The Union Budget 2017-18 was unique and historic in many ways. For starters, it was presented on a much earlier date of 1st February as opposed to the usual date of 1st March. Also, the Railway Budget was incorporated into the General Budget. On the backdrop of various Macroeconomic and Geo-Political events such as demonetization, US Presidential Elections etc. the Q3 YoY GDP took a hit. CRISIL has lowered the country’s GDP growth forecast to 6.9% for 2017.
Therefore, the Union Budget 2017-18 had a huge role to play in normalizing and revival of the growth of the Indian economy.
Following are the major points that have been covered in the budget:
- In the last 2.5 years, the administration has moved from discretionary and favoritism based to systematic and transparency based
- Infrastructure sector got a big boost with a total fund allocation of Rs.3.96 lakh Cr with a strong focus on the Railways (Rs.1.31 lakh Cr) and Road network development
- The Budget proposed to scrap Foreign Investment Promotion Board(FIPB) in 2017-18 and further liberalize the FDI policy
- Rural economy gets a boost. Allocation for MNREGA hiked to Rs.48,000 crore; 100% rural electrification by May, 2018; Rs.40,000 crores allocated to irrigation funds
- Tax rates slashed to 5% for those within the income bracket of 2.5 to 5 lakh rupees. 10% additional surcharge levied on those individuals whose income lies between Rs.50 lakh to Rs1 crore. Minimum alternative tax reduced to 25% for companies with sub 50 crore revenue
- In a move to curb black money, maximum cash transaction will be capped at Rs.3 lakh. Funding to political parties in terms of cash has been capped at Rs.2000. Any donations above this would have to be done via digital or cheque modes
- Proposed to create a Payments Regulatory Board in the Reserve Bank of India by replacing the existing Board for Regulation and Supervision of Payment and Settlement Systems
- FRBM Committee has recommended 3% fiscal deficit for the next three years, keeping in mind the sustainable debt target and need for public investment and Govt. is committed to achieve that
- In order to make MSME companies more viable, income tax for companies with annual turnover less than Rs.50 crore is reduced to 25%
- Utilize the Head Post Offices as front offices for rendering passport services