Union Budget has always followed the convention of being presented on the last working day of February. This time, however, things are pretty different. Taking a departure from the custom of announcing the Union budget on the last day of February, the government has announced the Union Budget 2017-18 in advance, on February 1, 2017. The reason behind advancing the budget budget is to make sure that the legislative approval for annual spending and tax proposals could be completed before the next financial year begins on 1 April, 2017. Read on to find out what Union Budget 2017-18 has brought with it on various crucial topics like Direct Tax, Indirect Tax, Banking sector, Health, Education, Infrastructure, Banking reforms and more.
Union Budget 2017-18: Highlights
- More spending on rural areas to alleviate poverty.
- World GDP will grow by 3.4 per cent in 2017, estimates IMF.
- MNREGA allocation increased to Rs. 48.000 crore for the fiscal year 2017-18.
- Foreign Investment Promotion Board will be abolished.
- Allocation for women and children raised from Rs. 1,56,528 crore to Rs. 1,84,632 crore.
- Schemes for employment in textile, leather and footwear sectors.
- Tenure of loans under Credit Linked Subsidy Scheme of Pradhan Mantri Awas Yojana extended from 15 to 20 years.
- Proposal to RBI to launch electoral bonds.
- Rs. 10,000 crore allocated for BharatNet.
- 1.5 lakh Gram Panchayats will be connected through optical fibre.
- Allocation for infrastructure of Rs 3,96,135 crore.
- To spend Rs. 27,000 crore on Pradhan Mantri Gram Sadak Yojana.
- To provide safe drinking water to 28,000 arsenic and fluoride affected habitations.
- One crore houses for homeless to be completed by 2017-18.
- Emphasis on science and flexibility in school curriculum.
- National testing agency to be established to conduct national level examination.
- Innovation fund to be created for secondary education.
- Swayam platform announced, where students can access courses by best faculty, take test and access academic grades.
- To undertake reforms in UGC (University Grants Commission)
- To formulate new rules for medical devices.
- Emphasis on policies aimed at SC/St and minorities.
- Two new AIIMS will be set up in Gujarat and Jharkhand.
- Cost of life-saving drugs to be reduces.
- Aadhar card based Smartcards to monitor health of senior citizens.
- 25000 PG seats in medicines.
- Digi Gaon to be launched to promote tele-medicine and education
- To introduce new law to confiscate assets of offenders who escape the country.
- Fiscal deficit for 2017-18 pegged at 3.2 percent of GDP, target for next three years pegged at 3 percent.
- Taxation rates to be made reasonable.
- Tax reduced from 30%to 25% for small firms with turnover up to Rs 50 crore.
- Tax rate halved to 5% from 10% for those with annual income between Rs. 2.5 lakh to Rs. 5 lakh.
- Zero tax liability for those with annual income of Rs. 3 lakh.
- Surcharge of 10% for those with salaries between Rs. 50 lakh to Rs. 1 crore.
- Foreign portfolio investors exempted from indirect transfer provisions.
- No tax for Rs 4.5 lakh annual income on use of exemption under 80C of IT Act.
- Tax liability of Rs 2,500 for people with annual income between Rs 3 lakh and 3.5 lakh.
- The tax proposals would lead to loss of Rs 22,700 crore.
- No changes in excise and service tax regime.
- Deposits between Rs. 2 lakh and Rs. 80 lakh were made in 1.09 crore bank accounts from 8 November to 30 December 2016.
- Maximum cash donation to political parties from one source can not exceed Rs. 2000.
- Political parties will be entitled to receive donations by cheques or digital modes.
- Government has accespted recommendation to not to allow cash transaction over Rs. 3 lakh.
- Bonus, cashback schemes announced for BHIM app users.
Agriculture & Farming
- Aims to double farm income in five years.
- Allocation for rural and agricultural sector will be Rs. 1,87,223 crore in 2017-18
- Model law for contract farming to be adopted.
- Agriculture sector expected to grow at 4.6%.
- Agriculture expenditure targeted at Rs 10 lakh crore.
- Mini labs to be set up in all 648 krishi vigyan kendras by qualified local entrepreneurs for soil testing.
Energy & Crude Oil
- Strategic crude oil reserves will be set up in Odisha and Rajasthan.
- Second phase of solar power develeopment for additional 20,000 mw.
Union Budget 2017-18: Expert Analysis
Due to the damage caused by demonetization, the Union Budget for the year 2017-18 was expected to come with masterstroke announcements. It did not come with a lot of bells and whistles, yet it is a bold one. The first combined Union Budget-Railway budget focuses every section in the society like youth, adults, poor and rich and looks like a welcomed budget for all. What do you think of Union Budget 2017-18? Share your views in the comments below.
Union Budget 2017-18: Key Expectations
Following are some expectations from 2017-18 Union Budget:
- Since the Union-Budget 2017-18 is the first budget to be presented post-demonetization, announcements pertaining to promotion of cashless transactions are expected. Government is likely to announce discounts and other offers on making transactions through debit/credit cards or other modes of cashless payments.
- The income tax slabs are likely to be revised in order to benefit the low-income tax payers. The income tax limit is likely to be increased from Rs 2.5 lakh to Rs 4 lakh.
- Hike in the HRA deduction limit is expected to be increased for the salaried people.
- There’s no denying that a lot of farmers suffered due to demonetization. Cash crunch did also impact the rural areas of country. The Budget 2017 is thus, likely to offer some benefits as compensation for the loss. Different programs and schemes for agriculture, farmer welfare and rural sector are likely to be announced.
- The Corporate tax is expected to be reduced by 1-2%.
- The GST is also expected to be included in the Union Budget 2017 and is likely to be implemented from July 1, 2017.