Budget 2017: Income Tax & Political Funds Trimmed, Poor-Oriented
What will a post-notebandi budget look like?
- Personal Income Tax for Rs 2.5-5 lakh bracket reduced to 5%.
- Political donations capped at Rs 2000 from one single source.
- No cash transactions above Rs 3 lakh will be permitted.
- No service charge on rail e-tickets from 1 April.
- Mixed reactions from experts and business bigwigs to the Budget.
- Sensex, Nifty cheer at FM Arun Jaitley’s Budget.
- The finance minister presented an ‘uttam’ Budget devoted to the poor, says PM Modi.
- Demonetisation was a bold strike in a series of measures to arrive at a bigger, cleaner and real GDP, says FM.
- Despite protests by Congress, LS Speaker allows Budget presentation.
- Budget presentation kicks off with an obituary reference for late MP E Ahamed.
Arun Jaitley In Conversation With The Quint's Sanjay Pugalia
Finance Minister Arun Jaitley shares his thoughts on the Union Budget 2017-18 with Sanjay Pugalia, Editorial Director of The Quint.
Watch here:
FM Presented an ‘Uttam Budget’ Devoted to Poor: PM Modi
The finance minister has presented an 'Uttam' Budget, devoted to strengthening the hands of the poor, Prime Minister Narendra Modi says.
He said that the merger of the Railway Budget with the general Budget will give an impetus to the transport sector's growth.
He added that the government’s commitment to eliminate corruption and black money is reflected in the Budget. “This Budget will help small businesses to become competitive in the global market,” the prime minister said.
Clueless, Useless, Baseless Budget: Mamata Banerjee
West Bengal Chief Minister Mamata Banerjee tweet-stormed against the Budget announcement to express her disapproval.
Business Tycoons React to the Budget
There have been mixed reactions from experts and business bigwigs to the Budget.
'Fairly Routine Budget': Former RBI Governor
Former RBI governor C Rangarajan describes the 2017-18 Budget as ‘a fairly routine’ one.
General Secretary ASSOCHAM DS Rawat says, “I consider it mix budget. Industry hoped a lot more for promotion of investment but I think the Finance Minister did whatever was possible.”
Reducing Tax Rate Will Help With Enough People Paying Taxes: CEA
Chief Economic Adviser Arvind Subramanian, spoke to NDTV about the problem of people evading Income Tax and not enough people paying taxes.
He added that there won’t be any overnight achievements and it is a slow process.
Budget Marks Continuation Of Fiscal Prudence: Moody’s
Comments by William Foster, Vice President, Sovereign Risk Group, Moody’s Investors Service:
The budget speech’s emphasis on fiscal prudence indicates that continued commitment to gradual fiscal consolidation remains. This is consistent with the target of a deficit at 3.2 percent of GDP this fiscal year, followed by 3 percent. These targets are not materially different from the previous roadmap and our projections.
Measures that effectively foster higher Foreign Direct Investment would be credit positive by bolstering stable and balanced growth and providing stable financing for the current account deficit. India’s external vulnerability is currently low, a support to the rating.
Higher revenues seem likely to largely stem from higher incomes and profits, as well as improved revenue collection. We will continue to monitor revenue collection as an indication of policy effectiveness, in particular to which extent measures such as demonetization and GST enhance overall revenue intake.
Rahul Gandhi Unhappy With Budget
Congress Vice-President Rahul Gandhi called the Budget anti-farmer. “We were expecting fireworks, got a bit of a damp squib,” says Gandhi.
Market Experts React to the Budget
Sensex, Nifty Cheer Finance Minister Arun Jaitley’s Budget 2017
The market seemed to have given their thumbs-up to Finance Minister Arun Jaitley’s Budget, with the Sensex rising 265.79 points, at 27,921.75. There was no long-term capital gains tax as was the fear among investors. That seemed to have gone down well.
Excise Duty on Cigarettes Hiked by 6% Across All Lengths
Finance Minister Arun Jaitley hiked excise duty on cigarettes of all lengths by 6 percent, but below the market expectations.
Excise duty on non-filter cigarettes of length not exceeding 65 mm raised to Rs 311 per thousand from Rs 215 per thousand.
Excise duty on pan masala containing tobacco (Gutkha) raised to 12% from 10%.
'Affordable Housing to All'
Under the scheme for profit-linked income tax deduction for promotion of affordable housing, carpet area instead of built up area of 30 and 60 Sq.mtr. will be counted. 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.
For builders for whom constructed buildings are stock-in-trade, tax on notional rental income will only apply after one year of the end of the year in which completion certificate is received
Personal Income Tax in Rs 2.5-5 lakh Bracket Reduced
Post the government's demonetisation drive, the finance minister proceeded to soothe the middle-class by slashing tax rates for income between Rs 2.5-5 lakh by half. The rationale behind this was to ensure more people come into the tax net, he said.
Income tax rate on income between Rs 2.5 lakh and Rs 5 lakh cut to 5% from 10%.
Persons with income between Rs 50 lakh and Rs 1 crore to pay an additional surcharge of 10 percent.
Watch Finance Minister's Budget Speech Here
No Cash Transactions Over Rs 3 Lakh
The finance minister said that no transactions above Rs 3 lakh will be permitted in cash.
Cash Donations for Political Parties Capped at Rs 2,000
Aiming to reform political funding, Jaitley said the maximum cash donation any party can receive will be Rs 2,000 from one source.
Political parties will be entitled to receive donations by cheque or in the digital mode from their donors.
A donor can purchase electoral bonds issued by RBI from authorised banks, which can be redeemed with a registered political party.
Finance Minister Cuts Corporate Tax Rate For Small Firms To 25%
The finance minister announced that the tax rate for companies with an annual turnover up to 50 crores will be reduced to 25% to strengthen MSME (Micro Small and Medium Enterprises) sector.
India Largely A Non-Tax Compliant Society: FM
Finance Minister Arun Jaitley said that the country is largely a non-tax complaint society with many evading payments of their Income Tax returns.
He said this was also evident from the surge in personal income declarations post the bold demonetisation move.
Fiscal Deficit Target For FY17-18 At 3.2% Of GDP: Jaitley
The fiscal deficit target for financial year 2017-2018 has been aimed at 3.2% of GDP, and revenue deficit pegged at 1.9%.
FIPB To Be Abolished, Says Finance Minister Arun Jaitley
The finance minister has proposed to phase out the Foreign Investment Promotion Board (FIPB). India's FDI policy is also likely to see further easing in FY18, the minister said.
“A total liberalisation of FDI policy is being done and an announcement will come in the due course of time,” Jaitley said.
Considering New Law to Confiscate Assets of Economic Offenders
The government is considering a new law to confiscate assets of individuals who are fleeing the legal system in the country.
Finance Minister Allocates Rs 3.96 Lakh Crore For Infrastructure
- Allocation for transportation at Rs 2,41,387 crore for FY18.
- Airport Authority of India Act to be amended to allow monetisation of land assets.
- Select airports in tier-II cities to be taken up for PPP-mode upgradation.
- National Highway allocation set at Rs 64,000 crore versus Rs 57,676 crore last year.
Banks to Get Additional 10,000 Crore Towards Recapitalisation: FM
The government will provide an additional Rs 10,000 crore towards bank recapitalisation, Finance Minister Arun Jaitley said in his budget speech. This in inline with its earlier commitment, which will dissapointing for the market as it hoped higher allocation.
- Nifty PSU Index pares gains to 1.26%
- Negative for PSU Banks - IOB, Dena Bank, PNB
- Negative for SBI, BOB, BOI, Union Bank
Railway Budget: Jaitley Says FY18 Rail Capital Expenditure At Rs 1.31 Lakh Crore
Presenting the first budget of 'Independent India' which included the newly merged railway budget, the finance minister laid out priorities for the Indian railways. The minister laid emphasis on passenger safety, financial and accounting reforms as well as cleanliness.
Here are some of his initiatives:
- A new Railway Safety Fund called the 'Rail Sanraksha Kosh' has been setup with an initial corpus of Rs 1 lakh crore for the next five years.
- The minister also proposed to phase out narrow gauge lines by 2020.
- A proposal to redevelop 25 new railway stations in FY18 was also mooted.
- Railway lines of 3,500 kilometres were proposed to be commissioned during FY18.
- All train coaches to have bio toilets by 2019.
- Plan to introduce a metro rail policy to focus on urban transportation.
- Service charge while booking tickets on IRCTC website waived off.
Broadband Services Announced for 1.5 Lakh Villages
Rs 10,000 crore for high speed broadband has been allocated to 150,000 gram panchayats. The broadband services will be implemented by the year end, Jaitley says.
Two New AIIMS in Jharkhand and Gujarat
While speaking about higher education, Jaitley announced the opening of two new AIIMS hospitals in Jharkhand and Gujarat.
Announces Reforms for Youth, Poor and Women
Government to Spend Rs 27,000 Crore Under Pradhan Mantri Gram Sadak Yojana
The finance minister said that the pace of road construction under the Pradhan Mantri Gram Sadak Yojana (PMGSY) has been increased to 133 kilometres per day as compared to 73 kilometres per day during 2011-14. The total spend under this scheme for FY18 has been set at Rs 27,000 crore inclusive of state spending.
Ratings agency India Ratings believes that higher infrastructure spending coupled lower borrowing cost will be positive for Infrastructure.
'Higest Ever' MNREGA Allocation
Jaitley increases allocation to rural employment scheme Mahatma Gandhi National Rural Employment Guarantee Act (or, MGNREGA) to Rs 48,000 crore. The finance minister says it is the highest ever.
He added that the government aims to bring 1 crore rural households out of poverty.
Committed To Double Farmers' Income In 5 Years: Jaitley
Finance Minister Arun Jaitley said the government is committed to double the farmers’ income in the coming 5 years. He made the following points.
- India Agriculture to grow at 4.1 percent in 2017-2018
- Rs 10 lakh crore has been provided to farmers as credit
- Coverage under Pradhan Mantri Fasal Bima Yojana to be increased from 30 percent to 40 percent in 2017-18 and 50 percent in 2018-19
- India to spend Rs 13,240 crore on crop insurance in FY18
Demonetisation, GST Will Have Positive Impact on Economy: Jaitley
The finance minister said demonetisation was a “bold and decisive” measure as tax evasion had become a way of life. He said drop in economic activity on account of currency squeeze will only have a transient effect on the economy.
“The pace of remonetisation has picked up and has reached comfortable levels. The impact of demonetisation will not spill over into the next year,” he said.
He hailed demonetisation as a move that will lead to a bigger and cleaner GDP.
Three Challenges in Global Scenario
Jaitley said that currently there are three challenges in the global scenario: monetary stance of US FED Reserve, commodity prices specially crude oil and retreat from globalisation.
IMF Expects India to be One of the Fastest Growing Economies During 2017: Jaitley
Finance Minister Arun Jaitley said the Modi government has attempted a transformational shift in governance of the country.
Inflation has been controlled and sluggish growth has been replaced by high growth, Jaitley said.
He said this budget comes in the backdrop of global uncertainty.
Signs of Retreat From Globalisation Will Hurt Exports: Jaitley
Jaitley said the US Fed policy can lead to capital outflows from the emerging markets.
Arun Jaitley Starts Budget Speech Amidst Protests
Finance Minister Arun Jaitley begins the Budget presentation in the Parliament with his speech, while members of the Opposition continue to raise their voice in protest.
Before he started to speak, Congress leader Kharge made his statement expressing the Opposition’s wish to delay the Budget. However, the Speaker said the proceedings have to go on as planned as it is a constitutional obligation.
Parliament Session Begins
Lok Sabha Speaker Sumitra Mahajan starts the Parliament’s session with an obituary for MP E Ahamed. The House observes silence for a minute.
Will Present Budget at 11 am: Arun Jaitley
Finance Minister Arun Jaitley has tweeted that he will be presenting the Union Budget at 11 am in the Parliament.
Lok Speaker Sumitra Mahajan also says that she’s saddened by MP E Ahamed’s demise but the Budget will have to be presented today. She will make the formal announcement shortly.
Will Raise Issue to Delay Budget in the House: Congress Member
Congress member Mallikarjun Kharge has made a striking statement saying:
He said that the government may have done so to avoid any affect on the Budget presentation.
He added that the Opposition’s opinion, including JDU leaders and former PM Deve Gowda, is that the Budget should be postponed by a day and they’ll raise the issue in the House.
Reports say that there are precedents to this situation. In 1954, MP Paul Jujhar had passed away and the Rail Budget was presented as scheduled and in 1974, then-MoS Industry MB Rana’s demise did not affect the Union Budget presentation.
Jaitley Reaches Parliament; PM Modi Visits E Ahamed's Residence
Lok Sabha Speaker Sumitra Mahajan will visit MP E Ahamed's residence at 10 am. The former minister passed away late on Tuesday night after collapsing in the Parliament during the session.
Prime Minister Narendra Modi, Home Minister Rajnath Singh and Union Minister Ananth Kumar visit the MP’s residence.
Meanwhile, Finance Minister Arun Jaitley has reached the Parliament with the Budget documents ahead of the day’s proceedings.
Govt Sources Say Budget to be Presented Today
Government sources say Budget will be presented today and the obituary for MP E Ahamed may happen before or after it, reports ANI. Sources further add that the government has spoken to all parties and has arrived at a consensus.
Some reports are saying that there may be a delay of an hour or two in the Budget presentation.
ANI reported the sources as saying that there is a precedent and in the past also a sitting MP/MoS had passed away and the Budget was presented.
Sensex, Nifty Gain As Investors Await Budget 2017; Tech Stocks Extend Decline
Indian shares snapped a two-day losing streak and gained marginally as investors position themselves ahead of Finance Minister Arun Jaitley’s presentation of his fourth Union Budget.
A gauge of the country’s top 10 information technology companies declined for a third straight session on concerns of Trump administration’s protectionist policies.
The S&P BSE Sensex climbed 0.1 percent to 27,695 while the NSE Nifty gained 0.2 percent to 8,578. The market breadth was skewed in favour of the buyers. About 893 stocks advanced, 543 advanced and 449 remained unchanged.
Arun Jaitley Meets President
Finance Minster Arun Jaitley leaves for Rashtrapati Bhavan to meet the President. He has left the Finance Ministry with Budget documents.
The final decision on whether or not the Budget will be presented today will be taken by the Speaker and is expected by 10 am.
The copies of the Budget have reached the Parliament.
Arun Jaitley Arrives at Finance Ministry
Finance Minister Arun Jaitley has reached the North Block on Day 2 of the Budget session in Parliament.
MoS Finance Arjun Ram Meghwal along with other officials have also arrived at the Finance Ministry.
Speaker to Decide on Budget Presentation As MP Passes Away: Reports
Some media reports say that former minister and Congress MP E Ahamed’s sudden demise may delay the Budget presentation. MoS Finance Santosh Gangwar has said that the Speaker will decide whether or not it will be presented as per schedule. If it is postponed, the Budget will take place a day later, say sources.
However, conflicting reports say the session will go on as planned. CNBC TV18 and NDTV report that the Budget will be presented as planned at the start of Day 2 of the Parliament’s session.
The Opposition may demand that the Budget be postponed.
PM Modi Offers His Condolences on MP's Demise
Prime Minister Narendra Modi offered his condolences on E Ahamed’s demise and lauded all the former minister’s work throughout his life.
Economic Survey Takes a Conservative Stance on Govt’s Finances
Changing tack from last year, the Economic Survey released on Tuesday took a conservative stance on the government’s finances, saying that India’s economic experience shows the validity of the existing fiscal responsibility framework.
Still, it argued for some change in the operational framework of the Fiscal Responsibility and Budget Management (FRBM) Act, leaving room for the government to set a fiscal deficit target higher than 3 percent for fiscal 2018. Bond markets are expecting the government to announce a target of between 3.2-3.3 percent of GDP when the Union Budget is presented.
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What Millennials Expect From Budget 2017
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Jaitley to Answer Questions on Twitter
Jaitley will reply to questions by Twitterati on the proposals in the Budget after it is presented.
The questions can be asked on Twitter by using hashtag #MyQuestionToFM.
Union Budget 2017-2018 out Today
Finance Minister Arun Jaitley is all set to announce the Union Budget for 2017-2018 in the Lok Sabha today. This year, the government has decided to advance the Union Budget presentation to 1 February, doing away with a decade-old practice of presenting it on the last working day of February.
This is also the first time the Union Budget and the Rail Budget have been merged. There is high anticipation about what the Budget will look like post demonetisation.
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