The Finance Minister, Mr. Arun Jaitley presented Union Budget 2017, his fourth annual budget, in the Parliament on 1st February bringing three major reforms; ‘date of presentation of budget’ has been advanced to February 1st in order to enable the Ministries and Departments to operationalise all schemes and projects right from the commencement of the next financial year; ‘Merger of Railways Budget with the General Budget’ which itself is the historic step; ‘abolition of plan and non-plan expenditure’ which will provide a holistic view of allocations for sectors and ministries, and will facilitate optimal allocation of resources. Setting the agenda of TEC India (Transform, Energise and Clean India), the Finance Minister divided his budget proposal into ten distinct themes: Farmers (for whom the Govt. has committed to double the income in 5 years), Rural Population (providing employment and basic infrastructure), Youth (energising them through education, skills and jobs), 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 and stability through 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) and Tax Administration (honouring the honest).
The overall approach in budget 2017 is to spend more in the rural areas. In order to ensure adequate flow to the underserved areas total allocation for rural, agricultural credit and allied sectors has been increased. Various other initiatives have been taken such as crop insurance scheme Fasal Bima Yojna, micro irrigation fund to be set up by NABARD, rural roads construction scheme Pradhan Mantri Gram Sadak Yojana (PMGSY), increase in coverage of the National Agricultural Market (e-NAM), computerization and integration of Primary Agriculture Credit Societies (PACS) etc. Focussing on quality education, gender parity and innovation, various schemes have been introduced for youth, such as Innovation Fund in educationally backward districts, extension of Pradhan Mantri Kaushal Kendras across the country, Leveraging IT with launch of SWAYAM, establishing Indian International Skill Centres and National Testing Agency for all entrance exams and freeing up CBSE, AICTE and other bodies. The Govt. has also made provisions for the poor and underprivileged by giving affordable housing infrastructure, opportunities for skill development, employment, digital literacy, health and nutrition.
Finance Minister focussing on the infrastructure, increased the total outlay for its development, capital expenditure on defence, roads and highways, railway expenditure etc. Focussing on TEC India agenda in financial sector, steps have been taken towards building stable and stronger institutions by abolishing Foreign Investment Promotion Board, liberalisation of FDI policy, operational and legal framework to integrate spot market and derivatives market in the agricultural sector for commodities trading, establishing Computer Emergency Response Team for Financial Sector (CERT-Fin) and listing of shares of Railway PSEs like IRCTC, IRFC and IRCON. Emphasizing on the cashless economy, Finance Minister made a large number of announcements to push the digital economy such as government-aided BHIM Aadhar-based mobile wallet, AadharPay for people not having debit card, credit card and net bankig facility, allocated funds for UPI based payments and other digital payments, refinancing the merchants through SIDBI, withdrawal of service charges on reservations through IRCTC and e-tickets. Public Service sector has been identified as one of the key drivers of the economy and 8 districts of Haryana have become kerosene free. Head post offices will now be used as front offices for making passports, centralised defence travel system will be developed where tickets can be booked by soldiers and officers without any hassle, 2-tier system of examination has been introduced for recruitment in Central Government. With the abolition of Plan – Non Plan classification of expenditure, the focus of the Govt. is now on Revenue and Capital expenditure. Increased budget has been allocated under the Department of Economic Affairs, Defence expenditure and Scientific Ministries. The fiscal deficit for FY 2018 pegged at 3.2% of GDP and revenue deficit at 1.9%.
To compensate for the hardships endured by the middle class during demonetisation drive, the Finance Minister announced a 5% reduction in the existing rate of taxation for individuals with income between Rs.2.5 lakh to Rs.5 lakh from the existing 10 per cent. To offset the loss of revenue due to exemption limit, the finance minister announced a surcharge of 10 per cent for taxpayers with income between Rs.50 lakh to Rs.1 crore. The surcharge of 15 per cent for taxpayers with income more than Rs.1 crore has been continued. No transaction above Rs. 3 lakh is be permitted in cash. Goods and Service Tax (GST), which will subsume central and state levies like excise duty, service tax and VAT, is scheduled to be rolled out from July 1.
Ms. Deepika Saxena,