The main theme of Union Budget 2017-18 is Integral Humanism. Integral Humanism put emphasis on decentralization and attaches immense importance to the economic progress of every human being. In India, Prime Minister Mr. Narendra Modi’s approach is a perfect example for this, ‘minimum government, maximum governance’ and ‘sabkha sath, sabkha vikas (collective efforts, inclusive growth)’ kind of principles are at the core of each and every policy of our current government, and its results are remarkable.
Agriculture and Rural Development is one of the key focus areas of union budget 2017-18. With 157.35 million hectares, India holds the second largest agricultural land in the world. The agriculture sector is one the largest contributor to the GDP of our country. Agricultural export constitutes 10 percent of the country’s exports and is the fourth-largest exported principal commodity. Government initiatives and schemes have encouraged several players to invest in this sector. Our government is providing the best opportunity to transform the rural economy.
Some key reformative steps in the union budget 2017-18 are: abolishment of FIPB, merger of Railway budget with General budget, removal of plan/non-plan classification of expenditure and presentation of budget on 1st February itself is a crucial step because it will help the ministries to operationalize all activities from the commencement of the financial year.
Let’s take a look at some important aspects of this year’s budget.
AGRICULTURE AND RURAL DEVELOPMENT
–The total budget allocation for rural, agricultural and allied sectors for 2017-18 is Rs 187223 crore, which is 24% higher than last year.
–Rs 10 lakh crore allocated for agricultural credit.
–Fasal Bima Yojana- Cropped area coverage increased to 40% and by FY 18-19, the area will further increase to 50%.
–Rs 1,900 crore allocated for computerization of PACS (Primary Agricultural Credit Societies) and 63000 functional PACS will get integrated with the core banking system of district central cooperative banks. The computerization and integration of PACS will enhance the transparency and will help in streamlining the process.
–Coverage of eNAM (National Agricultural Market- an online platform) to be expanded from 250 to 585 APMCs (APMC is an Agricultural Produce Market Committee, a marketing board established by the state government in India). The government wants to invest in modern technologies of cleaning/packaging and storage of agricultural produce and for this, each APMC that moves under eNAM will be given a cash assistance of Rs 75 lakh.
–Government wants to provide high-speed broadband on optical fibre in over 1.5 lakh gram panchayats with hotspots and access to digital services at low tariffs by the end of 2017-18 and for this Rs 10,000 crore is allocated for Bharat Net project.
–A model law on contract farming to be prepared and circulated among the States for adoption.
–Dairy Processing and Infrastructure Development Fund to be set up in NABARD with a corpus of Rs 2000 crores and will be increased to Rs 8000 crores over 3 years.
–A dedicated micro-irrigation fund will be set up by NABARD to achieve the goal of ‘Per Drop More Crop’. Its initial corpus will be Rs 5000 crore.
–1000 mini soil testing labs will setup in Krishi Vigyan Kendras. This will help the farmers to access to relevant information e.g. seeds, soil analysis and suitable plant varieties to optimize output in their respective areas.
–From the existing 5 lakh farm ponds, the government plans to implement an additional 10 lakh farm ponds this year and add another 5 lakh ponds in FY 17-18.
–Mission Antyodaya to bring 1 crore households out of poverty and to make 50,000 Gram Panchayats poverty-free by 2019.
–100% village electrification will be achieved by May 1, 2018.
–Budget allocation to MNREGA increased to a record Rs 48,000 crore for 2017-18, from Rs 37,000 crore in 2016-17. Participation of women in MNREGA has increased to 55%. The government will use space technology in the planning of MNREGA.
–Allocation for Pradhan Mantri Awas Yojana – Gramin increased from Rs 15,000 crores in BE 2016-17 to Rs 23,000 crores in 2017-18 with a target to complete 1 crore houses by 2019 for the houseless and those living in kutcha houses.
–The Cabinet has approved extension of tenure of loans under Credit Linked Subsidy Scheme of the Pradhan Mantri Awas Yojana from 15 to 20 years.
Sanitation coverage in rural India has gone up from 42% in Oct 2014 to about 60%. Open Defecation Free villages are now being given priority for piped water supply. –Pace of construction of PMGSY (Pradhan Mantri Gram Sadak Yojana) roads accelerated to 133 km roads per day in 2016-17, against an average of 73 km during 2011-2014.
–Government has taken up the task of connecting habitations with more than 100 persons in left wing extremism affected Blocks under PMGSY. All such habitations are expected to be covered by 2019 and the allocation for PMGSY, including the State’s Share, is Rs 27,000 crores in 2017-18.
–As part of a submission of the National Rural Drinking Water Programme (NRDWP), it is proposed to provide safe drinking water to over 28,000 arsenic and fluoride affected habitations in the next four years.
–For imparting new skills to people in rural areas, mason training will be provided to 5 lakh persons by 2022.
–A program of “human resource reforms for results” will be launched during 2017-18 for human resources development in Panchayati Raj Institutions.
–The Action plans to eliminate Kala Azar and Filariasis by 2017, Leprosy by 2018, Measles by 2020 and Tuberculosis by 2025.
–This year Rs 2, 74,000 crores is allocated for defence budget (excluding pensions). There is an overall 6% increase in the defence budget as compared to last year.
–A centralized defence travel system developed to book tickets online by soldiers and officers.
–Web-based interactive pension disbursement system for defence pensioners to be established.
–Foreign Investment Promotion Board to be abolished in 2017-18 and further liberalization of FDI policy is under consideration.
–An expert committee will be constituted to study and promote the creation of an operational and legal framework to integrate spot market and derivatives market in the agricultural sector, for commodities trading. e- NAM to be an integral part of the framework.
–Bill relating to curtail the menace of illicit deposit schemes will be introduced.
–A bill relating to resolution of financial firms will be introduced in the current Budget Session of Parliament. This will contribute to stability and resilience of our financial system.
–A mechanism to streamline institutional arrangements for resolution of disputes in infrastructure related construction contracts, PPP, and public utility contracts will be introduced as an amendment to the Arbitration and Conciliation Act 1996.
–A Computer Emergency Response Team for our Financial Sector (CERT-Fin) will be established.
–Government will put in place a revised mechanism and procedure to ensure time bound listing of identified CPSEs on stock exchanges. The shares of Railway PSEs like IRCTC, IRFC, and IRCON will be listed on stock exchanges.
–A new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18.
–In line with the Indradhanush roadmap, Rs 10,000 crores for the recapitalization of Banks provided in 2017-18.
–Lending target under Pradhan Mantri Mudra Yojana to be set at Rs 2.44 lakh crores. Priority will be given to Dalits, Tribals, Backward Classes and Women.
–For transportation sector as a whole, including rail, roads, shipping, provision of Rs 2, 41,387 crores has been made in 2017-18.
–Select airports in Tier 2 cities will be taken up for operation and maintenance in the PPP mode.
–In the road sector, the Budget allocation for highways increased from Rs 57,976 crores in BE 2016-17 to Rs 64,900 crores in 2017-18.
–2,000 km of coastal connectivity roads have been identified for construction and development. The total length of roads, including those under PMGSY, built from 2014-15 till the current year is about 1, 40,000 km which is significantly higher than previous three years.
–For creating an eco-system to make India a global hub for electronics manufacturing Rs 745 crore is allocated in incentive schemes like M-SIPS and EDF.
–A new and restructured Central scheme with a focus on export infrastructure called Trade Infrastructure for Export Scheme (TIES) will be launched in 2017-18.
–125 lakh people have adopted the BHIM app so far. The Government will launch two new schemes to promote the usage of BHIM app- Referral Bonus Scheme for individuals and a Cash-back Scheme for merchants.
–Aadhar Pay a merchant version of Aadhar Enabled Payment System, will be launched shortly.
–A Mission will be set up with a target of 2,500 crore digital transactions for 2017-18 through UPI, USSD, Aadhar Pay, IMPS and debit cards.
–A proposal to mandate all Government receipts through digital means, beyond a prescribed limit, is under consideration.
–Banks have targeted to introduce additional 10 lakh new POS terminals by March 2017. They will be encouraged to introduce 20 lakh Aadhar based POS by September 2017.
–Proposed to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems.
Steps to promote Digital Economy
–Under the scheme of presumptive income for small and medium taxpayers whose turnover is up to 2 crores, the present, 8% of their turnover which is counted as presumptive income is reduced to 6% in respect of turnover which is by non-cash means.
–No transaction above Rs 3 lakh would be permitted in cash subject to certain exceptions.
–Miniaturized POS card reader for m-POS (other than mobile phones or tablet computers), micro ATM standards version 1.5.1, Finger Print Readers / Scanners and Iris Scanners and on their parts and components for the manufacture of such devices to be exempt from BCD, Excise/CV duty and SAD.
EASE OF DOING BUSINESS
–Scope of domestic transfer pricing restricted to only if one of the entities involved in related party transaction enjoys specified profit-linked deduction.
–Threshold limit for the audit of business entities which opt for presumptive income scheme increased from Rs 1 crore to Rs 2 crores. Similarly, the threshold for maintenance of books for individuals and HUF increased from the turnover of 10 lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs.
–Foreign Portfolio Investor (FPI) Category I & II exempted from indirect transfer provision. Indirect transfer provision shall not apply in the case of redemption of shares or interests outside India as a result of or arising out of redemption or sale of investment in India which is chargeable to tax in India.
–Commission payable to individual insurance agents exempt from the requirement of TDS subject to their filing a self-declaration that their income is below taxable limit.
–Under the scheme for presumptive taxation for professionals with the receipt up to Rs 50 lakhs p.a. advance tax can be paid in one installment instead of four.
–Time period for revising a tax return is being reduced to 12 months from completion of financial year, at par with the time period for filing of return. Also the time for completion of scrutiny assessments is being compressed further from 21 months to 18 months for Assessment Year 2018-19 and further to 12 months for Assessment Year 2019-20 and thereafter.
OIL AND GAS SECTOR
–This year’s budget has proposed to create an integrated public sector ‘oil major’ which will be able to match the performance of international and domestic private sector oil and gas companies. The government is concerned about the fact that a number of state-run oil and gas companies do not have the financial power to give competition on bids for overseas exploration and production assets.
–To lift the share of natural gas in the overall energy mix, finance minister Mr. Arun Jaitley announced a cut to the import tax for liquefied natural gas (LNG) to 2.5% from 5%.
–Budget is proposed to set up strategic crude oil reserves at 2 more locations, namely, Chandikhole in Odisha and Bikaner in Rajasthan. This will take our strategic reserve capacity to 15.33 MMT.
Note: State-owned firms in the oil and gas sector are: Oil and Natural Gas Corp. Ltd (ONGC), Oil India Ltd, GAIL (India) Ltd, Indian Oil Corp. Ltd, Bharat Petroleum Corp. Ltd, Hindustan Petroleum Corp. Ltd, Numaligarh Refinery Ltd, Chennai Petroleum Corp. Ltd, Engineers India Ltd, Balmer Lawrie and Co. Ltd, and Biecco Lawrie Co. Ltd.
–The second phase of Solar Park development to be taken up for additional 20,000 MW capacities.
–Finance minister Mr. Arun Jaitley announced a series of measures in Budget 2017-18 to promote clean energy, access to power and energy security that will result in 20 gigawatts (GW) of solar capacity addition.
–Proposals for setting up of 20 GW of solar power capacity and feeding 7,000 railway stations with solar power.
— Lower import duty on liquefied natural gas (LNG) and items used in making solar cells and panels (from 5% to zero).
–For 2017-18, the total capital and development expenditure of Railways has been pegged at Rs 1, 31,000 crores. This includes Rs 55,000 crores provided by the Government.
–For passenger safety, a Rashtriya Rail Sanraksha Kosh will be created with a corpus of Rs 1 lakh crores over a period of 5 years.
–Unmanned level crossings on Broad Gauge lines will be eliminated by 2020.
–In the next 3 years, the throughput is proposed to be enhanced by 10%. This will be done through modernization and upgradation of identified corridors.
–Railway lines of 3,500 km will be commissioned in 2017-18. During 2017-18, at least 25 stations are expected to be awarded for station redevelopment.
–500 stations will be made differently abled friendly by providing lifts and escalators.
–It is proposed to feed about 7,000 stations with solar power in the medium term.
–SMS based Clean My Coach Service has been started.
–‘Coach Mitra’- A single window interface, to register all coach related complaints and requirements to be launched.
–By 2019, all coaches of Indian Railways will be fitted with bio-toilets.
–Tariffs of Railways would be fixed, taking into consideration costs, quality of service and competition from other forms of transport.
–A new Metro Rail Policy will be announced with the focus on innovative models of implementation and financing, as well as standardization and indigenization of hardware and software.
–A new Metro Rail Act will be enacted by rationalizing the existing laws. This will facilitate greater private participation and investment in construction and operation.
For more information about measures related to youths, poor and underprivileged, public service, fiscal management, real estate sector, electoral funding and tax reforms etc. you can read information from government’s official sources:
(Source of the facts: Government’s official websites/different online newspapers and journals)