UNION

BUDGET 2017

Theme- TEC INDIA- “transform, energize and clean India”

Transform- quality of governance, quality of life of people
Energize- youth and vulnerable sections
Clean- from corruption, black money, non transparent political funding


GENERAL:
• Distinction between plan and non plan expenditure removed from budget
• No separate railway budget anymore
• Presentation of budget advanced to 1st february
• Fiscal deficit target- 3.2%; revenue deficit target- 1.9%
• Inflation- 3.4% in December 2016
• Current account deficit- declined from 1% of GDP last year to 0.3% of GDP in
first half of 2016
• Foreign exchange reserves- $361 billion
• For the first time, a consolidated Outcome Budget, covering all Ministries and
Departments, is being laid along with the other Budget documents
• Net market borrowing of Government restricted to 3.48 lakh crores after
buyback in 2017-18, much lower than 4.25 lakh crores of the previous year
• RAPID (Revenue, Accountability, Probity, Information and Digitisation)- for
larger e-assessment in the coming year and greater accountability of IT
officials
• Sensex gain after budget- 1.76% or 485.68 points
• Number of people entering employment market every year- 12 million

AGRICULTURE:

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• Allocation to agriculture ministry- Rs 51026 crore

• Target for agricultural credit in 2017-18: Rs 10 lakh crores
• 60 days interest waiver announced on 31st December 2016
• NABARD to implement computerization of 63000 functional primary
agricultural credit societies and integration with core banking system of
district central cooperative banks. To be done in 3 years for Rs 1900 crores
• Fasal Bima yojana:
o Coverage to be increased to 30% of cropped area in 2016-17; 40% of
cropped area in 2017-18; 50% in 2018-19.
o Budget provision- Rs 9000 crores
• New mini labs in Krishi Vigyan Kendras (KVK). 100% coverage of KVKs for soil
sample testing.
• Long term irrigation fund (LTIF) was setup under NABARD in 2016 budget
with 20,000 crore corpus. Corpus to be increased to 40,000 crore
• Micro Irrigation Fund (MIF) in NABARD- 5000 crore (objective- per drop more
crop)
• Coverage of National Agriculture Market (NAM) to be increased to 585
APMCs. Assistance of 75 lakh for every e-NAM
• Model law on contract farming to be prepared
• Dairy Processing and Infrastructure Development Fund to be set up in
NABARD with a corpus of 2000 crores and will be increased to 8000 crores
over 3 years
• Double the income of farmers in 5 years

MSME:

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• Income tax for MSMEs with annual turnover up to Rs 50 crore is reduced to

25%



AFFORDABLE HOUSING:
• National housing bank will refinance individual housing loans of about Rs
20,000 crore in 2017-18
• Affordable housing granted infrastructure status
• For income tax deduction under affordable housing, carpet area instead of
built up area to be used. The 30 Sq.mtr. limit will apply only in case of
municipal limits of 4 metropolitan cities while for the rest of the country
including in the peripheral areas of metros, limit of 60 Sq.mtr. will apply
• Pradhan Mantri awas yojana allocation- 29043 crore




HEALTH:
• Allocation- 47352 crore.
• Two AIIMS to be setup in Jharkhand and Gujarat
• Rs 6000 to be transferred to bank accounts of pregnant women, who
undergo institutional delivery and vaccinate their children
• To eliminate kala-azar and Filariasis by 2017; Leprosy by 2018; Measles by
2020 and Tuberculosis by 2025.
• Reduce IMR from 39 in 2014 to 28 by 2019 and MMR from 167 in 2011-13 to
100 by 2018-2020
• To create additional 5,000 Post Graduate seats per annum to ensure
adequate availability of specialist doctors to strengthen Secondary and
Tertiary levels of health care

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• For senior citizens, Aadhar based Smart Cards containing their health details
will be introduced

FDI:
• FIPB to be abolished in 2017-18 (FIPB came into existence in 1993 to attract
foreign investors. FIPB was a single window clearance channel to investors
willing to invest in India. FIPB has handled investment proposals worth up to
Rs 5000 crore. It is being abolished as more than 90% transactions now
happen under automatic route.




FINANCE:
• AADHAAR PAY, a merchant version of aadhaar enabled payment to be
launched to reduce merchant transaction fees further.
• Bill relating to curtail the menace of illicit deposit schemes will be introduced
in 2017-18
• A Computer Emergency Response Team for our Financial Sector (CERT-Fin)
will be established
• A new Exchange Traded Fund (ETF) with diversified CPSE stocks and other
Government holdings will be launched in 2017-18. ETF is like a mutual fund,
with the difference that it is traded on the stock exchange and can be bought
or sold at net asset value (NAV).
• Lending target under Pradhan Mantri Mudra Yojana to be set at 2.44 lakh
crores. Priority will be given to Dalits, Tribals, Backward Classes and Women.
• Concessional withholding rate of 5% charged on interest earned by foreign
entities in external commercial borrowings or in bonds and Government

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securities is extended to 30.6.2020. This benefit is also extended to Rupee

Denominated (Masala) Bonds

PROMOTING CASHLESS TRANSACTIONS:
• Duties on miniaturized point of sale card reader for mobile POS to be waived
• Parts and components used in the manufacture of the above miniaturized
POS machines to not attract customs, special additional duty and
countervailing duty.
• No transaction above Rs. 3 lakh would be permitted in cash subject to certain
exceptions

DEFENCE:
• Allocation- 2,74,114 crore; 5.6% increase over the revised estimates of the
present year
• This accounts for 12.77% of total allocation of central government
expenditure of Rs 21,46,735 crore for 2017-18
• 3000 crore for optical fibre cable network for defence services.
• A Centralised Defence Travel System has been developed through which
travel tickets can be booked online by our soldiers and officers

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BLACK MONEY AND CORRUPTION:

• Cash donation limit to political parties slashed from Rs 20,000 to Rs 2,000
• RBI to float electoral bonds that people can purchase from banks and political
parties.




TAX:
• Those earning between 2.5 to 5 lakh to be required to pay only 5% tax
• All taxpayers in other categories also to get uniform benefit of Rs 12500
• Surcharge of 10% for those earning between 50 lakh to 1 crore
• Surcharge of 15% for those earning more than 1 crore (to continue)
• Basic customs duty on LNG reduced from 5% to 2.5%
• MAT credit is allowed to be carried forward up to a period of 15 years instead
of 10 years at present
• Under scheme of presumptive income for small and medium tax payers
whose turnover is upto 2 crores, the present, 8% of their turnover which is
counted as presumptive income is reduced to 6% in respect of turnover
which is by non-cash means
• Threshold limit for audit of business entities who opt for presumptive income
scheme increased from Rs 1 crore to 2 crores. Similarly, the threshold for
maintenance of books for individuals and HUF increased from turnover of 10
lakhs to 25 lakhs or income from 1.2 lakhs to 2.5 lakhs
• Holding period for computing long term capital gains from transfer of
immovable property cut to 2 years from 3 years.

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RAILWAYS:
• The shares of railway public sector enterprises like IRCTC, IRFC, IRCON will be
listed in stock exchanges
• Passenger safety- creation of rashtriya rail sanraksha kosh with a corpus of Rs
1 lakh crore over 5 years
• Total development and capital expenditure of railways for 2017-18: 1.31 lakh
crore (55000 crore to be provided by the government)
• Unmanned level crossings on broad gauge to be eliminated by 2020
• SMS based Clean My Coach Service has been started
• ‘Coach Mitra’, a single window interface, to register all coach related
complaints and requirements to be launched
• By 2019, all coaches of Indian Railways will be fitted with bio toilets.
• A new Metro Rail Act will be enacted by rationalising the existing laws. This
will facilitate greater private participation and investment in construction and
operation.
• No service charge on tickets booked online through IRCTC website.

YOUTH:

• Pradhan Mantri Kaushal Kendras to be extended to more than 600 districts

across the country. 100 India International Skills Centres will be established
across the country.
• Skill Acquisition and Knowledge Awareness for Livelihood Promotion
programme (SANKALP) to be launched at a cost of ` 4000 crores. SANKALP
will provide market relevant training to 3.5 crore youth
• Next phase of Skill Strengthening for Industrial Value Enhancement (STRIVE)
will be launched in 2017-18 at a cost of 2,200 crores

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• Incredible India 2.0 Campaign will be launched across the world to promote
tourism and employment.
• labour laws to be culminated into 4 Codes on (i) wages; (ii) industrial
relations; (iii) social security and welfare; and (iv) safety and working
conditions.

RURAL DEVELOPMENT:
• Allocation for rural, agriculture and allied sectors- 187223 crore
• Allocation for rural development- 107758 crore
• Mission Antyodaya- To bring 1 crore households out of poverty and make
50,000 gram panchayats poverty free by 2019 (150th birth anniversary of
gandhiji)
• The target for farm ponds under MGNREGA for 2016-17 was 5 lakh. Against
the target, 10 lakh will be created and more 5 lakh in 2017-18.
• Women participation in MGNREGA increased to 55%
• MGNREGA allocation to be highest at Rs 48000 crore
• Pace of construction of PMGSY roads accelerated to 133 km roads per day in
2016-17, against an average of 73 km during 2011-2014
• Allocation for PMGSY- 19000 crore
• Connect all habitations with more than 100 persons in left wing extremism
affected blocks under PMGSY by 2019
• Pradhan mantri awas yojana (PMAY)- graamin allocation: increased from
15000 crore to 23000 crore in 2017-18. To create 1 crore houses by 2019.
• To achieve 100% village electrification by 1st may 2018
• Sanitation coverage in rural india has increased to 60%
• National Rural Drinking Water Programme (NRDWP)- to provide safe drinking
water to arsenic affected habitations in next 4 years

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• Mason training to 5 lakh people by 2022

• Programme called “human resource reforms for results”- for human resource
development in panchayati raj institutions.



POVERTY:

• Mahila Shakti Kendra to be set up with an allocation of 500 crores in 14 lakh

ICDS Anganwadi Centres- to provide one stop convergent support services
for empowering rural women with opportunities for skill development,
employment, digital literacy, health and nutrition.

MINORITY:

• The allocation for Scheduled Castes has been increased by 35% compared to
BE 2016-17. The allocation for Scheduled Tribes has been increased to 31,920
crores and for Minority Affairs to 4,195 crores

INFRASTRUCTURE:

• 241387 crore allocation for transportation as a whole.

• Budget allocation for highways increased from 57,976 crores in BE 2016-17 to
64,900 crores in 2017-18

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• Select airports in Tier 2 cities will be taken up for operation and maintenance
in the PPP mode
• By the end of 2017-18, high speed broadband connectivity on optical fibre
will be available in more than 1,50,000 gram panchayats, under BharatNet.
Rs 10,000 crore allocation to BharatNet. A DigiGaon initiative will be
launched to provide tele-medicine, education and skills through digital
technology
• Strategic crude oil reserves- Chandikhole in Odisha and Bikaner in Rajasthan.
This will take our strategic reserve capacity to 15.33 MMT.
• Trade Infrastructure for Export Scheme (TIES)- new scheme to focus on
export infrastructure
• to create an integrated public sector ‘oil major’ which will be able to match
the performance of international and domestic private sector oil and gas
companies
• SAGARMALA project- allocation of Rs 600 crore.

BANKING:

• 10,000 Crore for recapitalization of PSBs to be provided in 2017-18

• 125 lakh people have adopted the BHIM app so far. The Government will
launch two new schemes to promote the usage of BHIM; these are, Referral
Bonus Scheme for individuals and a Cashback Scheme for merchants
• Target of 2,500 crore digital transactions for 2017-18 through UPI, USSD,
Aadhar Pay, IMPS and debit cards
• Banks have targeted to introduce additional 10 lakh new POS terminals by
March 2017. They will be encouraged to introduce 20 lakh Aadhar based POS
by September 2017

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• 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. PRB to be a 6 member body with 3 members
belonging to RBI and 3 appointed by the government.
• To utilise the Head Post Offices as front offices for rendering passport
services
• Allowable provision for Non-Performing Asset of Banks increased from 7.5%
to 8.5%.

LEGAL:

• To rationalise the number of tribunals and merge tribunals wherever

appropriate

STATES:

• Total resources transferred to states and UTs with legislatures is 4.11 lakh
crore (3.60 lakh crore in 2016-17)
• Exemption from capital gain tax for persons holding land on 2.6.2014, the
date on which the State of Andhra Pradesh was reorganised, and whose land
is being pooled for creation of capital city of Andhra Pradesh under the
Government scheme

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REAL ESTATE:

• Reduction in the holding period for computing long term capital gains from
transfer of immovable property from 3 years to 2 years. Base year for
indexation to measure capital gains tax to be shifted to 2001 from 1981

START-UPS:

• The profit (linked deduction) exemption available to the start-ups for 3 years
out of 5 years is changed to 3 years out of 7 years

ON INDIRECT TRANSFER PROVISION:

• Foreign Portfolio Investor (FPI) Category I & II exempted from indirect

transfer provision. Indirect transfer provision shall not apply in case of
redemption of shares or interests outside India as a result of or arising out of
redemption or sale of investment in India which is chargeable to tax in India

EXPLANATION:

• Category I FPIs include sovereign wealth funds and central banks and
category II includes mutual funds and banks. However, hedge funds,
individuals and other high-risk foreign investors will not get this relief.
• 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

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• Apprehensions have been raised about some difficulties which arise

because of this provision in case of transfer of stake of investors of India-
based funds located abroad, but investing in India-based companies
• In December 2016, the Central Board of Direct Taxes (CBDT) said that FPIs
were subject to indirect transfer tax provisions, which impose taxes on
offshore transactions if the value of Indian assets represents 50% or more
of the value of all assets owned by the FPI. (Vodafone case)
• Foreign investors had then termed the move as a case of double taxation
as they were already paying securities transaction tax (STT) and were
worried about the retrospective impact of the circular.
• The Centre clarified that foreign portfolio investors (FPIs) would not have
to pay tax in India for assets sold overseas even if the underlying value is
derived from Indian assets

EDUCATION:

• Mid day meal scheme allocation- 10,000 crore

• Allocation for education- 79685 crore
• SWAYAM platform, leveraging IT, to be launched with at least 350 online
courses. This would enable students to virtually attend courses taught by the
best faculty
• NATIONAL TESTING AGENCY- to conduct all entrance exams for higher
educational institutions

TOURISM:

• Swadesh Darshan Scheme- integrated development of tourist circuits around

specific themes.

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• 13 thematic circuits identified:

o North East india circuit
o Buddhist circuit
o Himalayan circuit
o Coastal circuit
o Krishna Circuit
o Desert Circuit
o Tribal Circuit
o Eco circuit
o Wildlife circuit
o Rural circuit
o Spiritual circuit
o Ramayana circuit
o Heritage circuit

SUBSIDY:

• Subsidies as a percentage of GDP- 1.61%

• Subsidy distribution:
o Highest- food
o Second- fertilizer
o Third- petroleum
o Fourth- interest

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