Budget 2017 Special: FM Arun Jaitley favours poor, taxes super rich

Feb 02, 2017, 06:00 IST | Alex K Mathew

Finance Minister Arun Jaitley leaves his office to present the budget in Delhi

The budget is in line with expectations and is, in fact, very good from an overall perspective. The pain of the Big ‘D’ – demonetisation – can be seen easing in a month or two. It will not spill over to the next fiscal. There is also high importance being given to the rural sector. The government has emphasised on agriculture, infrastructure for the rural belt, education and job opportunities for the poor as priority and these are positives for the economy in terms of a long-term perspective. There is reason to cheer for small and middle enterprises, those with a turnover of less than R50 crore annually, as their tax has been reduced from 30 per cent to 25 per cent, which is a real boost.

The fiscal deficit is going to be reduced to 3.2 per cent, which is in line with expectation.

Indians shop for gold jewellery post demonetisation. Pic /AFP

We can even now think of 3 per cent, which looks achievable by 2018-2019. The emphasis on building and construction, especially in the rural sector will up the demand for cement, steel, electricity. It is notable that so much emphasis has been given to solar power. We see a lot of sops for the rural sector. I think the Budget is giving us what we expected and going on expected lines, I would call it very good.

Markets up
Market expert Arun Kejriwal says, “This is a big relief to the small taxpayer. We see a lot of simplicity being brought in. For the first time, there was hardly any movement in the market during the budget and now, immediately after it has shot up by 1.2 per cent, so you can see the sentiment. So far it is really looking good.”

Tweet talk
Rahul Gandhi: We were expecting fireworks, instead got a damp squib. Sher o shayari ka budget hai... kisaano ke liye kuch nahi kia,yuvaon ke liye kuch nahi kiya Milind Deora @@milinddeora: DeMo's pros still unclear but govt left with little legroom to counterbalance cons. Too little, too late: best way to sum up

Ramesh Srivats @rameshsrivats: #Budget2017 Congress must be wondering if they can declare the budget as anti-poor right now, or should they wait till the speech is over.

Rohit TK ‏@ObsoleteVodka: Indian government is an app development company!!

Sensex pares early gains, investors turn cautious
Mumbai: Stock market turned cautious amid the budget announcements with the key indices paring early gains as IT, pharma and power shares witnessed selling pressure. The benchmark BSE Sensex opened higher at 27,669 and moved in a range of 27,725 and 27,590 points in morning trade. At 11.45 am, the Sensex surrendered the gains to trade lower by 4.45 points, or 0.02 per cent, dragged by losses in IT major TCS and Infosys.

The big talking points
>> Income Tax rate for annual income between R2.5 lakh to R5 lakh has been reduced to 5 per cent from 10 per cent and zero tax liability for people with annual income of R3 lakh.

>> There is also a surcharge of 10 per cent on individuals earning between R50 lakh to R1 crore.

>> Tax liability of R2,500 for annual income between R3 lakh and R3.5 lakh.

>> No tax for R4.5 lakh annual income if using exemption under Section 80C of the I-T Act. These proposals mean 50 per cent savings in income for someone earning up to R5 lakh.

Bollywood reaction

Mukesh Bhatt, producer

Babul Supriyo with Mukesh Bhatt

The government has rarely acknowledged the entertainment industry. We are cultural ambassadors, but there haven’t been any incentives offered to us. We pay entertainment tax, but don’t get sops. There is no discussion on curbing the import of foreign films dubbed in multiple regional languages, leading to a drop in our business.

Cash dealings above Rs 3Lakh banned from April 1

Continuing with government steps to clamp down on black money, Jaitley today proposed to ban all cash transactions above R3 lakh beginning April 1, 2017. The decision is based on the recommendation of the SIT on black money that was set up by the SC, Jaitley said.

The blockbuster announcements

No cash
Transactions of R3 lakh and above cannot be carried out in cash

Property
Holding period for gain from immovable property is now 2 years

More tax
Surcharge of 10% for those whose annual income is Rs 50 lakh to R1 crore

Railways
Rail safety fund with R100,000 crore to be created over 5 years

Funding
Political parties can receive donation of only Rs 2,000 from 1 source

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