Budget 2017 aims to clean up political funding, push for rural development
Income Tax rate for annual income bracket of Rs 2.5-5 lakh halved to 5 percent
Finance Minister Arun Jaitley presented his fourth budget in the Lok Sabha today, emphasising that his overall approach has been to spend more on rural development. The Budget has made a total allocation of over Rs 1.87 lakh crore for rural, agri and allied sectors. Allocation under MGNREGA was also increased to Rs 48,000 crore from 38,500 crore, the highest ever since the scheme was conceived.
A dedicated micro-irrigation fund will be set up by NABARD to achieve the mission of ‘per drop more crop’. The corpus of long-term irrigation fund in NABARD will now become Rs 40,000 crore.
Jaitley also announced that the coverage of ‘Fasal Bima Yojna’ (crop insurance scheme) will go up from 30 percent of cropped area to 40 percent in 2017-18 and 50 percent in 2018-19.
The budget has come close on the heels of two major developments in the country: demonetisation of high currency notes and the passage of the GST bill. The push for rural development in the budget assumes significance as the states of Punjab and Uttar Pradesh go to polls and where the BJP has often been attacked by its political opponents for turning a blind eye towards the agrarian crisis.
Beginning his speech, the Finance Minister lauded India for maintaining its micro-economic stability in the midst of global economic uncertainties. ''India’s macro-econmic stability continues to be the foundation of our economic success. India continued to stand as a bright spot in the world economic landscape,'' he said. The government is aiming at a fiscal deficit target of 3.2 percent for 2017-18.
Referring to demonetisation, Jaitley said the move was aimed at creating a new normal where GDP would be bigger, cleaner and real. He added that the effects of demonetisation were not expected to spill over to the next year.
Another important take away from the 2017 budget has been the reduction of the existing rate of taxation for individuals with income ranging between Rs 2.5 lakh to Rs 5 lakh to 5 percent instead of 10 percent. This means that everyone under the tax bracket of Rs 50 lakh stands to gain Rs 12,500 tax benefit in the coming year.
While targeting to lift one crore people out of poverty as part of Mission ‘Antodaya’, the finance minister said that the budget had been formulated with the motto to transfer, energise and clean India.
In a break from the past when the annual financial statement of expenditures and revenues was tabled always towards the end of February and the Budget Session also began around that time, the session and the budget have both been advanced by almost a month this year.
The practice of presenting the Railway Budget has also been discarded and now the Rail Budget has been merged with the General Budget.
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.
Proposing to create a national rail safety fund with a corpus of Rs 1 lakh crore, it has made a total outlay of Rs 1.3 lakh crore for Railways. This amount will include Rs 51,000 crore from the government and will be used for increasing operational efficiency, and building and upgrading railway infrastructure. The announcement assumes significance as four major train accidents took place between November 2016 and January, killing at least 189 people.
Jaitley also announced that the service charge on e-tickets booked via IRCTC will be done away with.
The Budget also imposed a cap of Rs 2,000 on donations received by political parties in cash by an individual donor. Jaitley also proposed an additional amendment to the RBI to enable issuance of electoral bonds. The move which is being seen as an attempt to bring in greater transparency and accountability in donations received by political parties was however flayed by Swaraj Abhiyan’s Yogendra Yadav on Twitter: “Reducing cash limit for political funding from Rs 20K to Rs 2K is meaningless. Because there is no limit in number of persons (sic.)”
Congress vice-president Rahul Gandhi on the other hand welcomed the move saying, “Any step to clean political funding will be supported by us.”
The Budget was presented shortly after the House assembled for the day and obituary references were made to sitting member and former Union Minister E. Ahamed who died early this morning. It was tabled amid protest from the Opposition, mainly the Congress, which wanted the House to be adjourned for the day as a mark of respect to the memory of the deceased leader.
(With inputs from UNI)