Highlights of Union Budget 2017-18

Finance Minister Arun Jaitley presented the Union Budget for 2017-18 on Wednesday, with 10 broad themes and for the first time, incorporating the budget for railways



Photo by Manvender Vashist/PTI
Photo by Manvender Vashist/PTI

PTI

Finance Minister Arun Jaitley presented the Union Budget for 2017-18 in Parliament on Wednesday. The focus of the budget is on 10 sectors—farmers, rural population, youth, poor and under-privileged, infrastructure, financial sector, digital economy, public service, prudent fiscal management, tax administration. Notable points were higher allocations for farm loans, reduced tax rates and changes in political party funding.

Highlights

  • Total expenditure pegged at ₹21.47 lakh crore
  • Capital expenditure up 24%; to have multiplier effect
  • Direct Tax collection growth 15.8%, indirect tax 8.3%
  • Fiscal deficit pegged at 3.2% next year, 3% in FY'19
  • Disinvestment target at ₹72,500 crore, up from ₹56,500 crore
  • Gross market borrowing pegged at ₹6.05 lakh crore
  • Allocation to states hiked to ₹4.11 crore
  • FRBM Committee suggests Debt-GDP ratio of 60% by 2020
  • Retail inflation to remain within 2-6%
  • FDI increased 35% to ₹1.45 lakh crore in H1 FY'17
  • Allocation of ₹2.41 lakh crore rail, road, shipping to create jobs, spur economic activity

Taxation

  • Tax rates halved to 5% for income of ₹2.5-5 lakh, tax slabs unchanged
  • 10% surcharge on people earning between ₹50 lakh-1 crore
  • 15% surcharge on annual income above ₹1 crore to continue
  • Cash transactions above ₹3 lakh to banned
  • Corporate tax for SMEs with turnover up to ₹50 crore cut to 25%; 96% companies to benefit
  • Tax benefits for start-ups to be for 3 out of 7 years
  • 3-year period for long-term capital gains tax on immovable property reduced to 2 years; base year indexation shifted from April 1, 1981 to April 1, 2001

Political party funding

  • Political parties barred from accepting cash donation beyond ₹2,000 per individual
  • Political parties can receive donations via cheques, electronic mode; electoral bonds to be issued by RBI


Railways

  • Railway PSUs—IRCTC, IRFC, IRCON to be listed
  • Capital expenditure of Railway fixed at ₹1.31 lakh crore
  • Rail safety fund of ₹1 lakh crore over 5 years, unmanned level crossing to be eliminated by 2020
  • New metro rail policy to be announced

Financial Sector

  • Payment Regulatory Board to be set up within RBI to regulate digital payments
  • Negotiable Instruments Act to be amended to deal with cheque bounce cases
  • Legislative changes to confiscate of assets of economic offenders who flee country
  • Service charges on e-tickets booked via IRCTC waived
  • FIPB to be abolished; further FDI policy liberalisation
  • FPI to be exempt from indirect transfer provision
  • Duty exempted on POS machines and Iris readers for encouraging digital payments

Agriculture and allied

  • Farm sector to grow at 4.1% this fiscal, to double farm income in five years
  • Farm credit target for next fiscal at ₹10 lakh crore
  • Fasal Bima Yojana increased to 40% of crop area; raised to ₹1.41 lakh crore in Kharif 2017 season
  • To double irrigation fund corpus to ₹40,000 crore
  • Long-term irrigation fund has been proposed to be set up in NABARD with an additional corpus of ₹20,000 crore
  • ₹1.87 lakh crore allocated to rural, agri, allied sectors
  • Dairy processing fund with ₹2,000 crore corpus to be set up


Energy

  • Customs duty of LNG halved to 2.5%
  • New crude oil reserves proposed at Odisha and Rajasthan; to take strategic reserve capacity to 15.33 mmt
  • Integrated public sector oil major to be created to match global giants

Infrastructure

  • Infrastructure investment pegged at ₹3.96 lakh crore
  • Infrastructure status accorded to affordable housing
  • Road sector allocation hiked to ₹64,000 crore
  • 100% village electrification to be achieved by May 2018


Social sector

  • Highest ever allocation of ₹48,000 crore to MNREGA
  • ₹1.84 lakh cr allocated for women, child initiatives
  • 1 crore houses by 2019 for homeless
  • PM Awas Yojana allocation up from ₹15,000 crore to ₹23,000 crore
  • ₹31,920 crore allocated for Scheduled Tribes, ₹4,195 crore minority affairs, outcome-based budgeting to start
  • Aadhaar-based health cards for senior citizens; a scheme for them to ensure 8% guaranteed returns
  • 2 new AIIMS to come up in Jharkhand, Gujarat
  • Innovation Fund to be created for Secondary Education

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