Review of Union Budget 2017
It’s that time of the year when government rolls out the budget for the coming financial year. With the gross expenditure capping at Rs 21.47 lakh crores, let’s have a look at how the Union budget for 2017-18 can bring changes to cardinal sectors of the economy.
First things first; when union Finance Minister Mr. Arun Jaitley announced the budget, what caught our instant attention was the 5% drop in taxation for individuals whose annual income falls in between Rs 2.5 lakh and Rs 5 lakh. The drop from 10% to 5% will help empower the middle class, while levying a surcharge of 10% on whose income falls in between Rs 50 lakh and 1 crore will help bridge that large gap between middle class and upper middle class (read rich).
The government’s battle against cash seems to be serious. The mammoth move of demonetisation is now followed by various moves to replace cash with plastic money. By barring cash transactions for any sum greater than Rs 3 lakh and reducing the cess on material used to make Point of Sale (PoS) cards, the government aims at accountability and blocking unaccounted money that can hurt the economy. The move is expected to bring some real changes to real estate and jewelry.
However; limiting the cash donation a political party can receive from a single source to Rs 2000 seems to be a political move to improve the ruling party’s credibility in the backdrop of upcoming elections. The move is not infrangible as huge amounts can still be donated through multiple sources.
With a marginal hike of less than 10%, from Rs 2.58 lakh Cr last year to Rs 2.74 lakh Cr in 2017-18, defence is probably the least gained sector from the 2017-18 budget. While the defence ministry council was hoping an allocation of 2.5% of GDP, all they could get was 1.62% of GDP. Being the largest arms importer in the world, the year 2017-18 will likely pass without much high value buys for India.
Transport sector bags Rs 2.41 lakh Cr in allocations. With the budget rolling out Rs 64,000 Cr for highways, against Rs 57,676 Cr of last year; and the emphasis on linking the country with multi-modal logistics parks in seven states and a coastal highway road network of 7500 km, transport seems to be one of the laser focussed areas in the budget, designed for a significant growth in the logistics sector.
Railways & Infrastructure
2017 saw the first combined union budget as opposed to separate rail budgets in the past years. But on the contrary of what one might guess, Railway saw its greatest ever allocation this year with a whopping Rs 3.96 lakh Cr.
More stations are coming up and 500 existing ones will be turned solar and differently-abled friendly. The railways is also on a mission to replace all existing toilets with bio-toilets by 2019. A rail safety fund of Rs 1 lakh crore was announced along with the removal of service charges from online IRCTC booking.
The National Optic Fibre Network project, which was renamed Bharat Net Project in 2015, was awarded Rs 10,000 Cr for providing high speed broadband through Wifi hotspots to more than one lakh gram panchayats by the end of coming financial year. Yay! Insta-gram!
Housing & Welfare
Mission Antyodaya aims to build 1 crore home for the homeless and the poor. Pipe water supply will be implemented on full-scale in all open-defecation free villages.
Allocation for SCs saw a 35% hike from 38,833 Cr to Rs 52,393 Cr which can also be read along with the headlines of the coming elections. The fund for the welfare of women and children has also been raised to Rs 1.84 lakh Cr.
A total allocation, raised by 24% to Rs 1.87 trillion, was awarded to one of the most driving sectors of our country- agriculture. A 63% hike in total funds for crop insurance (Fasal Bima Yojana) was announced and an extra Rs 20,000 Cr will be made available to NABARD for micro irrigation funds.
The latest addition to the sector is contract farming to improve the markets for agricultural produce competitively. Sure, looks like a good harvest is on it’s way!
Now that the dice has been rolled, let’s see how the game plan will be played out for 2017-18!