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
- In the budget, Agricultural credit 2017-18 is targeted at Rs.10 lakh crores. In addition, there is a 60 days interest waiver also.
- The government intends to double the NABARD fund (for long term irrigation) corpus from Rs. 20,000 crore to Rs. 40,000 crore.
- A separate micro irrigation fund for NABARD will be set up with Rs 5,000 crore initial corpus.
- Dairy processing infrastructure fund will be initially created with a corpus of Rs. 2000 crore.
- Soil testing: Mini labs will established in Krishi Vigyan Kendras for the purpose of soil testing.
- The government intends to bring 1 crore households out of poverty by 2019.
- 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.
- The government plans to spend Rs 3 lakh crore on rural India. With MGNREGA, it aims to double farmers’ income.
- It is proposed that the government will build 1 crore houses for homeless families.
- Allotment of Rs. 19,000 crore was announced under Pradhan Mantri Gram Sadak Yojana in 2017-18.
- 100% rural electrification is targeted by March 2018.
- FIPB repealed: The government has decided to repeal FIPB (Foreign Investment Promotion Board) in 2017-18.
- PSE divestments: It is proposed to enlist the shares of railway PSEs like IRFC, IRCTC & IRCON on stock exchanges.
- Public sector bank recapitalisation: The central government proposed to allot Rs. 10,000 crores for the recapitalisation of PSU banks in 2017-18.
- 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.
- Amalgamation of spot & derivatives commodity market: An expert committee will be setup to study and encourage the commodities trading.
- 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.
- Launch of CERT-Fin: A Computer Emergency Response Team for the Financial Sector (CERT-Fin) will be established.
- 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.
- The budget postulates that the total expenditure will be around Rs. 21,47,000 for FY 2017-18.
- Focus on capital expenditure: The government has abolished planned and non-planned expenditure and has increased allocation for capital expenditure by 25.4%.
- Rs. 4.11 lakh crores will be transferred to all the states as well as union territories which have Legislatures.
- 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.
- 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.
- 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.
- Defence expenditure, excluding pension, estimated at Rs 2,74,114 crore.
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.