Key Highlights of Union Budget 2017-18

The Union Budget for the year 2017-18 was presented by the Finance Minister Mr. Arun Jaitley in the Parliament on 1 st February 2017.

AGRICULTRE

  • Agricultural credit during the year 2017-18 is targeted at Rs.10 lakh crores, with 60 days interest waiver.
  • The government intends to double the NABARD fund (for long term irrigation) corpus from Rs. 20,000 crore to Rs. 40,000 crore.
  • A dedicated micro irrigation fund will be set up for NABARD with Rs 5,000 crore initial corpus.
  • Dairy processing infrastructure fund will be initially created with a corpus of Rs. 2000 crore.
  • Soil testing: The government will set up mini labs in Krishi Vigyan Kendras for soil testing.

RURAL ECONOMY

  • The government intends to bring 1 crore households out of poverty by 2019.
  • In FY18, the government plans to under take five lakh farm ponds under the MGNREGA.
  • The government plans to spend Rs 3 lakh crore on rural India. With MGNREGA, it aims to double farmers’ income.
  • The government has proposed to complete 1 crore houses for those without homes.
  • Allocation of Rs. 19,000 crore was announced for Pradhan Mantri Gram Sadak Yojana in 2017-18.
  • The government aims to achieve 100% rural electrification by March 2018.

FINANCIAL MARKETS

  • FIPB abolished: The government has decided to abolish FIPB (Foreign Investment Promotion Board) in 2017-18.
  • PSE divestments: Shares of railway PSEs like IRCTC, IRFC & IRCON would be listed on stock exchanges.
  • Public sector bank recapitalisation: The government plans to allocate Rs. 10,000 crores for the recapitalisation of public sector banks in 2017-18.
  • New CPSE ETFs in the pipeline: A new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18. Furthermore, the government will introduce a revised mechanism to ensure time bound listing of CPSEs.
  • Integration of spot & derivatives commodity market: 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.
  • Pradhan Mantri Mudra Yojana: The government has fixed the lending target at Rs 2.44 lakh crore for 2017-18 under the Pradhan Mantri Mudra Yojana which takes care of the development & refinancing needs of micro units.
  • Launch of CERT-Fin: A Computer Emergency Response Team for the Financial Sector (CERT-Fin) will be established.
  • Very low likelihood of tax free bond issuance in FY18: This was the second consecutive union budget where the government did not mention any allocation to PSUs for mobilising funds through tax free bond issuances.

BUDGET ESTIMATES

  • Total Expenditure is estimated at 21,47,000 for FY 2017-18.
  • Focus on capital expenditure: The government has abolished planned and non-planned expenditure and has stepped up allocation for capital expenditure by 25.4% over the previous year.
  • Total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crores, against Rs. 3.60 lakh crores in BE 2017- 18
  • Fiscal deficit target for 2017-18 to be at 3.2% of GDP and government remains committed to achieve 3% in the following two years.
  • Revenue Deficit of 2.3% in BE (Budget Estimate) 2016-17 stands reduced to 2.1% in the Revised Estimates. The Revenue Deficit for next year is pegged at 1.9%, against 2% mandated by the FRBM Act.
  • Net market borrowing of government has come down to Rs. 3.48 lakh crores after buyback in 2017-18, much lower than Rs. 4.25 lakh crores of the previous year.
  • Defence expenditure, excluding pension, estimated at Rs 2,74,114 crore.

TAX PROPOSALS

  • Personal income tax: Existing tax rate for the tax slab of Rs. 2.5 – Rs 5 lakh is reduced to 5% from 10%. A surcharge of 10% has also been introduced for individuals whose annual taxable income falls between Rs. 50 lakhs and Rs. 1 crore.
  • Simple one-page form to be filed as income tax return for category of individuals having taxable income up to Rs. 5 lakhs other than business income.
  • People filing I-T returns for the first time will not come under government scrutiny.
  • GST update: Preparation of IT system for GST is on schedule. The government will start making extensive reach-out efforts to trade and industry for GST from 1st April, 2017.

 

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