UNION BUDGET

HIGHLIGHTS

2017-2018 2nd

February ‘17

OPENING REMARKS

• Govt has continued with steady path of

fiscal consolidation: FM

• There are two tectonic policy initiatives:

GST implementation and

demonetization

• Surplus liquidity in banking system will

raise access to credit, leading to

multiplier effect on economic activity

• Budget contains 3 major reforms:

advancement of date of presentation,

merger of railway budget with general

budget, abolition of Plan and non-Plan

expenditure

DEMONITIZATION

• An epoch making decision

• A bold and decisive result of

measures taken in last two years

• The effects of demonetization will

not spillover to the next fiscal.

• Will shave of 0.5% off GDP.

• The surplus cash with banks will

boost liquidity and benefit all.

AGRICULTURAL

• Farmer credit fixed at record

level of Rs10 trillion; will ensure

adequate flow to underserved

areas.

• A sum of Rs. 10 lakh crore is

allocated as credit to farmers,

with 60 days interest waiver.

• Long-term irrigation fund in

Nabard—corpus at Rs40,000

crore.

• Dairy processing infrastructure

fund will be initially created

with a corpus of Rs. 2000

crore.

AGRICULTURAL

• Soil health cards: Govt to set up

mini-labs in Krishi Vigyan

Kendras for soil testing.

• A dedicated micro irrigation

fund will be set up for NABARD

with Rs 5,000 crore initial

corpus.

• Irrigation corpus increased from

Rs 20,000 crore to Rs 40,000

crore.

• A model law on contract

farming will be prepared and

shared with the States.

AGRICULTURAL

RURAL

• Mission Antyodaya to bring 1

crore households out of poverty

by 2019

• During 2017-18, five lakh farm

ponds will be taken up under the

MGNREGA.

• MGNREGA: Rs48,000 crore has

been allocated

• Will take steps to ensure

participation of women in

MGNREGA up to 55%.

RURAL

• Will allocate Rs. 19,000 crore for

Pradhan Mantri Gram Sadak

Yojana in 2017-18.

• The country well on way to

achieve 100% rural electrification

by March 2018.

• Swachh Bharat mission has made

tremendous progress; sanitation

coverage has gone up from 42%

in Oct 13 to 60% now.

RURAL

YOUTH

• Education: System of measuring

annual learning outcomes,

emphasis on science

• Innovation fund for secondary

education

• Reforms in UGC: Colleges to be

identified based on ranking and

given more autonomy

• Propose to leverage information

technology with launch of

SWAYAM platform for virtual

learning

YOUTH

• National testing agency to be

established for all entrance exams,

freeing up CBSE, AICTE and other

bodies.

• 100 Indian international skill

centres to be established with

courses in foreign languages

• Rs4,000 crore allocated to launch

skill acquisition and knowledge

awareness

• Special scheme for creating

employment in leather/footwear

sector

• Tourism: Five special zones to be

set up

YOUTH

POOR &UNDERPRIVILEDGED

• Women: Mahila Shakti Kendras

with Rs 500 crore corpus

• Stepped up allocation to

Rs1.84 trillion for various

schemes for women and

children

• Affordable housing to be given

infrastructure status

• Action plan to eliminate leprosy

by 2018, TB by 2025, reduce

IMR to 29 in 2019

P&U

• To create additional PG medical

seats per annum

• Two new AIIMS in Jharkhand and

Gujarat

• Labour rights: Legislative reforms

to simplify and amalgamate

existing labour laws

• Allocation to SCs increased to

Rs52,393 crore; STs given

Rs31,920 crore, minority affairs

allocated Rs4,195 crore

• Senior citizens: Aadhaar-based

smart cards with health details to

be provided

P&U

INFRA

STRUCTURE

• Total capex and development

expenditure of railways pegged at

Rs1.31 trillion

• Railways: Passenger safety—Safety

fund corpus set up; unmanned level

crossings to be eliminated by 2020

• Railway lines of 3,500km to be

commissioned

• To launch dedicated

tourism/pilgrimage trains

• 500 stations to be made differently-

abled friendly

• Cleanliness in railways: To

introduce Coach Mitra facility; By

2019, biotoilets for all coaches

INFRA

• Railways to offer competitive ticket-

booking facility; service charge

withdrawn for tickets booked on IRCTC

• New metro rail policy to be announced

• Roads sector: Allocation for national

highways at Rs 64,000 crore

• Airports Authority of India Act to be

amended to enable monetization of

land resources

• Total allocation to transport sector at

Rs 2 trillion

• Telecom sector: Allocation to Bharat

Net programme at Rs 10,000 crore

INFRA

• FDI policy reforms - more than 90% of

FDI inflows are now automated.

• Shares of Railway PSE like IRCTC will

be listed on stock exchanges.

• Bill on resolution of financial firms will

be introduced in this session of

Parliament.

• Foreign Investment Promotion Board

will be abolished.

• Revised mechanism to ensure time-

bound listing of CPSEs.

• Computer emergency response team

for financial sector will be formed.

FINANCE

• Negotiable Instruments Act might be

amended.

• DBT to LPG consumers , Chandigarh is

kerosene-free, 84 government

schemes are on the DBT platform.

• Head post office as the central office

for rendering passport service.

• Easy online booking system for Army

and other defence personnel.

• For big-time offences - including

economic offenders fleeing India, the

government will introduce legislative

change or introduce law to confiscate

the assets of these people within the

country.

FINANCE

• Cyber-security: Computer emergency

response team to be set up

• Listing of PSEs will foster public

accountability; revised mechanism for

time-bound listing

• To create integrated public sector oil

major

• New Exchange Traded Fund to be

launched

• Pradhan Mantri Mudra Yojana:

Lending target at Rs2.44 trillion

• Stand-up India scheme: over 16,000

new enterprises have been set up

FINANCE

DIGITAL

ECONOMY

• Govt to launch two new schemes

to promote BHIM app, including

cashback scheme for merchants

and referral bonus scheme for

users

• Aadhaar Pay to be launched for

people who don’t have mobile

phones

• Panel on digital payments has

recommended structural reforms to

streamline process

• To create payment regulatory

board at RBI for better regulations

DIGITAL

• Aadhaar-card based smart cards

proposed for the older citizens in

regards to Healthcare and other

benefits

• Products promoting the digital

economy such as micro ATMS,

fingerprint scanner, PoS card

reader for mPOS and their parts

have been exempted from the

excise duty

• R&D Cess Act: imported

technology will cost less as the

non- creditable R&D cess is

replaced by creditable service tax

DIGITAL

• To use head post-office for passport

services

• Defence: centralized defence travel

system developed

• Defence: Centralized pension

distribution system to be established

• Govt recruitment: To introduce two-

tier exam system

• Govt looks to introduce laws to

confiscate assets of economic

defaulters

• High-level panel chaired by PM to

commemorate Mahatma Gandhi’s

150th birth anniversary

PUBLIC SERVICES

• Total expenditure is Rs. 21, 47,000

crore.

• Plan, non-plan expenditure to be

abolished; focus will be on capital

expenditure, which will be 25.4 %.

• Rs. 3,000 crore under the

Department of Economic Affairs

for implementing the Budget

announcements.

• Expenditure for science and

technology is Rs. 37,435 crore.

• Total resources transferred to States

and Union Territories is Rs 4.11

lakh crore.

• Recommended 3% fiscal deficit for

three years with a deviation of

0.5% of the GDP.

• Revenue deficit is 1.9 %

• Fiscal deficit of 2017-18 pegged

at 3.2% of the GDP. Will remain

committed to achieving 3% in the

next year.

FISCAL

• The maximum amount of cash

donation for a political party will

be Rs. 2,000 from any one

source.

• Political parties will be entitled to

receive donations by cheque or

digital mode from donors.

• An amendment is being proposed

to the RBI Act to enable issuance

of electoral bonds. A donor can

purchase these bonds from banks

or post offices through cheque or

digital transactions. They can be

redeemed only by registered

political parties.

FUNDING IN

POLITICS

• A strategic policy for crude reserves

will be set up.

• Rs. 1.26,000 crore received as energy

production based investments.

• Trade infra export scheme will be

launched 2017-18.

• Allocation for integrated power

development scheme also increased.

• An additional 20,000 megawatt to be

added in the second phase of solar

park development scheme.

• Taxes on parts, machinery used to

manufacture solar power project

components reduced.

ENERGY

SECTOR

• The income tax on smaller companies

with an annual turnover of up to Rs 50

crore has been reduced to 25 percent

• The profit-linked deductions has been

changed to three years out of seven

years

• Double the lending target of banks

under the MUDRA Yojna to Rs 2.44

lakh crore

• Ease of Foreign Investment by plans to

abolish FIPB

• Carry forward of Minimum Alternate

Tax (MAT) up to 15 years instead of

10.

STARTUPs

& MSMEs

• Direct tax collection not

commensurate with

income/expenditure pattern of

India

• We are largely a tax non-

compliant society; predominance

of cash in society enables tax

evasion

• After demonetization, data

received will increase tax net

• Black money: No cash transactions

above Rs3 lakh

• Transparency in political funding:

Parties continue to receive

anonymous donations; propose

system of cleaning up

TAXATION

• Personal income tax: Rate reduced to

5% for income bracket of Rs2.5-5

lakh; All other categories to get

uniform benefit of Rs12,500 per

person; to levy surcharge on income

bracket Rs50 lakh-Rs1 crore

• Personal income tax: To have simple

one-page form for taxable income up

to Rs5 lakh

• GST: preparedness of IT system on

schedule

• Not many changes to excise duties

since GST will be implemented soon

• FPI category 1 and 2 investors

exempted from indirect transfer

provisions

TAXATION

• Time period of revising tax returns

reduced to 12 months

• Real estate: to make changes in capital

gains tax

• Concessional withholding rate will be

extended to 30 June 2020, rupee-

denominated masala bonds to be

included

• MAT not to be abolished at present; to

allow carry-forward for 15 years

• Corporate tax rate: MSMEs’ rate

(annual turnover less than Rs50crore)

reduced to 25%

• LNG: Reduce customs duty to 2.5%

• Limit of cash donation for charitable

trusts cut to Rs2,000.

TAXATION

INCOME (Rupees) TAX (%)

Individual tax payers

Up to 2,50,000 No tax

2,50,001 - 5,00,000 0.05

5,00,001 – 10,00,000 0.2

More than 10,00,000 0.3

Senior citizens who are 60 years old and above but less than 80 years

Up to 3,00,000 No tax

3,00,001 - 5,00,000 0.05

5,00,001 - 10,00,000 0.2

More than 10,00,000 0.3

Senior citizens who are 80 years and above

Upto 5,00,000 No tax

5,00,001 - 10,00,000 0.2

More than 10,00,000 0.3

PERSONAL

TAX SLAB

Arun Jaitley

(Finance Minister of India)