers

  • Target for agricultural credit in 2017-18 has been fixed at a record level of 10 lakh crores.

  • Farmers will also benefit from 60 days' interest waiver announced on 31 Dec 2016 coverage under Fasal Bima Yojana scheme will be increased from 30% of Cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19 for which a budget provision of Rs 9000 crore has been made coverage of National Agricultural Market (e-NAM) to be expanded from 250 markets to 585 APMCs. Assistance up to 75 lakh will be provided to every e-NAM committed to double the income in 5 years.

Rural population

  • Aim to bring one crore households out of poverty and to make 50,000 Gram Panchayats poverty free by 2019, the 150th birth anniversary of Gandhi ji.

  • Women participation in MGNREGA has increased to 55% from less than 48%.

  • MGNREGA allocation to be the highest ever at 48,000 crores in 2017-18 .

  • Pace of construction of PMGSY roads accelerated to 133 km roads per day in 2016-17, against an avg. of 73 km during 2011-2014.

  • Well on our way to achieving 100% village electrification by 1st May 2018.

  • Total allocation for Rural, Agriculture and Allied sectors is ` 187223 crores

Youth

  • To introduce a system of measuring annual learning outcomes in our schools.

  • SWAYAM platform, leveraging IT ,to be launched with at least 350 online courses. This would enable students to virtually attend courses taught by the best faculty.

  • Pradhan Mantri Kaushal Kendras to be extended to more than 600 districts across the country. 100 India International Skills centres will be established across the country.

  • Incredible India 2.0 Campaign will be launched across the world to promote tourism and employment.

The poor and the underprivileged

  • Mahila Shakti Kendra will be set up with an allocation of ` 500 crores in 14 lakh ICDS Anganwadi Centres. This will provide one stop convergent support services for empowering rural women with opportunities for skill development, employment, digital literacy, health and nutrition.

  • Under Maternity Benefit Scheme Rs 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children.

  • To create additional 5,000 Post Graduate seats per annum to ensure adequate availability of specialist doctors to strengthen Secondary and Tertiary levels of health care.

  • Two new All India Institutes of Medical Sciences to be set up in Jharkhand and Gujarat.

  • Propose to amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote use of generic medicines.

  • For senior citizens, Aadhar based Smart Cards containing their health details will be introduced.

Infrastructure

  • For transportation sector as a whole, including rail, roads, shipping, provision of Rs 2, 41,387 crores has been made in 2017-18.

  • 2,000 kms of coastal connectivity roads have been identified for construction and development.

Railways

  • For 2017-18, the total capital and development expenditure of Railways has been pegged at Rs 1,31,000 crores. This includes Rs 55,000 crores provided by the Government.

  • For passenger safety, a Rashtriya Rail Sanraksha Kosh will be created with a corpus of Rs 1 lakh crores over a period of 5 years.

  • Unmanned level crossings on Broad Gauge lines will be eliminated by 2020.

  • By 2019, all coaches of Indian Railways will be fitted with bio toilets.

Financial Sector

  • Foreign Investment Promotion Board to be abolished in 2017-18 and further liberalization of FDI policy is under consideration.

  • Lending target under Pradhan Mantri Mudra Yojana to be set at Rs 2.44 lakh crores. Priority will be given to Dalits, Tribals, Backward Classes and Women.

  • In line with the 'INDRADHANUSH' roadmap Rs 10,000 crores for recapitalization of banks provided in 2017-18 .

Promoting Affordable Housing and Real Estate Sector

  • Under the scheme for profit-linked income tax deduction for promotion of affordable housing, carpet area instead of built up area of 30 Sq.mtr. limit will apply only in case of municipal limits of 4 metropolitan cities and 60 Sq.mtr. will be counted for the rest of the country.

  • For builders for whom constructed buildings are stock-in-trade, tax on notional rental income will only apply after one year of the end of the year in which completion certificate is received.

  • Reduction in the holding period for computing long term capital gains from transfer of immovable property from 3 years to 2 years. Also, the base year for indexation is proposed to be shifted from 01.04.1981 to 01.04.2001 for all classes of assets including immovable property.

Digital Economy

  • By the end of 2017-18, high speed broadband connectivity on optical fiber will be available in more than Rs 1, 50,000 gram panchayats, under BharatNet.

  • Aadhar Pay, a merchant version of Aadhar Enabled Payment System,will be launched shortly.

  • Banks have targeted to introduce additional 10 lakh new POS terminals by March 2017. They will be encouraged to introduce 20 lakh Aadhar based POS by September 2017.

  • Under scheme of presumptive income for small and medium tax payers whose turnover is upto 2 crores, the present, 8% of their turnover which is counted as presumptive income is reduced to 6% in respect of turnover which is by non-cash means.

  • No transaction above Rs 3 lakh would be permitted in cash subject to certain exceptions.

  • Miniaturized POS card reader for m-POS (other than mobile phones or tablet computers), micro ATM standards version 1.5.1, Finger Print Readers / Scanners and Iris Scanners and on their parts and components for manufacture of such devices to be exempt from BCD, Excise/CV duty and SAD.

Measures for Stimulating Growth and Ease of Doing Business

  • Concessional withholding rate of 5% charged on interest earned by foreign entities in external commercial borrowings or in bonds and Government securities is extended to 30.06.2020. This benefit is also extended to Rupee Denominated (Masala) Bonds.

  • MAT credit is allowed to be carried forward up to a period of 15 years instead of 10 years at present.

  • In order to make MSME companies more viable, income tax for companies with annual turnover up to Rs 50 crore is reduced to 25%.

  • Basic customs duty on LNG reduced from 5% to 2.5%.

  • Allowable provision for Non-Performing Asset of Banks increased from 7.5% to 8.5%.

  • Under scheme for presumptive taxation for professionals with receipt up to Rs 50 lakhs p.a. advance tax can be paid in one installment instead of four.

  • Threshold limit for audit of business entities who opt for presumptive income scheme increased from Rs 1 crore to Rs 2 crores .Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of 10 lakh to 25 lakh or income from 1.2 lakh to 2.5 lakh.

Transparency in Electoral Funding

  • Maximum amount of cash donation, a political party can receive, will be Rs 2000/- from one person.

  • Every political party would have to file its return within the time prescribed in accordance with the provision of the Income-tax Act.

  • Existing exemption to the political parties from payment of income-tax would be available only subject to the fulfillment of these conditions.

Income Tax

  • Time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return. Also the time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter.

  • Existing rate of taxation for individual assesses between income of Rs 2.5 lakh to 5 lakh reduced to 5% from the present rate of 10% .

  • Appeal to all citizens of India to contribute to Nation Building by making a small payment of 5% tax if their income is falling in the lowest slab of 2.5 lakhs to 5 lakhs.

  • Surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between Rs 50 lakh and Rs 1 crore.

Goods and Services Tax

  • The GST council has finalized its recommendations on almost all the issues based on consensus on the baisis of 9 meetings held.

  • The extensive reach-out efforts to trade and industry for GST will start from 1st April, 2017 to make them aware of the new taxation system.

  • Preparation of IT system for GST is also on schedule.