Finance Minister Arun Jaitley presented the Union Budget, where he strongly defence the demonitization move by the government. There were three major reforms in the budget, First, presentation of Budget advanced to 1st February to enable the Ministries to operationalise all activities from the commencement of the financial year. Second, merger of Railways Budget with General Budget to bring Railways to the centre stage of Government’s Fiscal Policy and Third, removal of plan and nonplan classification of expenditure to facilitate a holistic view of allocations for sectors and ministries.
Here are the key points of Budget 2017-18
- Income Tax for income falling in the lowest slab of 2.5 lakhs to 5 lakhs will be 5% this is reduced from the present 10% rate.
- Surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between `50 lakhs and ` 1 crore.
- Agenda for 2017-18 is : “Transform, Energise and Clean India” – TEC India. Ten distinct themes to foster this broad agenda:
Farmers : committed to double the income in 5 years;
Rural Population : providing employment & basic infrastructure;
Youth : energising them through education, skills and jobs;
The Poor and the Underprivileged : strengthening the systems of social security, health care and affordable housing;
Infrastructure: for efficiency, productivity and quality of life;
Financial Sector : growth & stability by stronger institutions;
Digital Economy : for speed, accountability and transparency;
Public Service : effective governance and efficient service delivery through people’s participation;
Prudent Fiscal Management: to ensure optimal deployment of resources and preserve fiscal stability;
Tax Administration: honouring the honest.
- Over ` 3 lakh crores spent in rural areas every year, for rural poor from Central Budget, State Budgets, Bank linkage for self-help groups, etc. MGNREGA allocation to be the highest ever at ` 48,000 crores in 2017-18.
- Foreign Investment Promotion Board to be abolished in 2017-18 and further liberalisation of FDI policy is under consideration.
- Lending target under Pradhan Mantri Mudra Yojana to be set at ` 2.44 lakh crores. Priority will be given to Dalits, Tribals, Backward Classes and Women.
- Under Maternity Benefit Scheme ` 6,000 each will be transferred directly to the bank accounts of pregnant women who undergo institutional delivery and vaccinate their children.
- Promoting affordable housing as promised by PM housing for all till 2022. For Joint Development Agreement signed for development of property, the liability to pay capital gain tax will arise in the year the project is completed.
- Profit-linked income tax deduction for promotion of affordable housing, carpet area instead of built up area of 30 and 60 Sq.mtr. will be counted.
- Reduction in the holding period for computing long term capital gains from transfer of immovable property from 3 years to 2 years.
- Threshold limit for audit of business entities who opt for presumptive income scheme increased from ` 1 crore to ` 2 crores. Similarly, the threshold for maintenance of books for individuals and HUF increased from turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs.
- A Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards . 125 lakh people have adopted the BHIM app so far. The Government will launch two new schemes to promote the usage of BHIM; these are, Referral Bonus Scheme for individuals and a Cashback Scheme for merchants.
- For Farmers – Target for agricultural credit in 2017-18 has been fixed at a record level of ` 10 lakh crores.
- Farmers will also benefit from 60 days’ interest waiver announced on 31 Dec 2016.
- To ensure flow of credit to small farmers, Government to support NABARD for computerisation and integration of all 63,000 functional Primary Agriculture Credit Societies with the Core Banking System of District Central Cooperative Banks.
- Coverage under Fasal Bima Yojana scheme will be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19 for which a budget provision of ` 9000 crore has been made .
- New mini labs in Krishi Vigyan Kendras (KVKs) and ensure 100% coverage of all 648 KVKs in the country for soil sample testing.
- Dedicated Micro Irrigation Fund in NABARD to achieve ‘per drop more crop’ with an initial corpus of ` 5,000 crores.
- Coverage of National Agricultural Market (e-NAM) to be expanded from 250 markets to 585 APMCs. Assistance up to ` 75 lakhs will be provided to every e-NAM.
- Dairy Processing and Infrastructure Development Fund to be set up in NABARD with a corpus of ` 2000 crores and will be increased to ` 8000 crores over 3 years .