Finance Minister Arun Jaitley’s Union Budget rose to the expectations of the people of a major tax relief after the demonetisation move. And with Assembly polls in five states fast approaching, the finance minister didn’t let down people announcing a big cut in Income tax rate and allocating a major chunk of the proposed expenditure for rural financing and infrastructural development. For individual tax payers, the tax rate for the slab between Rs 2.5 lakh and Rs 5 lakh was cut to 5 per cent from 10 per cent, while a 10-per cent surcharge has been kept for those with the annual income of between Rs 50 lakh and Rs 1 crore. Small and medium enterprises with a turnover of less than Rs 50 crore will also have a lower 25 per cent tax rate now against the earlier 30 per cent. The tax rates for larger corporates have been largely left untouched.
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In a big move to bring transparency in political funding, Jaitley, in his fourth budget, placed a cap of Rs 2,000 on the donation received by any political party from one source in cash. As of now, the limit to accept political donations in cash is Rs 20,000. The minister said that political parties will be entitled to receive donations by cheque or digital mode from their donors.
Seeking to improve the ease of doing business, Jaitley in his budget speech said that the government has abolished FIPB and had decided that foreign investment proposals requiring government approval would be cleared by the ministries concerned. He further promised to liberalise further FDI policy in more sectors in due course and also assured a law to confiscate the assets of fugitive economic offenders.
It was a historic budget as for the first time railway budget was merged with the finance bill. The latest exercise was also the first time when the date of presentation was been advanced by nearly a month. The allocation for Railway ministry was hiked by 20 per cent. Though, no new trains or routes were announced by Jaitley, emphasis was made on railway modernisation.
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Aiming to double farmers’ income by 2022, the government increased agri-credit target by 11 per cent to Rs 10 lakh crore for next fiscal and announced two dedicated funds with a corpus of Rs 13,000 crore to promote micro irrigation and dairy processing. Government also raised budget allocation for Agriculture Ministry by 6 per cent to Rs 51,026 crore for 2017-18 from Rs 48,072 crore (revised estimate) of this fiscal. The total allocation for agri and allied sectors is Rs 58,663 crore for next fiscal, up from Rs 52,821 crore. Jaitley also announced “highest ever” allocation for MNREGA at Rs 48,000 crore.
PM Modi calls it Uttam Budget
Describing the budget as futuristic, Prime Minister Narendra Modi said it aims on fulfilling the “dreams” of every section, including the poor, the farmers and the under-privileged while focussing on job creation, transparency, urban rejuvenation and rural development. He said called it an ‘Uttam Budget’ and said it is a key link between the work done by his government over the last two-and-a-half and the steps that it will be taking in the future as part of its vision to take the country on the path of development. “This is a Budget for the future – for farmers, underprivileged, transparency, urban rejuvenation, rural development, enterprise,” Modi said.
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Industry gives thumbs up to budget
India Inc said the budget builds a positive sentiment that government will take all steps to boost growth with its focus on rural economy and infrastructure but rued no cut in corporate tax for large companies. However, while welcoming reduction in income tax for smaller firms to 25 per cent, a section of India Inc rued that larger firms did not get relief in the form of lower corporate tax. FICCI on the other hand complimented the Finance Minister on his vision for the economy “which alongside economic growth also ensures economic justice. Growth without inclusion can be a liability for the country.”
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Opposition says budget misleading; ‘where are jobs?’
The Opposition, however, slammed the budget with Congress leader Rahul Gandhi saying it lacked a clear vision and had nothing for farmers, youths and job creation. He, however, was ppreciative of proposals on political funding, saying “any step to clean political funding will be supported by us”. TMC chief Mamata Banerjee dubbed the budget as “clueless, useless and heartless” and questioned why no data on demonetisation was given. Terming the budget as “contractionary” and a “complete gimmick”, the Left parties alleged that the figures given by
the Finance Minister do not match the reality. The opposition parties also accused the government of bringing the budget proposals keeping in mind the Assembly polls in five states and indulging in jugglery of words and numbers.
Both the Janata Dal (United) President and the RJD chief pointed out that the central government has failed to provide special packages to backward states such as Bihar as promised by Prime Minister Narendra Modi during the campaign for the state assembly polls in 2015. “The budget has disappointed the people. There is nothing that could speed up growth and development in the country. It is not going to help the common people, farmers and the youths,” Nitish Kumar said. Kumar also questioned the Centre’s silence over how much black money returned to the banks after demonetisation and what benefit did the November 8 move bring to the Indian economy. “Why has Finance Minister Arun Jaitley in his budget speech in parliament not given any information about how much black money returned following demonetisatiion and the benefits of demonetisation.”