Wednesday, 1 February 2017
Finance minister Arun Jaitley is about to presentthe Union Budget 2017-18 at the website. This incredibly important event will occur a month before instead of the traditional 28 February because of the Assembly Elections 2017 in Uttar Pradesh, Uttarakhand, Punjab, Goa and Manipur, which will be held between 4th February 2017 and 8th March 2017.
Union Budget is a combined budget, which includes the Railway Budget 2017 as well as the fiscal budget. Budget would aim at corporate tax rationalization, promoting ‘less cash’ economy and higher spending on rural sector, affordable housing and public infrastructure. Union budget is referred to annual budget according to article 112 its present a every years by the finance minister.
Important Highlights of Budgets 2017- 18
TRANSFORMATIONAL REFORMS IN LAST YEAR
· Passage of the Constitution Amendment Bill for GST and the progress for its introduction
· Demonetization of high denomination bank notes
· Enactment of the Insolvency and Bankruptcy Code; amendment to the RBI
· Act for inflation targeting; enactment of the Aadhar bill for disbursementof financial subsidies and benefits
· Budget 2017-18 contains 3 major reforms. 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
· Bold and decisive measure to curb tax evasion and parallel economy
· Government’s resolve to eliminate corruption, black money, counterfeit currency and terror funding
· Drop in economic activity, if any, to be temporary
· Generate long term benefits including reduced corruption, greater digitization, increased flow of financial savings and greater formalization of the economy
· Pace of demonetization has picked up and will soon reach comfortable levels
· The surplus liquidity in the banking system will lower borrowing costs and increase the access to credit
· Announcements made by the Honourable Prime Minister on 31st Dec, 2016 focusing on housing for the poor; relief to farmers; credit support to MSMEs; encouragement to digital transactions; assistance to pregnant women and senior citizens; and priority to dalits, tribals, backward classes and women under the Mudra Yojana, address key concerns of our economy
· Target for agricultural credit in 2017-18 has been fixed at a record level of 10 lakh crore
· 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. This will be done in 3 years at an estimated cost of 1,900 crores
· 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
· 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
· Aim to bring one crore households out of poverty and to make 50,000 Gram Panchayats poverty free by 2019, the 150th birth anniversary of Gandhi
· Against target of 5 lakh farm ponds under MGNREGA, 10 lakh farm ponds would be completed by March 2017. During 2017-18, another 5 lakh farm ponds will be taken up
· Women participation in MGNREGA has increased to 55% from less than 48%
· MGNREGA allocation to be the highest ever at ` 48,000 crore in 2017-18.
· For transportation sector as a whole, including rail, roads, shipping, provision of ` 2,41,387 crore has been made in 2017-18.
· For 2017-18, the total capital and development expenditure of Railways has been pegged at ` 1,31,000 crore. This includes 55,000 crore provided by the Government
· For passenger safety, a Rashtriya Rail Sanraksha Kosh will be created with a corpus of ` 1 lakh crore over a period of 5 years
· Unmanned level crossings on Broad Gauge lines will be eliminate by 2020
· Railway lines of 3,500 km will be commissioned in 2017-18. During 2017-18, at least 25 stations are expected to be awarded for station redevelopment.
· Foreign Investment Promotion Board to be abolished in 2017-18 and further liberalisation of FDI policy is under consideration
· An expert committee will be constituted to study and promote creation of an operational and legal framework to integrate spot market and derivatives market in the agricultural sector, for commodities trading. e- NAM to be an integral part of the framework.
· Bill relating to curtail the menace of illicit deposit schemes will be introduced. A bill relating to resolution of financial firms will be introduced in the current Budget Session of Parliament. This will contribute to stability and resilience of our financial system.
· A mechanism to streamline institutional arrangements for resolution of disputes in infrastructure related construction contracts, PPP and public utility contracts will be introduced as an amendment to the Arbitration and Conciliation Act 1996.
· A Computer Emergency Response Team for our Financial Sector (CERT-Fin) will be established
· Existing rate of taxation for individual assesses between income of2.5 lakhs to 5 lakhs reduced to 5% from the present rate of 10% 15
· Surcharge of 10% of tax payable on categories of individuals whose annual taxable income is between `50 lakhs and ` 1 crore
· Simple one-page form to be filed as Income Tax Return for the category of individuals having taxable income upto ` 5 Lakhs other than business income
· Appeal to all citizens of India to contribute to Nation Building by making a small payment of 5% tax if their income is falling in the lowest slab of 2.5 Lakhs to 5 Lakhs.
GOODS AND SERVICES TAX
· GST Council has finalised its recommendations on almost all the issues based on consensus on the basis of 9 meetings held
· Preparation of IT system for GST is also on schedule.
· The extensive reach-out efforts to trade and industry for GST will start from 1st April, 2017 to make them aware of the new taxation system. RAPID (Revenue, Accountability, Probity, Information and Digitization)
· Maximize efforts for e-assessment in the coming year
· Enforcing greater accountability of officers of Tax Department for specific act of commission and omission