Union Budget 2017-2018 has been presented by Indian Finance Minister Mr. Arun Jaitley on 1st February 2017. The details of the union Budget 2017-18 has been compiled in points for your ease of reading.
“Transform, Energise and Clean India” – TEC India is the Agenda for Budget 2017-18. Transform the quality of governance and quality of life of our people; Energise 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
Few Points About Budget 2017
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. Foreign exchange reserves have reached 361 billion US Dollars as on 20th January 2017.
In RE (2016-17), the total expenditure at Rs.20,14,407 crore is more than the BE (2016-17) by Rs.36,347 crore. Accordingly, the Fiscal Deficit target of 3.5% in 2016-2017 has been achieved without the reduction in expenditure at the RE stage.
What’s New – Budget 2017
- First, the presentation of the Budget has been advanced to 1st February,
- The Merger of the Railways Budget with the General Budget is a historic step.
- The government is done away with the plan and non-plan classification of expenditure. Revenue and capital will take their place.
Farmers: Budget 2017
- The target for agricultural credit in 2017-18 has been fixed at a record level of ₹ 10 lakh crores.
- The Primary Agriculture Credit Societies (PACS) act as the front end for loan disbursements. Govt. support NABARD for computerisation and integration of all 63,000 functional PACS with the Core Banking System of District Central Cooperative Banks. This will be done in 3 years at an estimated cost of ₹ 1,900 crores, with financial participation from State Governments.
- The coverage of “Fasal Bima Yojana” will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. The Budget provision of ₹ 5,500 crores for this Yojana in BE 2016-17 has been increased to ₹ 13,240 crores in RE 2016-17 to settle the arrear claims. For 2017-18, FM has provided a sum of ₹ 9,000 crores. The sum insured under this Yojana has more than doubled from ` 69,000 crores in Kharif 2015 to ` 1,41,625 crores in Kharif 2016.
- Mini Labs will be formed in in Krishi Vigyan Kendras (KVKs) and ensure 100% coverage of all 648 KVKs in the country. In addition, 1000 mini-labs will be set up by qualified local entrepreneurs.
- Dedicated Micro Irrigation Fund in NABARD to achieve ‘per drop more crop’ with an initial corpus of ₹ 5,000 crores.
- A Dairy Processing and Infrastructure Development Fund would be set up in NABARD with a corpus of ₹ 8,000 crores over 3 years. Initially, the Fund will start with a corpus of ₹ 2,000 crores.
Rural Population: Budget 2017
- Govt. is on the way to achieving 100% village electrification by 1st May 2018.
- Increase in allocation of “Pradhan Mantri Awaas Yojana” – Gramin from ₹ 15,000 crores in BE 2016-17 to ₹ 23,000 crores in 2017-18.
- An increased allocation of ₹ 4,814 crores has been proposed under the Deendayal Upadhyaya Gram Jyoti Yojana in 2017-18.
- To undertake a Mission Antyodaya to bring one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019, the 150th birth anniversary of Gandhiji.
- Participation of women in MGNREGA has increased to 55% from less than 48% in the past.
- The budget provision of ₹38,500 crores under MGNREGA in 2016-17 has been increased to `48,000 crores in 2017-18. This is the highest ever allocation for MGNREGA.
- A sum of ₹ 19,000 crores in 2017-18 for The Pradhan Mantri Gram Sadak Yojana (PMGSY) . Together with the contribution of States, an amount of ₹ 27,000 crores will be spent on PMGSY in 2017-18.
- Under National Rural Drinking Water Programme (NRDWP), it is proposed to provide safe drinking water to over 28,000 arsenic and fluoride affected habitations in the next four years.
- Mason training will be provided to 5 lakh persons by 2022, with an immediate target of training at least 20,000 persons by 2017-18.
- A programme of “human resource reforms for results” will be launched during 2017-18 for this purpose. As panchayati raj institutions still lack human resources.
- The total allocation for the rural, agriculture and allied sectors in 2017-18 is ₹ 1,87,223 crores, which is 24% higher than the previous year.
Youth: Budget 2017
- A system of measuring annual learning outcomes in our schools. Emphasis will be given on science education and flexibility in the curriculum to promote creativity through local innovative content.
- An Innovation Fund for Secondary Education will be created with ICT enabled learning transformation. The focus will be on 3479 educationally backward blocks.
- “SWAYAM” platform with at least 350 online courses. Access to SWAYAM would be widened by linkage with DTH channels, dedicated to education.
- “National Testing Agency” as an autonomous and self-sustained premier testing organisation to conduct all entrance examinations for higher education institutions.
- Pradhan Mantri Kaushal Kendras (PMKK) 100 India International Skills Centres will be established across the country.
- SANKALP (Skill Acquisition and Knowledge Awareness for Livelihood Promotion programme) will provide market relevant training to 3.5 crore youth at a cost of ₹ 4,000 crores.
- “STRIVE” (Skill Strengthening for Industrial Value Enhancement) will also be launched in 2017-18 at a cost of ₹ 2,200 crores. STRIVE will focus on improving the quality and market relevance of vocational training provided in ITIs and strengthen the apprenticeship programmes through industry cluster approach.
- Incredible India 2.0 Campaign will be launched across the world.
- Two new All India Institutes of Medical Sciences will be set up in the States of Jharkhand and Gujarat.
Poor and the Underprivileged: Budget 2017
- The National Housing Bank will refinance individual housing loans of about ₹ 20,000 crore in 2017-18.
- An action plan to eliminate Kala-Azar and Filariasis by 2017, Leprosy by 2018 and Measles by 2020.
- Mahila Shakti Kendra will be set up with an allocation of ₹ 500 crores in 14 lakh ICDS Anganwadi Centres.
- Govt. will amend the Drugs and Cosmetics Rules to ensure availability of drugs at reasonable prices and promote the use of generic medicines.
- To step up the welfare of schedule-castes, increased fund of 35% will be allocated comparing to BE 2016-17. The allocation for Scheduled Tribes has been increased to ₹ 31,920 crores and for Minority Affairs to ₹ 4,195 crores.
- Aadhar based Smart Cards containing their health details will be introduced.
Infrastructure: Budget 2017
- Service charge on e-tickets booked through IRCTC has been withdrawn.
- Area of focus for Railway in 2017-18, Passenger safety, Capital and development works, Cleanliness; and Finance and accounting reforms.
- A “Rashtriya Rail Sanraksha Kosh” will be created with a corpus of ₹ 1 lakh crores over a period of 5 years.
- Unmanned level crossings on Broad Gauge lines will be eliminated by 2020.
- SMS based Clean My Coach Service has been started. It is now proposed to introduce ‘Coach Mitra’ facility, a single window interface, to register all coach related complaints and requirements.
- By 2019, all coaches of Indian Railways will be fitted with bio-toilets.
- A new Metro Rail Policy will be announced. Also, a new Metro Rail Act will be enacted by rationalising the existing laws.
- In road sector, FM has stepped up the Budget allocation for highways from ₹ 57,976 crores in BE 2016-17 to ₹ 64,900 crores in 2017-18.
- Under the BharatNet Project, OFC has been laid in 1,55,000 km’s. Allocation for BharatNet Project to ₹ 10,000 crores in 2017-18.
- A DigiGaon initiative will be launched to provide telemedicine, education, and skills through digital technology.
- Crude Oil Reserves – 2 more locations, namely, Chandikhole in Odisha and Bikaner in Rajasthan. This will take our strategic reserve capacity to 15.33 MMT.
- TIES (Trade Infrastructure for Export Scheme) will be launched in 2017-18.
Financial Sector: Budget 2017
- More than 90% of the total FDI inflows are now through the automatic route.
- Foreign Investment Promotion Board (FIPB) has successfully implemented e-filing and online processing of FDI applications. Further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course.
- Multi-State Cooperative Societies Act, 2002. Govt. will amend this Act in consultation with various stakeholders, as part of our ‘Clean India’ agenda.
- A Computer Emergency Response Team for our Financial Sector (CERT-Fin) will be established.
- Shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges.
- In line with the ‘Indradhanush’ roadmap, FM has provided ₹ 10,000 crores for the recapitalisation of Banks in 2017-18.
- A reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges.
- “Pradhan Mantri Mudra Yojan”, at ₹ 2.44 lakh crores. (Priority will be given to Dalits, Tribals, Backward Classes, Minorities, and Women.)
- Stand Up India scheme, Over 16,000 new enterprises have come up through this scheme in activities, as diverse as food processing, garments, diagnostic centres, etc.
Digital Economy: Budget 2017
- Govt. to promote the usage of BHIM; these are, Referral Bonus Scheme for individuals and a Cashback Scheme for merchants.
- 125 lakh people have adopted the BHIM app so far.
- Aadhar Pay, a merchant version of Aadhar Enabled Payment System, will be launched shortly.
- A Mission will be set up with a target of ₹ 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards.
- 20 lakh Aadhar based PoS by September 2017. 10 lakh new PoS terminals by March 2017.
- Strengthening of digital payment infrastructure- The focus would be on rural and semi-urban areas through Post Offices, Fair Price, Shops and Banking Correspondents.
- Promote and possibly mandate petrol pumps, fertilizer depots, municipalities, Block offices, road transport offices, universities, colleges, hospitals and other institutions to have facilities for digital payments, including BHIM App.
- Govt. to amend Payment and Settlement Systems Act, 2007. The Government will undertake a comprehensive review of this Act and bring about appropriate amendments. – Under Committee on Digital Payments constituted by Department of Economic Affairs recommendation.
- It is proposed to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems. Necessary amendments are proposed to this effect in the Finance Bill 2017.
- A Mission will be set up with a target of ₹ 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards.
Public Service: Budget 2017
- Direct Benefit Transfer (DBT) to LPG and kerosene consumers. Chandigarh and eight districts of Haryana have become kerosene-free.
- 84 Government schemes have also boarded on the DBT platform.
- Head Post Offices as front offices for rendering passport services.
- A Centralised Defence Travel System has now been developed through which travel tickets can be booked online by our soldiers and officers.
- A web-based interactive Pension Disbursement System for Defence Pensioners will be established.
- Govt. will introduce a system of single registration and two-tier system of examination. To reduce cumbersome procedures of Government recruitment
- As there have been instances of big-time offenders, including economic offenders, fleeing the country to escape the reach of the law. Govt. will create a new law, to confiscate the assets of such persons located within the country.
Fiscal Management: Budget 2017
- Total expenditure in Budget for 2017-18 has been placed at ₹ 21.47 lakh crores.
- Abolition of Plan-Non Plan classification of expenditure, the focus is now on Revenue and Capital expenditure.
- Stepped up the allocation for Capital expenditure by 25.4% over the previous year
- Defense expenditure excluding pensions, FM has provided a sum of ₹ 2,74,114 crores including ₹ 86,488 crores for Defence capital.
- Increased the allocation for Scientific Ministries to ₹ 37,435 crore in 2017-18.
- FRBM Review Committee report – Committee has favoured Debt to GDP of 60% for the General Government by 2023, consisting of 40% for Central Government and 20% for State Governments. The Committee has derived and recommended 3% fiscal deficit for the next three years. The Committee has also provided for ‘Escape Clauses’, for deviations upto 0.5% of GDP, from the stipulated fiscal deficit target.
- Fiscal deficit for 2017-18 at 3.2% of GDP and remain committed to achieve 3% in the following year.
- Net market borrowing of Government to ₹ 3.48 lakh crores after the buyback, much lower than ₹ 4.25 lakh crores of the previous year.
- Revenue Deficit of 2.3% in BE 2016-17 stands reduced to 2.1% in the Revised Estimates. The Revenue Deficit for next year is pegged at 1.9%, against 2% mandated by the FRBM Act.
Tax Administration: Budget 2017
- Estimated 4.2 crore persons engaged in organised sector employment, the number of individuals filing a return for salary income are only 1.74 crore.
- 5.6 crore informal sector individual enterprises and firms doing small business in India, the number of returns filed by this category are only 1.81 crore.
- Net tax revenue of 2013-14 was ₹ 11.38 lakh crores. This grew by 9.4% in 2014-15 and 17% in 2015-16. As per the RE of 2016-17, we will end the year with a high growth rate of 17% for the second year in a row.
- Under affordable housing scheme, instead of built up area of 30 and 60 sq.mtr., the carpet area of 30 and 60 sq.mtr. will be counted.
- FM has propose to reduce the income tax for smaller companies with annual turnover upto ₹ 50 crore to 25%.
- Banking Sector– increase allowable provision for Non-Performing Asset from 7.5% to 8.5%.
- Basic customs duty on LNG reduced from 5% to 2.5%
- The limit of cash donation which can be received by a charitable trust is being reduced from ₹ 10,000/- to ₹ 2000/-.
- The Special Investigation Team (SIT) set up by the Government for black money has suggested that no transaction above ₹ 3 lakh should be permitted in cash.
- Propose to exempt BCD, Excise/CV duty and SAD on miniaturised POS card reader for m-POS, micro ATM standards version 1.5.1, Finger Print Readers/Scanners and Iris Scanners.
- A list of donors who contributed more than `20,000/- to any party in cash or cheque is required to be maintained.
- Donation to political parties- suggestion made by the Election Commission, the maximum amount of cash donation that a political party can receive will be ₹ 2000/- from one person.
- A donor could purchase bonds from authorised banks against cheque and digital payments only. They shall be redeemable only in the designated account of a registered political party. These bonds will be redeemable within the prescribed time limit from the issuance of the bond.
- Increase the threshold limit for the audit of business entities who opt for presumptive income scheme from ₹ 1 crore to ₹ 2 crores. Similarly, the threshold for maintenance of books for individuals and HUF is being increased from turnover of ₹ 10 lakhs to ₹ 25 lakhs or income from ₹ 1.2 lakhs to ₹ 2.5 lakhs.
- Exempt Foreign Portfolio Investor (FPI) Category I & II from indirect transfer provision.
- Exempt them from the requirement of TDS subject to their filing a self-declaration that their income is below taxable limit. TDS of 5% is being deducted from commission payable to individual insurance agents even if the income of some of them may be below taxable limit.
Personal Income Tax: Budget 2017
- To reduce the existing rate of taxation for individual assesses between the income of ₹ 2.5 lakhs to ₹ 5 lakhs to 5% from the present rate of 10%.
- Zero tax liability for people getting income upto ₹ 3 lakhs p.a. and the tax liability will only be ₹ 2,500 for people with income between ₹ 3 and ₹ 3.5 lakhs.
- If the limit of ₹ 1.5 lakh under Section 80C for investment is used fully the tax would be zero for people with income of ₹ 4.5 lakhs.
- A surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between ₹ 50 lakhs and ₹ 1 crore.
- A simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income upto ₹ 5 lakhs other than business income.
GST: Budget 2017
The GST Council has finalised its recommendations on almost all the issues based on consensus on the basis of 9 meetings held
- Preparation of IT system for GST is also on the schedule.
- 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.
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Source – indiabudget.nic.in