Union Budget 2017 India: Key-Highlights Explored for Major Sectors

In the pursuit of war against black money, and boosting the country’s economy, the Union Budget 2017 of India was presented by Finance Minister, Arun Jaitley on the 1^st Feb.  It was a merger of the railway budget and the general budget. After the bout of demonetization, which affected many industries financially, the budget seems to support digital payments and shows hope of recovering from fallbacks with remonetisation- reaping long-term benefits for several sectors.

The Budget was categorized into 9 distinct themes: rural population & farmers, digital economy, motivating youth & education, financial sector, public service, tax administration, poor and underprivileged, infrastructure, and fiscal management. It also had plans to invest hugely in benefitting the rural areas, logistics, along with shaping the GST implementation.

Here is how the Union Budget 2017, India was laid out by the Finance Minister for 9 major units:

1. Infrastructure and Transport

• 3.96 trillion to be invested in infrastructure. The new structure for the central scheme will reflect Export infra. Attention will be given to increasing pilgrimage/tourism trains.
• Amends to be made in the Airports Authority of India Act to allow monetization of land resources. Rs. 2 trillion funds directed towards the transport sector.
• Launch of Digi-gau initiative. Development expenditure for railways is estimated at Rs. 1.31 trillion. Allocation of Rs. 64,000 crore for the road sector (national highways).
• Preparation to make India a global hub of electronics manufacturing. For the telecom sector, Rs. 10,000 crore allocated for Bharat Net programme.
• Tickets booked on IRCTC will have no service charge applicable. A new metro policy will be announced. Under the Coach Mitra facility, bio-toilets will be available for all coaches by 2019.
• Unmanned level crossings will be eliminated by 2020. Safety fund corpus introduced. Promised 3,500km of railway lines.
• 500 stations will be made friendly for differently-abled.

2. Financial Sector

• Foreign Investment Promotion Board will be abolished. Over 16,000 new enterprises were set up under the stand-up India scheme.
• Public accountability will be fostered by listing PSEs and revision mechanisms in the same will be pushed ahead.
• Strict resolution mechanisms are formed for financial firms. Pradhan Manti Mudra Yojana to target Rs. 2.44 trillion for lending purposes.
• Integrated public sector oil major to be created and a new ETF shall be launched.
• There will be a computer emergency response team set up to better cyber-security.
• Legal framework for derivative and spot markets to be studied concerning commodities market.

3. Tax Administration

• Rate reduced to 5% for personal income tax (income bracket of Rs. 2.5 to 5 lakhs). Other income categories to receive a uniform benefit of Rs. 12,000 per individual and a levy surcharge are liable for an income bracket of Rs. 50 lakh to Rs. 1 crore.
• Revising tax returns time period is reduced to 12 months.
• No cash transactions must be done over Rs. 3 lakh or a penalty of 100% will be applied. Cash donations for charitable causes are limited to Rs. 2,000 per person.
• GST preparedness for the IT system is still underway, with not many shifts in excise duties done.
• Reduction of customs duty to 2.5% for LNG.
• Political parties to receive donations only digitally or by cheques, while cash donations per person to be only Rs. 2000. Every party must file tax returns in a given time. Amendments to be proposed to RBI act in issuing electoral bonds.
• The corporate tax rate was reduced to 25% for MSMEs with an annual turnover of less than Rs. 50 crore.
• Capital gains tax will undergo changes in the real estate sector.
• MAT is to be carried forward for the next 15 years.
• Rupee denominated Masala bonds will be included, and the concessional withholding rate shall be extended to 30^th June 2020.

4. Fiscal Management

• Expenditure for defence excluding pensions will be Rs. 2.74 trillion.
• Total budget expense on fiscal management is Rs. 21 trillion.
• For FY18, the revenue deficit is 1.9%, and the fiscal deficit is 3.2% of the GDP.
• Consolidated outcome budget to be created for all ministries.
• 3,000 crore to be implemented for various announcements in the Budget.

5. Public Services

• For the defence sector, centralized pension distribution will be established, and a centralized travel system to be developed.
• Head post offices to be approached for passport services. The government will introduce a two-tier exam system for recruitment.
• The government may bring up laws that allow it to confiscate the assets of the economic defaulters.

6. Farmers and Rural Population

• A corpus of Rs. 8,000 crore was announced for dairy processing infra-fund. Similarly, a corpus of Rs. 5,000 crore will be dedicated to the micro-irrigation fund.
• The government will set up mini-laboratories in Krishi Vigyan Kendras. A corpus of Rs 40,000 crore will go to the irrigation fund in the Nabard.
• MGNREGA: Rs. 48,000 crores will be provided. Emphasis on using space technology. Mason training shall be assured to about 5 lakh people.
• Adequate flow of funds will go to farmers on fixed credit, which is at a record level of Rs. 10 trillion as per reports. Rs. 19,000 crore was allocated for Prime Minister Gram Sadak Yojana.
• Rs 1 crore will be devoted to helping households in poverty under the Mission Antyodaya. Rs 23,000 crore shall be allocated under the Pradhan Mantri Awas Yojana.
• While Rs. 4,500 crores is set to aid the rural livelihood mission, Rs. 1,87,223 crore will go on to support other rural programmes.
• A human resource reform programme will be introduced for Panchayat Raj. Village electrification in completion will be achieved by May 2018.

7. Underprivileged and Poor

• 1.84 trillion as funds for various schemes dedicated to children and women. Rs. 500 crore corpuses assigned to Mahila Shakti Kendras.
• Allocation increased for STs (Rs. 31,920 crore), SCs (Rs. 52,393 crore), and minority affairs (Rs. 4,195 crore).
• Aadhaar based smart cards for senior citizens, with health specifications provided. Affordable housing schemes launched. Plans for two new AIIMS in Gujrat and Jharkhand.
• Aim to generate additional PG medical seats annually and eliminate tuberculosis by 2025, lessen IMR to 29 by the 2019, and put out leprosy by 2018.
• Legislative reforms to apply for labour rights. New rules to better medical devices and their application.

8. Education and Youth

• Emphasis on education to be seen in science and annual learning outcomes will be measured closely.
• Every entrance exam will be linked to a National testing agency, which will free up AICTE, CBSE, and other bodies.
• Information technology to be leveraged with the SWAYAM platform made essential for virtual learning.
• Funds to be increased for secondary education, while reforms will apply to UGC, where colleges shall be identified according to rankings.
• An addition of 100 Indian International Skill Centres will come up with courses in foreign languages.
• 4,000 crore allocated for launching knowledge awareness and skill acquisition.
• Special schemes will be brought ahead for generating employment in the footwear/leather sector. Five special zones will be set up for the tourism sector.

9. Digital Economy

• The government will promote the BHIM app and cashback scheme for the merchants.
• Digital revolutions plans were introduced with a focus on driving digitization in rural and semi-urban areas as well.
• For people who don’t possess mobile phones, now they can switch to the Aadhaar Pay option.
• A panel was set to bring structural reforms for digital payments. Funds to be encouraged for the Digital India programme.
• A payment regulatory board will be created at RBI.

Though the budget showcases intensive plans for the above-mentioned sectors, it could not elucidate the outcome of demonetization in concrete data evidence, thus drawing a lot of criticism from opposition political parties and citizens. However, Arun Jaitley claims that the economy is going to brighten up in the future and GDP to significantly improve with well-organized enhancements, especially for sectors such as infrastructure, financial, rural, underprivileged and poor.