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UNION BUDGET 2017 to 2018: Everything you need to know

The 2017-18 Union Budget was presented amidst a somewhat wobbly backdrop of the world economy facing considerable uncertainty, increasing signs of a retreat from the globalisation of goods the world over, and high expectations from people back home relating to good governance.

AGRICULTURE

  • Agricultural credit during the year 2017-18 is targeted at Rs.10 lakh crores, with 60 days interest waiver.
  • The government intends to double the NABARD fund (for long term irrigation) corpus from Rs. 20,000 crore to Rs. 40,000 crore.
  • A dedicated micro irrigation fund will be set up for NABARD with Rs 5,000 crore initial corpus.
  • Dairy processing infrastructure fund will be initially created with a corpus of Rs. 2000 crore.
  • Soil testing: The government will set up mini labs in Krishi Vigyan Kendras for soil testing.

RURAL ECONOMY

  • The government intends to bring 1 crore households out of poverty by 2019.
  • In FY18, the government plans to under take five lakh farm ponds under the MGNREGA.
  • The government plans to spend Rs 3 lakh crore in rural India. With MGNREGA, it aims to double farmers’ income.
  • The government has proposed to complete 1 crore houses for those without homes.
  • Allocation of Rs. 19,000 crore was announced for Pradhan Mantri Gram Sadak Yojana in 2017-18.
  • The government aims to achieve 100% rural electrification by March 2018.

FINANCIAL MARKETS

  • FIPB abolished: The government has decided to abolish FIPB (Foreign Investment Promotion Board) in 2017-18.
  • PSE divestments: Shares of railway PSEs like IRCTC, IRFC & IRCON would be listed on stock exchanges.
  • Public sector bank recapitalisation: The government plans to allocate Rs. 10,000 crores for the recapitalisation of public sector banks in 2017-18.
  • New CPSE ETFs in the pipeline: A new ETF with diversified CPSE stocks and other Government holdings will be launched in 2017-18. Furthermore, the government will introduce a revised mechanism to ensure time bound listing of CPSEs.
  • Integration of spot & derivatives commodity market: 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.
  • Pradhan Mantri Mudra Yojana: The government has fixed the lending target at Rs 2.44 lakh crore for 2017-18 under the Pradhan Mantri Mudra Yojana which takes care of the development & refinancing needs of micro units.
  • Launch of CERT-Fin: A Computer Emergency Response Team for the Financial Sector (CERT-Fin) will be established.
  • Very low likelihood of tax-free bond issuance in FY18: This was the second consecutive Union budget where the government did not mention any allocation to PSUs for mobilising funds through tax-free bond issuances.

BUDGET ESTIMATES

  • Total Expenditure is estimated at 21,47,000 for FY 2017-18.
  • Focus on capital expenditure: The government has abolished planned and non-planned expenditure and has stepped up allocation for capital expenditure by 25.4% over the previous year.
  • Total resources being transferred to the States and the Union Territories with Legislatures is Rs. 4.11 lakh crores, against Rs. 3.60 lakh crores in BE 2017- 18
  • Fiscal deficit target for 2017-18 to be at 3.2% of GDP and government remains committed to achieving 3% in the following two years.
  • Revenue Deficit of 2.3% in BE (Budget Estimate) 2016-17 stands reduced to 2.1% in the Revised Estimates. The Revenue Deficit for next year is pegged at 1.9%, against 2% mandated by the FRBM Act.
  • Net market borrowing of government has come down to Rs. 3.48 lakh crores after buyback in 2017-18, much lower than Rs. 4.25 lakh crores of the previous year.
  • Defence expenditure, excluding pension, estimated at Rs 2,74,114 crore.

TAX PROPOSALS

  • Personal income tax: Existing tax rate for the tax slab of Rs. 2.5 – Rs 5 lakh is reduced to 5% from 10%. A surcharge of 10% has also been introduced for individuals whose annual taxable income falls between Rs. 50 lakhs and Rs. 1 crore.
  • Simple one-page form to be filed as income tax return for a category of individuals having taxable income up to Rs. 5 lakhs other than business income.
  • People filing I-T returns for the first time will not come under government scrutiny.
  • GST update: Preparation of IT system for GST is on schedule. The government will start making extensive reach-out efforts to trade and industry for GST from 1st April 2017.