Finance Minister Arun Jaitley announced several incentives for people including lowering of taxes for certain income groups and startups.
The Union Budget Session 2017 commenced today in Parliament with Union Finance Minister Arun Jaitley laying out various achievements and setbacks of the Union government so far, and announced new financial policies for the coming years.
Speaking in the session, he claimed that the BJP-led government transformed India an informal to a formal economy and controlled the double-digit inflation.
Some of the salient points made by the Finance Minister are as follows:
Economy:
"Foreign Institutional Investor (FII) has increased from Rs. 1.07 lakh crores to Rs. 1.45 lakh crores. Consumer Price Index (CPI) inflation is expected to remain within RBI's mandated range of 2% to 6%. India's Current Account Deficit decreased from about 1% of GDP last year to 0.3% of GDP in the 1st half of 2016-17. Growth in a number of emerging economies is expected to recover in 2017. India remains a bright spot in the gloomy global economy. We are seen as an engine of global growth," Jaitley said.
As per Jaitley, the Central government had done away with the planned and unplanned allocation of resources to States. Total resources being transferred to the States & Union Territories with was now Rs. 4.11 lakh crores.
Demonetization:
Recalling the demonetization decision, Jaitley reiterated that the Centre launched a massive war against black money which would continue till corruption was eliminated root and stem. The government was now seen as a trusted custodian of public money, he claimed.
"Demonetization has been done to create a new normal for a bigger, cleaner GDP rate; slowdown, if any, will be only transient. The effects of demonetization will not spill over to 2018. For several decades, tax evasion was a way of life for many. Only 10% of India pays its taxes, while several nations have nearly 70% taxpayers. Demonetization has brought people in line." He pointed out that surplus liquidity in the banking system created by the ban on the two currency notes would lower borrowing cost and increase access to credit.
He claimed that 125 lakh people adopted the BHIM app so far. He announced the launch of a merchant version of Aadhaar-enabled payment for those without debit cards or mobile phones. Jaitley declared that all transactions above Rs. 3 lakhs would strictly be electronic, and no paper cash should be entertained.
And due to demonetization, advance tax on personal income tax increased by 34.8%. And the net tax revenue grew by 17% in 2015-16.
Of the 76 lakh individuals who reported income of over Rs. 5 lakhs, 56 lakhs are salaried. Deposits between Rs. 2 - 80 lakhs made in 1.09 crore accounts post-demonetisation.
"Our aim is to bring everyone under the tax bracket, regardless of their income levels," he added.
Agriculture & Rural
Jaitley announced an agricultural credit of ten lakh crores for 2017-2018. Allocation for Pradhan Mantri Awaas Yojana has been increased 15,000 crores to 23,000 crores.
"My aim while preparing the budget this year has been to spend more in rural areas, infrastructure, and poverty alleviation and yet maintain fiscal prudence," he added. He also announced that 100% of villages in India would be entirely electrified by May 1, 2018. Open defecation free villages were now being given priority for piped water supply.
Education & Jobs:
"Our focus will be on energizing and mobilizing the youth to reap benefits of growth and employment. Growth in a number of emerging economies is expected to recover in 2017, including in India," the Finance Minister said.
"The Centre has also proposed to introduce a system of measuring annual learning for the youth. Science education will be given focus education in order to empower and enlighten youth. Skill centers will be set up across the country to help youngsters seeking opportunities abroad," Jaitley said.
Another major development Jaitley announced is the restructuring of the University Grants Commission (UGC).
Housing:
The Union government will complete 1,00,00,000 houses by 2019, for the homeless and also for those living in "kachcha" houses.
Power & Railways
Jaitley announced Rs. 55,000 crores for Railways in Budget 2017. Capital and development expenditure pegged at Rs. 1.31 lakh crores for railways will be given from the budget from Budget. Railway tariffs will be fixed on the basis of cost, social obligation, and competition. Also, State-run companies including Ircon and IRCTC will soon be listed on stock exchanges.
The focus is on Swachch railways, Jaitley said. Steps would be taken to launch dedicated trains for pilgrimage and tourism. IRCTC users would no longer have to pay any service charge. Rail safety fund with a corpus of Rs. 1 lakh crores would be created over a period of five years, he declared.
All villages in India will be 100% electrified by May 2018, he declared. Rs. 1.3 lakh crores had been allotted for solar power, disabled friendly stations.
Other infrastructure:
Total investment for infrastructure in budget 2017 stands at a record Rs 3,96,135 crores, says Arun Jaitley. Transport sector allocated Rs 2.41 lakh crore and Bharat Net Project allocated Rs 10,000 crore.
The Centre also announced the laying of Coastal roads of 2,000 km to accelerate the development of Coastal Economic Zones.
Healthcare & Welfare:
An action plan to eliminate Kala Azar and Filariasis by 2017, Leprosy by 2018, Measles by 2020, and Tuberculosis by 2025 has been chalked out.
Allocation for SCs has been increased from Rs. 38,833 crores to Rs. 52,393 crores, which is a rise of 35%, Jaitley said. Budget allocation for welfare of women and children under various Ministries increased to Rs 1,84,632 crores.
Taxes:
Income Tax for people earning below Rs. 2.5 lakhs per annum is now zero. Tax on those earning between Rs. 2.5 lakhs to Rs. 5 lakhs has been reduced to 5%. The Tax rate for companies with an annual turnover up to Rs. 50 crores have been reduced to 25% in order to strengthen the MSME sector (including Startups). IT on those earning above 5 crores per annum has been increased to 15%.
Jaitley added, "First-time taxpayers will not be scrutinized, as promised, except those earning a significant amount through business incomes."
Others:
In order to control corruption and bribing, the maximum amount a political Party could receive in cash donations would be only Rs. 2,000 per one source, the Union Minister announced. Political parties would be allowed to receive donations by cheque or digital mode.
Donors could now purchase electoral bonds from authorized banks, which are redeemable only in registered accounts of Party, Jaitley said.