New Delhi:Ahead of the Assembly polls in five states, Finance Minister Arun Jaitley today tabled the Budget for 2017-18 in Parliament, proposing to give a major push to rural development and agriculture and tax reliefs for the common man recovering from the blow of demonetisation, besides announcing a slew of measures to bring transparency in political funding.
Mr Jaitley also accorded infrastructure status to affordable housing and announced reduction in tax on small companies. He got thumps up from the India Inc for these measures.
Mr Jaitley’s proposals of infusing Rs 10,000 crore in public sector banks and keeping long-term and short-term capital gains tax unchanged were welcomed by markets.
The Sensex leaped to nearly 486 points to close at an over-three month high of 28,142.
The fourth Budget of Mr Jaitley has a total outlay of Rs 21.47 lakh crore. It has fiscal deficit target of 3.2 per cent for 2017-18. Prime Minister Narendra Modi hailed the Budget ”uttam” devoted to ”strengthening the hands of the poor”, whereas Mr Rahul Gandhi, vice president of the main Oposition Congress, described the Budget as ‘visionless’ and a ‘damp squib’. He said that the budget did not include any proposal for job creation in the country.
Other Opposition like the SP, JD(U) and the RJD have also described the budget as directionless, but the BJD described the budget as balanced.
The CPI(M) said the budget was ”contractionary” which is likely to greatly exacerbate suffering of the working people”.
In the budget proposals Finance Minister announced Income Tax relief to those who earn up to Rs 5-lakh per annum as they will have to pay only five per cent tax on the income between 2.5-lakh to Rs 5-lakh. In effective terms there will be no tax up to Rs 4.5-lakh if they avail the exemptions mentioned under various categories. The tax earlier was 10 per cent.
The Minister imposed a surcharge of 10 percent for those whose annual income is Rs 50 lakh to Rs one crore. The 15 per cent surcharge on incomes above Rs one crore will continue. To curb the black money coming to the Political Parties through cash, Mr Jaitley announced that only Rs 2000 can be given in cash to a political party . Any amount above this will have to be donated through cheque or digital mode. Earlier, Political Parties were allowed to get donations of up to Rs 20000 in cash.
Political parties have to keep the records of all the donation will have to file the return on time. For Political funding, Mr Jaitley mooted the proposal of Electoral Bonds to be issued by the Reserve Bank of India (RBI) in due course.
Encouraged by the Agricultural sector growth rate of 4.1 this year, he said that this sector is expected to grow at 4.6 percent. Total allocation for rural, agricultural and allied sectors for 2017-18 is Rs 187223-crore, which is 24 percent higher than last year.
The Finance Minister proposed a total outlay of Rs 21.47 lakh crore to give a major push to agriculture and rural areas development. The Budget has made a total allocation of over Rs 1.87 lakh crore for rural, agri and allied sectors, and highest ever allocation has been for MGNREGA, up from Rs 37,000-crore in 2016-17 to Rs 48,000-crore in 2017-18.
The Budget also increased agri-credit target for next fiscal by 11 per cent to Rs 10 Lakh crore with the objective of doubling farmers’ income by 2022.
The Budget has also increased road sector allocation from Rs 57, 676 crore in 2016 to Rs 64,900 crore in 2017-18, which will also impact rural development by enhancing connectivity.
For the first time, there was no separate Railway budget this time as it has been merged with the general budget. Railways have been given Rs 1,31000 Crore for 2017-18 for their total and capital expenditure.For passenger safety a National Rail Safety Fund with a corpus of Rs one lakh crore is proposed to be created.
In a bid to improve the ease of doing business, the Finance Minister said the Foreign Investment Proposal Board had been abolished and all foreign proposals requiring government proposals would be cleared by the Ministries concerned
Tobacco items to be dearer, Point-of-Sales machines, solar energy glasses to be cheaper
In the budget proposals for fiscal 2017-18 as presented by Finance Minister Arun Jaitley today, the prices of pan masala, unmanufactured tobacco, cigarettes and Zarda scented tobacco would be costlier as the government hiked excise duties on these items. Pushing its ‘Digital India’ vision, the government’s proposals for new financial year also announced duty exemption on various Point-of-Sale (POS) machines. This measure is aimed at encouraging digital payments.
The online purchase of railway tickets would also be cheaper as the IRCTC Service Charge has been abolished. Service Charge on IRCTC ticket purchases was Rs 20 each on sleeper/2nd Class and Rs 40 on AC classes for booking through IRCTC. On November 23, post-demonetisation, the Government had announced that no service charge shall be collected on booking of e-tickets/ i-tickets till December 31, 2016. The Government announcement today also said solar tempered glass used for manufacturing of solar cells/panels have been exempted from Customs Duty. Moreover, the Customs duty on Liquefied Natural Gas (LNG) to be reduced from 5 percent to 2.5 percent. Tabling the Union Budget, Mr Jaitley said the excise duty on cigars and cheroots have been hiked to 12.5 percent or Rs 4006 per thousand. On pan masala products, Jaitley said the excise duty has been increased to 9 percent from 6 percent, while for other unmanufactured tobacco raised to 8.3 percent from 4.2 percent earlier. The increase in excise duty on cigarettes and other related tobacco products is likely to increase the price of the products in the market. In 2016, the government had increased the excise and customs duties on cigarettes by 9 percent. For chewing tobacco including filter Khaini, the additional duty levied has been increased from 6 percent to 12 percent. Similarly, for Zarda scented tobacco, the duty charge has been enhanced to 12 percent from the existing 6 percent. According to budgetary documents presented, parts used for manufacturing LED lights will attract basic Customs Duty of 5 percent. The Customs Duty on printed circuit board for manufacture of mobile phones hiked to 2 percent. Several electronic items were tax free earlier. Duty on aluminium ores and concentrates raised to 30 percent from nil presently. The excise duty structure has been kept unchaged giving a kind of relief to auto industries.However, according to sources, the reduction in tax burden of individual with an income of Rs 2.5-lakh to Rs 5-lakh is also seen as a positive development for the sales of small cars, two-wheelers and tractors
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