Key highlights of Arun Jaitley’s Union Budget 2017-18

Key highlights of Arun Jaitley’s Union Budget 2017-18

On 1st February, 2017 the Union Budget 2017-18 was presented by the Finance Minister Mr. Arun Jaitley in the Lok Sabha. The 2017-18 Union Budget was presented amidst a somewhat wobbly backdrop of the world economy facing considerable uncertainty, increasing signs of a retreat from globalization of goods the world over, and high expectations from people back home relating to good governance. Amidst all these developments, India has stood out as a bright spot in the world economic landscape. India‟s macro-economic stability continues to be the foundation of economic success. With this in the background, we present the key highlights of Union Budget 2017-18.

Key highlights of Union Budget 2017-18

AGRICULTURE

  1. In the budget, Agricultural credit 2017-18 is targeted at Rs.10 lakh crores. In addition, there is a 60 days interest waiver also.
  2. The government intends to double the NABARD fund (for long term irrigation) corpus from Rs. 20,000 crore to Rs. 40,000 crore.
  3. A separate micro irrigation fund for NABARD will be set up with Rs 5,000 crore initial corpus.
  4. Dairy processing infrastructure fund will be initially created with a corpus of Rs. 2000 crore.
  5. Soil testing: Mini labs will established in Krishi Vigyan Kendras for the purpose of soil testing.

RURAL ECONOMY

  1. The government intends to bring 1 crore households out of poverty by 2019.
  2. A special feature of Union Budget 17-18 is that the Govt plans to under take 5 lakh farm ponds under the MGNREGA in the coming fiscal.
  3. The government plans to spend Rs 3 lakh crore on rural India. With MGNREGA, it aims to double farmers’ income.
  4. It is proposed that the government will build 1 crore houses for homeless families.
  5. Allotment of Rs. 19,000 crore was announced under Pradhan Mantri Gram Sadak Yojana in 2017-18.
  6. 100% rural electrification is targeted by March 2018.

FINANCIAL MARKETS

  1. FIPB repealed: The government has decided to repeal FIPB (Foreign Investment Promotion Board) in 2017-18.
  2. PSE divestments: It is proposed to enlist the shares of railway PSEs like IRFC, IRCTC & IRCON on stock exchanges.
  3. Public sector bank recapitalisation: The central government proposed to allot Rs. 10,000 crores for the recapitalisation of PSU banks in 2017-18.
  4. New CPSE ETFs is mooted: There is a program to launch a new ETF with variegated CPSE stocks and other Government holdings will be launched in 2017-18. Furthermore, the government is going to introduce a revised mechanism to make certain the time bound listing of CPSEs.
  5. Amalgamation of spot & derivatives commodity market: An expert committee will be setup to study and encourage the commodities trading.
  6. Pradhan Mantri Mudra Yojana: The government will lend Rs 2.44 lakh crore for 2017-18 under the Pradhan Mantri Mudra Yojana, This scheme will take care of the development & refinancing needs of micro units.
  7. Launch of CERT-Fin: A Computer Emergency Response Team for the Financial Sector (CERT-Fin) will be established.
  8. Little possibility of tax free bonds being issued in FY18: This was the 2nd consecutive union budget in which the Union Govt. did not mention any allocation to PSUs for mobilising funds through tax free bond issuances.

BUDGET ESTIMATES

  1. The budget postulates that the total expenditure will be around Rs. 21,47,000 for FY 2017-18.
  2. Focus on capital expenditure: The government has abolished planned and non-planned expenditure and has increased allocation for capital expenditure by 25.4%.
  3. Rs. 4.11 lakh crores will be transferred to all the states as well as union territories which have Legislatures.
  4. Fiscal deficit target for 2017-18 to be at 3.2% of GDP and government has re-iterated its commitment to achieve 3% in the following 2 years.
  5. Revenue Deficit of 2.3% pegged in the Budget Estimate 2016-17 has now been reduced reduced to 2.1% in the Revised Estimates. The Revenue Deficit for next year is fixed at 1.9%, against 2% recommended by the FRBM Act.
  6. Net market borrowing has been lowered to Rs. 3.48 lakh crores which is much less than Rs. 4.25 lakh crores of the last year.
  7. Defence expenditure, excluding pension, estimated at Rs 2,74,114 crore.

TAX PROPOSALS

1. Personal income tax: In this budget, existing 10% tax rate for the tax slab of Rs. 2.5 – Rs 5 lakh is reduced to 5%. 10% surcharge has also been levied on individuals whose annual taxable income is between the range of Rs. 50 lakhs and Rs. 1 crore.

2. There will be a one-page form that should be filed as income tax return for category of individuals  who are having taxable income up to Rs. 5 lakhs other than business income.

3. People filing I-T returns for the first time will not come under government scrutiny.

4. GST update: Preparation of IT system for GST is on schedule. The government will start making extensive reach-out efforts to trade and industry for GST from 1st April, 2017.

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