The Budget 2017-18 consists of 3 major reforms which are the presentation’s advancement date, the merger of railway budget along with the general budget and the abolition of Plan as well as non-Plan expenditure.
The Finance Minister has discussed the budget reforms in relation to the various sectors like Rural Population, agricultural sector, Railways and Infrastructure, energy and financial sector, fiscal situation, political parties funding, defence sector, tax proposals, personal income tax, health care of poor and underprivileged, youth and demonetisation. The 2017 Union Budget has laid focus on these 10 sectors. Lets us have a quick glance on them.
Mr Jaitley mentioned in his budget speech that India is seen as the “Engine Of Global Growth”. Of late there are two structural policy initiatives namely Demonetisation and GST implementation.
- FDI policy reforms – more than 90% of FDI inflows are now automated.
- The Shares of Railway PSE like IRCTC are going to be listed on stock exchanges.
- The Foreign Investment Promotion Board will be put to an end.
- There will be an introduction of the bill of financial firms in this session of Parliament.
- There will be a revise in the mechanism so that time bound listing of CPSEs is done.
- There will be a formation of Computer emergency response team for the financial sector.
- There will be an easy online booking system for Army and other defence personnel.
- The Negotiable Instruments Act will be modified.
- The lending target for Pradhan Mantri Mudra Yojana for 2017-18 has been fixed at Rs 2.44 lakh crore.
- The Government has introduced two new schemes in related to Digital India. This will bring about major revolution in the mobile phone sector. The two schemes are as follows
a. Promotion of BHIM App will be done by providing referral bonus to the users, and
b. Cash back will be provided to the traders.
- The post office will be considered as the central office to render passport services.
- There is a new law that is going to be introduced for the economic offenders who vanish from India. According to this law, the government will confiscate the assets of such people within the country.
- Stand-up India scheme: There has been a setup of around 16,000 new enterprises
- There will be Resolution Mechanism created for financial firms
Personal Income Tax
There will not be many changes to excise duties because of GST implementation. A massive war has been launched against black money and now the government has been considered as a trusted custodian of public money
- The income tax rate for the individuals with income ranging from Rs. 2.5- Rs 5 lakh has been reduced from 10% to 5%.
- There will not be any scrutiny by the government for those who are filing their I-T Returns for the first time.
- There is a precise I.T return of one page for an annual income of Rs 5 lakh apart from the business income.
- The tax payers in consecutive brackets and belonging to different categories are going to obtain a benefit amounting to Rs 12, 500
- There will be a surcharge of 10 % on the individual income that ranges from Rs 50 lakh to Rs 1 crore so that the loss incurred (15,000 Crore) due to personal I-T rate is recovered.
- The surcharge of 15 % on an individual’s income that is above Rs 1 crore will be continued as it was earlier
There is a possibility that the Net Income Tax could be gradually widened by including all those individuals who earn high incomes. It is expected that the growth will come to normal as soon as the new currency comes in circulation.
- The total expenditure has been around Rs 21,47,000 crore.
- Capital expenditure will be focussed upon more this year and its percentage will be close to 25.4%
- The fiscal deficit of 2017-18 is going to be achieved to an extent of 3% in the next year.
- The planned as well as non-planned expenditures will be put to an end.
- The revenue deficit was 1.9 %
- The fiscal deficit was recommended to be 3% for a period of three years along with the deviation of 0.5% of GDP.
The Direct tax collection is not considerate with the income and expenditure pattern of India. The duration of revising tax returns has been reduced to 12 months.
- The Holding period for long-term capital gain has been reduced to two years.
- It has been noticed that the tax to GDP Ratio of India is not favourable.
- The Capital gains Tax is going to be exempted for those individuals who have a land that was meant for the purpose of the creating the state capital of Andhra Pradesh.
- There is a proposal that has been laid for the carrying forward MAT for 15 years.
- It has been proposed by the government to lower down the basic customs duty for LNG from 5 % to 2.5%.
- The Income Tax Act to be amended to ensure that no transaction above Rs 3 lakh is permitted in cash.
- The ratio of Direct to Indirect Tax is not an optimal one.
- It has been observed that only 1.72 lakh people have showed their income to be more than Rs 50 lakh a year.
There will be a two-tier exam system for the purpose of Govt Recruitment Govt recruitment: To introduce two-tier exam system.
It has been decided by the government that The government has decided to reduce the corporate income tax from FY 2017-18 will be reduced from 30 % to 25% for all those companies that had a turnover up to Rs 50 crore in FY 2015-16. The startups which are recognised under the Startup India policy are now able to claim tax benefits in three out of the first seven years under Section 80-IAC of the Income-tax Act, 1961.
Demonetisation has to lead to the transfer of resources from tax evaders to govt. It has been seen that Demonetisation has a strong potential to generate long-term benefits.
- It is going to have a considerable impact on the economy as well as people’s lives.
- It has been observed that demonetisation is a resolute and definitive step which is going to certainly increase the GDP growth.
- It is expected that demonetisation will have a transitory impact on the economy.
Infrastructure and Railways
India are marching towards launching dedicated tourism as well as pilgrimage trains. A new metro rail policy is also going to be announced
- There will be no service charges on the tickets that are booked online.
- Around 500 Railway Stations are going to be made differently-abled friendly.
- All trains are going to have bio-toilets by 2019.
- The Railways are going to partner with logistics players for solutions like front-end and back-end for selected commodities.
- There will also be a facility to book competitive ticket booking.
- A new facility called Coach Mitra has been introduced so that the public can register all their coach related complaints.
- There has been an allocation of Rs. 39,61,354 crore for infrastructure.
- The total allocation for Railways is Rs. 1,31,000 crore.
- There is an introduction of a new service that is based on SMS. It is named as ”clean my coach service”.
The Farmer credit that has been fixed at a record level of Rs10 trillion is going to ensure adequate flow to the underserved areas.
- The fund related to NABARD is going to be raised to Rs. 40,000 crore.
- The government is going to set up mini labs for the testing of soil in Krishi Vigyan Kendras.
- The focus will be on the security of the farmers against natural disasters.
- The farmers will be allotted with a credit of Rs 10 lakh and 60 days waiver of interest.
- The corpus of irrigation has increased from Rs 20,000 crore to Rs 40,000 crore.
- The issuance of soil cards has gained impetus.
- This sector has been allocated an amount of Rs. 2.74,114 crore
- There is a scheme for Trade Infra Export Scheme that is going to be launched in 2017-18
- The investments in Energy Production are close to Rs. 1.26,000 crore
- There will be a set up of a policy for developing strategies to set up crude reserves.
A new Human Resource Programme by name “Panchayat Raj” is going to be launched. It has been decided that mason training will be provided to 5 lakh people.
- Steps are going to be taken so that women participation in MGNREGA is increased to 55%.
- It has been proposed by the govt that 1 crore people without homes will be provided homes.
- There will be an allocation of Rs. 19,000 crore for Pradhan Mantri Gram Sadak Yojana in 2017-18.
- It is believed that 100% rural electrification will be achieved by March 2018.
- Swachh Bharat mission has made a lot of progress and sanitation coverage has gone up from 42% on Oct 13 to 60% now.
- The aim of government is to make 1 crore households come out of poverty by the year 2019.
The allocation of Rs 4,000 crore has been done to launch skill acquisition and knowledge awareness. A special scheme has been introduced for the creation of employment in the Footwear Sector.
- This year the focus will be on the educationally backward blocks which are 3479 in totality.
- The colleges will be described on the basis of accreditation.
- Will introduce a system of measuring annual learning outcomes and come out with an innovation fund for secondary education.
- The Mission of Skill India has been to maximise the potential. There is a plan to set up 100 International Centres all over India.
- The courses related to foreign languages are going to be introduced.
- Steps will be taken to create almost 5000 PG seats per year.
India is at an edge of extensive digital transformation. It has been said that Aadhaar Pay will be launched for those people who don’t have mobile phones. There is also a recommendation from the panel to bring in reforms so that a payment regulatory board is created at RBI.
Poor and Unprivileged
Creation of additional PG medical seats per annum can be seen and new rules will be added for medical devices.
- Smart Cards based on Aadhaar along with the health details will be provided to Senior Citizens.
- The Legislative reforms will be made easy and combined with the existing labour laws.
Guidelines and Plan Of Action For 2017- 18
To-do-list for 2017-18 is: “Transform, Energise and Clean India” – TEC India
- Revamp the governance quality and enhance the quality of the life of the people of India.
- Dynamize different sections of the society like the youth and the susceptible in such a way that they are encouraged to unleash their true potential; and
- Eradicate corruption, non-transparent political funding and black money from the country
Apart from the above reforms in the budget there is also an introduction of a scheme for senior citizens to ensure 8 per cent guaranteed returns and the excise duty on Tobacco and Paan Masala has been increased from 10 pc to 12 pc. Lastly it can be concluded that the new budget has softened the blow of demonetisation. The main idea behind this budget has been to spend more on rural areas, infrastructure and eliminate the poverty by maintaining fiscal prudence while ensuring that the finances of the government are not going out of control.