Tuesday, Nov 29, 2022

Personal finance, Railways, Digital India, Demonetisation: All you need to know about Union Budget 2017

Here is a quick read on all the different sectors of the Budget.

budget, budget 2017, union budget, Railway Budget, rail budget, budgte updates, taxation, tax rate, income tax, Fiscal Deficit, Revenue Expenditure, plan Expenditure,MGNREGS, GDp, financial year, arun jaitley, indian express news, india news, indian express explained Arun Jaitley

Finance Minister Arun Jaitley presented the Union Budget 2017-18 on Wednesday in the Lok Sabha announcing several benefits for the salaried class and the farmers. Jaitley halved the tax to 5 per cent on incomes upto Rs 5 lakh but proposed a new surcharge of 10 per cent on incomes between Rs 50 lakh and Rs 1 crore. He stepped up allocations for infrastructure, rural, agriculture and social sectors. The budget was a historic one as for the first time railway budget was merged with the finance bill and the date to present it was advanced by a month.

Here is a quick read on all the different sectors of the Budget:

THE MACRO: TAKE 5

 

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oil-4801 With over 90 per cent of the FDI proposals coming via the automatic route, the government said it will abolish the Foreign Investment Promotion Board that clears proposals up to Rs 5,000 crore under approval route

2 Government plans to create a giant national oil company by combining other state-owned firms, to match the performance of international and domestic private sector oil and gas companies

3 Listing and trading of Security Receipts issued by a securitisation company or a reconstruction company under the SARFAESI Act will be permitted in SEBI registered stock exchanges. This will enhance capital flows in to the securitisation industry and will particularly be helpful to deal with bank NPAs.

4 Maximum donation that a political party can take from a single person reduced to Rs 2,000 from Rs 20,000 while the Reserve Bank to enable issuance of electoral bonds. Political parties will be entitled to receive donations by cheque or digital mode from their donors.

5 Income tax on MSME companies with turnover up to Rs 50 crore reduced to 25 per cent from 30 per cent. There are 6.94 lakh companies filing returns of which 6.67 lakh companies fall in this category and, therefore, percentage-wise 96 per cent of companies will get this benefit of lower taxation

Soumya Kanti Ghosh’s writes Budget for Everyone

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New Delhi: An official showing the copy of Union Budget 2017-18 at Parliament after its presentation in the Lok Sabha in New Delhi on Wednesday. PTI Photo by Manvender Vashist (PTI2_1_2017_000203A) A copy of Union Budget 2017-18 at Parliament after its presentation in the Lok Sabha in New Delhi PTI Photo

The FY17 Budget numbers are in line with market expectations. The good thing is that despite a market cacophony, the budget has not deviated from its long term goal of fiscal consolidation. Interestingly, at Rs 5.46 lakh crore / 3.2 per cent of GDP, there is an absolute expansion in fiscal deficit by only Rs 12,258 crore, nearly equivalent to Rs 12,800 crore give way on account of personal income tax concessions. Thus the Budget is nicely balanced in terms of arithmetic.

For FY18, the Government Borrowing is budgeted at Rs 6.05 lakh crore and a net borrowing requirement is pegged at Rs 3.48 lakh crore taking into account repayments (adjusting for switch and buyback) of Rs 2.56 lakh crore. However, of this amount, buyback of Rs 75,000 crore is contingent on the receipts from securities against small savings at Rs 1 lakh crore. (READ FULL STORY)

Consolidation: Govt plans to merge major oil PSUs to take on international competition

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The government plans to form a major oil company by merging some of the existing firms in the oil and gas sector to take on international and domestic players, finance minister Arun Jaitley said in his Budget speech on Wednesday. The government also announced setting up of two new strategic oil reserves in Chandikhole in Odisha and Bikaner in Rajasthan.

Merging the existing oil and gas companies will give them “capacity to bear higher risks, avail economies of scale, take higher investment decisions and create more value for the stakeholders,” Jaitley said. Indian Oil Corporation, ONGC, Hindustan Petroleum Corporation and GAIL, are among the existing state-owned players operating in the energy sector. (FULL STORY)

Reforms: FIPB abolished, more measures to attract FDI

debit-card-759 The government will announce more measures to attract FDI, reform labour laws and push digital payments.

The government announced key reform measures including abolition of the Foreign Investment Promotion Board (FIPB), cleaning up of the electoral funding process and a sharp cut of 5 percentage points in the tax rate for MSME sector, but Wednesday’s Budget refrained from taking specific measures on the twin balance sheet problem of over-indebted companies and the banking sector hamstrung by a mountain of stressed assets.

With more than 90 per cent of the foreign direct investment proposals coming through the automatic route, finance minister Arun Jaitley said it was only logical to phase out the FIPB, the body which clears FDI plans up to Rs 5,000 crore. The government will announce more measures to attract FDI, reform labour laws and push digital payments. (READ STORY)

Fisc & Tax: Take 5

 

tax1 Fiscal deficit for 2017-18 pegged at 3.2 per cent as against 3.0 per cent as estimated earlier. For 2018-19, fiscal deficit retained at 3 per cent. Revenue deficit will be reduced to 2.1 per cent for 2017-18 from 2.3 per cent in the ongoing fiscal

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2 Allocation for total capital expenditure up by 10.7 per cent over previous year and total expenditure stands at Rs 21.5 lakh crore for 2017-18.

3 A revised mechanism and procedure to ensure time-bound listing of identified CPSEs on stock exchanges as “listing will foster greater public accountability and unlock their true value”.

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4 For 2015-16, as against the estimated 4.2 crore persons employed in organised sector, only 1.74 crore individuals filed salary income return. Of the 5.6 crore people in the informal sector, only 1.81 crore filed income return.

5 In 2015-16, among the 3.7 crore individuals who filed the tax returns, 99 lakh individuals showed income below the exemption limit of Rs 2.5 lakh per annum, 1.95 crore individuals showed income between Rs 2.5-Rs 5 lakh, 52 lakh individuals showed income between Rs 5-Rs 10 lakhs and only 24 lakh people showed income above Rs 10 lakh. Of the 76 lakh individual assesses who declared income above Rs 5 lakh, 56 lakh were in the salaried class in 2015-16. Only 1.72 lakh people showed income of more than Rs 50 lakh. The net tax revenue grew by 17 per cent in 2015-16.

Selloff target hiked 60% to Rs 72,500 crore

arun-jaitley-7593

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The Centre has set a target to raise Rs 72,500 crore through disinvestment of Public Sector Units (PSUs) during the next fiscal, including by way of listing of three railway units — IRCTC, IRFC and IRCON, and a merger and consolidation proposal to create “globally competitive” PSUs. The finance ministry had estimated its receipts from disinvestment at Rs 56,500 crore in 2016-17, of which, it has so far raised Rs 26,903 crore through minority stake sale in state-owned companies.

Finance Minister Arun Jaitley said the government will put in place a revised mechanism and procedure to ensure time-bound listing of identified CPSEs on stock exchanges. “Listing of public sector enterprises will foster greater public accountability and unlock the true value of these companies. The government will put in place a revised mechanism and procedure to ensure time-bound listing of identified CPSEs on stock exchanges. The disinvestment policy announced by me in the last budget will continue. The shares of Railway PSEs like IRCTC, IRFC and IRCON will be listed in stock exchanges,” Jaitley said in his budget speech. (FULL REPORT)

Arun Jaitley pegs fiscal deficit at 3.2 per cent of GDP

New Delhi: Finance Minister Arun Jaitley with MoS Arjun Ram Meghwal arrives at Parliament to present the Union Budget 2017-18 in the Lok Sabha, in New Delhi on Wednesday. PTI Photo by Manvender Vashist(PTI2_1_2017_000179b) New Delhi: Finance Minister Arun Jaitley with MoS Arjun Ram Meghwal arrives at Parliament to present the Union Budget 2017-18 in the Lok Sabha, in New Delhi on Wednesday. PTI Photo by Manvender Vashist(PTI2_1_2017_000179b)

Finance Minister Arun Jaitley deviated slightly from his earlier fiscal consolidation roadmap by pegging the fiscal deficit at 3.2 per cent of gross domestic product (GDP) for 2017-18, up from the earlier target of 3 per cent of GDP. Alongside, though, Jaitley proposed a target for achieving a revenue deficit of 1.9 per cent of GDP in 2017-18 from the earlier target of 2 per cent of GDP.

In his Budget, Jaitley said the expert panel headed by former revenue secretary N K Singh that was mandated with charting out a new fiscal framework had, in a report submitted last month, recommended maintaining a debt-to-GDP ratio of 60 per cent by 2023 and a fiscal deficit of 3 per cent of GDP for the next three fiscal years. (READ STORY)

Timeline to claim MAT credit enhanced to 15 years

union budget 2017, budget 2017, Finance Minister Arun Jaitley, Jaitley budget, Arun Jaitley budget, Negotiable instrument act, ammendment of negotiable instrument act, indian express news New Delhi: Finance Minister Arun Jaitley tabling the Union Budget for 2017-18 in the Parliament in New Delhi on Wednesday. PTI Photo/TV Grab(PTI2_1_2017_000028B)

Providing relief to assessees paying Minimum Alternate Tax (MAT), Finance Minister Arun Jaitley proposed to enhance the time limit to claim MAT credit from the existing 10 years to 15 years. Currently, tax credit can be carried forward up to the 10th assessment year. With a view to provide relief to the assessees paying MAT, it is proposed to amend section 115JAA to provide that the tax credit determined under this section can be carried forward up to the 15th assessment year, immediately succeeding the assessment years in which such tax credit becomes allowable.

While experts welcomed the move, they said that the market expected a reduction in the MAT rate. Abhishek Goenka of PwC said there was an expectation that the rate of MAT will be reduced in line with its goal of reducing the headline corporate tax rate to 25 per cent. (REPORT HERE)

All cesses, barring petroleum, to be merged in GST: Hasmukh Adhia

gst, gst bill, hasmukh adhia, revenue secretary hasmukh adhia, gst constitution amendment act, india news, latest news File photo of Hasmukh Adhia revenue secretary.

The proposed Goods and Services Tax (GST) will subsume all cesses except those on petroleum, Revenue Secretary Hasmukh Adhia said on Wednesday. This proposal is in contrast to the earlier decision of the Council, which had proposed levy of additional cess for luxury and sin goods such as tobacco, cigarettes, and aerated drinks to compensate states for five years after the rollout of the regime.

It was decided that even though all other cesses would be subsumed in the GST, the Centre would continue to levy clean environment cess on coal, peat and lignite. The Centre had also proposed to continue collection of the National Calamity Contingency Duty, presently collected as a cess, for the purpose of funding the National Disaster Relief Fund. (READ REPORT)

Personal Finance: Take 5

personel-finance1 Rs 5,000 penalty on individuals will be levied for any delay in return filing after due date till December 31  and a fee of Rs 10,000 in other cases

2 The government has proposed to reduce the rate of presumptive taxation to 6 per cent under Section 44AD for small businesses with an annual turnover of up to Rs 2 crore. Also, the audit limit for businesses opting for presumptive scheme has been increased from Rs 1 crore to Rs 2 crore. Experts stressed that this will induce more businesses to opt for the Presumptive Taxation scheme

3 Investment in Rajiv Gandhi Equity Saving Scheme will not be eligible for deduction for investment from the Assessment Year 2018-19

4 Cash donation limit allowed for deduction under section 80G reduced from Rs 10,000 to Rs 2,000. Cash payment limit by a business or profession to a person has been reduced from Rs 20,000 in a day to Rs 10,000 in a day for the purpose of claiming deduction. No transaction above Rs 3 lakh would be permitted in cash

5 The government proposed to lower the rate of deduction of tax in case of payments made to a person engaged only in the business of operation of call centre. Deduction of tax at source for fee payment of over Rs 30,000 to a call centre has been cut from 10 per cent to 2 per cent

Arun Jaitley tempers income tax rate gains with cut in rebates

New Delhi : Union Finance Minister, Arun Jaitley with Chief Economic Adviser Arvind Subramanian (L), Economic Affairs Secretary Shaktikanta Das (2nd L) at North Block in New Delhi on Monday. Finance Minister Jaitley will table Economic Survey 2017 in Parliament on Tuesday. PTI Photo by Vijay Verma (PTI1_30_2017_000137B) Union Finance Minister, Arun Jaitley with Chief Economic Adviser Arvind Subramanian (L), Economic Affairs Secretary Shaktikanta Das (2nd L) at North Block in New Delhi on Monday PTI Photo

While the finance minister brought cheer to the tax payers by his decision to half the tax rate to 5 per cent for income falling between Rs 2.5 lakh and Rs 5 lakh, he took back some of the gains from those earning up to Rs 5 lakh as he reduced the maximum rebate available to individuals under section 87A from Rs 5,000 to Rs 2,500.

On Wednesday, the finance minister announced to reduce the lowest tax rate from 10 per cent to 5 per cent thereby providing a benefit of up to Rs 12,500 to all tax payers. If this came as a big benefit to all tax-payers, the finance minister also took back some of the benefits available to tax payers falling in the income tax bracket of Rs 2.5 lakh to Rs 5 lakh. (READ FULL STORY)

Relief on partial withdrawal to encourage National Pension System

pension Under the Income Tax Act, employee or other individuals are allowed deduction for amount deposited in the National Pension System Trust (NPS).

To encourage National Pension System (NPS), finance minister Arun Jaitley on Wednesday proposed tax relief on partial withdrawal of up to 25 per cent of the contribution by the subscribers and permitted self-employed individuals deduction on up to 20 per cent of his total income for contribution to the NPS.

“In order to provide parity between an individual who is an employee and an individual who is self-employed, it is proposed to provide that the self-employed individual shall be eligible for deduction upto twenty per cent of his gross total income in respect of contribution made to National Pension System Trust,” Jaitley said. (FULL STORY)

Nimesh Shah writes on the Emphasis on financial savings

The corporate, excise and service tax targets that are proposed are reasonable and likely to be achieved. (Illustration by: C R Sasikumar) The corporate, excise and service tax targets that are proposed are reasonable and likely to be achieved. (Illustration by: C R Sasikumar)

The Budget 2017 proposals are positive for financial assets and the returns from equity is expected to remain on an uptrend. In terms of the macros, we are seeing a continuation of prudent policies that defined the budgets of the past three years. Two things stand out. One, the Budget continues to support financial assets, which productive assets for the economy.

Two, physical assets are being slowly discouraged, the incremental capital output to the economy is very low. On this front, one of the Budget proposals in case of real estate is to restrict the tax benefits in the case of house property. This will continue to drive people away from physical assets like as real estate. (READ STORY)

SOCIAL SECTOR: TAKE 5

social-sector1 As per the Finance Minister’s speech, the allocation for women and children under various schemes across all ministries has been increased from Rs 1,56,528 crore in budget estimate 2016-17 to Rs 1,84,632 crore for 2017-18. The budget estimate for the Woman and Child Development Ministry has been increased from Rs 17,408 crore to Rs 22,094 crore.

2 An amount of Rs 500 crore has been allocated for setting up Mahila Shakti Kendras in 14 lakh ICDS anganwadi centres. These are meant to be a one-stop convergent support service for providing rural women with opportunities for skill development, employment, digital literacy, health and nutrition. The Beti Bachao Beti Padhao scheme has been allotted Rs 200 crore in this year’s budget, almost a five-fold increase from last year’s allocation.

3 The allocation for schemes funded by the Nirbhaya fund was Rs 585 crore in 2016-17; it has been cut to Rs 400 crore for 2017-18.

4 The amount budgeted for Indira Gandhi Matritva Sahyog Yojana saw a four-fold hike, with Rs 2,700 crore being set aside this year as compared to Rs 634 crore in 2016-17. As per this scheme, Rs 6,000 will be provided to mothers who seek institutionalised delivery and vaccination.

5 Additional duty on pan masala was increased from 6 per cent to 9 per cent, on unmanufactured tobacco from 4.2 per cent to 8.3 per cent, zarda and scented tobacco from 6 per cent to 12 per cent, and tobacco containing pan masala by the same amount.

Jharkhand and Gujarat get an AIIMS each, Health Mission gets a Rs 6,000-crore boost

Patients outside AIIMS in Delhi. There are 18 other AIIMS-like institutions around the country. Express archive Patients outside AIIMS in Delhi. There are 18 other AIIMS-like institutions around the country. Express archive

EVEN AS the flagship health insurance scheme of the last Budget awaits the Cabinet’s nod, the Union Budget for the financial year 2017-18 enhanced the allocation for health by Rs 10,000 crore to Rs 47,352.51 crore. The ministry had asked for approximately Rs 50,000 crore.

The allocation for the National Health Mission was increased by a little more than Rs 6,000 crore to Rs 20,762 crore. Like the last several budgets, two new All India Institutes of Medical Science (AIIMS) were announced in Jharkhand and Gujarat — the latter goes to the polls later this year. (STORY HERE)

Pregnant women entitled to Rs 6,000: Maternity scheme gets Rs 2,700 crore, experts say not enough

The conditional cash transfer is applicable only to women above the age of 19 years and for up to two live children. Express archive The conditional cash transfer is applicable only to women above the age of
19 years and for up to two live children. Express archive

The much-talked about maternity benefit entitlement of Rs 6,000 per woman, announced by Prime Minister Narendra Modi on December 31, 2016, has received a meagre allocation of Rs 2,700 crore. This is not even a quarter of the estimate drawn up by civil society groups that have been long demanding enforcement of this entitlement promised under the National Food Security Act way back in 2013.

The scheme grants Rs 6,000 to pregnant and lactating women who go for institutional delivery and vaccinate their children. As per the scheme details, released by the Women and Child Development Ministry immediately after the PM’s announcement, state governments will have to pool in 40 per cent of the amount with the Centre providing the rest. (READ REPORT HERE)

IITs corner over 40 per cent of higher education outlay

Ganga cleaning, ganga, IIT, IIts, & IITs, Ganga IITi, IIt Ganga cleaning, NGT, National Green Tribunal, Namami Gange programme, india news Of the Rs 7,292 crore hike, a large chunk of Rs 3,000 crore will go to the IITs.

School education continues to be low on the government’s priority list, with the midday meal scheme — aimed at improving attendance in government schools — getting a paltry hike of Rs 300 crore this time, even though the HRD Ministry had sought Rs 2,200 crore more in 2016.

Finance Minister Arun Jaitley on Wednesday announced a 10 per cent increase in the overall Budget for education — from Rs 72,394 crore in 2016 to Rs 79,686 crore this year — with a bigger thrust on higher education. Of the Rs 7,292 crore hike, a large chunk of Rs 3,000 crore will go to the IITs. (FULL STORY HERE)

Infrastructure: Take 5

infra-7591 Two new strategic oil reserves of 10 million metric tonnes (MMT) total capacity will be built in Chandikhole, Odisha, and Bikaner, Rajasthan. With this, the total number of strategic oil reserves will increase to five with a combined capacity of 15.3 MMT.

2 Immovable properties — land or building or both — will be considered “long term capital asset”, if the period of holding is two years. Previously, to avail the same benefit, the period of holding had to be three years.

3 Those getting their land pooled for the creation of Andhra Pradesh capital Amaravati would get exemption from capital gain tax. The capital tax gains will be exempted on those who were the owners of such land as on June 2, 2014— the date when Telangana was carved out as a separate state from Andhra Pradesh.

4 Second phase of solar park to be developed with an additional 20,000 MW capacity. The Finance Minister has also proposed a decrease in customs duty on “resin and catalyst” that are required to manufacture cast components of wind turbines from 7.5 per cent to 5 per cent.

5 Budget allocation for highways increased to Rs 64, 900 crore from Rs 57,976 crore in 2016-17. Moreover, 2,000 km of coastal connectivity roads have been identified for development.

Affordable housing: Low-cost housing to benefit from infra tag

The Budget also confers certain sops on real-estate investors. The Budget also confers certain sops on real-estate investors.

AFFORDABLE HOUSING has got its much sought after ‘infrastructure’ tag, a long-standing demand by real-estate developers who can now enjoy the benefit of lower borrowing rates, tax concessions and increased flow of foreign and private capital into their projects.

The infrastructure status is a natural corollary to the Real Estate Real Estate (Regulation and Development) Bill, 2016. The Institutional Mechanism under the Ministry of Finance had made the passage of the Bill, to regulate the realty sector, a pre-condition to including affordable housing in the master list of 32 infrastructure sub-sectors, which includes urban public transport, water supply pipelines, electricity distribution and capital stock in education and healthcare. (READ STORY)

No increase in allocation for rural roads scheme

The government has identified 2,000 kms of coastal connectivity roads for construction and development. The government has identified 2,000 kms of coastal connectivity roads for construction and development.

The government has decided not to increase the allocation for Pradhan Mantri Gram Sadak Yojana (PMGSY) from Rs 19,000 crore last year. However, the total allocation for Road Transport and Highways Ministry has been increased from Rs 57,976 crore in 2016-17 to Rs 64,900 crore in 2017-18. “We have committed to complete the current target under PMGSY by 2019. I have provided a sum of Rs 19,000 crores in 2017-18 for this scheme. Together with the contribution of states, an amount of Rs 27,000 crores will be spent on PMGSY in 2017-18,” said Finance Minister Arun Jaitley.

“The PMGSY is now being implemented as never before. The pace of construction of PMGSY roads has accelerated to reach 133 km roads per day in 2016-17, as against an average of 73 km during the period 2011-2014. We have also taken up the task of connecting habitations with more than 100 persons in Left-wing extremism affected blocks.” (REPORT HERE)

Phase II of solar park gets green signal

Finance Minister Arun Jaitley Finance Minister Arun Jaitley

Finance minister Arun Jaitley Wednesday announced that the Centre would take up the second phase of solar park development for an additional capacity of 20,000 MW. The first scheme for “Development of Solar Parks and Ultra Mega Solar Power Projects” was rolled on December 12, 2014, with a target of 20,000 MW. According to a fact sheet issued by the MNRE on May 23, 2016, the central government — under this scheme — had granted the approvals to 33 solar parks of aggregate capacity of 20,000 MW to be set up in 21 states.

The Budget also proposed customs and excise duty cuts on raw materials used for manufacturing solar modules, biogas plants and wind turbines. For example, basic customs duty on all items of machinery required for systems “operating on biogas/bio-methane/ by-product hydrogen” has been reduced from 10 to 5 per cent, while the excise duty has been reduced from 12.5 per cent to 6 per cent. (FULL REPORT)

Two more strategic oil reserves to be built

Finance Minister Arun Jaitley Friday announced that Centre will build two more strategic oil reserves with a combined capacity of 10 million metric tonnes (MMT) — at Chandikhole in Odisha and at Bikaner in Rajasthan. The government has already built three such reserves at Visakhapatnam, Mangalore and Padur in Kerala — with a combined capacity of 5.33 MMT. These three reserves have the individual capacity of approximately 1.33 MMT, 1.5 MMT and 2.5 MMT, respectively.

“To boost our energy sector, the government has decided to set up strategic crude oil reserves. In the first phase, three reserves were set up. In the second phase, two more caverns are proposed. This will take our capacity to 15.33 MMT,” he said. (FULL STORY)

Internal security budget gets a Rs 8,500 crore fillip

The Union Ministry of Home Affairs has received an 11 per cent increase in its annual budget this year and there has been a 20 per cent hike in the “capital” outlay that would be used for new acquisitions and to strengthen security infrastructure in border areas. Last year, the overall budget allocation for the Home Ministry was Rs 75,355 crore. This year, it has been increased to Rs 83,823 crore.

Lauding the Budget, Union Home Minister Rajnath Singh said, “It provides for systemic political reforms and a transformative shift for our economy. The Union Budget provisions honour honest taxpayers, curb the flow of black money and provide relief to the middle class.” The allocation for the National Emergency Response Centre (NERC) has been doubled, with Rs 313 crore being earmarked for it this fiscal. (READ STORY)

The Rural: Take 5

rural-farmers1 The total allocation for the rural, agriculture and allied sectors at Rs 1,87,223 crore is 24% higher than the previous year.

2 The coverage of the Fasal Bima Yojana is to be increased from 30% of cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. For a good crop, adequate credit should be available to farmers in time. The target for agricultural credit in 2017-18 has been fixed at a record level of `10 lakh crore. FM Jaitley, in his Budget speech said: We will take special efforts to ensure adequate flow of credit to the under serviced areas, the Eastern States and Jammu & Kashmir.

3 Mission Antyodaya, a convergence of all ongoing rural schemes, is aimed at bringing one crore households out of poverty and to make 50,000 gram panchayats poverty free by 2019,

4 Rs 19,000 crore for the Pradhan Mantri Gram Sadak Yojana (PMGSY). The pace of construction of roads has gone up from an average of 73 km during 2011-2014 to reach 133 km roads per day in 2016-17.

5 The allocation for Pradhan Mantri Awaas Yojana – Gramin increased from Rs 15,000 crore in 2016-17 to `23,000 crore in 2017-18. An increased allocation of `4,814 crore has been proposed under the Deendayal Upadhyaya Gram Jyoti Yojana in 2017-18.

Rural job generation: Rs 48,000 crore for MNREGA

This effectively amounts to a mere 1 per cent increase as opposed to the increase of 25 per cent that is being projected. This effectively amounts to a mere 1 per cent increase as opposed to the increase of 25 per cent that is being projected.

The highlight of the rural emphasis of his budget, stressed finance minister Arun Jaitley, is ‘the highest ever allocation for MGNREGA’. This year’s provision is Rs 48,000 crore, as against Rs 38,500 crore in 2016-17, he said. The speech made no mention of the fact that the revised budgetary allocation for the scheme in 2016-17 was Rs 47,500 crore, which too was way below what was actually demanded by the Ministry of Rural Development in the last two supplementary grants. This effectively amounts to a mere 1 per cent increase as opposed to the increase of 25 per cent that is being projected.

In fact, the existing funds crunch seems to be hitting MGNREGA work generation on ground as the data for January shows a steep decline as compared to December and also as compared to the corresponding month in the last two years. The total person days generation of work under MGNREGA in January 2017 was only 5.94 crore as compared to 10 crore in December 2016 and 28 crore and 10 crore in January 2016 and January 2015 respectively. (READ REPORT)

Does budget meet farmers’ expectations asks Dr T Haque in his piece

Considering all these aspects, farmers had higher expectation that Budget 2017-18 would give them the best deal. Considering all these aspects, farmers had higher expectation that Budget 2017-18 would give them the best deal.

It is now widely recognised and reported that farmers in India are facing a distressing situation. During 1995-96 to 2015-16, about 3 lakh farmers in the country committed suicide due to economic distress and depression. The Election Manifesto of Bharatiya Janata Party in both 1998 and 2014 Lok Sabha election highlighted the issue of agrarian distress and promised actions to improve the economic conditions of farmers, if elected to power.

Therefore, when BJP under the leadership of Narendra Modi was elected to power in May 2014, farmers expected a real improvement in their working and living conditions. However, one can see for sure that even in the beginning of 2017, the economic condition of farmers has not improved even though the government should not be blamed for this. Farmers suffered mostly due to severe drought in the country in 2014-15 and 2015-16 and also because of substantial dip in the market prices of most agricultural commodities in 2016-17. (FULL REPORT)

Disinvestment Policy: Budget proposes new Rs 8,000-crore Dairy Industry Fund

Gaushala near Mansa Devi Temple in Panchkula. Jaipal Singh Gaushala near Mansa Devi Temple in Panchkula. Jaipal Singh

The dairy industry is awaiting the fine print of the proposed Rs 8,000-crore Dairy Processing and Infrastructure Development Fund to be set up under the NABARD. In his Budget speech, FM Arun Jaitley has said the fund, with an initial corpus of Rs 2,000 crore and to be quadrupled in three years, would be used to enable expansion of milk processing capacity in the country. But there are no further details, including in the expenditure budget statement of the Department of Animal Husbandry, Dairying and Fisheries or even the Department of Financial Services.

“On paper, it seems a good scheme. An average dairy with two lakh litres per day (LLPD) milk processing capacity would require an investment of about Rs 35 crore. With Rs 8,000 crore, you can establish capacities aggregating over 450 LLPD. At an average procurement price of Rs 30 per litre, this investment can help pump in over Rs 49,000 crore annually to farmers,” said RS Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation, which owns India’s largest dairy and food brand, Amul. (READ STORY)

Capital Markets: TAke 5

capital-market1 Markets are happy that the finance minister has not made any changes in long-term or short-term capital gains tax as feared earlier

2 Reduction in the existing rate of taxation for individual assessees between income of `2.5 lakh and `5 lakh to 5% from the present rate of 10%, reducing the tax liability of all persons below Rs 5 lakh income either to zero (with rebate) or 50% of their existing liability

3 Cut in income tax for small companies with an annual turnover of up to Rs 50 crore to 25%, in order to make MSME companies more viable and encourage migration to company format

4 Rs 10,000-cr recapitalisation plan for public sector banks hit by bad loans and losses in the financial year 2017-18

5 Govt proposes to exempt FPIs from indirect transfer taxation and proposes to issue a clarification that such provision will not apply in the case of redemption of shares outside India as a result of sale of investment in India which is chargeable to tax in India

Government earmarks another Rs 10,000 crore for recapitalisation into public sector banks

India Inc, meanwhile, asked the government to provide more funds. India Inc, meanwhile, asked the government to provide more funds.

Hit by mounting non-performing assets (NPAs) and losses, the government will pump in Rs 10,000 crore into public sector banks (PSBs) in the next financial year to meet their capital requirements and bail them out from a financial mess. While a section of the industry feels this figure might not be sufficient, finance minister Arun Jaitley has promised more infusion, if the situation warrants fresh recapitalisation.

The capitalisation profile of PSBs remains weak as reflected in the Tier-I capitalisation of 9.5 per cent and overall capitalisation (including Tier-II) of 12.3 per cent for PSBs as on September 30, 2016. Within Tier-I, their core Tier-I capital stood at 8.8 per cent as on September 2016. (FULL STORY)

Banks hit by bad loans to get tax concession

The measure will remove the headache of having to pay tax even when interest income is not realised. The measure will remove the headache of having to pay tax even when interest income is not realised.

After promising Rs 10,000-crore recapitalisation bailout for the public sector banks (PSBs) reeling under huge bad loans, the government has proposed a tax concession on provisions for non-performing assets (NPAs) which are set to cross the Rs 7-lakh crore mark for the December quarter. However, there’s disappointment in the sector as finance minister Arun Jaitley didn’t make any announcement on a bad bank, or the proposed Public Sector Asset Rehabilitation Agency, to buy NPAs at market prices.

Jaitley has recommended an increase in allowable provision for NPAs from 7.5 per cent to 8.5 per cent which “will reduce the tax liability of banks”. The minister also proposed to tax interest receivable on actual receipt instead of accrual basis in respect of NPA accounts of all non-scheduled cooperative banks also, at par with scheduled banks. (READ REPORT)

Spot, derivatives markets to be integrated

Finance minister Arun Jaitley has proposed to integrate spot and derivatives commodity markets in the country and form an expert committee to prepare the groundwork for the integration.

“The commodities markets require further reforms for the benefits of farmers,” Jaitley said. 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 for commodities trading. E-NAM would be an integral part of such framework. (READ)

Tax relief for foreign investors

The entire capital market has heaved a sigh of relief after the government announced that the Foreign Portfolio Investors (FPI), who pulled out over Rs 70,000 crore from the Indian markets in the last three months, will be exempted from indirect transfer provision under the Income Tax Act.

The measure is aimed at reviving the floundering overseas investments as foreign players have been in a ‘quit India’ mode since November 2016 for a variety of reasons. The government has now proposed to amend the I-T Act to exempt category I and II FPIs from taxation on indirect transfers. In 2012, the Income-Tax Act was amended to provide for taxation of those transactions of transfer of shares or interest in a foreign entity deriving its value substantially from Indian assets. (READ STORY)

Market shoots up on fiscal discipline, tax clarity

Both the Sensex and the Nifty soared past the 28,000 and 8,700 levels, respectively, posting their biggest single-day gain since October 2016. Both the Sensex and the Nifty soared past the 28,000 and 8,700 levels, respectively, posting their biggest single-day gain since October 2016.

Dalal Street bulls who pored over the Budget proposals didn’t find any big-ticket announcement by finance minister Arun Jaitley on Wednesday but they eventually took the Sensex up by 486 points with some clarity coming on the tax front for foreign investors, fiscal discipline and no tinkering in the capital gains tax.

Though the market, which feared the worst, was expecting changes in capital gains tax, Jaitley prudently kept the long-term capital gains (LTCG) and short-term capital gains tax (STCG) unchanged for the capital market. Further, the Budget proposal that Category-I and -II Foreign Portfolio Investors (FPIs) will be exempted from taxation on indirect transfers made the sentiment bullish. (STORY HERE)

Demonetisation: take 5

demonetisation1 Period for gains to qualify as long-term in case of immovable property reduced to 2 years from 3 years. This will reduce the tax burden since long-term capital gains are taxes at lower rate of 20%, against 30% for short-term capital gains

2 The government has changed the base year to which the acquisition cost of immovable property is indexed to. The new year is now 2001, as against the earlier base year of 1981. This will lower tax liability in case of gains from sale
of properties

3 The basket of bonds in which gains can be invested has been expanded. These measures will also encourage people to declare actual value of properties, in contrast to the current practice undervaluing these for the fear being taxed at higher rates

4 The Special Investigation Team recommendations of not allowing cash transactions of over Rs 3 lakh in aggregate from a person in a day, or in respect of a single transaction, or in respect of transactions relating to one event
or occasion from a person, have been accepted

5 Cash transactions beyond Rs 3 lakh will be penalised, and the penalty will be a sum equal to the amount of
the transaction

Immovable property: Period for long-term gains cut to 2 years

sustainable development, sustainable real estate, green commercial buildings, global corporates, dfid, national housing bank, housing loan, green environment, clean houses, residential property market, green building concept, rain water harvesting, Energy Conservation Building Code, indian express news, india news Green building concepts, when implemented to the required extent and intent, will help save water through rainwater harvesting and recycling of waste water, and in reaping benefits from the water energy nexus.

The Budget 2017-18 has lowered the holding period for gains to qualify as long-term in the case of immovable property to two years from three years currently. This will significantly reduce the tax burden of people selling properties after two years and promote investment in the real estate sector. The government also changed the base year to which acquisition cost of an immovable asset is indexed to. The new base year is now 2001, against the earlier year of 1981. This will enable people to improve the acquisition cost of their immovable assets, thereby reducing their overall capital gains.

“We also propose to make a number of changes in the capital gain taxation provisions in respect of land and building. The holding period for considering gain from immovable property to be long term is three years now. This is proposed to be reduced to two years. Also, the base year for indexation is proposed to be shifted from April 1, 1981, to April 1, 2001, for all classes of assets including immovable property. This move will significantly reduce the capital gain tax liability while encouraging the mobility of assets,” Jaitley said. (READ STORY)

Not as populist as feared by many writes RC Bhargava

The Budget essentially continued the pattern of the finance minister’s (FM’s) past reformist Budgets, and was directed towards implementing the government’s desire to bring about greater transparency in governance, reduce corruption and create conditions for faster economic growth. This Budget has taken big steps in those directions.

The FM raised the issue of cleaning political funding. It is widely acknowledged that the ‘pull’ from the demand for election funding is one of the main drivers for black money generation. Cash donations have been limited to Rs 2,000, and political parties are required to get their accounts audited and tax returns filed in time. (FULL STORY)

Tax Non-Compliance: 3.7 crore filed returns in FY16, only 24 lakh showed income over Rs 10 lakh

Haryana transport Commission, Haryana transport commission corruption, money embezzled through VVIP numbers, haryana government, corruption, indian express news (Representational Image)

Even though the government did not disclose any data about the total amount of scrapped currency that has flown back into the financial system, finance minister Arun Jaitley in his Budget speech said deposits between Rs 2 lakh and Rs 80 lakh were made in about 1.09 crore accounts with an average deposit size of Rs 5.03 lakh during November 8 to December 30.

Also, deposits of more than Rs 80 lakh were made in 1.48 lakh accounts with average deposit size of Rs 3.31 crore, he said, adding that this data would help the government “immensely in expanding the tax net as well as increasing the revenues”. Justifying the demonetisation exercise, Jaitley said that India has become “largely a tax non-compliant society”, and that predominance of cash in the economy made it possible for people to evade their taxes. (READ STORY)

Digital India: take 5

digital-india1 Removal of applicable duties (basic customs duty, excise duty, countervailing duty, special additional duty) for miniaturised point of sale (PoS) card reader, micro ATM, finger print reader, iris scanner, and components used for manufacturing these items

2 Banks will be encouraged to introduce 20 lakh Aadhaar based PoS by September 2017. Aadhaar Pay, a merchant version of Aadhaar PoS, will be launched shortly. This will be beneficial for those who do not have debit cards, mobile wallets and mobile phones

3 Additional allocation of Rs 10,000 crore for Bharat Net project to provide broadband connectivity to villages. High speed broadband via WiFi hotspots will be provided to more than 150,000 gram panchayats by 2017-18

4 Creation of a six-member payments regulatory board headed by the RBI Governor. It aims to strengthen the grievance mechanism for electronic payment systems. A computer emergency response team will also be set up to deal with potential cyber threats to the financial sector

5 Allocation for schemes incentivising electronic manufacturing increased to Rs 745 crore. However, the downward trend in allocation for research and development in the information technology and electronics sector continued with the allocation of Rs 101 crore, as compared to Rs 122 crore in 2016-17

Budget continues govt push on e-payments

New Delhi: Finance Minister Arun Jaitley arrives in Parliament to present the Union budget for 2017-18, in New Delhi on Wednesday. PTI Photo by Shabaz Khan(PTI2_1_2017_000021A)

The government’s push for digital payments, which gained momentum after announcement of demonetisation, has continued with the Union Budget for 2017-18, in which an impetus has been provided to the apparatus needed for e-payments by removing various duties on these tools.

“To promote cashless transactions, I propose to exempt BCD, Excise/CV duty and SAD on miniaturised POS card reader for m-POS, micro ATM standards version 1.5.1, finger print readers/scanners and iris scanners. Simultaneously, I also propose to exempt parts and components for manufacture of such devices, so as to encourage domestic manufacturing of these devices,” Finance Minister Arun Jaitley said in his speech on Wednesday. (FULL STORY)

Arun Jaitley gives tax incentives for digital payments, start-ups

Budget, Budget and Pharma Industry, Budget and Pharma Industry news, Latest news, Budget and Indian Industries, latest news, India news, National news, Latest news, India news, National news Finance Minister Arun Jaitley tabling the Union Budget for 2017-18 in the Parliament in New Delhi on Wednesday. KPMG’s Utkarsh Palnitkar said the Budget has not specifically addressed imminent challenges directly affecting the sector. (Source: PTI)

In an attempt to reduce cash transactions in the economy, Finance Minister Arun Jaitley has announced in the Budget a slew of measures, including reduction of the income tax limit for donations to parties made in cash. As per prevalent norms, any cash donation above Rs 10,000 is not considered for deductions. This will be reduced to Rs 2,000.

Further, a provision has been introduced in the income tax law to prohibit deductions for capital expenditure incurred by companies on cash payments up to a prescribed limit. Any capital expenditure beyond Rs 10,000 per day that is made in cash to acquire any assets would be “ignored for the purposes of determination of actual cost of such asset”. (FULL REPORT)

Govt increases allocation for M-SIPS and EDF

Union Budget 2017, Budget 2017, Arun Jaitley, Electronic Development Fund, Modified Special Incentive Package Scheme, Budget news, Budget latest news, India news, Indian Express Finance Minister Arun Jaitley, centre, holds a briefcase containing federal budget documents as he arrives to present the budget in Parliament house accompanied by junior finance ministers Santosh Gangwar, right, and Arjun Ram Meghwal, left, in New Delhi, India, Wednesday, Feb. 1, 2017 (AP Photo/Manish Swarup)

While the Union Budget for 2017-18 aims to provide an impetus to electronic manufacturing by increasing allocation to various schemes that incentivise domestic production of these goods, it has also imposed a special additional duty on one of the key components used to manufacture mobile phones.

“Over 250 investment proposals for electronics manufacturing have been received in the last 2 years, totalling an investment of Rs 1.26 lakh crore. A number of global leaders and mobile manufacturers have set up production facilities in India. I have therefore exponentially increased the allocation for incentive schemes like M-SIPS (Modified Special Incentive Package Scheme) and EDF (Electronic Development Fund) to Rs 745 crore in 2017-18,” Finance Minister Arun Jaitley said. (READ STORY)

Centre proposes new regulatory board to strengthen e-payment systems

The industry also believes that much more could have been done to strengthen the country’s cyber defences. The industry also believes that much more could have been done to strengthen the country’s cyber defences.

While on one hand the government is pushing the digital payments ecosystem, on the other it also aims to strengthen the grievance mechanism for the electronic payment systems by setting up Payments Regulatory Board in the RBI by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems (BPSS).

The six-member regulatory board would be headed by the RBI Governor. Prior to this announcement, the BPSS existed as a sub-committee of the RBI’s central board. The Ratan Watal committee on digital payments, which suggested that the BPSS be given an independent status, also suggested other amendments to the Payments and Settlement Systems Act, 2007 to include explicit mandate for open access and interoperability, consumer protection including penalties and independent appeal mechanism, regulations on systemic risks, among other issues. (STORY HERE)

Gain for rural broadband connectivity with BharatNet expansion

bharat-net The allocation was Rs 6,000 crore in 2016-17 fiscal.

Internet being the basic requirement for most electronic payment modes, broadband connectivity to rural areas is pegged to be at the heart of the Centre’s push for digital payments. To further facilitate expansion of the government’s rural connectivity programme —- BharatNet —- the Union Budget proposes to allocate Rs 10,000 crore to the project. The allocation was Rs 6,000 crore in 2016-17 fiscal.

“Under the BharatNet Project, OFC has been laid in 1,55,000 km. I have stepped up allocation for BharatNet project to Rs 10,000 crore in 2017-18,” Finance Minister Arun Jaitley said in his Budget speech on Wednesday. (REPORT HERE)

RAILWAYS: take 5

Ready For Revamp Mumbai’s Churchgate station on Wednesday evening . Five railway stations on the Mumbai suburban section are listed by the Railways for redevelopment on public private partnership model. Kevin DSouza

Ready For Revamp: Mumbai’s Churchgate station on Wednesday evening . Five railway stations on the Mumbai suburban section are listed by the Railways for redevelopment on public private partnership model. Kevin DSouza

Railways taken by surprise over listing of its 3 PSUs

People wait on a platform as a train is unloaded in a railway station in New Delhi, India February 1, 2017. REUTERS/Cathal McNaughton People wait on a platform as a train is unloaded in a railway station in New Delhi, India February 1, 2017. REUTERS/Cathal McNaughton

IN THE first merger of the Rail Budget with the General Budget on Wednesday, the Railways Ministry was reportedly caught unawares by the government’s announcement that three of its public sector units (PSUs) would be listed in the stock market.

Sources said the announcement came barely two days after the issue was first discussed at a meeting on Monday. With no indication that the future of its PSUs was up for discussion, the ministry did not send any Railway Board member for the meeting. A joint secretary-level officer and an additional member attended the meeting with NITI Aayog officials and Secretary, Department of Investment and Public Asset Management (DIPAM). (READ STORY)

Present system has failed, we are experimenting with a new system, says Arun Jaitley

Union Budget 2017, Budget 2017, Arun jaitley, Jaitley, Arun Jaitley fpresentation, Arun jaitley full speech, Arun Jaitley speech, Full text, Union Budget full text, budget presentation full text, india news, indian express news Finance Minister Arun Jaitley

In his fourth Budget after the NDA came to power in May 2014, Finance Minister Arun Jaitley is attempting to cleanse the 70-year-old opaque political funding system. He warned that parties not following the new rules would lose tax exemption.

Excerpts from his post-Budget media interaction.

How would you enforce the curbs on political funding announced in the Budget?

The system involves the following steps. The donor and the donee will get tax exemptions provided the returns are filed by the political party. Donations of four kinds are encouraged: Donate by cheque, digital mode, cash donation limited to Rs 2,000 per person, and lastly there is a provision of electoral bonds which requires an amendment to the RBI Act. (FULL INTERVIEW)

Highest budgetary support, but Rail finances a concern

Railways may have managed to get highest ever Gross Budgetary Support of Rs 55,000 crore from the Finance Ministry after tenacious bargaining and discussions over weeks to take care of capital expenditure and safety upgrade works, but its finances vis-a-vis business for next year continue to be a matter of concern.

After struggling to meet its own targets in earnings all-year round, Railways expects to end the year with a Rs 12,000 crore shortfall in earnings. As a result, its projections for business next year is modest, in line with year-on-year growth projected in the previous years. But that hardly serves the transporter’s purpose. (READ STORY)

Defence budget goes up by just 5.6 per cent

Defence Minister Manohar Parrikar PTI Photo Defence Minister Manohar Parrikar PTI Photo

Announcing a modest increase of 5.6 per cent in defence expenditure, the government earmarked Rs 2,74,114.12 crore in the Union budget for the next fiscal. In addition, an allocation of Rs 8,57,140 crore for defence pensions was announced by Finance Minister Arun Jaitley in his budget speech.

The defence allocations for FY 17-18 are 12.77 per cent of the total central government expenditure. The amount allocated for defence at the budgetary stage in FY 16-17 was Rs 2,58,589.32 crore, which increased to Rs 2,59,480.13 crore at the Revised Estimates (RE) stage. (FULL STORY)

First published on: 02-02-2017 at 11:19:33 am
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Tokyo 2020 medals to be made from ‘recycled’ mobile phones

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