Finance Minister chops complications and corruption possibility; opts for simplicity to achieve three-pronged aim to transform, cleanse and energise country
The Union Budget for 2017-18 has three unique events attached to it this time around — the presentation was advanced to February 1, so there would not be any need for a vote on account and only a single appropriation Bill would need to be passed; there was no separate Railway Budget, ending a colonial practice since 1924; the plan and non-plan classification of expenditure has been done away with.
NaMo and DeMo
This Budget was presented in the backdrop of three things; first, upcoming elections in five states; second, the DeMo effect on the poor and middle class; and third, kick-starting the post DeMo economy. The Budget has addressed all three issues. The election issue was resolved with a major thrust on agriculture and rural economy. Spending on railways, roads and ports, with a focus on rural India, is pegged at R2.41 lakh crore. Allocation to MNREGA was increased to Rs 48,000 crore.
Balm after the storm
For people hit by demonetisation, a balm has been applied by reducing the tax rate to half in the Rs 2.5 lakh-5 lakh slab. Also, people filing returns for the first time would be exempt from any scrutiny. Higher spending on rural infrastructure will provide jobs in rural India. This will have a multiplier effect and lower tax rates will spur demand.
Affordable housing has been given infra status, which would enable it to get long-term borrowings from banks and financial institutions. Secondly, the change in 30/60 sq mt of built-up area being changed to carpet area would address the area issue in all but the four metros.
Sweeping changes have been made to cleanse political funding — if that can be achieved, it would be a milestone in the world's largest democracy. There are some grey areas that need clarification, such as leveraged companies and these getting a set-off of interest payments from profits made. The FM has proposed a limit to such set-off, and this appears to be a move to prevent more Kingfisher-like incidents.
FM was king of the market
The BSE-SENSEX gained a whopping 485.68 points, or 1.76%, to close at 28,141.64 points, while NIFTY gained 155.10 points, or 1.81 per cent, to close at 8,716.40 points. Today, the day belonged to the FM, as far as the market was concerned. Tomorrow is yet another day.
Direct tax for individuals earning upto R3 lakh
Tax for senior citizens between 60-80 years with income upto R3 lakh
Tax for senior citizens above 80 years and income upto R5 lakh
'Objective of this year's budget is that the pace of economic growth should be significantly pushed, political and economic system is cleansed, and honest taxpayers are incentivised and those who don't pay tax even after income should be brought under tax net'
'The World Bank is more optimistic and has projected a GDP growth of 7 per cent in 2016-17, 7.6 per cent in 2017-18 and 7.8 per cent in 2018-19. This pick-up in our economy is premised upon our policy and determination to continue with economic reforms, increase in public investment in infrastructure and development projects'
'Railways, roads and rivers are the lifeline of our country. I feel privileged to present the first combined Budget of independent India that includes the railways. We are now in a position to synergise the investments in railways, roads, waterways and civil aviation'
'Rs 2,74,114 crore is allocated for defence expenditure, excluding pension. This includes R86,000 crore for defence capital'
'Implementation of GST is likely to bring more taxes to both central and state governments because of widening of tax net. I have preferred not to make many changes in current regime of excise and service tax because the same are to be replaced by GST soon'
'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'
'We have now reached a stage where FIPB can be phased out. We have, therefore, decided to abolish the FIPB in 2017-18. A roadmap for the same will be announced in the next few months. In the meantime, further liberalisation of FDI policy is under consideration and necessary announcements will be made in due course'
'We seek opportunities to strengthen our central Public Sector Enterprises through consolidation, mergers and acquisitions'