UNION

BUDGET
2017 - 2018

UNION BUDGET
2017 - 2018
KEY
HIGHLIGHTS

The Union Budget for the year 2017-18 was presented by the Finance Minister Mr.
Arun Jaitley in the Parliament on 1st February 2017.

Background
Though the Union Budget is essentially a Statement of Account of public finances, it
has historically become a significant opportunity to indicate the direction and the
pace of Indias economic policy. 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 globalization of goods the world over, and high
expectations from people back home relating to good governance. Amidst all these
developments, India has stood out as a bright spot in the world economic
landscape. Indias macro-economic stability continues to be the foundation of
economic success.

With this in the background, we present the key highlights of Union Budget 2017-18.

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UNION BUDGET, 2017 - 2018
KEY
HIGHLIGHTS

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

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

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UNION BUDGET, 2017 - 2018
KEY
HIGHLIGHTS

FINANCIAL MARKETS

o FIPB abolished: The government has decided to abolish FIPB (Foreign

Investment Promotion Board) in 2017-18.
o PSE divestments: Shares of railway PSEs like IRCTC, IRFC & IRCON
would be listed on stock exchanges.
o Public sector bank recapitalisation: The government plans to allocate Rs.
10,000 crores for the recapitalisation of public sector banks in 2017-18.
o 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.
o Integration of spot & derivatives commodity market: An expert
committee will be constituted to study and promote creation of an
operational and legal framework to integrate spot market and derivatives
market in the agricultural sector, for commodities trading.
o 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.
o Launch of CERT-Fin: A Computer Emergency Response Team for the
Financial Sector (CERT-Fin) will be established.
o 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.

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HIGHLIGHTS

BUDGET ESTIMATES

o Total Expenditure is estimated at 21,47,000 for FY 2017-18.

o 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.
o 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
o Fiscal deficit target for 2017-18 to be at 3.2% of GDP and government
remains committed to achieve 3% in the following two years.
o 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.
o 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.
o Defence expenditure, excluding pension, estimated at Rs 2,74,114 crore.

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UNION BUDGET, 2017 - 2018
KEY
HIGHLIGHTS

TAX PROPOSALS

o 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.
o Simple one-page form to be filed as income tax return for category of
individuals having taxable income up to Rs. 5 lakhs other than business
income.
o People filing I-T returns for the first time will not come under government
scrutiny.
o 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.

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UNION BUDGET, 2017 - 2018