Thursday, February 2, 2017

Sector-wise Budget 2017-18 : Highlights – At a Glance

Opening Remarks

·       Our govt was elected amidst huge expectations; underlying theme was good governance
·       Massive war against black money has been launched
·       Govt now seen as a trusted custodian of public money
·       Focus on energizing youth to reap benefits of growth
·       World economy faces considerable uncertainty
·       Three major challenges for emerging economies: US Fed stance, uncertainty over commodity prices especially oil prices, signs of increasing retreat from globalization as protectionist fears build up 

Tax Administration

·       Black Money: No cash transaction above Rs. 3 lakh
·       Transparency in political funding: Parties continue to receive anonymous donations; proposed system to c lean up limits maximum amount of cash donations to Rs. 2000/=. No limit to payment through cheques or digitally. Amendment proposed to RBI Act to issue electoral bonds. Every party will have to file returns within specified time
·       Exempt FPI Category 1 & 2 investors from indirect provisions
·       Time period of revising tax returns reduced to twelve months income
·       Personal Income Tax: Rate reduced to 5% for income bracket Rs 2.5-5 Lakh. All categories to get uniform benefit of Rs 12.500 per person. Levy of  10% surcharge on bracket Rs 50 Lakh-Rs 1 Crore
·       Personal Income Tax: To have simple one page form for taxable income up to Rs 5 Lakh
·       Direct tax collection not commensurate with income/expenditure pattern of India
·       We are largely a Tax non –compliant society; predominance  of cash in society enable tax evasion
·       After demonetization; data received  will increase tax net
·       Real Estate: Changes in capital gain tax
·       Concessional withholding rate will be extended to 30 June2020 and for  rupee-denominated masala bonds
·       Start-ups: Relaxing holding rules
·       MAT not to be abolished at present; to allow carry forward for 15 years
·       Corporate tax rate: MSME’s rate (annual turnover less than Rs 50 Crore) reduced to 25%
·       Limit of cash donation for Charitable Trusts reduced to Rs 2000/=

Fiscal Management

·       Total Budget expenditure  Rs 21 trillion
·       Rs 3,000 crore to implement various budget announcements
·       Defence expenditure  excluding pensions is Rs 2,74,114 Crore
·       Consolidated outcome budget for all ministries being created
·       FRBM review panel has recommended debt-to-GDP of 60%
·       Fiscal deficit for FY18 pegged at 3.2% of GDP
·       Revenue deficit for FY 18 at 1.9%
·       Public Service
·       To use Head post office for  passport services
·       Defence: Centralized defence travel system developed
·       Defence: Centralised Pension distribution system to be  established
·       Govt recruitment: To introduce two-tier exam system
·       Considering introducing laws to confiscate assets of economic defaulters
·       High-level panel chaired by PM to commemorate Mahtama Gandhi’s 150th birth anniversary

Digital Economy

·       India at cusp of digital revolution
·       Govt to launch 2 scheme including cash back scheme for merchants
·       AADHAAR  Pay for people who don’t have mobile phones
·       Focus on rural and semi-urban areas
·       To strengthen financial inclusion fund
·       Panel on digital payments has recommended structural reforms
·       To create payment board at RBI

Financial Sector

·       FDI policy: FIPB to be abolished
·       Commodities market: Panel to study legal framework for spot & derivative market
·       Resolution mechanism for financial firms
·       Cyber security: Computer emergency response to be set up
·       Listing of PSEs will foster public accountability; revised mechanism for time-bound listing
·       To create integrated public sector oil major
·       Pradhan Mantri Mudra Yojana: Lending target at 2.44 trillion
·       Stand-up India scheme: Over 16,000 new enterprises have been set up


·       Total Capex & development expenditure of railways pegged at Rs 1,31,000 Crore
·       Railways: Passenger safety fund corpus set up. Unmanned level crossing to be eliminated by 2020
·       Railway lines of 3,500km to be commissioned
·       To launch dedicated tourism/pilgrimage trains
·       500 stations to be made differently-abled friendly
·       Cleanliness in Railways: To introduce Coach Mitra facility. By 2019, bio-toilets for all coaches
·       Railways to offer competitive ticket-booking facility. Service charge withdrawn from IRCTC
·       New metro rail policy to be announced
·       Roads sector: National highways allocation at Rs 64,000 Crore
·       AAI Act to be amended to enable monetization of land resources
·       Transport sector: Allocation at Rs 2 trillion
·       Telecom Sector: Allocation to Bharat Net programme at Rs 10,000 Crore
·       Digi-gau initiative to be launched
·       To make India global hub for electronics manufacture
·       Export infra: New restructured central scheme to be launched
·       Total allocation for infrastructure Rs 3.96 trillion

Poor & Underprivileged

·       Women: Mahila  Shakti Kendras with Rs 500 Crore corpus
·       Stepped up allocation to Rs 1,84,632 Crore for various schemes for women and children
·       Affordable housing to be given infrastructure status
·       Action plan to eliminate leprosy by 2018, TB by 2025, reduce IMR to 29 in 2019
·       To create additional PG medical seats
·       Two new AIIMS in Jharkhand & Gujarat
·       New rules for medical devices
·       Labour rights: Legislative  reforms to simplify existing labour laws
·       Allocation to SCs increased to Rs 52,393 crore; STs to Rs 31,920 crore, Minority affairs Rs 4,195 crore


·       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 & AICTE
·       100 Indian international skill centres to be established with courses in foreign language
·       To launch skill acquisition and knowledge awareness  -  Rs 4,000 crore
·       Special  scheme for  creating employment in leather/footwear sector
·       Tourism: Five special zones to be set up


·       Farmer  credit fixed at record level of Rs 10 trillion; will ensure adequate flow to underserved areas
·       Soil health cards: Govt to set up mini-labs in Krishi Vignan Kendras
·       Long-term irrigation fund in Nabard-corpus at Rs 40,000 crore
·       Model law on contract farming to be circulated
·       Dairy processing infra fund with corpus at Rs 8,000 crore
·       Dedicated micro-irrigation fund with Rs 5,000 crore corpus

Rural Population

·       Mission Antyodaya to bring 1 crore  households of pverty
·       MGNREGA: Participation of women now at 55%
·       MGNREGA: Rs 48,000 crore allocated
·       MGNREGA: using space technology in a big way
·       Prime Minister Gram Sadak Yogna: Rs 1,9000 crore allocated; along with states, Rs 27,000 crore to be  spent in FY18
·       Pradhan Mantri Awas Yogana: Rs  23,000 crore allocated
·       100% village electrification by May 2018
·       Rural livelihood mission: Rs 4,500 crore allocated
·       Mason training for 5 lakh people
·       Panchyat Raj: HR resource programme to be launched

·       Rs 1,87,223 crore for rural programmes

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