Union Budget 2017 India: Key-Highlights Explored for Major Sectors

Union Budget 2017-18 India

In the pursuit to war against black-money, and boosting the country’s economy, the Union Budget 2017 of India was presented by Finance Minister, Arun Jaitley on the 1st Feb.  It was a merger of railway budget and the general budget. After the bout of demonetization, which affected many industries financially, the budget seems to support digital payments and shows hope in recovering from fallbacks with remonetisation- reaping long-term benefits for several sectors.

The Budget was categorized in 9 distinct themes: rural population & farmers, digital economy, motivating youth & education, financial sector, public service, tax administration, poor and underprivileged, infrastructure, and fiscal management. It also had plans to invest hugely in benefitting the rural areas, logistics, along with shaping the GST implementation.

Here is how the Union Budget 2017, India was laid out by the Finance Minister for 9 major units:

  1. Infrastructure and Transport
  • 3.96 trillion to be invested in infrastructure. New structure for central scheme will reflect for Export infra. Attention will be given to increase pilgrimage/tourism trains.
  • Amends to be made in Airports Authority of India Act to allow monetization for land resources. Rs. 2 trillion funds directed towards the transport sector.
  • Launch of Digi-gau initiative. Development expenditure for railways estimated at Rs. 1.31 trillion. Allocation of Rs. 64,000 crore for road sector (national highways).
  • Preparation to make India a global hub of electronics manufacture. For telecom sector, Rs. 10,000 crore allocated for Bharat Net programme.
  • Tickets booked on IRCTC will have no service charge applicable. New metro policy will be announced. Under Coach Mitra facility, bio-toilets will be available for all coaches by the 2019.
  • Unmanned level crossings will be eliminated by the 2020. Safety fund corpus introduced. Promised 3,500km of railway lines.
  • 500 stations will be made friendly for differently-abled.

 

  1. Financial Sector
  • Foreign Investment Promotion Board will be abolished. Over 16,000 new enterprises were set up under the stand-up India scheme.
  • Public accountability will be fostered by listing PSEs and revision mechanism in the same will be pushed ahead.
  • Strict resolution mechanisms formed for financial firms. Pradhan Manti Mudra Yojana to target Rs. 2.44 trillion for lending purpose.
  • Integrated public sector oil major to be created, and new ETF shall be launched.
  • There will be a computer emergency response team set up to better the cyber-security.
  • Legal framework for derivative and spot markets to be studied concerning commodities market.

 

  1. Tax Administration
  • Rate reduced to 5% for personal income tax (income bracket of Rs. 2.5 to 5 lakhs). Other income categories to receive uniform benefit of Rs. 12,000 per individual and a levy surcharge are liable for income bracket of Rs. 50 lakh to Rs. 1 crore.
  • Revising tax returns time period is reduced to 12 months.
  • No cash transactions must be done over Rs. 3 lakh or a penalty of 100% will be applied. Cash donations for charitable causes limited to Rs. 2,000 per person.
  • GST preparedness for IT system is still underway, with not many shifts in excise duties done.
  • Reduction of customs duty to 2.5% for LNG.
  • Political parties to receive donations only digitally or by cheques, while cash donation per person to be only Rs. 2000. Every party must file tax returns in given time. Amendments to be proposed to RBI act in issuing electoral bonds.
  • Corporate tax rate reduced to 25% for MSMEs’ rate with annual turnover of less than Rs. 50 crore.
  • Capital gains tax will undergo changes for real estate sector.
  • MAT to be carried forward for the next 15 years.
  • Rupee denominated Masala bonds will be included, and concessional withholding rate shall be extended to 30th June, 2020.

 

  1. Fiscal Management
  • Expenditure for defence excluding pensions will be Rs. 2.74 trillion.
  • Total budget expense on fiscal management to be Rs. 21 trillion.
  • For FY18, the revenue deficit is 1.9%, and fiscal deficit is 3.2% of the GDP.
  • Consolidated outcome budget to be created for all ministries.
  • 3,000 crore to be implemented for various announcements in the Budget.

 

  1. Public Services
  • For defence sector, centralized pension distribution will be established, and centralized travel system to be developed.
  • Head post-offices to be approach for passport services. Government will introduce two-tier exam system for recruitments.
  • Government may bring up laws that allow it to confiscate assets of the economic defaulters.

 

  1. Farmers and Rural Population
  • A corpus of Rs. 8,000 crore was announced for dairy processing infra-fund. Similarly, a corpus of Rs. 5,000 crore will be dedicated to micro-irrigation fund.
  • Government will set up mini-laboratories in Krishi Vigyan Kendras. A corpus of Rs 40,000 crore will go to irrigation fund in the Nabard.
  • MGNREGA: Rs. 48,000 crore will be provided. Emphasis on using space technology. Mason training shall be assured to about 5 lakh people.
  • Adequate flow of funds will go to farmers on fixed credit, which is on record level of Rs. 10 trillion as per reports. Rs. 19,000 crore was allocated for Prime Minister Gram Sadak Yojana.
  • Rs 1 crore will be devoted to help households of poverty under the Mission Antyodaya. Rs 23,000 crore shall be allocated under the Pradhan Mantri Awas Yojana.
  • While Rs. 4,500 crore is set to aid the rural livelihood mission, Rs. 1,87,223 crore will go on to support other rural programmes.
  • Human resource reform programme will be introduced for Panchayat Raj. Village electrification in completion will be achieved till May 2018.

 

  1. Underprivileged and Poor
  • 1.84 trillion as funds for various schemes dedicated to children and women. Rs. 500 crore corpuses assigned to Mahila Shakti Kendras.
  • Allocation increased for STs (Rs. 31,920 crore), SCs (Rs. 52,393 crore), and minority affairs (Rs. 4,195 crore).
  • Aadhaar based smart cards for senior citizens, with health specifications provided. Affordable housing schemes launched. Plans for two new AIIMS in Gujrat and Jharkhand.
  • Aim to generate additional PG medical seats annually and eliminate tuberculosis by 2025, lessen IMR to 29 by the 2019, and put out leprosy by the 2018.
  • Legislative reforms to apply for labour rights. New rules to better medical devices and their application.

 

  1. Education and Youth
  • Emphasis on education to be seen on science and annual learning outcomes will be measured closely.
  • Every entrance exam will be linked to National testing agency, which will free up AICTE, CBSE, and other bodies.
  • Information technology to be leveraged with SWAYAM platform made essential for virtual learning.
  • Funds to be increased for secondary education, while reforms will apply to UGC, where colleges shall be identified according to rankings.
  • An addition of 100 Indian International Skill Centres will come up with courses in foreign languages.
  • 4,000 crore allocated for launching knowledge awareness and skill acquisition.
  • Special schemes will be brought ahead for generating employment in footwear/leather sector. Five special zones will be set up for tourism sector.

 

  1. Digital Economy
  • Government will promote BHIM app and cashback scheme for the merchants.
  • Digital revolutions plans introduced with focus on driving digitization in rural and semi-urban areas as well.
  • For people who don’t possess mobile phones, now they can switch to Aadhaar Pay option.
  • A panel was set to bring structural reforms for digital payments. Funds to be encouraged for digital India programme.
  • Payment regulatory board will be created at RBI.

Though the budget showcases intensive plans for the above-mentioned sectors, it could not elucidate the outcome of demonetization in concrete data evidence, thus drew a lot of criticism from opposition political parties and citizens. However, Arun Jaitley claims that the economy is going to brighten up in the future and GDP to significantly improve with well-organized enhancements especially for sectors such as infrastructure, financial, rural, underprivileged and poor.

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