Union Budget | 2017 - 2018

Finance Minister Arun Jaitley presented the General Budget 2017-18, in New Delhi on February 01, 2017.

Budget Highlights (Key Features)

Budget Speech (English)

Budget Speech (Hindi)

Key to the Budget Document 2017-18

बजट पत्रों का संक्षिप्त परिचय 2017-18

Budget at a Glance

Here are the key highlights of his speech:

•10 distinct themes: Farmers, rural population, energizing youth, poor and underprivileged, infrastructure, financial sector, digital economy, public service, prudent fiscal management, tax administration

TAX ADMINISTRATION:

•Black money: No cash transactions above Rs3 lakh

•Transparency in political funding: Parties continue to receive anonymous donations; propose system of cleaning up: Maximum amount of cash donation that can be received is Rs2,000; political parties can receive donations by cheques or digitally; amendment proposed to RBI Act to issue electoral bonds; every party has to file returns within specified time

•Personal income tax: Rate reduced to 5% for income bracket of Rs2.5-5 lakh; All other categories to get uniform benefit of Rs12,500 per person; to levy surcharge on income bracket Rs50 lakh-Rs1 crore

•Personal income tax: To have simple one-page form for taxable income up to Rs5 lakh

•GST: preparedness of IT system on schedule;

•Not many changes to excise duties since GST will be implemented soon

•Exempt FPI category 1 and 2 investors from indirect provisions

•Time period of revising tax return reduced to 12 months

•Direct tax collection not commensurate with income/expenditure pattern of India

•We are largely a tax non-compliant society; predominance of cash in society enables tax evasion

•After demonetization, data received will increase tax net

•Real estate: to make changes in capital gains tax

•Concessional withholding rate will be extended to 30 June 2020 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: MSMEs’ rate (annual turnover less than Rs50crore) reduced to 25%

•LNG: Reduce customs duty to 2.5%

•Limit of cash donation for charitable trusts cut to Rs2,000

FISCAL MANAGEMENT:

•Total budget expenditure: Rs21 trillion

•Rs3,000 crore to implement various budget announcements

•Defence expenditure excluding pensions: Rs2,74,114 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 FY18 at 1.9%

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

•High-level panel chaired by PM to commemorate Mahatma Gandhi’s 150th birth anniversary

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

•Focus on rural and semi-urban areas

•To strengthen financial inclusion fund

•Panel on digital payments has recommended structural reforms

•To create payment regulatory board at RBI

FINANCIAL SECTOR:

•FDI policy: FIPB to be abolished

•Commodities market: panel to study legal framework for spot and derivative market

•Resolution mechanism for financial firms

•Cyber-security: Computer emergency response team to be set up

• Listing of PSEs will foster public accountability; revised mechanism for time-bound listing

•To create integrated public sector oil major

•New ETF to be launched

•Pradhan Mantri Mudra Yojana: Lending target at Rs2.44 trillion

•Stand-up India scheme: over 16,000 new enterprises have been set up

INFRASTRUCTURE:

•Total capex and development expenditure of railways pegged at Rs1,31,000 crore

•Railways: Passenger safety--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, biotoilets for all coaches

•Railways to offer competitive ticket-booking facility; service charge withdrawn for IRCTC

•New metro rail policy to be announced

•Roads sector: National highways allocation at Rs64,000 crore

•AAI Act to be amended to enable monetization of land resources

•Transport sector: Allocation at Rs2 trillion

•Telecom sector: allocation to Bharat Net programme at Rs10,000 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: Rs3.96 trillion

POOR AND UNPRIVILEGED:

•Women: Mahila Shakti Kendras with Rs500 crore corpus

•Stepped up allocation to Rs1,84,632 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 per annum

•Two new AIIMS in Jharkhand and Gujarat

•New rules for medical devices

•Labour rights: Legislative reforms to simplify existing labour laws

•Allocation to SCs increased to Rs52,393 crore; STs to Rs31,920 croe, Minority affairs: Rs4,195 crore

•Senior citizens: Aadhaar-based smart cards with health details

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

•Tourism: Five special zones to be set up

FARMERS:

•Farmer credit fixed at record level of Rs10 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 Rs40,000 crore

•Model law on contract farming to be circulated

•Dairy processing infra fuind with corpus of Rs8,000 crore

•Dedicated micro-irrigation fund with Rs5,000 crore corpus

RURAL POPULATION:

•Mission Antyodaya to bring 1 crore households of poverty

•MGNREGA: Participation of women now at 55%

•MGNREGA: Rs48,000 crore allocated

•MGNREGA: using space technology in a big way

•Prime Minister Gram Sadak Yojana: Rs19,000 crore allocated; along with states, Rs27,000 crore to be spent in FY18

•Pradhan Mantri Awas Yojana: Rs23,000 crore allocated

•100% village electrification by May 2018

•Rural livelihood mission: Rs4,500 crore allocated

•Mason training for 5 lakh people

•Panchayat Raj: HR resource programme to be launched

•Rs1,87,223 crore for rural programmes

OPENING REMARKS:

•Our govt was elected amidst huge expectations; underlying theme was good governance: Arun Jaitley

•Massive war against black money has been launched

•Govt now seen as a trusted custodian of public money: FM

•Focus on energizing youth to reap benefits of growth

•World economy faces considerable uncertainty: FM

•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

•India stands out as a bright spot

•Govt has continued with steady path of fiscal consolidation: FM

•We are seen as an engine of global growth: FM

• Two tectonic policy initiatives: GST implementation and demonetization

•Demonetization was a continuation of series of measures taken in last two years; was a bold and decisive measure

•Demonetization seeks to create a new normal where GDP would be cleaner and bigger

•Drop in economic activity due to remonetization expected to have only a transient effect

•Demonetization has strong potential to generate long-term benefits

•Demonetization helps to transfer resources resources from tax evaders to govt

•Firmly believe demonetization and GST will have epoch-making impact

•Pace of remonetization will soon reach comfortable levels; effect of demonetization not expected to spill over into next year

•Surplus liquidity in banking system will raise access to credit, leading to multiplier effect on economic activity: FM

•Overall approach in budget to spend more in rural areas

•Budget 2017-18 contains 3 major reforms: advancement of date of presentation, merger of railway budget with general budget, done away with Plan and non-Plan expenditure