Perusing the Union Budget in detail is certainly not everyone’s cup of tea. However, if you want to discuss this year’s budget over a cup of tea, here is a ready reference for your conversation! To get to speed on the 2017 Budget, read below for a quick and easy-to-digest analysis of the main aspects of this year’s budget.
Some general highlights include the fact that the Rail and Union budgets were combined for the first time. The total budget expenditure for 2017-18 was Rs 21.4 trillion, of which the defense sector received Rs. 2.7 trillion. The fiscal deficit was pegged at 3.2% of GDP.
Personal Income Tax
Provisions/changes in personal income tax are invariably the most eagerly awaited part of the Budget announcement.
• The most dramatic change is the halving of the income tax rate from 10% to 5% for those with an annual income of between 2.5-5 lakhs.
• Other segments will enjoy a uniform benefit of Rs. 12,500 per person, so whatever your tax bracket, you will receive this welcome extra money.
• Those with an annual income of between Rs50 lakhs-1 crore per annum have to pay an additional surcharge of 10%. The 15% surcharge on those with an income above Rs. 1 crore remains.
The Budget incentivizes moves towards a cashless, digital economy with special emphasis on small business owners.
• Cash transactions above Rs3 lakh prohibited
• Installation of 1 million Aadhaar-enabled point-of-sale (POS) machines by March 2017, which will be scaled up to 2 million by September 2017
• Tax exemptions for manufacturing of POS card readers, mobile POS (mPOS) systems, fingerprint readers and iris scanners
• Two new referral schemes to promote digital payments on Bharat Interface for Money (BHIM) - a bonus scheme for customers and a cash-back scheme for merchants
• Tax relief for small businesses using cashless systems
Farmers and agrarian India
The 2017 Budget continues its focus on the rural and agrarian sector and aims to alleviate some of the more pressing problems facing farmers in the country.
• Continued focus on agricultural marketing reforms and laws on contract farming.
• Rs 9000 crores set aside for crop insurance, up from Rs 4500 crores in the last budget.
• Rs. 48,000 crores set aside for rural jobs programmes.
• Mission Antyodaya to bring 1 crore households out of poverty by 2019 and make 50,000 gram panchayats poverty-free y 2019.
• Over Rs 3 lakh crore reserved for rural India. MGNREGA to double farmers' income.
• Space technology to be used to ensure MGNREGA efficacy.
• Targeting 100% rural electrification by March 2018.
Range of budgetary allocations from financial support for low-income pregnant women to medical education to senior citizen health
• Rs. 500 crore allocated for Mahila Shakthi Kendras.
• Rs. 6000 to be transferred to each woman under the nationwide scheme for pregnant women.
• Focus on elimination of tuberculosis by 2025.
• Two more AIIMS to be set up in Jharkhand and Gujarat.
• Adhaar-based smartcards will be issued to senior citizens to monitor their health.
Transport infrastructure and railways:
The Budget also sees aggressive allocation for transport projects. Rs 2.41 trillion allocated for an integrated transportation model that comprises roads, railways, waterways and civil aviation. Roadways receive Rs 8000 crore more than in last year’s allocation.
• Indian Railways to list its subsidiaries—Indian Railway Catering and Tourism Corporation, Indian Railway Finance Corporation and Ircon International Ltd.
• No service charge to be levied on tickets booked through IRCTC.
• Unmanned level crossings to be eliminated by 2020.
• Rs. 1 trillion safety fund to be set up.
• All trains to have bio-toilets by 2019.
• 500 stations to be made differently-abled friendly.
Make in India and Ease of Doing Business
These are two initiatives that the NDA government continues to focus on and promote.
• All existing labour laws to be streamlined into four codes - wages; social security and welfare; industrial relations; and safety and working conditions
• Foreign Investment Promotion Board (FIPB) that vets foreign direct investment proposals to be abolished
• Start-ups incorporated after March 2016 can avail of a 3 year tax holiday in their first seven years.
• MSMEs with a turnover of up to Rs 50 crore to get their tax rate reduced to 25% (from 30%) to help them tide over any losses incurred due to demonetization and to make small scale companies more viable.
• For offences including economic offenders fleeing India and other big-time offences, the government to introduce legislative change or introduce laws to confiscate the assets within the country.
On Funding of political parties
• Maximum amount of cash donation for a political party capped at Rs. 2000 from any one source.
Political parties can receive donations by cheque or digital mode from donors.