UNION BUDGET 2017-18Call Put

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Union Budget 2017-18

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UNION BUDGET 2016-17 Fiscal Situation. Tax Proposals. Personal Income Tax. Healthcare. Education. Social. Agriculture. Financial Sector. Infrastructure & Railways. Energy. Defense. Demonetization. Funding of Political Parties.

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Total expenditure outlay at INR 21,47,000 crore. Abolition of Plan &, Non-plan expenditure. Emphasis will

be on Capital expenditure, which will be 25.4 % of the total outlay.

Department of Economic Affairs to get an allocation of INR 3,000 crore for implementing the Budget announcements.

Expenditure for science and technology has been raised to INR 37,435 crore.

INR 4.11 lakh crore worth of resources transferred to States and Union Territories.

Fiscal deficit is recommended to be at 3% for three years with a deviation of 0.5% of the GDP.

FISCAL SITUATION

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Fiscal deficit of 2017-18 pegged at 3.2% of the GDP. Revenue deficit stands at1.9 %. India’s tax to GDP ratio is very disheartening. 45% firms have filed returns for 2016-17.i.e., only 5.97

lakh firms out of 13.14 lakh registered companies. Direct tax to indirect tax ratio is not optimum and

inefficient. 1.95 crore individuals declared an income between INR

2.5 lakh to INR 5 lakh.

TAX PROPOSALS

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76 lakh individual declared income more than INR 5 lakh of which 56 lakh are salaried (74%).

1.72 lakh people declared income of more than INR 50 lakh a year, which is abysmal.

Net tax revenue of 2013-14 was INR 11.38 lakh crore. Out of 76 lakh individual assessees declaring income

more than INR 5 lakh, 56 lakh are salaried. 1.95 crore individuals showed income between INR 2.5

lakh to INR 5 lakh.

TAX PROPOSALS

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Substantial increase in rate of growth of advance tax in Personal I-T , 34.8% in the last three quarters of FY 2016-17.

Holding period for long term capital gain lowered to two years.

Proposal to have a carry-forward of MAT for 15 years. Capital gains tax to be exempted for persons holding land

from which land was pooled for creation of the state capital of Andhra Pradesh.

To make MSME companies more sustainable, Proposal to reduce the corporate tax for small companies with a turnover of up to INR 50 crore to 25%.The benefit will accrue to approximately 67 lakh companies, which is 96% of the companies in this category.

TAX PROPOSALS

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Basic Customs Duty for LNG reduced from 5% to 2.5%. The Income Tax Act to be amended to avoid cash

transaction above INR 3 lakh. The limit of cash donation by charitable trusts is reduced

to INR 2,000 from INR 10,000. Net revenue loss in direct tax expected to be INR 20,000

crore.

TAX PROPOSALS

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Existing rate of tax for individuals between INR  2.5 -5 lakh is reduced to 5% from 10%.

All other categories of tax payers in subsequent brackets will get a benefit of INR 12,500.

Single page return for people with an annual income of INR 5 lakh other than business income.

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

10 % surcharge on individual income above INR 50 lakh and up to INR 1 crore to make up for INR 15,000 crore loss due to cut in personal I-T rate. 15% surcharge on individual income above INR 1 crore to continue.

PERSONAL INCOME TAX

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INR 500 crore allocated for Mahila Shakthi Kendras. INR 6000 will be transferred to each pregnant women

under a special scheme. A sum of INR 1,84,632  crore allocated for welfare of

women and children. INR 52,393  crore have been allocated for welfare of

Scheduled Castes. Health of senior citizens to monitored with Aadhaar-based

smartcards. Elimination of tuberculosis by 2025 targeted. Two AIIMS to be set up in Jharkhand and Gujarat.

HEALTHCARE

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Special fund to be created for secondary education. 3,479 educationally-backward blocks to get increased

emphasis. Colleges to be identified based on accreditation. 100 Skill India mission centers to be established to tap

the potential of the youth. Courses on foreign languages to be introduced. Proposed introduction of a new system of measuring

annual learning outcomes.

EDUCATION

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Five lakh farm ponds will be taken up under the MGNREGA. MGNREGA plans to double farmers' income. Plans for increased participation of women in MGNREGA up

to 55%. INR 3 lakh crore planned to be spent for rural India. Target to bring 1 crore households out of poverty by 2019. INR 19,000 crore allocated for Pradhan Mantri Gram Sadak

Yojana in 2017-18. Affordable housing to be given infrastructure status. Proposal to complete 1 crore houses for homeless.

SOCIAL

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INR 10 lakh crore allocated as credit to farmers, with 60 days interest waiver.

NABARD fund to be increased to INR 40,000 crore.  Micro irrigation fund to be set up for NABARD with INR 5,000

crore initial corpus. Irrigation corpus doubled from INR 20,000 crore to INR

40,000 crore. Dairy processing infrastructure fund to be set up with INR

2000 crore initial corpus. Mini labs to be setup in Krishi Vigyan Kendras for soil testing. Issuance of soil cards emphasized.

AGRICULTURE

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Shares of Railway PSE like IRCTC, IRFC, etc. to be listed on stock exchanges. 

Foreign Investment Promotion Board to be abolished. Revised mechanism to ensure time-bound listing of

CPSEs. Computer emergency response team for financial

sector to be formed. Pradhan Mantri Mudra Yojana lending target fixed at

INR 2.44 lakh crore for 2017-18.

FINANCIAL

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Head post office as the central office for rendering passport service.

Easy online booking system for Army and other defense personnel.

To avoid economic offenders fleeing India, proposal to introduce legislative change or introduce law to confiscate the assets of these people within the country.

Digital India - BHIM app to unleash mobile phone revolution. BHIM App to be promoted using referral bonus for the users and cash back for the traders.

FINANCIAL

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A total allocation of INR 39,61,354 crore has been made for infrastructure.

Total allocation for Railways is INR 1,31,000 crore. A corpus of INR 1 lakh crore for five years (for

passenger safety) to be created. 3,500 km of railway lines to be commissioned. SMS-based ''clean my coach service'' is put in place. No service charge on tickets booked through IRCTC.

INFRASTRUCTURE & RAILWAYS

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Five-hundred stations to be made differently-abled friendly.

It is proposed to have bio-toilets in all trains by 2019. Unmanned level crossings to be eliminated by 2020. Railways to partner with logistics players for front-end

and back-end solutions for select commodities. INR 64,000 crore allocated for highways.  High speed Internet to be allocated to 1,50,000 gram

panchayats. New Metro rail policy to be announced with new

modes of financing.

INFRASTRUCTURE & RAILWAYS

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Crude oil strategic reserves to be set up in Odisha and Rajasthan apart from 3 already constructed.

INR 1.26,000 crore received as energy production based investments.

Trade infra export scheme to be launched 2017-18. Second phase of solar power development with an aim

to generate 20000 MW planned. Solar tempered glass used for manufacture of solar

cells/panels exempted from customs duty.

ENERGY

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The defense sector gets an allocation of INR 2,74,114 crore including INR 86,00 crore for defense capital.

DEFENSE

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Poorly planned and ill executed Demonetization scheme was not touched upon in detail.

Demonetization is expected to have a long lasting impact on the economy and is likely to spill over till FY 2018-19.

It has already impacted the lives of people especially those who remain outside the banking network.

Experts opine that the “Demonetization” may lead to lowering of GDP growth by about 0.5% this fiscal year.

Between November 8 to December 30, deposits ranging from INR 2 lakh and INR 80 lakh were made in 1.09 crore accounts.

DEMONETIZATION

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Cash donation for a political party restricted to a maximum of INR 2,000 from any single source.

Donations to Political parties permitted by check or digital mode from donors.

An amendment is being recommended to the RBI Act to permit issuance of electoral bonds .Electoral Bonds can be purchased from banks or post offices through check or digital transactions. These bond can be only redeemed by registered political parties.

FUNDING OF POLITICAL PARTIES

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CONCLUSION

“Overall this budget appears to have been used as a mechanism for controlling the damage done to the economy and sentiments due to demonetization. It has missed out on an opportunity to efficiently allocate the money deposited through 26 crore Jan Dhan Accounts during the Demonetization drive. The focus on agricultural and rural development appear to have been planned with the forthcoming state elections in view. It is unlikely that this budget will be able to improve the GDP or help create jobs.”

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THANK YOU

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